UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
(Mark
one)
☒
Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For
the fiscal year ended December 31, 2019
or
☐
Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from to .
Commission
file no. 0-16469
Inter
Parfums, Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
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13-3275609
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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551 Fifth Avenue, New York, New York
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10176
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrant’s
telephone number, including area code: 212.983.2640
Securities
registered pursuant to Section 12(b) of the Act:
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Title
of each class
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Name
of exchange on which registered
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Common
Stock, $.001 par value per share
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The
Nasdaq Stock Market
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Securities
registered pursuant to Section 12(g) of the Act:
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Title
of each class
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Name
of exchange on which registered
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None
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None
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Indicate
by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days: Yes ☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company,
or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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If an emerging growth company, indicate
by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
State
the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price
at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day
of the registrant’s most recently completed second fiscal quarter. $1,165,784,928 of voting equity and $-0- of non-voting
equity.
Indicate
the number of shares outstanding of the registrant’s $.001 par value common stock as of the close of business on the latest
practicable date February 12, 2020: 31,531,418.
Documents
Incorporated By Reference: None.
TABLE OF CONTENTS
FORWARD
LOOKING STATEMENTS
This
report includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, and if incorporated
by reference into a registration statement under the Securities Act of 1933, as amended, within the meaning of Section 27A of
such act. When used in this report, the words “anticipate,” “believe,” “estimate,” “will,”
“should,” “could,” “may,” “intend,” “expect,” “plan,”
“predict,” “potential,” or “continue” or similar expressions identify certain forward-looking
statements. Although we believe that our plans, intentions and expectations reflected in such forward-looking statements are reasonable,
we can give no assurance that such plans, intentions or expectations will be achieved.
Actual
results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking
statements contained in this report. Important factors that could cause actual results to differ materially from our forward-looking
statements are set forth in this report, including under the heading “Risk Factors”. Such factors include: Our inability
to successfully integrate or manage any future acquisitions; continuation and renewal of existing license and similar agreements;
potential inability to obtain new licensing, arrangements or agreements for additional brands; potential reduction in sales of
our fragrance products due to reduced consumer confidence as the result of a prolonged economic downturn, recession or terrorist
attack in the United States, Europe or any of the other countries in which we do significant business; uncertainties and deterioration
in global credit markets could negatively impact suppliers, customers and consumers; outbreak of disease, epidemic or pandemic, or similar public
health threat, such as the coronavirus; inability to protect our intellectual property
rights; potential liability for infringement of third party brand names; product liability claims; effectiveness of our sales
and marketing efforts and product acceptance by consumers; our dependence upon third party manufacturers and distributors; our
dependence upon existing management; competition in the fragrance industry; risks related to our foreign operations, currency
fluctuation and international tariff and trade barriers; compliance with governmental regulation; potential negative effects of
“Brexit”; potential hacking and outages of our global information systems; seasonal variability of our business; our
ability to operate our business without infringing, and misappropriating or otherwise violating the intellectual property rights
of other parties.
These
factors are not intended to represent a complete list of the general or specific factors that may affect us. It should be recognized
that other factors, including general economic factors and business strategies, may be significant, presently or in the future,
and the factors set forth herein may affect us to a greater extent than indicated. All forward-looking statements attributable
to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth in this
report. Except as may be required by law, we undertake no obligation to update any forward-looking statement, whether as a result
of new information, future events or otherwise.
PART
I
Item
1. Business
Introduction
Founded
in 1982, we operate in the fragrance business, and manufacture, market and distribute a wide array of prestige fragrance, and
fragrance related products.
Our
worldwide headquarters and the office of our four (4) wholly-owned United States subsidiaries, Jean Philippe Fragrances, LLC,
Inter Parfums USA, LLC and Interstellar Brands LLC, all New York limited liability companies, and IP Beauty, Inc., a Delaware
corporation, are located at 551 Fifth Avenue, New York, New York 10176, and our telephone number is 212.983.2640. We also own
100% of Inter Parfums USA Hong Kong Limited indirectly through our wholly-owned subsidiary, Inter Parfums USA, LLC.
Our
consolidated wholly-owned subsidiary, Inter Parfums Holdings, S.A., and its majority-owned subsidiary, Interparfums SA, maintain
executive offices at 4 Rond Point des Champs Elysees, 75008 Paris, France. Our telephone number in Paris is 331.5377.0000. Interparfums
SA is the sole owner of three (3) distribution subsidiaries: Inter Parfums srl for Italy, Inter España Parfums et Cosmetiques,
SL, for Spain and Interparfums Luxury Brands, Inc., a Delaware corporation, for distribution of prestige brands in the United
States. Interparfums SA is also the majority owner of Parfums Rochas Spain, SL, a Spanish limited liability company, which specializes
in the distribution of Rochas fragrances. In addition, Interparfums SA is also the sole owner of Interparfums (Suisse) SARL, a
company formed to hold and manage certain brand names, and Interparfums Asia Pacific Pte., Ltd., an Asian sales and marketing
office.
Our
common stock is listed on The Nasdaq Global Select Market under the trading symbol “IPAR”. The common shares of our
subsidiary, Interparfums SA, are traded on the Euronext Exchange.
The
Securities and Exchange Commission (“SEC”) maintains an internet site at http://www.sec.gov that contains financial
reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. We maintain
our internet website at www.interparfumsinc.com, which is linked to the SEC internet site. You can obtain through our website,
free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, interactive data files, current reports on Form
8-K, beneficial ownership reports (Forms 3, 4 and 5) and amendments to those reports filed or furnished pursuant to Section 13(a)
of the Securities Exchange Act of 1934 as soon as reasonably practicable after they have been electronically filed with or furnished
to the SEC.
Company
Overview
The
following information is qualified in its entirety by and should be read together with the more detailed information and audited
financial statements, including the related notes, contained or incorporated by reference in this report.
General
We
operate in the fragrance business and manufacture, market and distribute a wide array of fragrance and fragrance related products.
We manage our business in two segments, European based operations and United States based operations. Certain prestige fragrance
products are produced and marketed by our European operations through our 73% owned subsidiary in Paris, Interparfums SA, which
is also a publicly traded company as 27% of Interparfums SA shares trade on the NYSE Euronext.
Our
business is not capital intensive, and it is important to note that we do not own manufacturing facilities. We act as a general
contractor and source our needed components from our suppliers. These components are received at one of our distribution centers
and then, based upon production needs, the components are sent to one of several third party fillers which manufacture the finished
product for us and deliver them to one of our distribution centers.
Our
fragrance products focus on prestige brands, each with a devoted following. By concentrating in markets where the brands are best
known, we have had many successful product launches. We typically launch new fragrance families for our brands every year or two,
and more frequently seasonal and limited edition fragrances are introduced as well.
The
creation and marketing of each product family is intimately linked with the brand’s name, its past and present positioning,
customer base and, more generally, the prevailing market atmosphere. Accordingly, we generally study the market for each proposed
family of fragrance products for almost a full year before we introduce any new product into the market. This study is intended
to define the general position of the fragrance family and more particularly its scent, bottle, packaging and appeal to the buyer.
In our opinion, the unity of these four elements of the marketing mix makes for a successful product.
As
with any business, many aspects of our operations are subject to influences outside our control. We believe we have a strong brand
portfolio with global reach and potential. As part of our strategy, we plan to continue to make investments behind fast-growing
markets and channels to grow market share. We discuss in greater detail risk factors relating to our business in Item 1A
of this Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and the reports that we file from time to
time with the SEC.
European
Operations
We
produce and distribute our fragrance products primarily under license agreements with brand owners, and fragrance product sales
through our European operations represented approximately 76% of net sales for 2019. We have built a portfolio of prestige brands,
which include Boucheron, Coach, Jimmy Choo, Karl Lagerfeld, Kate Spade New York, Lanvin, Montblanc, Paul Smith, Repetto, Rochas,
S.T. Dupont and Van Cleef & Arpels, whose products are distributed in over 120 countries around the world.
United
States Operations
Prestige
brand fragrance products are also marketed through our United States operations, and represented 24% of sales for the year ended
December 31, 2019. These fragrance products are sold under trademarks owned by us or pursuant to license or other agreements
with the owners of brands, which include Abercrombie & Fitch, Anna Sui, bebe, Dunhill, French Connection, Graff, GUESS,
Hollister, MCM and Oscar de la Renta.
Recent
Developments
Abercrombie
& Fitch and Hollister
In
November 2019, we extended our license for both the Abercrombie & Fitch and Hollister brands until December 31, 2022, and
added automatic renewals unless terminated on 3 years notice.
MCM
In
September 2019, we entered into an exclusive, 10-year worldwide license agreement with German luxury fashion house MCM for the
creation, development and distribution of fragrances under the MCM brand. Our rights under such license are subject to certain
minimum advertising expenditures and royalty payments as are customary in our industry.
Oscar
de la Renta
In
September 2019, we extended our license through December 31, 2031, and added an additional five-year extension option through
December 31, 2036. The original license agreement, signed in October 2013, would have expired on December 31, 2025.
Kate
Spade New York
In
June 2019, we entered into an exclusive 11-year worldwide license agreement with Kate Spade New York for the creation, development
and distribution under the Kate Spade brand. Our rights under such license are subject to certain minimum advertising expenditures
and royalty payments as are customary in our industry.
Fragrance
Products
General
We
are the owner of the Rochas brand, and the Lanvin brand name and trademark for our class of trade. In addition, we have built
a portfolio of licensed prestige brands whereby we produce and distribute our prestige fragrance products under license
agreements with brand owners. Under license agreements, we obtain the right to use the brand name, create new fragrances and
packaging, determine positioning and distribution, and market and sell the licensed products, in exchange for the payment of
royalties. Our rights under license agreements are also generally subject to certain minimum sales requirements and
advertising expenditures as are customary in our industry. As a percentage of net sales, product sales for the
Company’s largest brands were as follows:
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Year Ended December 31,
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2019
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2018
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2017
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Montblanc
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22
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%
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19
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%
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21
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%
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Jimmy Choo
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16
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%
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17
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%
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18
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%
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Coach
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14
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%
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15
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%
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10
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%
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GUESS (license commenced April, 1 2018)
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10
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%
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n/a
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n/a
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Lanvin
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8
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%
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10
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%
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11
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%
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Our
licenses expire on the following dates:
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Brand Name
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Expiration Date
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Abercrombie & Fitch
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Extends until either party terminates on 3 years notice
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Anna Sui
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December 31, 2021,
plus two 5-year optional terms if certain conditions are met
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bebe Stores
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June
30, 2023
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Boucheron
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December 31, 2025,
plus a 5-year optional term if certain sales targets are met
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Coach
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June 30, 2026
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Dunhill
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September 30, 2023
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French Connection
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December 31, 2027, plus a 10-year optional term
if certain sales targets are met
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Graff
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December
31, 2026, plus 3 optional 3-year terms if certain sales targets are met
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GUESS
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December
31, 2033
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Hollister
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December
31, 2022, plus automatic renewals unless terminated on 3 years notice
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Kate Spade New York
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June 30, 2030
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Jimmy Choo
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December 31, 2031
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Karl Lagerfeld
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October 31, 2032
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Lily Aldridge
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December 31, 2023
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MCM
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December 31, 2030, plus 4 option years
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Montblanc
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December 31, 2025
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Oscar de la Renta
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December 31, 2031, plus a 5-year optional term
if certain sales targets are met
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Paul Smith
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December 31, 2021
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Repetto
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December 31, 2024
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S.T. Dupont
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December 31, 2020, plus automatic annual renewals,
unless terminated on 6 months’ notice by either party
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Van Cleef & Arpels
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December 31, 2024
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In
connection with the acquisition of the Lanvin brand names and trademarks for our class of trade, we granted the seller the right
to repurchase the brand names and trademarks in 2025 for the greater of €70 million (approximately $79 million) or one times
the average of the annual sales for the years ending December 31, 2023 and 2024.
Fragrance
Portfolio
Abercrombie
& Fitch — In 2014, we entered into a worldwide license to create, produce and distribute new fragrances and
fragrance related products under the Abercrombie & Fitch brand name. We distribute these fragrances internationally in specialty
stores, high-end department stores and duty free shops, and in the U.S., in duty free shops and in select Abercrombie & Fitch
retail stores. Our initial men’s scent, First Instinct was launched in 2016 followed by a women’s version in
2017. During 2018 and early 2019, we introduced several First Instinct brand extensions. In the spring of 2019, we unveiled
a new fragrance family for Abercrombie & Fitch, Authentic, for men and women, and for 2020, we have a brand extension
duo planned.
Abercrombie & Fitch believes that every
day should feel as exceptional as the start of the long weekend. Since 1892, the brand has been a specialty retailer of quality
apparel, outerwear and fragrance – designed to inspire our global customers to feel confident, be comfortable and face their
Fierce.
Anna
Sui—In 2011, we entered into an exclusive worldwide fragrance license to create, produce and distribute fragrances and
fragrance related products under the Anna Sui brand. We work in partnership with American designer, Anna Sui, and her creative
team to build upon the brand’s growing customer appeal, and develop new fragrances that capture the brand’s very sweet
feminine girly aspect, combined with touch of nostalgia, hipness and rock-and-roll. Anna Sui’s devoted customer base, which
spans the world, is concentrated in Asia.
After
a period of weaker sales, due primarily to a decline in China’s economy, the 2017 successful launch of Fantasia by
Anna Sui and the benefit that accrued from our continued commitment to advertising and marketing commitment, produced a significant
increase in 2018 brand sales. However, brand sales declined modestly 2019, as the 2018 and 2019 product launches were primarily
brand extensions. We look to Sky by Anna Sui to reinvigorate brand sales when it debuts in the fall of 2020.
Boucheron—
In 2010, we entered into an exclusive 15-year worldwide license agreement for the creation, development and distribution of
fragrances under the Boucheron brand. Boucheron is the French jeweler “par excellence”. Founded by Frederic Boucheron
in 1858, the House has produced some of the world’s most beautiful and precious creations. Today Boucheron creates jewelry
and timepieces and, under license from global brand leaders, fragrances and sunglasses. Currently Boucheron operates through over
40 boutiques worldwide as well as an e-commerce site.
Boucheron
brand sales continue to be driven by legacy scents Boucheron Femme and Boucheron Homme as well as its legendary
Jaipur lines. A six scent collection was launched under the Boucheron brand in 2017, and additional scents were added in
2018. In 2019, two new fragrances, Boucheron Fleurs and Boucheron Quatre en Rouge, were added to the Boucheron collection.
Coach—
In 2015, we entered into an exclusive 11-year worldwide license to create, produce and distribute new men’s and women’s
fragrances and fragrance related products under the Coach brand name. We distribute these fragrances globally to department stores,
specialty stores and duty free shops, as well as in Coach retail stores.
Coach,
established in New York City in 1941, is a leading design house of modern luxury accessories and lifestyle collections with a
rich heritage of pairing exceptional leathers and materials with innovative design. Coach branded products are sold worldwide
through Coach stores, select department stores and specialty stores, and through Coach’s website.
In
2016, we launched our first Coach fragrance, a women’s scent, and in 2017, a men’s scent, both of which have quickly
become top selling prestige fragrances. In 2018, the Coach brand achieved remarkable sales growth and quickly become one of the
largest brands in our portfolio. Coach sales were driven by the continued popularity of the Coach signature lines, as well as
the success of flankers, Coach Floral and Coach Platinum, which rolled out in 2018. For 2019 we added Coach Floral
Blush, and we have a new Coach women’s scent Coach Dreams debuting in early 2020. Coach is part of the Tapestry
house of brands.
Dunhill—In
2012, we entered into an exclusive 10-year worldwide fragrance license to create, produce and distribute fragrances and fragrance
related products under the Dunhill brand.
The
house of Dunhill was established in 1893 and since that time has been dedicated to providing high quality men’s luxury products,
with core collections offered in menswear, leather goods and accessories. The brand has global reach through a premium mix of
self-managed retail outlets, high-level department stores and specialty stores. Known for its commitment to elegance and innovation
and being a leader of British men’s style, the brand continues to blend innovation and creativity with traditional craftsmanship.
Beginning
in 2015, we rolled out a new Dunhill scent, Icon, the success of which has made the Dunhill brand one of the stars within
our United States based operations. Building upon the established success of the Icon fragrance family, we launched several
product extensions including Icon Absolute, Icon Elite and Icon Racing. In 2018 we introduced a new Dunhill scent
for men called Century, and in 2019 Century Blue. Also in 2019 the Dunhill Signature Collection debuted exclusively
at Harrod’s followed by a global rollout. Brand extensions dominate our plans for Dunhill in 2020.
Graff—
In 2018, the Company entered into an exclusive, 8-year worldwide license agreement with London-based Graff for the creation, development
and distribution of fragrances under the Graff brand. The 8-year agreement has three 3-year automatic renewal options, potentially
extending the license until December 31, 2035.
Since
Laurence Graff OBE founded the company in 1960, Graff has been dedicated to sourcing and crafting diamonds and gemstones of untold
beauty and rarity, and transforming them into spectacular pieces of jewelry that move the heart and stir the soul. Throughout
its rich history, Graff has become the world leader for diamonds of rarity, magnitude and distinction. Most notably, it has dominated
the list of historical and important rough diamonds discovered, cut and polished this century. Each jewelry creation is designed
and manufactured in Graff’s London atelier, where master craftsman employ stone-led design techniques to emphasize the beauty
of each individual stone. The company remains a family business, overseen by Francois Graff, Chief Executive Officer.
For
Graff, we will have a six-scent collection for women debuting exclusively at Harrods beginning in March 2020. In the fall of 2020,
the global rollout will begin with selective luxury distribution limited to only the most exclusive, upmarket retail outlets.
Additionally, we are exploring opportunities for luxury travel amenities, including five star hotels.
GUESS—
In 2018, the Company entered into an exclusive, 15-year worldwide license agreement with GUESS?, Inc. for the creation, development
and distribution of fragrances under the GUESS brand.
Established
in 1981, GUESS began as a jeans company and has since successfully grown into a global lifestyle brand. GUESS?, Inc. designs,
markets, distributes and licenses a lifestyle collection of contemporary apparel, denim, handbags, watches, footwear and other
related consumer products. GUESS products are distributed through branded GUESS stores as well as better department and specialty
stores around the world.
This
license took effect on April 1, 2018 and we began selling GUESS legacy scents in 2018. In 2019 the GUESS brand became the largest
within our U.S. operations, with legacy fragrances dominating the sales mix. In the 2019 third quarter, we began shipments of
1981 Los Angeles and Seductive Noir, both flankers of established scents, which accelerated brand growth further.
Nearly
two years in the making, our first new blockbuster scent will debut for the GUESS brand domestically in spring 2020, followed
in the fall by an international rollout. In addition, a new men’s grooming and fragrance collection is being readied for
a fall 2020 launch. In its first full year of sales, GUESS has become the fourth largest brand in our portfolio.
Hollister—
We have a worldwide license to create, produce and distribute new fragrances and fragrance related products under the Hollister
brand name. The Company distributes these fragrances internationally in specialty stores, high-end department stores and duty
free shops, and in the U.S., in duty free shops as well as select Hollister retail stores. In 2016 we launched a men’s and
women’s scent, Wave, for Hollister. In 2017, we introduced a fragrance duo, Wave 2, to complement the Wave
franchise by Hollister. During 2018 we debuted an entirely new fragrance family for Hollister, Festival Vibes, as well
as Free Wave, both for men and women. In 2019, we launched the Wave limited edition duo, plus our first Festival
brand extension, Festival Nite. For 2020, we have a duo in the works, Canyon Escape for men and women scheduled
for a spring launch.
The quintessential retail brand of the global
teen consumer, Hollister Co. believes in liberating the spirit of an endless summer inside everyone. At Hollister,
summer isn’t just a season; it’s a state of mind. Hollister creates carefree style designed to make all teens
feel celebrated and comfortable in their own skin, so they can live in a summer mindset all year long, whatever the season.
Jimmy
Choo— In 2009, we entered into an exclusive 12-year worldwide license agreement for the creation, development and distribution
of fragrances under the Jimmy Choo brand, and in 2017, we extended the license agreement which now runs through December 31, 2031.
Jimmy
Choo encompasses a complete luxury accessories brand. Women’s shoes remain the core of the product offering, alongside handbags,
small leather goods, scarves, eyewear, belts, fragrance and men’s shoes. Management at Jimmy Choo share a vision to create
one of the world’s most treasured luxury brands. Jimmy Choo has a global store network encompassing more than 150 stores
and is present in the most prestigious department and specialty stores worldwide. Jimmy Choo is part of the Capri Holdings Limited
luxury fashion group.
Our
first fragrance under the Jimmy Choo brand, a women’s signature scent, rolled out globally in 2011. In 2013, we launched
our second Jimmy Choo line, Flash, and in 2014, we debuted Jimmy Choo Man, our first men’s scent. In 2015,
the launch of Jimmy Choo Illicit, our third women’s fragrance under that label hit the market. In 2017, building
on the very strong fragrance family trees of the women’s signature scent and Jimmy Choo Man, we successfully launched
Jimmy Choo L’Eau for women and Jimmy Choo Man Ice. In 2018 we released another men’s flanker, Jimmy
Choo Man Blue, and the brand’s women’s signature scent added Jimmy Choo Fever. During 2019, we introduced
a Jimmy Choo Floral line, and an entirely new scent for men, Jimmy Choo Urban Hero, launched late in the year. For
2020, we are expanding our product line to include a lipstick and nail polish line, and our new women’s fragrance, I
want Choo should be ready towards the end of the year with much of the sell-in continuing into 2021.
Karl
Lagerfeld— In 2012, we entered into a 20-year worldwide license agreement with Karl Lagerfeld B.V., the internationally
renowned haute couture fashion house, to create, produce and distribute fragrances under the Karl Lagerfeld brand.
Under
the creative direction of the late Karl Lagerfeld, one of the world’s most influential and iconic designers, the Lagerfeld
Portfolio represents a modern approach to distribution, an innovative digital strategy and a global 360 degree vision that reflects
the designer’s own style and soul. In 2017, we changed the strategic positioning and instituted new pricing with the launch
of a new duo called Les Parfums Matières. Building on excellent sales results of the initial scents, in the second
half of 2018, we expanded the Les Parfums Matières line with another fragrance duo, and in 2019, we added new scents
to the brand’s expanding multi-scent collection.
Kate
Spade— In 2019, we entered into an exclusive, 11-year worldwide license agreement with Kate Spade New York to create,
produce and distribute new perfumes and fragrance-related products under the Kate Spade brand. We will distribute these fragrances
globally to department and specialty stores and duty-free shops, as well as in Kate Spade New York retail stores beginning with
our first new scent in summer 2020. We will also take over distribution of the Kate Spade’s existing fragrance portfolio
in April 2020.
Since
its launch in 1993 with a collection of six essential handbags, Kate Spade New York has always stood for optimistic femininity.
Today, the brand is a global life and style house with handbags, ready-to-wear, jewelry, footwear, gifts, home décor and
more. Polished ease, thoughtful details and a modern, sophisticated use of color—Kate Spade New York’s founding principles
define a unique style synonymous with joy. Under the vision of its creative director, the brand continues to celebrate confident
women with a youthful spirit. Kate Spade New York is part of the Tapestry house of brands.
Lanvin—
In 2007, we acquired the worldwide rights to the Lanvin brand names and international trademarks listed in Class 3, our class
of trade. A synonym of luxury and elegance, the Lanvin fashion house, founded in 1889 by Jeanne Lanvin, expanded into fragrances
in the 1920s.
Lanvin
fragrances occupy an important position in the selective distribution market in France, Eastern Europe and Asia, and we have several
lines currently in distribution, including: Arpège, Lanvin L’Homme, Éclat d’Arpège,
Rumeur 2 Rose, Jeanne Lanvin, Marry Me, Modern Princess and A Girl in Capri. Our Éclat d’Arpège
line accounts for almost 50% of brand sales. To capitalize on the success of our Éclat d’Arpège
line, in 2015 we launched Éclat d’Arpège Homme as well as Éclat de Fleurs. In late 2016,
we released a new women’s line, Modern Princess which rolled out to broader international distribution in 2017. We
added two flankers, Modern Princess Eau Sensuelle and Éclat de Nuit in 2018, and we debuted a new scent called
A Girl in Capri in 2019.
Lily
Aldridge— In 2018, Interstellar Brands LLC, a wholly-owned subsidiary of the Company announced the development of a
new fragrance line in collaboration with supermodel Lily Aldridge after signing a license that expires December 31, 2023. This
marked the beginning of a strategic partnership between Interstellar and IMG Models, which manages Lily Aldridge, to develop a
direct-to-consumer e-commerce fragrance and beauty businesses for IMG Models’ diverse and dynamic client base. Despite her
popularity on social media fragrance, sales to date have been modest for our initial multi-scent fragrance line launched in September
2019. We are evaluating the potential for further product development.
MCM—
In 2019, we entered into an exclusive, 10-year worldwide license agreement with German luxury fashion house MCM for the creation,
development and distribution of fragrances under the MCM brand. The agreement has a 4-year automatic renewal option, potentially
extending the license until December 31, 2034.
Fusing
modern German craftsmanship and the traditional art of French perfumery, Inter Parfums will develop exceptional fragrances for
women and men that will celebrate the boldness, attitude and essence of MCM which defined the brand since its birth in Munich.
The long-term collaboration will thrive on innovation with a passionate, tailor-made approach built on a mastery of fragrance
expertise. Positioned in the prestige fine fragrance arena, MCM fragrances will fuse luxury with an expressive spirit of originality
and optimism. Every detail will enhance MCM’s identity, transcending perfumery with elegance and excellence.
Our
plan is to develop extraordinary fragrances for women and men that capture the creative spirit of MCM, with the first launch targeted
for the first quarter of 2021. We expect our distribution strategy to include MCM stores, high-end department stores and prestige
beauty retailers, with a geographic focus on Asia, the Americas and Europe.
Montblanc—In
2010, we entered into an exclusive license agreement to create, develop and distribute fragrances and fragrance related products
under the Montblanc brand. In 2015, we extended the agreement which now runs through December 31, 2025.
Montblanc
has achieved a world-renowned position in the luxury segment and has become a purveyor of exclusive products, which reflect today’s
exacting demands for timeless design, tradition and master craftsmanship. Through its leadership positions in writing instruments,
watches and leather goods, promising growth outlook in women’s jewelry, active presence in more than 70 countries, network of
more than 350 boutiques worldwide and high standards of product design and quality, Montblanc has grown to be our largest fragrance
brand.
In
2011, we launched our first new Montblanc fragrance, Legend, which quickly became our best-selling men’s line. In
2012, we launched our first women’s fragrance under the Montblanc brand, and our second men’s line, Emblem,
was launched in 2014. The Emblem line was expanded in 2015 to include Montblanc Emblem Intense and a new women’s
scent, Lady Emblem. In 2016, we further extended our successful Montblanc Legend line with another men’s scent,
Montblanc Legend Spirit. For 2017, we continued the rollout of the highly successful launch of Montblanc Legend Spirit
and launched Montblanc Legend Night. In 2019, we unveiled Montblanc Explorer, a new men’s scent, with
distribution in all geographic markets around the globe. For 2020, the Montblanc brand will introduce a new women’s scent,
which will debut in the fall.
Oscar
de la Renta— In 2013, we entered into an exclusive worldwide license to create, produce and distribute fragrances and
fragrance related products under the Oscar de la Renta brand. In 2019, the agreement was extended through December 31, 2031, with
an additional five-year option potentially extending the agreement through December 31, 2036. In 2014, we took over distribution
of fragrances within the brand’s legacy fragrance portfolio, and our first new women’s fragrance under the Oscar de
la Renta brand, Extraordinary, was launched in 2015. Oscar de la Renta Bella Blanca, a new Oscar de la Renta scent,
debuted in early 2018, and the Bella Rosa flanker was introduced in 2019. In 2020, the Oscar de la Renta Bella pillar
will add Bella Essence to the family tree.
Oscar
de la Renta is one of the world’s leading luxury goods firms. The New York-based company was established in 1965, and encompasses
a full line of women’s accessories, bridal, children’s wear, fragrance, beauty and home goods, in addition to its
internationally renowned signature women’s ready to wear collection. Oscar de la Renta products are sold globally in fine
department and specialty stores, www.oscardelarenta.com and through wholesale channels. The Oscar de la Renta brand has a loyal
following in the United States, Canada and Latin America.
Paul
Smith— In 2017, the Company renewed its license agreement for an additional four years with Paul Smith for the creation,
development, and distribution of fragrance products through December 2021, without any material changes in terms and conditions.
Our initial 12-year license agreement with Paul Smith was signed in 1998, and had previously been extended through December 31,
2017.
Paul
Smith is an internationally renowned British designer who creates fashion with a clear identity. Paul Smith has a modern style
which combines elegance, inventiveness and a sense of humor and enjoys a loyal following, especially in the UK and Japan. Fragrances
include: Paul Smith, Paul Smith Extrême, Paul Smith Rose Hello You, and Paul Smith Essential.
Repetto—
In 2011, we entered into a 13-year exclusive worldwide license agreement to create, produce and distribute fragrances under
the Repetto brand.
Created
in 1947 by Rose Repetto at the request of her son, dancer and choreographer Roland Petit, Repetto is today a legendary name in
the world of dance. For a number of years, it has developed timeless and must-have collections with a fully modernized signature
style ranging from dance shoes, ballet slippers, flat shoes, and sandals to more recently handbags and high-end accessories.
With
Repetto boutiques in several countries throughout the world, the brand has branched out into Asia, notably China, Hong Kong, Singapore,
Thailand, South Korea and Japan with a mix of cross-generational appeal and French chic. Our first Repetto fragrance line was
launched in 2013 and a floral scent was added in 2015. Despite this brand’s success with footwear, handbags and high-end
accessories, fragrance sales have been modest. Repetto’s most recent new scent, Dance with Repetto, debuted in 2018.
Rochas—
In 2015, we acquired the Rochas brand from The Procter & Gamble Company. Founded by Marcel Rochas in 1925, the brand began
as a fashion house and expanded into perfumery in the 1950s under Hélène Rochas’ direction. This transaction included
all brand names and registered trademarks for Rochas (Femme, Madame, Eau de Rochas, etc.), mainly for fragrance, cosmetics
and fashion.
This
acquisition opened a new page in the Company’s history by integrating for the first time both fragrances and fashion, allowing
us to apply a global approach to managing a fragrance brand with complete freedom in terms of creativity and aesthetic choices.
At the same time, we enjoy a very high degree of visibility establishing a position of even greater preeminence for Rochas in
the luxury goods universe. Rochas brand sales currently include approximately $2.2 million of royalties generated by the fashion
and accessory business via its portfolio of license agreements. Our first new fragrance for Rochas, Mademoiselle Rochas,
had a successful launch that began in the first quarter of 2017 in its traditional markets of France and Spain. In 2018, we debuted
flankers for Eau de Rochas and Mademoiselle Rochas and in late 2018, we launched our first new men’s line,
Rochas Moustache. In 2019, a seasonal limited edition called Escapade Exotique came to market, as well as the debut
of Mademoiselle Rochas Couture. A new men’s line, Byzance, debuted in early 2020.
S.T. Dupont— In 1997, we signed an exclusive worldwide
license agreement with S.T. Dupont for the creation, manufacture and distribution of S.T. Dupont fragrances. The license agreement
had been renewed several times and is now renewed annually, without any material changes in terms and conditions. S.T. Dupont
is a French luxury goods house founded in 1872, which is known for its fine writing instruments, lighters and leather goods. S.T.
Dupont fragrances include: S.T. Dupont Classic, S.T. Dupont Essence Pure, S.T. Dupont Collection and Be
Exceptional.
Van
Cleef & Arpels— In 2018, the Company renewed its license agreement for an additional six years with Van Cleef &
Arpels for the creation, development, and distribution of fragrance products through December 2024. Our initial 12-year license
agreement with Van Cleef & Arpels was signed in 2006.
Van
Cleef & Arpels fragrances in current distribution include: First and Collection Extraordinaire. Sales of the
Collection Extraordinaire line have experienced continued growth since its debut. We continue to introduce new additions
to the Van Cleef & Arpels Collection Extraordinaire assortment annually.
Business
Strategy
Focus
on prestige beauty brands. Prestige beauty brands are expected to contribute significantly to our growth. We focus on developing
and launching quality fragrances utilizing internationally renowned brand names. By identifying and concentrating in the most
receptive market segments and territories where our brands are known, and executing highly targeted launches that capture the
essence of the brand, we have had a history of successful launches. Certain fashion designers and other licensors choose us as
a partner, because our Company’s size enables us to work more closely with them in the product development process as well
as our successful track record.
Grow
portfolio brands through new product development and marketing. We grow through the creation of fragrance family extensions
within the existing brands in our portfolio. Every year or two, we create a new family of fragrances for each brand in our portfolio.
We frequently introduce seasonal and limited edition fragrances as well. With new introductions, we leverage our ability and experience
to gauge trends in the market and further leverage the brand name into different product families in order to maximize sales and
profit potential. We have had success in introducing new fragrance families (sub-brands, flanker brands or flankers) within our
brand franchises. Furthermore, we promote the performance of our prestige fragrance operations through knowledge of the market,
detailed analysis of the image and potential of each brand name, and a highly professional approach to international distribution
channels.
Continue
to add new brands to our portfolio, through new licenses or acquisitions. Prestige brands are the core of our business and
we intend to add new prestige beauty brands to our portfolio. Over the past 25 years, we have built our portfolio of well-known
prestige brands through acquisitions and new license agreements. We intend to further build on our success in prestige fragrances
and pursue new licenses and acquire new brands to strengthen our position in the prestige beauty market. To that end, in 2017,
we extended our Jimmy Choo license through December 31, 2031 and our Paul Smith license until December 2021. In 2018, we signed
new license agreements with GUESS?, Inc., Graff and Lily Aldridge and extended our license with Van Cleef & Arpels. In 2019,
we extended our license agreements for Abercrombie & Fitch, Hollister and Oscar de la Renta, and signed new licenses for Kate
Spade New York and MCM. As of December 31, 2019, we had cash, cash equivalents and short-term investments of approximately $253
million, which we believe should assist us in entering new brand licenses or out-right acquisitions. We identify prestige brands
that can be developed and marketed into a full and varied product families and, with our technical knowledge and practical experience
gained over time, take licensed brand names through all phases of concept, development, manufacturing, marketing and distribution.
Expand
existing portfolio into new categories. We selectively broaden our product offering beyond the fragrance category and offer
other fragrance related products and personal care products under some of our existing brands. We believe such product offerings
meet customer needs and further strengthen customer loyalty.
Continue
to build global distribution footprint. Our business is a global business and we intend to continue to build our global distribution
footprint. In order to adapt to changes in the environment and our business, in addition to our arrangements with third party
distributors globally, we are operating distribution subsidiaries or divisions in the major markets of the United States, France
and Spain for distribution of prestige fragrances. We may look into future joint arrangements or acquire distribution companies
within other key markets to distribute certain of our prestige brands. While building a global distribution footprint is part
of our long-term strategy, we may need to make certain decisions based on the short-term needs of the business. We believe that
in certain markets, vertical integration of our distribution network may be one of the keys to future growth of our Company, and
ownership of such distribution should enable us to better serve our customers’ needs in local markets and adapt more quickly
as situations may determine.
Production
and Supply
The
stages of the development and production process for all fragrances are as follows:
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Simultaneous
discussions with perfume designers and creators (includes analysis of esthetic and olfactory trends, target clientele and market
communication approach)
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Produce
mock-ups for final acceptance of bottles and packaging
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Receive
bids from component suppliers (glass makers, plastic processors, printers, etc.) and packaging companies
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Schedule
production and packaging
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Issue
component purchase orders
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Follow
quality control procedures for incoming components; and
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Follow
packaging and inventory control procedures.
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Suppliers
who assist us with product development include:
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Independent
perfumery design companies (Aesthete, Carré Basset, PI Design, Cent Degres)
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Perfumers
(IFF, Givaudan, Firmenich, Robertet, Takasago, Mane) which create a fragrance consistent with our expectations and, that of the
fragrance designers and creators
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Bottle
manufacturers (Pochet du Courval, Verescence, Verreries Brosse, Bormioli Luigi, Stoelzle Masnières ), caps (Qualipac, ALBEA,
RPC, Codiplas, LF Beauty, Texen Group)) or boxes (Autajon , MMPP, Nortier, Draeger)
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Production
specialists who carry out packaging (CCI, Edipar , Jacomo, SDPP, MF Productions, Biopack) or logistics (Bolloré Logistics
for storage, order preparation and shipment)
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Suppliers’
accounts for our European operations are primarily settled in euro and for our United States operations, suppliers’ accounts
are primarily settled in U.S. dollars. For our European operations components for our prestige fragrances are purchased from many
suppliers around the world and are primarily manufactured in France. For United States operations, components for our prestige
fragrances are sourced from many suppliers around the world and are primarily manufactured in the United States.
Marketing
and Distribution
Our
products are distributed in over 120 countries around the world through a selective distribution network. For our international
distribution, we either contract with independent distribution companies specializing in luxury goods or distribute prestige products
through our distribution subsidiaries. In each country, we designate anywhere from one to three distributors on an exclusive basis
for one or more of our name brands. We also distribute our products through a variety of duty free operators, such as airports
and airlines and select vacation destinations.
As
our business is a global one, we intend to continue to build our global distribution footprint. For distribution of brands within
our European based operations we operate through our distribution subsidiaries or divisions in the major markets of the United
States, France, Italy and Spain, in addition to our arrangements with third party distributors globally. Our third party distributors
vary in size depending on the number of competing brands they represent. This extensive and diverse network together with our
own distribution subsidiaries provides us with a significant presence in over 100 countries around the world.
Over
45% of our European based prestige fragrance net sales are denominated in U.S. dollars. We address certain financial exposures
through a controlled program of risk management that includes the use of derivative financial instruments. We primarily
enter into foreign currency forward exchange contracts to reduce the effects of fluctuating foreign currency exchange rates.
The
business of our European operations has become increasingly seasonal due to the timing of shipments by our distribution subsidiaries
and divisions to their customers, which are weighted to the second half of the year.
For
our United States operations, we distribute product to retailers and distributors in the United States as well as internationally,
including duty free and other travel-related retailers. We utilize our in-house sales team to reach our third party distributors
and customers outside the United States. In addition, the business of our United States operations has become increasingly seasonal
as shipments are weighted toward the second half of the year.
Competition
The
market for prestige fragrance products is highly competitive and sensitive to changing preferences and demands. The prestige fragrance
industry is highly concentrated around certain major players with resources far greater than ours. We compete with an original
strategy, regular and methodical development of quality fragrances for a growing portfolio of internationally renowned brand names.
Inventory
We
purchase raw materials and component parts from suppliers based on internal estimates of anticipated need for finished goods,
which enables us to meet production requirements for finished goods. We generally ship product to customers within 72 hours of
the receipt of their orders. Our business is not capital intensive, and it is important to note that we do not own manufacturing
facilities. We act as a general contractor and source our needed components from our suppliers. These components are received
at one of our distribution centers and then, based upon production needs, the components are sent to one of several third party
fillers which manufacture the finished product for us and then deliver them to one of our distribution centers.
Product
Liability
Our
United States operations maintain product liability coverage in an amount of $10.0 million, and our European operations maintain
product liability coverage in an amount of €20.0 million (approximately $22.5 million). Based upon our experience, we believe
this coverage is adequate and covers substantially all of the exposure we may have with respect to our products. We have never
been the subject of any material product liability claims.
Government
Regulation
A
fragrance is defined as a “cosmetic” under the Federal Food, Drug and Cosmetics Act. A fragrance must comply with
the labeling requirements of this FDC Act as well as the Fair Packaging and Labeling Act and its regulations. Some of our color
cosmetic products may contain menthol and are also classified as a “drug”. Under U.S. law, a product may be classified
as both a cosmetic and a drug. Additional regulatory requirements for products which are “drugs” include additional
labeling requirements, registration of the manufacturer and the semi-annual update of a drug list. In addition, various jurisdictions
prohibit the use of certain ingredients in fragrances and cosmetics.
Our
fragrances are subject to the approval of the Bureau of Alcohol, Tobacco and Firearms as a result of the use of specially denatured
alcohol. So far we have not experienced any difficulties in obtaining the required approvals.
Our
fragrance products that are manufactured or sold in Europe are subject to certain regulatory requirements of the European Union,
such as Cosmetic Directive 76/768/CEE and Regulation number 1223/2009 on cosmetic products, but as of the date of this report,
we have not experienced any material difficulties in complying with such requirements.
Trademarks
The
market for our products depends to a significant extent upon the value associated with our trademarks and brand names. We have
licenses or other rights to use, or own, the material trademark and brand name rights used in connection with the packaging, marketing
and distribution of our major products both in the United States and in other countries where such products are principally sold.
Therefore, trademark and brand name protection is important to our business. Although most of the brand names we license, use
or own are registered in the United States and in certain foreign countries in which we operate, we may not be successful in asserting
trademark or brand name protection. In addition, the laws of certain foreign countries may not protect our intellectual property
rights to the same extent as the laws of the United States. The costs required to protect our trademarks and brand names may be
substantial.
Under
various license and other agreements we have the right to use certain registered trademarks throughout the world for fragrance
products. These registered trademarks include:
In
addition, we are the registered trademark owner of several trademarks for fragrance and beauty products, including:
Employees
As
of January 1, 2020, we had 402 full-time employees worldwide. Of these, 296 are full-time employees of our European operations,
with 114 employees engaged in sales activities and 182 in administrative, production and marketing activities. Our United States
operations have 106 employees, and of these, 16 were engaged in sales activities and 90 in administrative, production and marketing
activities. We believe that our relationship with our employees is good.
Item
1A. Risk Factors.
You
should carefully consider these risk factors before you decide to purchase or sell shares of our common stock. These factors could
cause our future results to differ materially from those expressed or implied in forward-looking statements made by us. The trading
price of our common stock could decline due to any of these risks, and you may lose all or part of your investment.
We
are dependent upon the continuation and renewal of various licenses and other agreements for a significant portion of our sales,
and the loss of one or more licenses or agreements could have a material adverse effect on us.
All
of our rights relating to prestige fragrance brands, other than Lanvin and Rochas, are derived from licenses or other agreements
from unaffiliated third parties, and our business is dependent upon the continuation and renewal of such licenses and other agreements
on terms favorable to us. Each license or agreement is for a specific term and may have additional optional terms. Generally,
each license is subject to us making required royalty payments (which are subject to certain minimums), minimum advertising and
promotional expenditures and meeting minimum sales requirements. Other agreements are generally subject to meeting minimum sales
requirements. Just as the loss of a license or other significant agreement may have a material adverse effect on us, a renewal
on less favorable terms may also negatively impact us.
Our
business could be adversely affected by a prolonged downturn or recession in the United States, Europe, China or other countries
in which we conduct business.
A
prolonged economic downturn or recession in the United States, Europe, China or any of the other countries in which we do significant
business could materially and adversely affect our business, financial condition and results of operations. In particular, such
a downturn or recession could adversely impact (i) the level of spending by our ultimate consumers, (ii) our ability
to collect accounts receivable on a timely basis from certain customers, (iii) our ability of certain suppliers to fill our
orders for raw materials, packaging or co-packed finished goods on a timely basis, and (iv) the mix of our product sales.
Consumers
may reduce discretionary purchases of our products as a result of a general economic downturn.
We
believe that a high degree of global economic uncertainty could have a negative effect on consumer confidence, demand and spending. In
addition, we believe that consumer spending on beauty products is influenced by general economic conditions and the availability
of discretionary income. Accordingly, we may experience sustained periods of declines in sales during periods of economic downturn
as it may affect consumer purchasing patterns. In addition, a general economic downturn may result in reduced traffic in our customers’
stores which may, in turn, result in reduced net sales to our retail store customers. Any resulting material reduction in our
sales could have a material adverse effect on our business, financial condition and operating results.
Uncertainties
and deterioration in global credit markets, as evidenced by previous reductions in sovereign credit ratings in the United States
and Europe, could negatively impact suppliers, customers and consumers, which could have an adverse impact on our business as
a whole.
Uncertainties
and deterioration in the global credit markets as evidenced by previous reductions in sovereign credit ratings in the United States
and Europe, could negatively impact our suppliers, customers and consumers which, in turn, could have an adverse impact on our
business. While thus far, uncertainties in global credit markets have not significantly affected our access to credit due to our
strong credit rating, a further deterioration in global financial markets could make future financing difficult or more expensive.
Such lack of credit or lack of credit on favorable terms could have a material adverse effect on our business, financial condition
and operating results.
An outbreak of disease, epidemic or pandemic, or similar
public health threat, such as the coronavirus, could have a material adverse impact on the Company’s business, operating
results and financial condition.
An outbreak of disease, epidemic or pandemic, or similar public
threat, or fear of such an event, that negatively impacts consumer spending on or our products could have a material adverse impact
on the Company’s business, financial condition and operating results. Like most companies doing business around the globe,
ours is being impacted by the coronavirus. There are many unknowns as to the duration and severity of the situation which we are
closely monitoring. As a result of the trends in 2020 we have seen, there has been a significant decline in air travel and consumer
traffic in key shopping and tourist areas. The extent and potential short and long term impact of the coronavirus on the Company’s
operational and financial performance will depend on future developments, including the duration and spread of the outbreak, our
customers’ willingness to travel and purchase our products, and the impact on our supply chain and the financial markets,
all of which are highly uncertain and cannot be predicted.
If
our intangible assets, such as trademarks and licenses, become impaired, we may be required to record a significant non-cash charge
to earnings which would negatively impact our results of operations.
Under
United States generally accepted accounting principles, we review our intangible assets, including our trademarks and licenses,
for impairment annually in the fourth quarter of each fiscal year, or more frequently if events or changes in circumstances indicate
the carrying value of our intangible assets may not be fully recoverable. The carrying value of our intangible assets may not
be recoverable due to factors such as reduced estimates of future cash flows, including those associated with the specific brands
to which intangibles relate, or slower growth rates in our industry. Estimates of future cash flows are based on a long-term financial
outlook of our operations and the specific brands to which the intangible assets relate. However, actual performance in the near-term
or long-term could be materially different from these forecasts, which could impact future estimates and the recorded value of
the intangibles. Any significant impairment to our intangible assets would result in a significant charge to earnings in our financial
statements during the period in which the impairment is determined to exist.
If
we are unable to protect our intellectual property rights, specifically trademarks and brand names, our ability to compete could
be negatively impacted.
The
market for our products depends to a significant extent upon the value associated with trademarks and brand names that we license,
use or own. We have licenses or other rights to use, or own the material trademark and brand name rights in connection with the
packaging, marketing and distribution of our major products both in the United States and in other countries where such products
are principally sold. Therefore, trademark and brand name protection is important to our business. Although most of the brand
names we license, use or own are registered in the United States and in certain foreign countries in which we operate, we may
not be successful in asserting trademark or brand name protection. In addition, the laws of certain foreign countries may not
protect our intellectual property rights to the same extent as the laws of the United States. The costs required to protect our
trademarks and brand names may be substantial.
The
illegal distribution and sale by third parties of counterfeit versions of the Company’s products or the unauthorized diversion
by third parties of the Company’s products could have an adverse effect on the Company’s revenues and a negative impact
on the Company’s reputation and business.
Third
parties may illegally distribute and sell counterfeit versions of the Company’s products. These counterfeit products may
be inferior in terms of quality and other characteristics compared to the Company’s authentic products and/or the counterfeit
products could pose safety risks that the Company’s authentic products would not otherwise present to consumers. Consumers
could confuse counterfeit products with the Company’s authentic products, which could damage or diminish the image, reputation
and/or value of the Company’s brands and cause consumers to refrain from purchasing the Company’s products in the
future. In addition, the sale of the Company’s prestige products through non-authorized “grey market” channels
could damage or diminish the image, reputation and/or value of the Company’s brands and could adversely affect the Company’s
revenues and have a negative impact on the Company’s reputation.
Our
success depends on our ability to operate our business without infringing, misappropriating or otherwise violating the trademarks,
patents, copyrights and proprietary rights of other parties.
Our
commercial success depends at least in part on our ability to operate without infringing, misappropriating or otherwise violating
the trademarks, patents, copyrights and other proprietary rights of others. However, we cannot be certain that the conduct of
our business does not and will not infringe, misappropriate or otherwise violate such rights. Many companies have employed intellectual
property litigation as a way to gain a competitive advantage, and to the extent we gain greater visibility and market exposure,
we may also face a greater risk of being the subject of such litigation. For these and other reasons, third parties may allege
that our products, services or activities infringe, misappropriate or otherwise violate their trademark, patent, copyright or
other proprietary rights. Defending against allegations and litigation could be expensive, take significant time, divert management’s
attention from other business concerns, and delay getting our products to market. In addition, if we are found to be infringing,
misappropriating or otherwise violating third party trademark, patent, copyright or other proprietary rights, we may need to obtain
a license, which may not be available on commercially reasonable terms or at all, or redesign or rebrand our products, which may
not be possible. We may also be required to pay substantial damages or be subject to a court order prohibiting us and our customers
from selling certain products or engaging in certain activities. Our inability to operate our business without infringing, misappropriating
or otherwise violating the trademarks, patents, copyrights and proprietary rights of others could therefore have a material adverse
effect on our business, financial condition and results of operations.
The
success of our products is dependent on public taste.
Our
revenues are substantially dependent on the success of our products, which depends upon, among other matters, pronounced and rapidly
changing public tastes, factors which are difficult to predict and over which we have little, if any, control. In addition, we
have to develop successful marketing, promotional and sales programs in order to sell our fragrances and fragrance related products.
If we are not able to develop successful marketing, promotional and sales programs, then such failure will have a material adverse
effect on our business, financial condition and operating results.
We
are subject to extreme competition in the fragrance industry.
The
market for fragrance products is highly competitive and sensitive to changing market preferences and demands. Many of our competitors
in this market are larger than we are and have greater financial resources than are available to us, potentially allowing them
greater operational flexibility. Our success in the prestige fragrance industry is dependent upon our ability to continue to generate
original strategies and develop quality products that are in accord with ongoing changes in the market.
If
there is insufficient demand for our existing fragrance products, or if we do not develop future strategies and products that
withstand competition or we are unsuccessful in competing on price terms, then we could experience a material adverse effect on
our business, financial condition and operating results.
If
we are unable to acquire or license additional brands, or obtain the required financing for these agreements and arrangements,
then the growth of our business could be impaired.
Our
future expansion through acquisitions or new product license or distribution arrangements, if any, will depend upon the capital
resources and working capital available to us. Further, we may be unable to obtain financing or credit that we may require for
additional licenses, acquisitions or other transactions. We may be unsuccessful in identifying, negotiating, financing and consummating
such acquisitions or arrangements on terms acceptable to us, or at all, which could hinder our ability to increase revenues and
build our business. Just as the loss of a license or other significant agreement may have a material adverse effect on us, our
failure to acquire rights to new brands may also negatively impact us.
We
may engage in future acquisitions that we may not be able to successfully integrate or manage. These acquisitions may dilute our
stockholders and cause us to incur debt and assume contingent liabilities.
We
continuously review acquisition prospects that would complement our current product offerings, increase our size and geographic
scope of operations or otherwise offer growth and operating efficiency opportunities. The financing, if available, for any of
these acquisitions could significantly dilute our stockholders and/or result in an increase in our indebtedness. We may acquire
or make investments in businesses or products in the future, and such acquisitions may entail numerous integration risks and impose
costs on us, including:
|
|
●
|
difficulties
in assimilating acquired operations or products, including the loss of key employees from acquired businesses
|
|
|
●
|
diversion
of management’s attention from our core business
|
|
|
●
|
adverse
effects on existing business relationships with suppliers and customers
|
|
|
●
|
risks
of entering markets in which we have no or limited prior experience
|
|
|
●
|
dilutive
issuances of equity securities
|
|
|
●
|
incurrence
of substantial debt
|
|
|
●
|
assumption
of contingent liabilities
|
|
|
●
|
incurrence
of significant amortization expenses related to intangible assets and the potential impairment of acquired assets and
|
|
|
●
|
incurrence
of significant immediate write-offs.
|
Our
failure to successfully complete the integration of any acquired business could have a material adverse effect on our business,
financial condition and operating results.
Joint
arrangements or strategic alliances in geographic markets in which we have limited or no prior experience may expose us to additional
risks.
We
review, and from time to time may establish, arrangements and strategic alliances that we believe would complement our current
product offerings, increase the size and geographic scope of our operations or otherwise offer growth and operating efficiency
opportunities. These business relationships may require us to rely on the local expertise of our partners with respect to market
development, sales, local regulatory compliance and other matters. Further, there may be challenges with ensuring that such arrangements
or strategic alliances implement the appropriate internal controls to ensure compliance with the various laws and regulations
applicable to us as a U.S. public company. Accordingly, in addition to commercial and operational risk, these arrangements and
strategic alliances may entail risks such as reputational risk and regulatory compliance risk. In addition, there can be no assurance
that we will be able to identify suitable alliance or candidates, that we will be able to consummate any such alliances or arrangements
on favorable terms, or that we will realize the anticipated benefits of entering into any such alliances or arrangements.
We
are dependent upon Messrs. Jean Madar and Philippe Benacin, and the loss of their services could harm our business.
Jean
Madar, our Chief Executive Officer, and Philippe Benacin, our President and Chief Executive Officer of Interparfums SA, are responsible
for day-to-day operations as well as major decisions. Termination of their relationships with us, whether through death, incapacity
or otherwise, could have a material adverse effect on our operations, and we cannot assure you that qualified replacements can
be found.
Our
reliance on third party manufacturers could have a material adverse effect on us.
We
rely on outside sources to manufacture our fragrances and cosmetics. The failure of such third party manufacturers to deliver
either compliant, quality components or finished goods on a timely basis could have a material adverse effect on our business.
Although we believe there are alternate manufacturers available to supply our requirements, we cannot assure you that current
or alternative sources will be able to supply all of our demands on a timely basis. We do not intend to develop our own manufacturing
capacity. As these are third parties over whom we have little or no control, the failure of such third parties to provide components
or finished goods on a timely basis could have a material adverse effect on our business, financial condition and operating results.
Our
reliance on third party distributors could have a material adverse effect on us.
We
sell a substantial percentage of our prestige fragrances through independent distributors specializing in luxury goods. Given
the growing importance of distribution, we have modified our distribution model by owning a controlling interest in certain of
our distributors within key markets. However, we have little or no control over third party distributors and the failure of such
third parties to provide services on a timely basis could have a material adverse effect on our business, financial condition
and operating results. In addition, if we replace existing third party distributors with new third party distributors or with
our own distribution arrangements, then transition issues could have a material adverse effect on our business, financial condition
and operating results.
Terrorist
attacks, acts of war or military actions, other civil unrest or natural disasters may adversely affect territories in which we
operate, and therefore affect our business, financial condition and operating results.
Terrorist
attacks such as those that have occurred in Paris, France where we have our European headquarters, amongst other locations, and
attempted terrorist attacks, military responses to terrorist attacks, other military actions, or governmental action in response
to or in anticipation of a terrorist attack, or civil unrest as occurring in the Middle East, the Ukraine and Africa or natural
disasters, may adversely affect prevailing economic conditions. These events could result in work stoppages, reduced consumer
spending or reduced demand for our products. These developments subject our worldwide operations to increased risks and, depending
on their magnitude, could reduce net sales and therefore could have a material adverse effect on our business, financial condition
and operating results.
The
loss of or disruption in our distribution facilities could have a material adverse effect on our business, financial condition
and operating results.
We
currently have several distribution facilities in Europe, China and the United States. The loss of any of those facilities, as
well as the inventory stored in those facilities, would require us to find replacement facilities and assets. In addition, acts
of God, such as extreme weather conditions, natural disasters and the like or terrorist attacks, could disrupt our distribution
operations. If we cannot replace our distribution capacity and inventory in a timely, cost-efficient manner, then such failure
could have a material adverse effect on our business, financial condition and operating results.
Changes
in laws, regulations and policies that affect our business could adversely affect our financial results.
Our
business is subject to numerous laws, regulations and policies. Changes in the laws, regulations and policies, including
the interpretation or enforcement thereof, that affect, or will affect, our business, including changes in accounting standards,
tax laws and regulations, environmental or climate change laws, regulations or accords, trade rules and customs regulations,
or increased cosmetics regulation, and the outcome and expense of legal or regulatory proceedings, and any action we may take
as a result could adversely affect our financial results.
Our
success depends, in part, on the quality and safety of our products.
Our
success depends, in part, on the quality and safety of our products. If our products are found to be defective or unsafe,
or if they otherwise fail to meet our consumers’ standards, then our relationships with customers or consumers could suffer,
the appeal of one or more of our brands could be diminished, and we could lose sales and/or become subject to liability claims,
any of which could result in a material adverse effect on our business, results of operations and financial condition.
We
are subject to risks related to our foreign operations, and a disruption in our operations or supply chain could adversely affect
our business and financial results.
We
operate on a global basis, with a substantial portion of our net sales and net income generated outside the United States, and
we anticipate for the foreseeable future that a substantial portion of our net sales and net income will be generated outside
the United States. A substantial portion of our cash, cash equivalents and short-term investments that result from these earnings
remain outside the United States. As a company engaged in manufacturing and distribution on a global scale, we are subject to
many risks and uncertainties, including:
|
|
●
|
changes
in foreign laws, regulations and policies, including restrictions on trade, import and export license requirements, and tariffs
and taxes, as well as changes in United States laws and regulations relating to foreign trade and investment; and
|
|
|
●
|
industrial
accidents, environmental events, strikes and other labor disputes, disruptions in supply chain or information technology, loss
or impairment of key manufacturing sites or suppliers, product quality control, safety, as well as natural disasters, adverse
weather conditions, social, economic and geopolitical conditions, such as terrorist attacks, war or other military action and
other external factors over which we have no control.
|
These
risks could have a material adverse effect on our business, prospects, results of operations and financial condition.
Changing
political conditions could adversely impact our business and financial results.
Changes
in the political conditions in markets in which we manufacture, sell or distribute our products may be difficult to predict and
may adversely affect our business and financial results. For example, the United Kingdom’s recent withdrawal from the European
Union (“Brexit”) has created uncertainty regarding, among other things, the U.K.’s future legal and economic framework
and how the U.K. will interact with other countries, including with respect to the free movement of goods, services, capital and
people. In addition, results of elections, referendums or other political processes in certain markets in which our products are
manufactured, sold or distributed could create uncertainty regarding how existing governmental policies, laws and regulations
may change, including with respect to sanctions, taxes, the movement of goods, services, capital and people between countries
and other matters. The potential implications of such uncertainty, which include, among others, exchange rate fluctuations, tariffs,
trade barriers and market contraction, could adversely affect the Company’s business and financial results.
Changes
in foreign tax provisions, the adoption of new tax legislation or exposure to additional tax liabilities could affect our profitability
and cash flows.
In
addition to being subject to taxation in the United States, we are subject to income and other taxes in other foreign jurisdictions.
Our effective tax rate in the future could be adversely affected by changes to our operating structure, changes in the mix of
earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes
in tax laws and the discovery of new information in the course of our tax return preparation process. From time to time, tax proposals
are introduced or considered by the United States Congress or the legislative bodies in foreign jurisdictions that could also
affect our tax rate, the carrying value of our deferred tax assets, or our other tax liabilities. Our tax liabilities are also
affected by the amounts we charge for inventory, services, licenses, funding, cross-jurisdictional transfer pricing, and other
items in intercompany transactions. A negative determination or ultimate disposition in any tax audit, changes in tax laws or
tax rates, or the ability to utilize our deferred tax assets could materially affect our tax provision, net income and cash flows
in future periods.
The
international character of our business renders us subject to fluctuation in foreign currency exchange rates and international
trade tariffs, barriers and other restrictions.
A
substantial portion of our European operations’ net sales (over 45%) are sold in U.S. dollars. In an effort to reduce our
exposure to foreign currency exchange fluctuations, we engage in a controlled program of risk management that includes the use
of derivative financial instruments for all major currencies with which we operate. Despite such actions, fluctuations in foreign
currency exchange rates for the U.S. dollar, particularly with respect to the euro, could have a material adverse effect on our
operating results. Possible import, export, tariff and other trade barriers, which could be imposed by the United States, the
European Union or other countries might also have a material adverse effect on our operating results.
Our
business is subject to governmental regulation, which could impact our operations.
Fragrance
products must comply with the labeling requirements of the Federal Food, Drug and Cosmetics Act as well as the Fair Packaging
and Labeling Act and their regulations. Some of our color cosmetic products may also be classified as a “drug”. Additional
regulatory requirements for products which are “drugs” include additional labeling requirements, registration of the
manufacturer and the semi-annual update of a drug list. In addition, various jurisdictions prohibit the use of certain ingredients
in fragrances and cosmetics.
Our
fragrances are subject to the approval of the Bureau of Alcohol, Tobacco and Firearms as a result of the use of specially denatured
alcohol. So far, we have not experienced any difficulties in obtaining the required approvals.
Our
fragrance products that are manufactured or sold in Europe are subject to certain regulatory requirements of the European Union,
such as Cosmetic Directive 76/768/CEE and Regulation number 1223/2009 on cosmetic products, but as of the date of this report,
we have not experienced any material difficulties in complying with such requirements.
However,
we cannot assure you that, should we use proscribed ingredients in our fragrance products that we develop or market, or develop
or market fragrance products with different ingredients, or should existing regulations or requirements be revised, we would not
in the future experience difficulty in complying with such requirements, which could have a material adverse effect on our results
of operations.
Our
information systems and websites may be susceptible to outages, hacking and other risks.
We
have information systems that support our business processes, including product development, production, marketing, order processing,
sales, distribution, finance and intra-company communications. We also have Internet websites in the United States and Europe. These
systems may be susceptible to outages due to fire, floods, power loss, telecommunications failures, hacking and similar events. Despite
the implementation of network security measures, our systems may be vulnerable to computer viruses, hacking and similar disruptions
from unauthorized tampering. The occurrence of these or other events could disrupt or damage our information systems and
adversely affect our business and results of operations.
Our
failure to protect our reputation, or the failure of our partners to protect their reputations, could have a material adverse
effect on our brand images.
Our
ability to maintain our reputation is critical to our various brand images. Our reputation could be jeopardized if we fail to
maintain high standards for merchandise quality and integrity or if we, or the third parties with whom we do business, do not
comply with regulations or accepted practices. Any negative publicity about these types of concerns may reduce demand for our
merchandise. Failure to comply with ethical, social, product, labor and environmental standards, or related political considerations,
such as animal testing, could also jeopardize our reputation and potentially lead to various adverse consumer actions, including
boycotts. Failure to comply with local laws and regulations, including applicable U.S. trade sanctions, to maintain an effective
system of internal controls or to provide accurate and timely financial statement information could also hurt our reputation.
We are also dependent on the reputations of our brand partners and licensors, which can be affected by matters outside of our
control. Damage to our reputation or the reputations of our brand partners or licensors or loss of consumer confidence for any
of these or other reasons could have a material adverse effect on our results of operations, financial condition and cash flows,
as well as require additional resources to rebuild our reputation.
Our
business is subject to seasonal variability.
Our
business is somewhat seasonal due to the timing of shipments to our customers, which are weighted to the second half of the year.
Accordingly, our financial performance, sales, working capital requirements, cash flow and borrowings generally experience variability
during the third and fourth quarters.
The
trading prices of our securities periodically may rise or fall based on the accuracy of predictions of our earnings or other financial
performance.
Our
business planning process is designed to maximize our long-term strength, growth and profitability, not to achieve an earnings
target in any particular fiscal quarter. We believe that this longer-term focus is in the best interests of our Company and
our stockholders. At the same time, however, we recognize that it may be helpful to provide investors with guidance as to
our forecast of annual net sales and earnings per share. Accordingly, we provide guidance as to our expected annual net sales,
and earnings per share, which is updated as appropriate throughout the year. While we generally provide updates to our guidance
when we report our results each fiscal quarter if called for, we assume no responsibility to update any of our forward-looking
statements at such times or otherwise. In addition, longer-term guidance that we may from time to time provide is based on
goals that we believe, at the time guidance is given, are reasonably attainable.
In
all of our public statements when we make, or update, a forward-looking statement about our sales and/or earnings expectations
or expectations regarding other initiatives, we accompany such statements directly, or by reference to a public document, with
a list of factors that could cause our actual results to differ materially from those we expect. Such a list is included,
among other places, in our earnings press releases (by reference to our periodic filings with the Securities and Exchange Commission)
and in our periodic filings with the Securities and Exchange Commission (e.g., in our reports on Form 10-K and Forms 10-Q).
These and other factors may make it difficult for outside observers, such as research analysts, to predict what our earnings will
be in any given fiscal quarter or year.
Outside
analysts and investors have the right to make their own predictions of our financial results for any future period. Outside
analysts, however, have access to no more material information about our results or plans than any other public investor, and
we do not endorse or adopt their predictions as to our future performance. Nor do we assume any responsibility to correct
the predictions of outside analysts or others when they differ from our own internal expectations. If and when we announce
actual results that differ from those that outside analysts or others have been predicting, the market price of our securities
could be affected. Investors who rely on the predictions of outside analysts or others when making investment decisions with
respect to our securities do so at their own risk. We take no responsibility for any losses suffered as a result of such
changes in the prices of our securities.
Item
1B. Unresolved Staff Comments.
None.
Item
2. Properties
United
States Operations
We maintain our corporate headquarters and United States operations
in approximately 24,900 square feet with a term that expires on December 31, 2029, and have been at the same location in New York
City since 1992. We also have a 140,000 square foot distribution center in New Jersey, and this lease expires on October 31, 2025.
In addition, we maintain office space in Hong Kong with a lease that expires in June 2020. In August 2019 we opened a small distribution
center in Shanghai, China that expires in July 2020.
European
Operations
Our
European operations maintain their corporate headquarters on the Champs Elysees in Paris France, with leases for various units
that expire from March 2022 to September 2026, and a studio and operations departments at a second location in Paris with a lease
that expires in June 2021. United States distribution operations for European operations maintain their headquarters in New York
City, with a lease that expires in May 2029. A small office is located Singapore for Asia-Pacific distribution by European operations.
The
approximately 333,700 square foot distribution center for European operations is located in Criquebeuf sur Seine, France, with
a seven year term that expires May 2027 and an option to extend the term for an additional two years.
Interparfums SA has had an agreement with Bolloré Logistics
(and its predecessor, Sagatrans, S.A.) for warehousing and distribution services for several years. The current agreement with
Bolloré Logistics for warehousing and distribution services expires on December 31, 2020. Service fees payable to Bolloré
Logistics are calculated based upon a percentage of sales, which is customary in the industry. Service fees actually paid were
€4.9 million, €5.2 million and €4.2 million in 2019, 2018 and 2017, respectively.
We
believe our office and warehouse facilities are satisfactory for our present needs and those for the foreseeable future.
Item
3. Legal Proceedings
We
are not a party to any material lawsuits.
Item
4. Mine Safety Disclosures
Not
applicable.
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities
The Market for Our Common Stock
Our Company’s common stock, $.001 par value
per share, is traded on The Nasdaq Global Select Market under the symbol “IPAR”. The following table sets forth in
dollars, the range of high and low closing prices for the past two fiscal years for our common stock.
|
Fiscal 2019
|
|
High Closing Price
|
|
|
Low Closing Price
|
|
|
Fourth Quarter
|
|
|
81.40
|
|
|
|
66.65
|
|
|
Third Quarter
|
|
|
71.58
|
|
|
|
62.38
|
|
|
Second Quarter
|
|
|
77.34
|
|
|
|
63.53
|
|
|
First Quarter
|
|
|
80.99
|
|
|
|
58.50
|
|
|
Fiscal 2018
|
|
High Closing Price
|
|
|
Low Closing Price
|
|
|
Fourth Quarter
|
|
|
66.48
|
|
|
|
55.88
|
|
|
Third Quarter
|
|
|
66.25
|
|
|
|
53.75
|
|
|
Second Quarter
|
|
|
54.75
|
|
|
|
46.25
|
|
|
First Quarter
|
|
|
49.15
|
|
|
|
42.00
|
|
As of February 10, 2020, the number of record
holders, which include brokers and broker nominees, etc., of our common stock was 37. We believe there are approximately
16,100 beneficial owners of our common stock.
Corporate Performance Graph
The following graph compares the performance
for the periods indicated in the graph of our common stock with the performance of the Nasdaq Market Index and the average performance
of a group of the Company’s peer corporations consisting of: Avon Products Inc., CCA Industries, Inc., Colgate-Palmolive
Co., Estée Lauder Companies, Inc., Inter Parfums, Inc., Kimberly Clark Corp., Natural Health Trends Corp., Procter &
Gamble Co., Revlon, Inc., Spectrum Brands Holdings, Inc., Stephan Co., Summer Infant, Inc. and United Guardian, Inc. The graph
assumes that the value of the investment in our common stock and each index was $100 at the beginning of the period indicated in
the graph, and that all dividends were reinvested.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL
RETURN*
Among Inter Parfums, Inc., the NASDAQ Composite Index,
and a Peer Group
|
|
*
|
$100 invested on 12/31/14 in stock or index, including reinvestment of dividends. Fiscal year ending December 31.
|
Below is the list of the data points for
each year that corresponds to the lines on the above graph.
|
|
|
12/14
|
|
|
12/15
|
|
|
12/16
|
|
|
12/17
|
|
|
12/18
|
|
|
12/19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inter Parfums, Inc.
|
|
|
100.00
|
|
|
|
88.41
|
|
|
|
124.00
|
|
|
|
167.48
|
|
|
|
256.80
|
|
|
|
289.48
|
|
|
NASDAQ Composite
|
|
|
100.00
|
|
|
|
106.96
|
|
|
|
116.45
|
|
|
|
150.96
|
|
|
|
146.67
|
|
|
|
200.49
|
|
|
Peer Group
|
|
|
100.00
|
|
|
|
94.92
|
|
|
|
99.10
|
|
|
|
114.27
|
|
|
|
113.19
|
|
|
|
154.63
|
|
Dividends
In October 2018, our Board of Directors
authorized a 31% increase in the annual dividend to $1.10 per share on an annual basis. In October 2019, our Board of Directors
authorized a 20% increase in the annual dividend to $1.32 per share on an annual basis. The next quarterly cash dividend of $0.33
per share is payable on April 15, 2020 to shareholders of record on March 31, 2020.
Sales of Unregistered Securities
In December 2019, our non-employee directors
exercised stock options to purchase an aggregate of 2,750 shares of restricted common stock. These transactions were exempt from
the registration requirements of Section 5 of the Securities Act under Sections 4(2) and 4(6) of the Securities Act. Each option
holder agreed that, if the option is exercised, the option holder would purchase his or her common stock for investment and not
for resale to the public. Also, we provide all option holders with all reports we file with the SEC and press releases issued by
us.
Item 6. Selected Financial Data
The following selected financial data have
been derived from our financial statements and should be read in conjunction with those financial statements, including the related
footnotes.
|
|
|
Years Ended December 31,
|
|
|
(In thousands except per share data)
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
Income statement data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
713,514
|
|
|
$
|
675,574
|
|
|
$
|
591,251
|
|
|
$
|
521,072
|
|
|
$
|
468,540
|
|
|
Cost of sales
|
|
|
267,578
|
|
|
|
248,012
|
|
|
|
214,965
|
|
|
|
194,601
|
|
|
|
179,069
|
|
|
Selling, general and administrative expenses
|
|
|
341,209
|
|
|
|
332,831
|
|
|
|
295,540
|
|
|
|
258,787
|
|
|
|
228,268
|
|
|
Operating income
|
|
|
104,727
|
|
|
|
94,731
|
|
|
|
78,623
|
|
|
|
66,678
|
|
|
|
61,203
|
|
|
Income before taxes
|
|
|
105,146
|
|
|
|
95,859
|
|
|
|
78,065
|
|
|
|
67,074
|
|
|
|
60,496
|
|
|
Net income attributable to the noncontrolling interest
|
|
|
15,821
|
|
|
|
15,922
|
|
|
|
13,659
|
|
|
|
9,917
|
|
|
|
8,532
|
|
|
Net income attributable to Inter Parfums, Inc.
|
|
|
60,249
|
|
|
|
53,793
|
|
|
|
41,594
|
|
|
|
33,331
|
|
|
|
30,437
|
|
|
Net income attributable to Inter Parfums, Inc. common shareholders per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.92
|
|
|
$
|
1.72
|
|
|
$
|
1.33
|
|
|
$
|
1.07
|
|
|
$
|
0.98
|
|
|
Diluted
|
|
$
|
1.90
|
|
|
$
|
1.71
|
|
|
$
|
1.33
|
|
|
$
|
1.07
|
|
|
$
|
0.98
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
31,451
|
|
|
|
31,308
|
|
|
|
31,172
|
|
|
|
31,072
|
|
|
|
30,996
|
|
|
Diluted
|
|
|
31,689
|
|
|
|
31,522
|
|
|
|
31,305
|
|
|
|
31,176
|
|
|
|
31,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
$
|
8,729
|
|
|
$
|
11,031
|
|
|
$
|
11,914
|
|
|
$
|
15,341
|
|
|
$
|
9,078
|
|
|
|
|
As at December 31,
|
|
|
(In thousands except per share data)
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
Balance sheet and other data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
192,417
|
|
|
$
|
193,136
|
|
|
$
|
208,343
|
|
|
$
|
161,828
|
|
|
$
|
176,967
|
|
|
Short-term investments
|
|
|
60,714
|
|
|
|
67,870
|
|
|
|
69,899
|
|
|
|
94,202
|
|
|
|
82,847
|
|
|
Working capital
|
|
|
388,831
|
|
|
|
382,425
|
|
|
|
382,171
|
|
|
|
337,977
|
|
|
|
337,674
|
|
|
Total assets
|
|
|
828,832
|
|
|
|
797,829
|
|
|
|
777,772
|
|
|
|
682,409
|
|
|
|
687,659
|
|
|
Short-term bank debt
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
Long-term debt (including current portion)
|
|
|
23,060
|
|
|
|
46,061
|
|
|
|
60,579
|
|
|
|
74,562
|
|
|
|
98,606
|
|
|
Lease liabilities (including current portion)
|
|
|
29,991
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
Inter Parfums, Inc. shareholders’ equity
|
|
|
468,006
|
|
|
|
447,607
|
|
|
|
433,298
|
|
|
|
370,391
|
|
|
|
365,587
|
|
|
Dividends declared per share
|
|
$
|
1.155
|
|
|
$
|
0.905
|
|
|
$
|
0.72
|
|
|
$
|
0.62
|
|
|
$
|
0.52
|
|
Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations
Overview
We operate in the fragrance business, and
manufacture, market and distribute a wide array of fragrances and fragrance related products. We manage our business in two segments,
European based operations and United States based operations. Certain prestige fragrance products are produced and marketed by
our European operations through our 73% owned subsidiary in Paris, Interparfums SA, which is also a publicly traded company as
27% of Interparfums SA shares trade on the NYSE Euronext.
We produce and distribute our European based
fragrance products primarily under license agreements with brand owners, and European based fragrance product sales represented
approximately 76%, 80% and 81% of net sales for 2019, 2018 and 2017, respectively. We have built a portfolio of prestige brands,
which include Boucheron, Coach, Jimmy Choo, Karl Lagerfeld, Kate Spade New York, Lanvin, Montblanc, Paul Smith, Repetto, Rochas,
S.T. Dupont and Van Cleef & Arpels, whose products are distributed in over 120 countries around the world.
Through our United States operations, we
also market fragrance and fragrance related products. United States operations represented 24%, 20% and 19% of net sales in 2019,
2018 and 2017, respectively. These fragrance products are sold or to be sold primarily pursuant to license or other agreements
with the owners of the Abercrombie & Fitch, Anna Sui, bebe, Dunhill, French Connection, Graff, GUESS, Hollister, MCM and
Oscar de la Renta brands.
With respect to the Company’s largest
brands, we own the Lanvin brand name for our class of trade, and license the Montblanc, Jimmy Choo, Coach and GUESS brand names.
As a percentage of net sales, product sales for the Company’s largest brands were as follows:
|
|
|
Year Ended December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
Montblanc
|
|
|
22
|
%
|
|
|
19
|
%
|
|
|
21
|
%
|
|
Jimmy Choo
|
|
|
16
|
%
|
|
|
17
|
%
|
|
|
18
|
%
|
|
Coach
|
|
|
14
|
%
|
|
|
15
|
%
|
|
|
10
|
%
|
|
GUESS (license commenced April 1, 2018)
|
|
|
10
|
%
|
|
|
n/a
|
|
|
|
n/a
|
|
|
Lanvin
|
|
|
8
|
%
|
|
|
10
|
%
|
|
|
11
|
%
|
Quarterly sales fluctuations are influenced
by the timing of new product launches as well as the third and fourth quarter holiday season. In certain markets where we sell
directly to retailers, seasonality is more evident. We sell directly to retailers in France as well as through our own distribution
subsidiaries in Italy, Spain and the United States.
We grow our business in two distinct ways.
First, we grow by adding new brands to our portfolio, either through new licenses or other arrangements or out-right acquisitions
of brands. Second, we grow through the introduction of new products and by supporting new and established products through advertising,
merchandising and sampling as well as by phasing out underperforming products so we can devote greater resources to those products
with greater potential. The economics of developing, producing, launching and supporting products influence our sales and operating
performance each year. Our introduction of new products may have some cannibalizing effect on sales of existing products,
which we take into account in our business planning.
Our business is not capital intensive, and
it is important to note that we do not own manufacturing facilities. We act as a general contractor and source our needed components
from our suppliers. These components are received at one of our distribution centers and then, based upon production needs, the
components are sent to one of several third party fillers, which manufacture the finished product for us and then deliver them
to one of our distribution centers.
As with any global business, many aspects
of our operations are subject to influences outside our control. We believe we have a strong brand portfolio with global reach
and potential. As part of our strategy, we plan to continue to make investments behind fast-growing markets and channels to grow
market share.
Our reported net sales are impacted by changes
in foreign currency exchange rates. A strong U.S. dollar has a negative impact on our net sales. However, earnings are positively
affected by a strong dollar, because over 45% of net sales of our European operations are denominated in U.S. dollars, while almost
all costs of our European operations are incurred in euro. Conversely, a weak U.S. dollar has a favorable impact on our net sales
while gross margins are negatively affected. We address certain financial exposures through a controlled program of risk management
that includes the use of derivative financial instruments, and primarily enter into foreign currency forward exchange contracts
to reduce the effects of fluctuating foreign currency exchange rates. We are also carefully monitoring currency trends in
the United Kingdom as a result of the volatility created from the United Kingdom’s exit from the European Union. We have
evaluated our pricing models and we do not expect any significant pricing changes. However, if the devaluation of the British Pound
worsens, it may affect future gross profit margins from sales in the territory.
Recent Important Events
Abercrombie & Fitch and Hollister
In November 2019, we extended our license
for both the Abercrombie & Fitch and Hollister brands until December 31, 2022, and added automatic renewals unless terminated
on 3 years’ notice.
MCM
In September 2019, we entered into an exclusive,
10-year worldwide license agreement with German luxury fashion house MCM for the creation, development and distribution of fragrances
under the MCM brand. Our rights under such license are subject to certain minimum advertising expenditures and royalty payments
as are customary in our industry.
Oscar de la Renta
In September 2019, we extended our license
through December 31, 2031, and added an additional five-year extension option through December 31, 2036. The original license agreement,
signed in October 2013, would have expired on December 31, 2025.
Kate Spade New York
In June 2019, we entered into an exclusive
11-year worldwide license agreement with Kate Spade New York for the creation, development and distribution of fragrances under
the Kate Spade brand. Our rights under such license are subject to certain minimum advertising expenditures and royalty payments
as are customary in our industry.
Discussion of Critical Accounting Policies
We make estimates and assumptions in the
preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America.
Actual results could differ significantly from those estimates under different assumptions and conditions. We believe the following
discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial
condition and results of operations. These accounting policies generally require our management’s most difficult and subjective
judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Management
of the Company has discussed the selection of significant accounting policies and the effect of estimates with the Audit Committee
of the Board of Directors.
Sales Returns
Generally, we do not permit customers to
return their unsold products. However, for U.S. based customers, we allow returns if properly requested, authorized and approved.
We regularly review and revise, as deemed necessary, our estimate of reserves for future sales returns based primarily upon historic
trends and relevant current data, including information provided by retailers regarding their inventory levels. In addition, as
necessary, specific accruals may be established for significant future known or anticipated events. The types of known or anticipated
events that we consider include, but are not limited to, the financial condition of our customers, store closings by retailers,
changes in the retail environment and our decision to continue to support new and existing products. We record our estimate
of potential sales returns as a reduction of sales and cost of sales with corresponding entries to accrued expenses, to record
the refund liability, and inventory, for the right to recover goods from the customer. Returned products are valued based
upon their estimated realizable value. The physical condition and marketability of returned products are the major factors we consider
in estimating realizable value. Actual returns, as well as estimated realizable values of returned products, may differ significantly,
either favorably or unfavorably, from our estimates, if factors such as economic conditions, inventory levels or competitive conditions
differ from our expectations.
Long-Lived Assets
We evaluate indefinite-lived intangible
assets for impairment at least annually during the fourth quarter, or more frequently when events occur or circumstances change,
such as an unexpected decline in sales, that would more likely than not indicate that the carrying value of an indefinite-lived
intangible asset may not be recoverable. When testing indefinite-lived intangible assets for impairment, the evaluation requires
a comparison of the estimated fair value of the asset to the carrying value of the asset. The fair values used in our evaluations
are estimated based upon discounted future cash flow projections using a weighted average cost of capital of 7.94%. The cash flow
projections are based upon a number of assumptions, including, future sales levels and future cost of goods and operating expense
levels, as well as economic conditions, changes to our business model or changes in consumer acceptance of our products which are
more subjective in nature. If the carrying value of an indefinite-lived intangible asset exceeds its fair value, an impairment
charge is recorded.
We believe that the assumptions we have
made in projecting future cash flows for the evaluations described above are reasonable. However, if future actual results do not
meet our expectations, we may be required to record an impairment charge, the amount of which could be material to our results
of operations.
At December 31, 2019 indefinite-lived intangible
assets aggregated $121.0 million. The following table presents the impact a change in the following significant assumptions would
have had on the calculated fair value in 2019 assuming all other assumptions remained constant:
|
$ in millions
|
|
Change
|
|
|
Increase (decrease) to fair
value
|
|
|
|
|
|
|
|
|
|
|
Weighted average cost of capital
|
|
|
+10
|
%
|
|
$
|
(14.9
|
)
|
|
Weighted average cost of capital
|
|
|
-10
|
%
|
|
$
|
15.0
|
|
|
Future sales levels
|
|
|
+10
|
%
|
|
$
|
13.3
|
|
|
Future sales levels
|
|
|
-10
|
%
|
|
$
|
(13.3
|
)
|
Intangible assets subject to amortization
are evaluated for impairment testing whenever events or changes in circumstances indicate that the carrying amount of an amortizable
intangible asset may not be recoverable. If impairment indicators exist for an amortizable intangible asset, the undiscounted future
cash flows associated with the expected service potential of the asset are compared to the carrying value of the asset. If our
projection of undiscounted future cash flows is in excess of the carrying value of the intangible asset, no impairment charge is
recorded. If our projection of undiscounted future cash flows is less than the carrying value of the intangible asset, an impairment
charge would be recorded to reduce the intangible asset to its fair value. The cash flow projections are based upon a number of
assumptions, including future sales levels and future cost of goods and operating expense levels, as well as economic conditions,
changes to our business model or changes in consumer acceptance of our products which are more subjective in nature. In those cases
where we determine that the useful life of long-lived assets should be shortened, we would amortize the net book value in excess
of the salvage value (after testing for impairment as described above), over the revised remaining useful life of such asset thereby
increasing amortization expense. We believe that the assumptions we have made in projecting future cash flows for the evaluations
described above are reasonable.
In determining the useful life of our Lanvin
brand names and trademarks, we applied the provisions of ASC topic 350-30-35-3. The only factor that prevented us from determining
that the Lanvin brand names and trademarks were indefinite life intangible assets was Item c. “Any legal, regulatory, or
contractual provisions that may limit the useful life.” The existence of a repurchase option in 2025 may limit the useful
life of the Lanvin brand names and trademarks to the Company. However, this limitation would only take effect if the repurchase
option were to be exercised and the repurchase price was paid. If the repurchase option is not exercised, then the Lanvin brand
names and trademarks are expected to continue to contribute directly to the future cash flows of our Company and their useful life
would be considered to be indefinite.
With respect to the application of ASC topic
350-30-35-8, the Lanvin brand names and trademarks would only have a finite life to our Company if the repurchase option were exercised,
and in applying ASC topic 350-30-35-8, we assumed that the repurchase option is exercised. When exercised, Lanvin has an obligation
to pay the exercise price and the Company would be required to convey the Lanvin brand names and trademarks back to Lanvin. The
exercise price to be received (Residual Value) is well in excess of the carrying value of the Lanvin brand names and trademarks,
therefore no amortization is required.
Quantitative Analysis
During the three-year period ended December
31, 2019, we have not made any material changes in our assumptions underlying these critical accounting policies or to the related
significant estimates. The results of our business underlying these assumptions have not differed significantly from our expectations.
While we believe the estimates we have made
are proper and the related results of operations for the period are presented fairly in all material respects, other assumptions
could reasonably be justified that would change the amount of reported net sales, cost of sales, and selling, general and administrative
expenses as they relate to the provisions for anticipated sales returns, allowance for doubtful accounts and inventory obsolescence
reserves. For 2019, had these estimates been changed simultaneously by 5% in either direction, our reported gross profit would
have increased or decreased by approximately $0.5 million and selling, general and administrative expenses would have changed by
approximately $0.1 million. The collective impact of these changes on 2019 operating income, net income attributable to Inter Parfums,
Inc., and net income attributable to Inter Parfums, Inc. per diluted share would be an increase or decrease of approximately $0.5
million, $0.2 million and $0.01, respectively.
Results of Operations
|
Net Sales
|
|
Years ended December 31,
|
|
|
(in millions)
|
|
2019
|
|
|
% Change
|
|
|
2018
|
|
|
% Change
|
|
|
2017
|
|
|
European based product sales
|
|
$
|
542.1
|
|
|
|
1
|
%
|
|
$
|
537.6
|
|
|
|
13
|
%
|
|
$
|
476.5
|
|
|
United States based product sales
|
|
|
171.4
|
|
|
|
24
|
%
|
|
|
138.0
|
|
|
|
20
|
%
|
|
|
114.8
|
|
|
Total net sales
|
|
$
|
713.5
|
|
|
|
6
|
%
|
|
$
|
675.6
|
|
|
|
14
|
%
|
|
$
|
591.3
|
|
Net sales increased 6% in 2019 to $713.5
million, as compared to $675.6 million in 2018. At comparable foreign currency exchange rates, net sales increased 8%. Net sales
increased 14% in 2018 to $675.6 million, as compared to $591.3 million in 2017. At comparable foreign currency exchange rates,
net sales increased 13%. The average U.S. dollar/euro exchange rates were 1.12 in 2019 and 1.18 in 2018 and 1.13 in 2017.
European based product sales increased 1%
in 2019 to $542.1 million, as compared to $537.6 million in 2018. At comparable foreign currency exchange rates, European based
product sales increased 4% in 2019. European based product sales increased 13% in 2018 to $537.6 million, as compared to $476.5
million in 2017. At comparable foreign currency exchange rates, European based product sales increased 11% in 2018.
European based product sales came in as
expected in 2019 despite fighting a stronger dollar throughout the year. Our largest brand, Montblanc, grew full year sales by
23% with the excellent performance of the new Montblanc Explorer scent as well as the continued strength of the brand’s
Legend fragrance family. In constant dollars, Jimmy Choo brand sales were up slightly. However, due to the strengthening
of the dollar brand sales for our second largest brand were down nominally in actual dollars. Coach brand sales were also down
slightly in 2019 in actual dollars but ahead of 2018 in constant dollars. Of note, Coach brand sales in 2018 were 73.3% ahead of
the prior year. Two of our mid-sized brands, Karl Lagerfeld and Van Cleef & Arpels, achieved year-over-year sales growth of
5.0% and 6.8%, respectively.
European based product sales in 2018 were
stronger than our original expectations even though no new fragrance families were launched that year. Top line growth was primarily
attributed to established scents and brand extensions for our largest brands. Coach brand sales accounted for much of the 2018
upside surprise with brand sales increasing 73.3% in 2018 to $99.7 million, as compared to $57.5 million in 2017, making it our
portfolio’s third largest brand. The other largest brands in our European operations portfolio performed as expected with
Montblanc, Jimmy Choo and Lanvin, achieving year-over-year sales growth of 1%, 8%, and 7%, respectively.
United States based product sales increased
24% in 2019 to $171.4 million, as compared to $138.0 million in 2018. GUESS brand fragrances had an extraordinary year due to the
addition of two brand extensions, 1981 Los Angeles and Seductive Noir, the continued popularity of legacy scents,
and the success of our international distribution and marketing programs. Also contributing to the top line growth by U.S. operations
were Abercrombie & Fitch and Hollister, both of which achieved significant sales growth spurred by the launch of the Authentic
fragrance duo for Abercrombie & Fitch, and brand extensions for the Wave and Festival fragrance families for
Hollister. Oscar de la Renta fragrance sales rose slightly, supported by legacy scents and our growing Bella fragrance family
United States based product sales increased
20% in 2018 to $138.0 million, as compared to $114.8 million in 2017. The inclusion of legacy GUESS fragrances, which began in
the second quarter of 2018, was a major contributor to the increase in net sales. Also factoring into the 2018 increase was the
successful launch of brand extensions for Abercrombie & Fitch and Hollister. With the popularity of Anna Sui fragrances throughout
Asia, we enjoyed dramatic increases in Anna Sui brand sales in that region in 2018.
We maintain confidence in our future as
we continue to strengthen advertising and promotional investments supporting all portfolio brands, accelerate brand development
and build upon the strength of our worldwide distribution network. We have a more robust launch schedule in 2020 on both sides
of the Atlantic. For U.S. operations, the most important launch will be our first blockbuster scent for women under the GUESS brand
unveiling this spring, domestically, followed in the fall by an international rollout. A new fragrance duo for Hollister, Canyon
Escape, is scheduled for a spring launch. We look to Sky by Anna Sui to reinvigorate brand sales when it debuts in the
fall of 2020. Our first fragrance collection under the Graff label debuts in Harrod’s for a six-month exclusive starting
in the spring, followed by select international luxury distribution. For European operations, our new Coach scent for women, Coach
Dreams, came to market this winter. We have new women’s scents for the Montblanc brand debuting in the spring, and
for Kate Spade New York our first scent is coming to market this summer. For Jimmy Choo our new women’s fragrance launch
should be close to year-end, with much of the sell-in continuing into 2021. In addition, as always, we will strengthen fragrance
families with brand extensions as well as limited edition and holiday programs throughout the year.
Lastly, we hope to benefit from our strong
financial position to potentially acquire one or more brands, either on a proprietary basis or as a licensee. However, we cannot
assure you that any new license or acquisition agreements will be consummated.
Net Sales to
Customers by Region
|
|
|
Years ended December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
North America
|
|
$
|
234.2
|
|
|
$
|
210.1
|
|
|
$
|
176.9
|
|
|
Western Europe
|
|
|
185.5
|
|
|
|
180.9
|
|
|
|
165.4
|
|
|
Asia
|
|
|
106.3
|
|
|
|
109.0
|
|
|
|
88.0
|
|
|
Middle East
|
|
|
72.6
|
|
|
|
59.3
|
|
|
|
50.5
|
|
|
Eastern Europe
|
|
|
55.3
|
|
|
|
52.8
|
|
|
|
49.4
|
|
|
Central and South America
|
|
|
46.2
|
|
|
|
51.7
|
|
|
|
51.2
|
|
|
Other
|
|
|
13.4
|
|
|
|
11.8
|
|
|
|
9.9
|
|
|
|
|
$
|
713.5
|
|
|
$
|
675.6
|
|
|
$
|
591.3
|
|
Virtually all regions registered growth
for the year ended December 31, 2019, as compared to 2018 with Central and South America being the only decline. Even Asia, which
appears to be down slightly in 2019, is actually up in constant dollars. The strongest gains were achieved by the Middle East,
North America and Eastern Europe, which increased sales by 22%, 11% and 5%, respectively. For the year ended December 31, 2018,
as compared to 2017, the strongest gains were achieved by Asia, North America and the Middle East, which increased sales by 24%,
19% and 17%, respectively.
Gross Margins
|
|
|
Years ended December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
713.5
|
|
|
$
|
675.6
|
|
|
$
|
591.3
|
|
|
Cost of sales
|
|
|
267.6
|
|
|
|
248.0
|
|
|
|
215.0
|
|
|
Gross margin
|
|
$
|
445.9
|
|
|
$
|
427.6
|
|
|
$
|
376.3
|
|
|
Gross margin, as a percent of net sales
|
|
|
62.5
|
%
|
|
|
63.3
|
%
|
|
|
63.6
|
%
|
As a percentage of net sales, gross profit
margin was 62.5%, 63.3%, and 63.6% in 2019, 2018 and 2017, respectively. For European based operations, gross profit margin as
a percentage of net sales was 65.7%, 66.3% and 67.1% in 2019, 2018 and 2017, respectively. We carefully monitor movements in foreign
currency exchange rates as over 45% of our European based operations net sales is denominated in U.S. dollars, while most of our
costs are incurred in euro. From a margin standpoint, a strong U.S. dollar has a positive effect on our gross margin while a weak
U.S. dollar has a negative effect. The average dollar/euro exchange rate was 1.12 in 2019, as compared to 1.18 in 2018. The stronger
dollar in 2019 resulted in a benefit to our gross margin in 2019, however, our new Montblanc Explorer product line has a
greater than typical cost of sales, which more than offset the benefit of the stronger dollar.
The small fluctuation in gross margin as
a percentage of sales for our European operations in 2018, as compared to 2017, is primarily the effect of exchange rate changes
as the average dollar/euro exchange rate was 1.18 in 2018, as compared to 1.13 in 2017.
For United States operations, gross profit
margin was 52.5%, 51.4% and 49.3% in 2019, 2018 and 2017, respectively. Sales growth for our United States operations has primarily
come from increased sales of higher margin prestige products under licenses.
Costs relating to purchase with purchase
and gift with purchase promotions are reflected in cost of sales, and aggregated $38.9 million, $36.4 million and $33.8 million
in 2019, 2018 and 2017, respectively, and represented 5.5%, 5.4% and 5.7% of net sales, respectively.
Generally, we do not bill customers for
shipping and handling costs and such costs, which aggregated $7.7 million, $7.1 million and $5.9 million in 2019, 2018 and 2017,
respectively, are included in selling, general and administrative expenses in the consolidated statements of income. As such, our
Company’s gross margins may not be comparable to other companies, which may include these expenses as a component of cost
of goods sold.
Selling, General & Administrative
Expenses
|
|
|
Years ended December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
Selling, general & administrative expenses
|
|
$
|
341.2
|
|
|
$
|
332.8
|
|
|
$
|
295.5
|
|
|
Selling, general & administrative expenses as a percent of net sales
|
|
|
47.8
|
%
|
|
|
49.3
|
%
|
|
|
50.0
|
%
|
Although selling, general and administrative
expenses increased 2.5% in 2019 as compared to 2018 and increased 12.6% in 2018 as compared to 2017, as a percentage of sales,
selling, general and administrative expenses exhibited a steady decrease, and were 47.8%, 49.3% and 50.0% in 2019, 2018 and 2017,
respectively. For European operations, selling, general and administrative expenses declined 1.0% in 2019 and increased 10.5% in
2018, as compared to the corresponding prior year period and represented 50.8%, 51.7% and 52.8% of sales in 2019, 2018 and 2017,
respectively. As discussed in more detail below, the fluctuations which are in line with the fluctuations in sales for European
operations, are primarily from variations in promotion and advertising expenditures.
For United States operations, selling, general
and administrative expenses increased 20.2% in 2019 and 25.0% in 2018, as compared to the corresponding prior year period and represented
38.5%, 39.8% and 38.2% of sales in 2019, 2018 and 2017, respectively. The increase, which is also in line with the increase in
sales, is the result of royalties and promotional and advertising expenses required under our license agreements.
Promotion and advertising included in selling,
general and administrative expenses aggregated $144.6 million, $139.7 million and $123.7 million in 2019, 2018 and 2017, respectively.
Promotion and advertising as a percentage of sales represented 20.3%, 20.7% and 20.9% of net sales in 2019, 2018 and 2017, respectively.
We continue to invest heavily in promotional spending to support new product launches and to build brand awareness. We anticipated
that on a full year basis, promotion and advertising expenditure would aggregate approximately 21% of 2019 net sales, which was
in line with prior year’s annual promotion and advertising expenditures as a percentage of sales. The slight decline in promotion
and advertising expense as a percentage of sales in 2019 is the result of minor fluctuations in launch schedules.
Royalty expense included in selling, general
and administrative expenses aggregated $53.0 million, $48.9 million and $39.6 million in 2019, 2018 and 2017, respectively. Royalty
expense as a percentage of sales represented 7.4%, 7.2% and 6.7% of net sales in 2019, 2018 and 2017, respectively. The increase
in 2019 and 2018, as a percentage of sales, is directly related to new licenses and increased royalty based product sales.
Service fees, which are fees paid within
our European operations to third parties relating to the activities of our distribution subsidiaries, aggregated $7.5 million,
$9.7 million and $11.7 million in 2019, 2018 and 2017, respectively. The 2019 and 2018 decrease is primarily the result of the
discontinuation of certain European distribution subsidiaries, and a return to a third party distribution model in those territories.
Impairment Loss
The Company reviews intangible assets with
finite lives for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
Product sales of some of our mass market product lines have been declining for many years. In 2017, the Company set in motion a
plan to discontinue several of these product lines over the next few years. As a result, the Company recorded an impairment loss
of $2.1 million in 2017.
Income from Operations
As a result of the above analysis regarding
net sales, gross profit margins, selling, general and administrative expenses and impairment loss, income from operations increased
10.6% to $104.7 million in 2019 as compared to $94.7 million in 2018, which was an increase of 20.5% from $78.6 million in 2017.
Operating margins aggregated 14.7%, 14.0% and 13.3% for the years ended December 31, 2019, 2018 and 2017, respectively. In summary,
small fluctuations in gross margin were mitigated by small fluctuations in selling, general and administrative expenses, primarily
promotion and advertising expenditures. Overall the Company has been able to increase sales with a steady increase in its operating
margin.
Other Income and Expenses
Interest expense aggregated $2.1 million,
$2.6 million and $2.0 million in 2019, 2018 and 2017, respectively. Interest expense is primarily related to the financing of brand
and licensing acquisitions. We use the credit lines available to us, as needed, to finance our working capital needs as well as
our financing needs for acquisitions. Long-term debt including current maturities aggregated $23.1 million, $46.1 million and $60.6
million as of December 31, 2019, 2018 and 2017, respectively.
Foreign currency losses aggregated $1.1
million, $0.3 million and $1.5 million in 2019, 2018 and 2017, respectively. We typically enter into foreign currency forward exchange
contracts to manage exposure related to receivables from unaffiliated third parties denominated in a foreign currency and occasionally
to manage risks related to future sales expected to be denominated in a foreign currency. Over 45% of 2019 net sales of our European
operations were denominated in U.S. dollars.
Interest and dividend income aggregated
$3.7 million, $4.0 million and $3.0 million in 2019, 2018 and 2017, respectively. Cash and cash equivalents and short-term investments
are primarily invested in certificates of deposit with varying maturities.
Income Taxes
In December 2017, the U.S. government
passed the Tax Cuts and Jobs Act (“the Tax Act”). The Tax Act made broad and complex changes to the U.S. tax code,
including, but not limited to reducing the U.S. federal corporate tax rate from 35% to 21% beginning in 2018, and requiring companies
to pay a one-time transition tax on certain unremitted earnings of foreign subsidiaries.
The Tax Act also established new tax laws
that took effect in 2018, including, but not limited to: (i) the reduction of the U.S. federal corporate tax rate discussed
above; (ii) a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries; (iii) a provision
designed to tax global intangible low-taxed income (“GILTI”); and (iv) a provision that allows a domestic corporation
an immediate deduction for a portion of its foreign derived intangible income (“FDII”).
The Securities and Exchange Commission staff
issued Staff Accounting Bulletin (“SAB”) 118, which provides a measurement period that was not to extend beyond one
year from the Tax Act enactment date for companies to complete the related accounting under ASC 740, Accounting for Income Taxes.
In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting
under ASC 740 is complete. To the extent that a company’s accounting for a certain income tax effect of the Tax Act was incomplete,
but it was able to determine a reasonable estimate, it was required to record a provisional estimate in the financial statements.
In connection with its initial analysis
of the impact of the Tax Act, the Company recorded a tax expense of $1.1 million for the year ended December 31, 2017.
This estimate consists of no expense for the one-time transition tax, and an expense of $1.1 million related to revaluation
of deferred tax assets and liabilities caused by the lower corporate tax rate. There were no material differences between the Company’s
2017 estimates and the final calculated amounts.
The Company has estimated of the effect
of GILTI and has determined that it has no tax liability related to GILTI as of December 31, 2019 and 2018.
The Tax Act also contains a provision that
allows a domestic corporation an immediate deduction for a portion of its foreign derived intangible income (“FDII”).
The Company estimated the effect of FDII and recorded a tax benefit of $0.9 million and $0.6 million as of December 31, 2019 and
2018, respectively.
Our effective income tax rate was 27.7%,
27.3% and 29.2% in 2019, 2018 and 2017, respectively. The French government had introduced a 3% tax on dividends or deemed dividends
for entities subject to French corporate income tax in 2012. In 2017, the French Constitutional Court released a decision declaring
that the 3% tax on dividends or deemed dividends is unconstitutional. As a result of that decision, the Company filed a claim for
refund of approximately $3.9 million for these taxes paid since 2015 including accrued interest of approximately $0.4 million.
The Company recorded the refund claim as of December 31, 2017 and received the entire refund in 2018.
Excluding the 2017 adjustment to deferred
tax benefit as a result of the Tax Act and the 2017 claim for refund, our effective tax rate for 2017 was 32.4%.
The French authorities are considering that
the existence of IP Suisse, a wholly-owned subsidiary of Interparfums SA, does not, in and of itself, constitute a permanent establishment
and therefore Interparfums, SA should pay French taxes on all or part of the profits of that entity. The French Tax Authority recently
notified the Company that IP Suisse will be the subject of a tax audit covering the period January 1, 2010 through December 31,
2018. No claim or assessment for any taxes or penalties has been made at this time. The Company disagrees and is prepared to vigorously
defend its position. Consequently, no provision has been made in the accompanying financial statements as we believe it is more
likely than not that our position will be sustained based on its technical merits. Although we believe that we have sufficient
arguments to support our position, there exists a risk that the French authorities may prevail. The Company’s exposure in
connection with this matter is approximately $5.8 million, net of recover taxes already paid to the Swiss authorities, and excluding
interest.
Lastly, pursuant to an action plan released
by the French Prime Minister, the French corporate income tax rate is expected to be cut from approximately 33% to 25% over a three-year
period which began in 2020. Other than as discussed above, we did not experience any significant changes in tax rates, and none
were expected in jurisdictions where we operate.
Net Income and Earnings per Share
|
|
|
Year ended December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
|
|
(In thousands except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to European operations
|
|
$
|
56,343
|
|
|
$
|
56,469
|
|
|
$
|
48,236
|
|
|
Net income attributable to United States operations
|
|
|
19,727
|
|
|
|
13,246
|
|
|
|
7,017
|
|
|
Net income
|
|
|
76,070
|
|
|
|
69,715
|
|
|
|
55,253
|
|
|
Less: Net income attributable to the noncontrolling interest
|
|
|
15,821
|
|
|
|
15,922
|
|
|
|
13,659
|
|
|
Net income attributable to Inter Parfums, Inc.
|
|
$
|
60,249
|
|
|
$
|
53,793
|
|
|
$
|
41,594
|
|
|
Net income attributable to Inter Parfums, Inc. common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.92
|
|
|
$
|
1.72
|
|
|
$
|
1.33
|
|
|
Diluted
|
|
|
1.90
|
|
|
|
1.71
|
|
|
|
1.33
|
|
|
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
31,451,093
|
|
|
|
31,307,991
|
|
|
|
31,172,285
|
|
|
Diluted
|
|
|
31,688,700
|
|
|
|
31,522,371
|
|
|
|
31,305,101
|
|
Net income has continued to increase over
the past three years, and aggregated $76.1 million, $69.7 million and $55.3 million in 2019, 2018 and 2017, respectively. Net income
attributable to European operations was $56.3 million, $56.5 million and $48.2 million in 2019, 2018 and 2017, respectively, while
net income attributable to United States operations was $19.7 million, $13.2 million and $7.0 million in 2019, 2018 and 2017, respectively.
The fluctuations in net income for European operations are directly related to the previous discussions relating to changes in
sales, gross profit margins, selling, general and administrative expenses and the French tax refund.
For United States operations the significant
fluctuations in net income are also directly related to the previous discussions relating to changes in sales, gross profit margins
and selling, general and administrative expenses. In addition, results for 2017 include the effect of the $2.1 million impairment
loss.
The noncontrolling interest arises primarily
from our 73% owned subsidiary in Paris, Interparfums SA, which is also a publicly traded company as 27% of Interparfums SA shares
trade on the NYSE Euronext. Net income attributable to the noncontrolling interest is related to the profitability of our European
operations, and aggregated 28.1%, 28.2% and 28.3% of European operations net income in 2019, 2018 and 2017, respectively. Net income
attributable to Inter Parfums, Inc. aggregated $60.2 million, $53.8 million and $41.6 million in 2019, 2018 and 2017, respectively.
Net margins attributable to Inter Parfums, Inc. aggregated 8.4%, 8.0% and 7.0% in 2019, 2018 and 2017, respectively.
Liquidity and Capital Resources
The Company’s financial position remains strong. At December
31, 2019, working capital aggregated $389 million, and we had a working capital ratio of over 3 to 1. Cash and cash equivalents
and short-term investments aggregated $253 million most of which is held in euro by our European operations and is readily convertible
into U.S. dollars. We have not had any liquidity issues to date, and do not expect any liquidity issues relating to such cash and
cash equivalents and short-term investments held by our European operations. Approximately 81% of the Company’s total assets
are held by European operations including approximately $176 million of trademarks, licenses and other intangible assets.
The Company hopes to benefit from its strong
financial position to potentially acquire one or more brands, either on a proprietary basis or as a licensee. Opportunities for
external growth continue to be examined, with the priority of maintaining the quality and homogeneous nature of our portfolio.
However, we cannot assure you that any new license or acquisition agreements will be consummated.
Cash provided by operating activities aggregated
$76.5 million, $63.0 million and $35.9 million in 2019, 2018 and 2017, respectively. In 2019, working capital items used $11.7
million in cash from operating activities, as compared to $20.9 million in 2018 and $32.5 million in 2017. Although accounts receivable
is up slightly from that of the prior year, day’s sales outstanding improved to 68 days in 2019, as compared to 71 days and
67 days in 2018 and 2017, respectively. Inventory days on hand aggregated 225 days in 2019, as compared to 223 days in 2018 and
189 days in 2017, respectively. The increase in 2018 was primarily the result of the required buildup of inventory for new licenses
entered into in 2018 where we do not have a full year of sales. At year-end 2019, higher inventory levels were needed to support
our robust new product launch schedule for 2020. In terms of cash flow, inventory levels at December 31, 2019 are up only 3.7%
from that date of the prior year.
Cash flows used in investing activities
reflect the purchase and sales of short-term investments. These investments are primarily certificates of deposit with maturities
greater than three months. At December 31, 2019, approximately $65 million of certificates of deposit contain penalties where we
would forfeit a portion of the interest earned in the event of early withdrawal.
Our business is not capital intensive as
we do not own any manufacturing facilities. On a full year basis, we spent approximately $5.4 million on capital expenditures including
tools and molds needed to support our new product development calendar. Capital expenditures also include amounts for office fixtures,
computer equipment and industrial equipment needed at our distribution centers. Payments for licenses, trademarks and other intangible
assets primarily represent upfront entry fees incurred in connection with new license agreements. In December 2016, the Company
agreed to a buyout of one of its licenses, effective December 31, 2016, for a payment aggregating approximately $5.9 million. The
Company received the buyout payment in May 2017.
In 2018, in connection with a new license
agreement, we agreed to pay $15.0 million in equal annual installments of $1.1 million including interest imputed at 4.1%. In 2015,
in connection with a brand acquisition, we entered into a 5-year term loan payable in equal quarterly installments of €5.0
million (approximately $5.6 million) plus interest. In order to reduce exposure to rising variable interest rates, we entered into
a swap transaction effectively exchanging the variable interest rate to a fixed rate of approximately 1.2%.
Our short-term financing requirements are expected to be met
by available cash on hand at December 31, 2019, cash generated by operations and short-term credit lines provided by domestic and
foreign banks. The principal credit facilities for 2020 consist of a $20.0 million unsecured revolving line of credit provided
by a domestic commercial bank and approximately $28.1 million in credit lines provided by a consortium of international financial
institutions. There were no balances due from short-term borrowings as of December 31, 2019 and 2018.
Purchase of subsidiary shares from noncontrolling
interest primarily represents the purchase of treasury shares of Interparfums SA, which are expected to be issued to Interparfums
SA employees pursuant to its Free Share Plan.
In October 2017, our Board authorized a
24% increase in the annual dividend to $0.84 per share. In October 2018, our Board authorized a 31% increase in the annual dividend
to $1.10 per share and in October 2019, our Board authorized a further 20% increase in the annual dividend to $1.32 per share.
The next quarterly cash dividend of $0.33 per share is payable on April 15, 2020 to shareholders of record on March 31, 2020.
Dividends paid, including dividends paid once per year to noncontrolling stockholders of Interparfums SA, aggregated $44.2 million,
$35.0 million and $27.2 million for the years ended December 31, 2019, 2018 and 2017, respectively. The cash dividends to be paid
in 2020 are not expected to have any significant impact on our financial position.
We believe that funds provided by or used
in operations can be supplemented by our present cash position and available credit facilities, so that they will provide us with
sufficient resources to meet all present and reasonably foreseeable future operating needs.
Inflation rates in the U.S. and foreign
countries in which we operate did not have a significant impact on operating results for the year ended December 31, 2019.
Contractual Obligations
The following table summarizes our contractual
obligations over the periods indicated, as well as our total contractual obligations ($ in thousands):
|
|
|
Payments due by period
|
|
|
Contractual Obligations
|
|
Total
|
|
|
Less than 1 year
|
|
|
Years
2-3
|
|
|
Years
4-5
|
|
|
More than 5 years
|
|
|
Long-Term Debt
|
|
$
|
23,060
|
|
|
$
|
12,326
|
|
|
$
|
2,142
|
|
|
$
|
2,142
|
|
|
$
|
6,450
|
|
|
Lease Liabilities
|
|
$
|
29,991
|
|
|
$
|
5,871
|
|
|
$
|
9,772
|
|
|
$
|
7,759
|
|
|
$
|
6,589
|
|
|
Purchase Obligations(1)
|
|
$
|
1,665,369
|
|
|
$
|
173,159
|
|
|
$
|
350,386
|
|
|
$
|
344,796
|
|
|
$
|
797,028
|
|
|
Total
|
|
$
|
1,718,420
|
|
|
$
|
191,356
|
|
|
$
|
362,300
|
|
|
$
|
354,697
|
|
|
$
|
810,067
|
|
|
(1)
|
Consists of purchase commitments for advertising and promotional items, minimum royalty guarantees, including fixed or minimum obligations, and estimates of such obligations subject to variable price provisions. Future advertising commitments were estimated based on planned future sales for the license terms that were in effect at December 31, 2019, without consideration for potential renewal periods and do not reflect the fact that our distributors share our advertising obligations.
|
Item 7A. Quantitative and Qualitative Disclosures About Market
Risk.
General
We address certain financial exposures through
a controlled program of risk management that primarily consists of the use of derivative financial instruments. We primarily enter
into foreign currency forward exchange contracts in order to reduce the effects of fluctuating foreign currency exchange rates.
We do not engage in the trading of foreign currency forward exchange contracts or interest rate swaps.
Foreign Exchange Risk Management
We periodically enter into foreign currency
forward exchange contracts to hedge exposure related to receivables denominated in a foreign currency and to manage risks related
to future sales expected to be denominated in a currency other than our functional currency. We enter into these exchange contracts
for periods consistent with our identified exposures. The purpose of the hedging activities is to minimize the effect of foreign
exchange rate movements on the receivables and cash flows of Interparfums SA, our French subsidiary, whose functional currency
is the euro. All foreign currency contracts are denominated in currencies of major industrial countries and are with large financial
institutions, which are rated as strong investment grade.
All derivative instruments are required
to be reflected as either assets or liabilities in the balance sheet measured at fair value. Generally, increases or decreases
in fair value of derivative instruments will be recognized as gains or losses in earnings in the period of change. If the derivative
is designated and qualifies as a cash flow hedge, then the changes in fair value of the derivative instrument will be recorded
in other comprehensive income.
Before entering into a derivative transaction
for hedging purposes, we determine that the change in the value of the derivative will effectively offset the change in the fair
value of the hedged item from a movement in foreign currency rates. Then, we measure the effectiveness of each hedge throughout
the hedged period. Any hedge ineffectiveness is recognized in the income statement.
At December 31, 2019, we had foreign
currency contracts in the form of forward exchange contracts with notional amounts of approximately U.S. $18.5 million, GB £2.7 million
and JPY ¥105.0 million which all have maturities of less than one year. We believe that our risk of loss as the result of nonperformance
by any of such financial institutions is remote.
Interest Rate Risk Management
We mitigate interest rate risk by monitoring
interest rates, and then determining whether fixed interest rates should be swapped for floating rate debt, or if floating rate
debt should be swapped for fixed rate debt. We entered into an interest rate swap in June 2015 on €100 million of debt, effectively
exchanging the variable interest rate to a fixed rate of approximately 1.2%. This derivative instrument is recorded at fair value
and changes in fair value are reflected in the accompanying consolidated statements of income.
Item 8. Financial Statements and Supplementary Data
The required financial statements commence
on page F-1.
Supplementary Data
Quarterly Data (Unaudited)
For the Year Ended December 31, 2019
(In Thousands Except Per Share Data)
|
|
|
1st Quarter
|
|
|
2nd Quarter
|
|
|
3rd Quarter
|
|
|
4th Quarter
|
|
|
Full Year
|
|
|
Net sales
|
|
$
|
178,242
|
|
|
$
|
166,242
|
|
|
$
|
191,227
|
|
|
$
|
177,803
|
|
|
$
|
713,514
|
|
|
Gross margin
|
|
|
109,841
|
|
|
|
106,974
|
|
|
|
114,437
|
|
|
|
114,684
|
|
|
|
445,936
|
|
|
Net income
|
|
|
24,978
|
|
|
|
15,600
|
|
|
|
26,658
|
|
|
|
8,834
|
|
|
|
76,070
|
|
|
Net income attributable to Inter Parfums, Inc.
|
|
|
18,894
|
|
|
|
12,318
|
|
|
|
20,848
|
|
|
|
8,189
|
|
|
|
60,249
|
|
|
Net income attributable to Inter Parfums, Inc. per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.60
|
|
|
$
|
0.39
|
|
|
$
|
0.66
|
|
|
$
|
0.26
|
|
|
$
|
1.92
|
|
|
Diluted
|
|
$
|
0.60
|
|
|
$
|
0.39
|
|
|
$
|
0.66
|
|
|
$
|
0.26
|
|
|
$
|
1.90
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
31,431
|
|
|
|
31,449
|
|
|
|
31,452
|
|
|
|
31,473
|
|
|
|
31,451
|
|
|
Diluted
|
|
|
31,679
|
|
|
|
31,687
|
|
|
|
31,676
|
|
|
|
31,713
|
|
|
|
31,689
|
|
Quarterly Data (Unaudited)
For the
Year Ended December 31, 2018
(In Thousands Except Per Share Data)
|
|
|
1st Quarter
|
|
|
2nd Quarter
|
|
|
3rd Quarter
|
|
|
4th Quarter
|
|
|
Full Year
|
|
|
Net sales
|
|
$
|
171,767
|
|
|
$
|
149,367
|
|
|
$
|
177,213
|
|
|
$
|
177,227
|
|
|
$
|
675,574
|
|
|
Gross margin
|
|
|
105,629
|
|
|
|
95,654
|
|
|
|
109,147
|
|
|
|
117,132
|
|
|
|
427,562
|
|
|
Net income
|
|
|
21,862
|
|
|
|
14,259
|
|
|
|
24,426
|
|
|
|
9,168
|
|
|
|
69,715
|
|
|
Net income attributable to Inter Parfums, Inc.
|
|
|
15,909
|
|
|
|
10,899
|
|
|
|
18,938
|
|
|
|
8,047
|
|
|
|
53,793
|
|
|
Net income attributable to Inter Parfums, Inc. per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.51
|
|
|
$
|
0.35
|
|
|
$
|
0.60
|
|
|
$
|
0.26
|
|
|
$
|
1.72
|
|
|
Diluted
|
|
$
|
0.51
|
|
|
$
|
0.35
|
|
|
$
|
0.60
|
|
|
$
|
0.26
|
|
|
$
|
1.71
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
31,267
|
|
|
|
31,299
|
|
|
|
31,326
|
|
|
|
31,340
|
|
|
|
31,308
|
|
|
Diluted
|
|
|
31,429
|
|
|
|
31,490
|
|
|
|
31,587
|
|
|
|
31,584
|
|
|
|
31,522
|
|
Item 9. Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer and Chief Financial
Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange
Act of 1934 Rule 13a-15(e)) as of the end of the period covered by this annual report on Form 10-K (the “Evaluation Date”).
Based on their review and evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of the Evaluation
Date, our Company’s disclosure controls and procedures were effective.
Management’s Annual Report on Internal Control over
Financial Reporting
The management of Inter Parfums, Inc. is
responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13(a)-15(f)
under the Securities Exchange Act of 1934. With the participation of the Chief Executive Officer and the Chief Financial Officer,
our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework
and criteria established in Internal Control – Integrated Framework (2013), issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on this evaluation, our management has concluded that our internal control over
financial reporting was effective as of December 31, 2019.
Our independent auditor, Mazars USA LLP,
a registered public accounting firm, has issued its report on its audit of our internal control over financial reporting. This
report appears on page F-2.
Changes in Internal Control Over Financial Reporting
There has been no change in our internal
control over financial reporting (as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934) that occurred during the
fourth quarter of 2019 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control
over financial reporting.
Item 9B. Other Information.
None.
PART
III
Item
10. Directors, Executive Officers and Corporate Governance
Executive
Officers and Directors
As
of the date of this report, our executive officers and directors were as follows:
|
Name
|
|
Position
|
|
Jean
Madar
|
|
Chairman
of the Board, Chief Executive Officer of Inter Parfums, Inc. and Director General of Interparfums SA
|
|
Philippe
Benacin
|
|
Vice
Chairman of the Board, President of Inter Parfums, Inc. and Chief Executive Officer of Interparfums SA
|
|
Russell
Greenberg
|
|
Director,
Executive Vice President and Chief Financial Officer
|
|
Philippe
Santi
|
|
Director,
Executive Vice President and Chief Financial Officer, Interparfums SA
|
|
François
Heilbronn
|
|
Director
|
|
Robert
Bensoussan
|
|
Director
|
|
Patrick
Choël
|
|
Director
|
|
Michel
Dyens
|
|
Director
|
|
Veronique
Gabai-Pinsky
|
|
Director
|
|
Gilbert
Harrison
|
|
Director
|
|
Frederic
Garcia-Pelayo
|
|
Executive
Vice President and Chief Operating Officer of Interparfums SA
|
Our
directors will serve until the next annual meeting of stockholders and thereafter until their successors shall have been elected
and qualified. Messrs. Jean Madar and Philippe Benacin have a verbal agreement or understanding to vote their shares and the shares
of their respective holding companies in a like manner.
With
the exception of Mr. Benacin, the officers are elected annually by the directors and serve at the discretion of the board
of directors. There are no family relationships between executive officers or directors of our Company.
Board
of Directors
Our
board of directors has the responsibility for establishing broad corporate policies and for the overall performance of our Company.
Although certain directors are not involved in day-to-day operating details, members of the board of directors are kept informed
of our business by various reports and documents made available to them. Our board of directors held 16 meetings (or executed
consents in lieu thereof), including meetings of committees of the full board of directors during 2019, and all of the directors
attended at least 75% of the meetings (or executed consents in lieu thereof) of the full board of directors and committees of
which they were a member. Our board of directors presently consists of ten (10) directors.
We
have adopted a Code of Business Conduct that applies to our principal executive officer, principal financial officer, principal
accounting officer or controller, as well as other persons performing similar functions, and we agree to provide to any person
without charge, upon request, a copy of our Code of Business Conduct. Any person who requests a copy of our Code of Business Conduct
should provide their name and address in writing to: Inter Parfums, Inc., 551 Fifth Avenue, New York, NY 10176, Att.: Shareholder
Relations. In addition, our Code of Conduct is also maintained on our website, at www.interparfumsinc.com.
During
2019, our board of directors had the following standing committees:
|
|
●
|
Audit
Committee – The Audit Committee has the sole authority and is directly responsible
for, the appointment, compensation and oversight of the work of the independent accountants
employed by our company which prepare or issue audit reports for our company. During
2019, this committee consisted of Messrs. Heilbronn and Choël, and Ms. Gabai-Pinsky.
The charter of the Audit Committee is posted on our company’s website.
|
The
Company does not have an “audit committee financial expert” within the definition of the applicable Securities and
Exchange Commission rules. Finding qualified nominees to serve as a director of a public company without substantial financial
resources has been challenging. In addition, despite the applicable Securities and Exchange Commission rule which states that
being named as the audit committee financial expert does not impose any greater duty, obligation or liability, our company has
been met with resistance from both present and former directors to being named as such, primarily due to potential additional
personal liability. However, as the result of the background, education and experience of the members of the Audit Committee,
our board of directors believes that such committee members are fully qualified to fulfill their obligations as members of the
Audit Committee.
|
|
●
|
Executive
Compensation and Stock Option Committee – The Executive Compensation and Stock
Option Committee oversees the compensation of our company’s executives and administers
our company’s stock option plans. During 2019, this committee consisted of Messrs.
Heilbronn and Choël, and Ms. Gabai-Pinsky. The charter of the Executive Compensation
and Stock Option Committee is posted on our company’s website.
|
|
|
●
|
Nominating
Committee – During 2019, this committee consisted of Messrs. Heilbronn and Choël,
and Ms. Gabai-Pinsky. The purpose of the Nominating Committee is to determine and recommend
qualified persons to the Board of Directors who will be put forth as management’s slate
of directors for vote of the Corporation’s stockholders, as well as to fill vacancies
in the Board of Directors. The charter of the Nominating Committee is posted on our company’s
website.
|
In
January 2018 our board of directors adopted a board diversity policy, which provides that the selection of candidates for appointment
to our board will be based on an overriding emphasis on merit, but the Nominating Committee will seek to fill board vacancies
by considering candidates that bring a diversity of background and industry or related expertise to our board. The Nominating
Committee is to consider an appropriate level of diversity having regard for factors such as skills, business and other experience,
education, gender, age, ethnicity and geographic location. A copy of the board diversity policy is posted on our company’s
website.
Business
Experience
The
following sets forth biographical information as to the business experience of each executive officer and director of our company
for at least the past five years.
Jean
Madar
Jean
Madar, age 59, a Director, has been the Chairman of the Board since our company’s inception, and is a co-founder of our
company with Mr. Philippe Benacin. From inception until December 1993 he was the President of our company; in January 1994, he
became Director General of Interparfums SA, our company’s subsidiary; and in January 1997, he became Chief Executive Officer
of our company. Mr. Madar was previously the managing director of Interparfums SA, from September 1983 until June 1985. At such
subsidiary, he had the responsibility of overseeing the marketing operations of its foreign distribution, including market research
analysis and actual marketing campaigns. Mr. Madar graduated from The French University for Economic and Commercial Sciences (ESSEC)
in 1983. We believe that Mr. Madar’s skills in guiding, leading and determining the strategic direction of our company since
its inception together with Mr. Benacin, in addition to his contacts in the fragrance and cosmetic industry, render him qualified
to serve as a member of our board of directors.
Philippe
Benacin
Mr.
Benacin, age 61, a Director, is President of our Company and the Chief Executive Officer of Interparfums SA, has been the Vice
Chairman of the Board since September 1991, and is a co-founder of our company with Mr. Madar. He was elected the Executive Vice
President in September 1991, Senior Vice President in April 1993, and President of the Company in January 1994. In addition, he
has been the Chief Executive Officer of Interparfums SA for more than the past five years. Mr. Benacin graduated from The French
University for Economic and Commercial Sciences (ESSEC) in 1983. In June 2014 Mr. Benacin was elected as a member of the Supervisory
Board of Vivendi, and Chairman of its Corporate Governance, Nominations and Remuneration Committee. We believe that Mr. Benacin’s
skills in guiding, leading and determining the strategic direction of our company since its inception together with Mr. Madar,
in addition to his contacts in the fragrance and cosmetic industry, render him qualified to serve as a member of our board of
directors.
Russell
Greenberg
Mr.
Greenberg, age 63, the Chief Financial Officer, was Vice-President, Finance when he joined the Company in June 1992; became Executive
Vice President in April 1993; and was appointed to our board of directors in February 1995. He is a certified public accountant
licensed in the State of New York, and is a member of the American Institute of Certified Public Accountants and the New York
State Society of Certified Public Accountants. After graduating from The Ohio State University in 1980, he was employed in public
accounting until he joined our company in June 1992. We believe that Mr. Greenberg’s skills in accounting and tax, as well
as his knowledge of the fragrance industry and our Company’s operations, render him qualified to serve as a member of our
board of directors.
Philippe
Santi
Philippe
Santi, age 58 and a Director since December 1999, is the Executive Vice President and Chief Financial Officer of Interparfums
SA. Mr. Santi, who is a Certified Accountant and Statutory Auditor in France, has been the Chief Financial Officer of Interparfums
SA since February 1995. Prior to February 1995, Mr. Santi was the Chief Financial Officer for Stryker France and an Audit Manager
for Ernst and Young. We believe that Mr. Santi’s skills in accounting and tax, as well as his knowledge of the fragrance
industry and our Company’s European operations, render him qualified to serve as a member of our board of directors.
Francois
Heilbronn
Mr.
Heilbronn, age 59 a Director since 1988, an independent director and a member of the Audit Committee, Nominating Committee and
the Executive Compensation and Stock Option Committee, is a graduate of Harvard Business School with a Master of Business Administration
degree and is currently the managing partner of the consulting firm of M.M. Friedrich, Heilbronn & Fiszer. He was formerly
employed by The Boston Consulting Group, Inc. from 1988 through 1992 as a manager. Mr. Heilbronn graduated from Institut d’ Etudes
Politiques de Paris in June 1983. From 1984 to 1986, he worked as a financial analyst for Lazard Freres & Co. In addition,
during 2009, Mr. Heilbronn became an Associate Professor in Business Strategy at Sciences Po, Paris, France. As the result of
his business and financial acumen, as well as his experience as managing partner of a business consulting firm in the area of
mergers and acquisitions of large international companies in retail, consumer goods and consumer services throughout the world,
we believe Mr. Heilbronn is qualified to serve as a member of our board of directors.
Robert
Bensoussan
Robert
Bensoussan, age 62, has been a Director since March 1997, and is also an independent director.
Mr.
Bensoussan is the founder of Sirius Equity Consultants,, a retail and branded luxury goods Investment Company. To date, Mr. Bensoussan
remains as an investor in feelunique.com, Europe’s largest online beauty retailer. C.A.R.O.L the AI driven fitness equipment,
Hapy Sweet Bee Ltd, natural health food products, Zen Car the Belgium based electric car rental Company and Eaglemoss Ltd, UK
part-works publisher.
He
was previously a board member of Celio International, the French retail conglomerate and Vivarte representing the GLG hedge fund.
In the latter part of 2019, Mr. Bensoussan resigned after 6 years as the only non-North American board member of lululemon athletica
Inc.
He
continues to remain as Chairman of feelunique.com since his appointment in December 2012. He is also a member of the Advisory
Board of Pictet Bank Premium Brands Fund and is Chairman of Camaïeu, the French retail conglomerate.
Previously
Mr. Bensoussan was as director of, and had an indirect ownership interest J. Choo Limited until July 2011, and CEO (from 2001
to 2007) and was a member of the Board of Jimmy Choo Ltd (from 2001 to 2011), a privately held luxury shoe wholesaler and retailer.
We
believe Mr. Bensoussan is qualified to serve as a member of our board of directors due to his business and financial acumen, as
well as his experience in the retail and branded luxury goods market.
Patrick
Choël
Mr.
Choël, age 76, was appointed to the board of directors in June 2006 as an independent director, and is a member of the Audit
Committee, Nominating Committee and the Executive Compensation and Stock Option Committee. Mr. Choël is a director of our
majority-owned subsidiary, Interparfums SA, a publicly held company, and Christian Dior and Guerlain, both privately held companies.
He is also the manager of Université 82, a business consultant and advisor. For approximately 10 years, through March 2004,
Mr. Choël was the President and CEO of two divisions of LVMH Moet Hennessy Louis Vuitton S.A., first Parfums Christian Dior,
a leading world-wide prestige beauty/fragrances business, and later, the LVMH Perfumes and Cosmetics Division, which included
such well-known brands as Parfums Christian Dior, Guerlain, and Parfums Givenchy, among others. Prior to such time, for approximately
30 years, he held various executive positions at Unilever, including President and CEO of Elida Fabergé France and President
and CEO of Chesebrough Pond’s USA. Because of this experience, especially in the prestige beauty business, we believe that
Mr. Choël is qualified to serve as a member of our board of directors.
Michel
Dyens
Michel
Dyens, age 80 and an independent director, is the Founder, Chairman and Chief Executive Officer of Michel Dyens & Co., which
he founded over 25 years ago. With headquarters in New York and Paris, Michel Dyens & Co. is a leading independent investment
banking firm focused on mergers and acquisitions. Michel Dyens & Co. has vast experience in luxury goods, beauty, spirits
and other premium branded consumer goods in which it has concluded numerous landmark deals. Michel Dyens & Co. has advised
in such deals as the sale of the Grey Goose ultra-premium vodka brand to Bacardi, the acquisition of the luxury Swiss watchmaker
Hublot by LVMH, the sale of the Harry Winston to Aber Diamond Corporation and Boucheron to Kering. Michel Dyens & Co. represented
the owners of Liaigre, the luxury furniture brand, in the sale to Symphony International and Navis Capital, and Casa Dragones,
the ultra-premium tequila, in the sale to BDT Partners (Byron Trott).
Michel
Dyens & Co. represented Mr. ChinWook Lee, the founder and CEO of Dr. Jart+, in the sale of Have & Be Co. Ltd. to The Estée
Lauder Companies. Michel Dyens & Co. also advised the owner of the ultra-luxury fragrance brand By Kilian, in the sale to
Estée Lauder. Michel Dyens & Co. advised the shareholders of the largest independent hair color and hair care company
in Brazil, Niely Cosmeticos in the sale of the company to L’Oréal, as well as the owner of the super-premium liqueur
St-Germain in the sale of the brand to Bacardi, the Colomer Group (American Crew and CND/Shellac brands) in its sale to Revlon,
and Sidney Frank Importing Company in the sale of the company to Jaegermeister. Other transactions include the sale of the Essie
cosmetics business to L’Oréal, the sale of TIGI (BedHead and Catwalk brands) to Unilever, the luxury hair care brand
Christophe Robin to The Hut Group, the thinning hair brand NIOXIN Research Laboratories to Procter & Gamble, John Frieda Professional
Hair Care and Molton Brown to the Kao Corporation, the Svedka vodka brand to Constellation Brands and Chambord liqueur to Brown-Forman.
From
April 2004 to September 2014, Mr. Dyens was an independent director of Interparfums SA. We believe Mr. Dyens is qualified to serve
as a member of our board of directors thanks to his knowledge of our company’s luxury business, his business and financial
acumen, as well as his experience in the luxury goods market.
Veronique
Gabai-Pinsky
Ms.
Gabai-Pinsky, age 54, was elected for the first time to our board in September 2017. She became a director of Interparfums SA
in April 2017. She is currently operating a startup specialty fragrance business. She was President of Vera Wang Group from January
2016 through June 2018, after a year of consulting with the company and she oversaw all product categories and markets. Prior
to joining Vera Wang, from 2006 to December 2014 Ms. Gabai-Pinsky was the Global President for Aramis and Designers Fragrances
as well as Beauty Bank and Idea Bank at the Estée Lauder Companies, reporting to the Chief Executive Officer of such company.
During her tenure, Ms. Gabai-Pinsky developed and ensured the growth of several beauty and skin care brands, including Lab Series
for Men. She was highly instrumental in the evolution of the fragrance category for such company, as she improved its overall
business model, globally grew brands such as Donna Karan and Michael Kors, evolved and harmonized the portfolio, divested dilutive
brands and brought in Tory Burch, Zegna and Marni under licenses. She ultimately actively participated in the acquisitions of
Le Labo, Frederic Malle, and By Kilian and assisted in the transformation of the long-term strategic direction of such company.
In
the earlier years of her career, Ms. Gabai-Pinsky served as Vice President of Marketing and Communication for Guerlain, a division
of LVMH Moet Hennessy Louis Vuitton S.A., where she led the successful re-launch of Shalimar, the introduction of Aqua Allegoria,
and contributed to the re-focus of the beauty category around its pillars, Terracotta, Meteorites and Issima, while redesigning
all communication strategies and content. She started her career at L’Oréal, and was also Vice President of Marketing
for Giorgio Armani, where she was instrumental in the overall development of its fragrance business by developing the successful
Acqua di Gio for men and introducing the Emporio Armani franchise. A graduate from ESSEC Business School in Paris, France, she
has received several awards, including Marketer of the Year by Women’s Wear Daily in December 2013.
Ms.
Gabai-Pinksy is an independent director, and is a member of the Audit Committee, Executive Compensation and Stock Option Committee
and the Nominating Committee of our company. We believe Ms. Gabi-Pinsky is qualified to serve as a member of our board of directors
due to her more than 25 years of experience in the luxury, fashion, beauty and fragrance fields, success as a brand builder, creative
thinker, business acumen, and a broad understanding of consumers, brands and business models.
Gilbert
Harrison
Mr.
Harrison, age 79, an independent director, was appointed to our board in April 2018. Mr. Harrison has more than 50 years of experience
in corporate finance and strategic transactions, specializing in the consumer products space. He began his career in 1965 practicing
corporate and securities law in New York and Philadelphia. In 1971 he founded Financo, which he grew to become one of the leading
independent middle market transaction firms in the country. In 1985, Financo was acquired by Lehman Brothers, where the firm’s
primary efforts were focused on increasing its expertise in retail, apparel and other merchandising transactions of all types.
At Lehman, Mr. Harrison was Chairman of the Merchandising Group and on the firm’s Investment Banking Operating Committee
while continuing as Chairman of Financo, which was renamed the Middle Market Group of Lehman. In 1989, he re-acquired Financo
from Lehman, re-establishing Financo as one of the leading investment banking firms handling transactions and providing strategic
advice in connection with merchandising companies. Mr. Harrison retired as Chairman of Financo in December of 2017, after which
he formed the Harrison Group, a firm that provides consulting and financial advisory services to merchandising and products companies.
Mr.
Harrison’s other activities include his membership on the Advisory Council of the World Retail Congress, Shoptalk and the Financial
Times Business of Luxury Summit. Additionally, he has created a course on mergers and acquisitions at The Wharton School and has
published various articles and academic studies on the state of retailing and mergers and acquisitions, including a chapter in
the book entitled, “The Mergers and Acquisitions Handbook.” Mr. Harrison lectures throughout the country, including
chairing seminars for Retail Week as well as for the International Council of Shopping Centers, the National Retail Federation,
Young President’s Center, The Wharton Aresty Institute of Executive Education and The President’s Association of the American
Management Association. He also appears frequently on Bloomberg TV and CNBC as an expert on retail and apparel.
Mr.
Harrison received a Bachelor of Science in Economics from The Wharton School of The University of Pennsylvania in 1962 and his
Juris Doctor from The University of Pennsylvania Law School in 1965. He is also Chairman of the Fashion Division of UJA, Treasurer
and a Board member of the Southampton Hospital, Director of the Peggy Guggenheim Collection, and former Board member of the Wharton
School of the University of Pennsylvania. We believe Mr. Harrison is qualified to serve as a member of our board of directors
due to his tremendous depth and breadth of knowledge about the merchandising and consumer industry, and he has a long track record
of facilitating value creating transactions for companies in this sector.
Frederic
Garcia-Pelayo
Frederic
Garcia-Pelayo, age 59, has been with Interparfums SA for more than the past 20 years. He is currently the Executive Vice President
and Chief Operating Officer of Interparfums SA, and was previously the Director of its Luxury and Fashion division beginning in
March 2005. He was also previously the Director of Marketing and Distribution for Perfume and Cosmetics and was first named Executive
Vice President in 2004.
Section
16(a) Beneficial Ownership Reporting Compliance
Based
solely upon a review of Forms 3, 4 and 5 and any amendments to such forms furnished to us, and written representations from various
reporting persons furnished to us, we are not aware of any reporting person who has failed to file the reports required to be
filed under Section 16(a) of the Securities Exchange Act of 1934 on a timely basis.
Item
11. Executive Compensation
Compensation
Discussion and Analysis
General
The
executive compensation and stock option committee of our board of directors is comprised entirely of independent directors and
oversees all elements of compensation (base salary, annual bonus, long-term incentives and perquisites) of our company’s
executive officers and administers our company’s stock option plans, other than the non-employee directors stock option
plan, which is self-executing.
The
objectives of our compensation program are designed to strike a balance between offering sufficient compensation to either retain
existing or attract new executives on the one hand, and maintaining compensation at reasonable levels on the other hand. We do
not have the resources comparable to the cosmetic giants in our industry, and, accordingly, cannot afford to pay excessive executive
compensation. In furtherance of these objectives, our executive compensation packages generally include a base salary, as well
as annual incentives tied to individual performance and long-term incentives tied to our operating performance.
Mr.
Madar, the Chairman and Chief Executive Officer, takes the initiative after discussions with Mr. Russell Greenberg, Executive
Vice President, Chief Financial Officer and a Director, and recommends executive compensation levels for executives for United
States operations. Mr. Benacin, the Chief Executive Officer of Interparfums SA, takes the initiative after discussions with Philippe
Santi, the Chief Financial Officer of Interparfums SA, and recommends executive compensation levels for executives for European
operations. The recommendations are presented to the compensation committee for its consideration, and the compensation committee
makes a final determination regarding salary adjustments and annual award amounts to executives, including Jean Madar and Philippe
Benacin. Messrs. Madar and Benacin are not present during deliberations or determination of their executive compensation by the
compensation committee. Further, Messrs. Madar and Benacin, in addition to being executive officers and directors, are our largest
beneficial shareholders, and therefore, their interests are aligned with our shareholder base in keeping executive compensation
at a reasonable level.
The
compensation committee was pleased that the most recent shareholder advisory vote on executive compensation held at our last annual
meeting of shareholders in September 2019 overwhelmingly approved the compensation policies and decisions of the compensation
committee. The compensation committee has determined to continue its present compensation policies in order to determine similar
future decisions.
Our
compensation committee believes that individual executive compensation is at a level comparable with executives in other companies
of similar size and stage of development that operate in the fragrance industry, and takes into account our company’s performance
as well as our own strategic goals. Further, the compensation committee believes that its present policies to date, with its emphasis
on rewarding performance, has served to focus the efforts of our executives, which in turn has permitted our company to weather
economic and political turmoil in certain parts of the world and keep our company on track for continued profitability, which
management believes will result in enhanced shareholder value.
During
2019, the members of such committee consisted of Messrs. Heilbronn and Choël, and Ms. Gabai-Pinsky.
Elements
of Compensation
General
The
compensation of our executive officers is generally comprised of base salaries, including a fee paid to the holding companies
of each of Messrs. Madar and Benacin, annual cash bonuses and long-term equity incentive awards. In determining specific components
of compensation, the compensation committee considers individual performance, level of responsibility, skills and experience,
other compensation awards or arrangements and overall company performance. The compensation committee reviews and approves all
elements of compensation for all of our executive officers taking into consideration recommendations from the Chief Executive
Officer of our company and the Chief Executive Officer of Interparfums SA, as well as information regarding compensation levels
at competitors in our industry.
Our
named executive officers have all been with the company for more than the past ten (10) years, with Messrs. Madar and Benacin
being founders of the company in 1985. As Messrs. Madar and Greenberg for United States operations, and Benacin and Santi for
European operations, are most familiar with the individual performance, level of responsibility, skills and experience of each
executive officer in their respective operating segments, the compensation committee relies upon the information provided by such
executive officers in determining individual performance, level of responsibility, skills and experience of each executive officer.
The
compensation committee views the competitive market place very broadly, which would include executive officers from both public
and privately held companies in general, including fashion and beauty companies, but not limited to the peer companies contained
in the corporate performance graph contained in our annual report. Generally, rather than tie the compensation committee’s
determination of compensation proposals to any specific peer companies, the members of our committee have used their business
experience, judgment and knowledge to review the executive compensation proposals recommended to them by Mr. Madar for United
States operations and Mr. Benacin for European operations. As such, as a general rule the compensation committee did not determine
the need to “benchmark” of any material item of compensation or overall compensation. However, in connection with
the salary increase to Mr. Madar that occurred in February 2020 surveys of both peer companies and companies with comparable market
capitalizations were used by the compensation committee as one of the factors in reaching such determination.
The
members of the compensation committee have extensive experience and business acumen and are well qualified in determining the
appropriateness of executive compensation levels. Mr. Heilbronn is a managing partner of a business consulting firm in the area
of mergers and acquisitions of large international companies in retail, consumer goods and consumer services throughout the world.
Mr. Choël is presently a business consultant and advisor, who previously worked as President and Chief Executive Officer
of two divisions of LVMH Moet Hennessy Louis Vuitton S.A., which included such well-known brands as Parfums Christian Dior, Guerlain,
and Parfums Givenchy. Mr. Choël has also been President and CEO of both Elida Fabergé France and Chesebrough Pond’s
USA. Ms. Gabai-Pinsky, the final committee member, has executive experience as the former President of Vera Wang Group, as well
as the Global President for Aramis and Designers Fragrances in addition to Beauty Bank and Idea Bank at the Estée Lauder
Companies.
Base
Salary
Base
salaries for executive officers are initially determined by evaluating the responsibilities of the position held and the experience
of the individual, and by reference to the competitive market place for executive talent. Base salaries for executive officers
are reviewed on an annual basis, and adjustments are determined by evaluating our operating performance, the performance of each
executive officer, as well as whether the nature of the responsibilities of the executive has changed.
As
stated above, as Messrs. Madar and Greenberg for United States operations, and Benacin and Santi for European operations, are
most familiar with the individual performance, level of responsibility, skills and experience of each executive officer in their
respective segments, the committee relies upon the information provided by such executive officers in determining individual performance,
level of responsibility, skills and experience of each executive officer.
For
executive officers of United States operations, the bulk of their annual compensation is in base salary including a fee paid to
the holding company for Mr. Madar for services rendered outside the United States. However, for executive officers of European
operations base salary comprises a smaller percentage of overall compensation. We have paid a lower percentage of overall compensation
in the form of base salary to executive officers of European operations for several years, principally because European operations
historically have had higher profitability than United States operations, and European operations are run differently from United
States operations by the Chief Executive Officer of European operations, Mr. Benacin. As the result of this historically higher
profitability, European operations have had the ability to pay higher bonus compensation in addition to base salary. As bonus
compensation is and has historically been discretionary, no targets were set in order to maintain flexibility. Further, if results
of operations for European operations were not satisfactory (again, no target amounts were set to maintain flexibility), then
bonus compensation, as well as overall compensation could be lowered without otherwise affecting base salary. Finally, by keeping
annual bonus compensation at a higher percentage of overall compensation and base salary at a lower percentage, our company benefits
because the base amount for annual salary adjustments would be smaller.
For 2019, Mr. Benacin received a modest increase in base salary
of $13,000 to $511,000. For 2018, Mr. Benacin had received an increase in base salary of $28,000, after not receiving any increase
in his base salary in 2017. Further, Mr. Benacin’s personal holding company received the same $250,000 in 2019 that it received
in 2018 and 2017 for services rendered outside of the United States by Mr. Benacin for the benefit of the Company’s United
States operations in his capacity as President of our company. Payment is being made by the Company’s United States operations
to Mr. Benacin’s holding company in accordance with the consulting agreement with Mr. Benacin’s holding company, which
provides for review on an annual basis of the amount of compensation payable to such company.
The
compensation committee took into account the following salient factors in authorizing payment to Mr. Benacin’s holding company—
services rendered to United States operations for several years by Mr. Benacin in connection with licensing and distribution of
international brands, as well as future services to be performed by Mr. Benacin internationally relating to licensing and distribution
of international brands for United States operations.
As
Mr. Benacin values the services of two named executive officers of Interparfums SA, Mr. Philippe Santi, Executive Vice President
and the Chief Financial Officer, and Mr. Frederic Garcia-Pelayo, Executive Vice President and Chief Operating Officer, equally,
their base salaries, as well as their bonus compensation discussed below, have been in lockstep. For 2019, each of Messrs. Santi
and Garcia-Pelayo received an increase in base salary of $13,000 to $443,000. Each of Messrs. Santi and Garcia-Pelayo had received
an increase of $28,000 and $60,000 in 2018 and 2017, respectively. These increases were awarded primarily to reward these two
executive officers for their contributions in European Operations achieving increases in both the sales and earnings. The compensation
committee considered the recommendations of Mr. Benacin, results of operations for the year, as well as the services performed
for European operations by Messrs. Santi and Garcia-Pelayo in authorizing these salary levels.
A
different approach is taken for United States operations as that segment is smaller and less profitable. A more significant base
salary is paid in order to attract and retain employees with the skills and talents needed to run the operation with a lesser
emphasis placed on bonuses. Neither of the executive officers for United States operations have employment agreements (although
Mr. Madar’s personal holding company has a consulting agreement that provides for review on an annual basis of the amount
of compensation payable to such company), as we believe that having flexibility in structuring annual base salary is a benefit,
which permits us to act quickly to meet a changing economic environment.
For
each of 2019, 2018 and 2017, Mr. Madar’s base salary, including cash compensation paid to his personal holding company,
remained steady and aggregated $630,000. Cash compensation paid to Mr. Madar’s personal holding company in each year was
in exchange for services rendered outside of the United States by Mr. Madar in his capacity as Chief Executive Officer. For 2018,
as the result of Mr. Madar spending more time outside of the United States, we changed the allocation of cash compensation paid
to Mr. Madar personally and to his personal holding company, but not the aggregate amount. The amount of salary paid to Mr. Madar
for his services in the United States in 2018 was reduced $380,000 to $160,000, while payments to his holding company were increased
by the like amount from $250,000 to $470,000. Therefore, through 2019 total cash compensation for Mr. Madar to be paid to him
and his personal holding company remained unchanged at $630,000.
For
seven years, from 2013 until 2019, the annual aggregate base salary paid to Mr. Madar individually and fees paid to his holding
company remained unchanged at $630,000.
The
members of each of the Audit Committee and the Executive Compensation and Stock Option Committee (collectively the “Committees”)
jointly reviewed two surveys of chief executive officer salaries for 2019 consisting of (i) the Inter Parfums’ peer companies
listed in the Inter Parfums’ Annual Report on Form 10-K and (ii) companies with comparable market capitalization (collectively
the “CEO Salary Surveys”). Such surveys indicated that the annual and median average CEO salaries for peer companies
in Inter Parfums’ annual report on Form 10-K (excluding the Madar Salary) were $2,854,656 and $1,540,000, respectively,
and $2,604,346 and $1,750,000 for comparable market capitalization companies, respectively.
After
review of the CEO Surveys, the Committees acknowledged that Mr. Madar’s current base salary is substantially below both
of the median and average salaries as set forth in the CEO Salary Surveys, and had not been increased since 2013. In addition,
the Committees acknowledged the efforts of Mr. Madar and his holding company as one of the prime causes for our substantial increase
in net sales and net income, as well as market capitalization from 2014, thus substantially increasing shareholder value.
Based
upon the foregoing, on February 4, 2020 the Committees jointly authorized the aggregate annual increase in Mr. Madar’s base
salary by $600,000 to $1.23 million effective as of January 1, 2020. The allocation was made as requested so that the annual base
salary to Jean Madar individually will be $285,000 and the fees to Jean Madar Holding SAS will be $945,000 effective as of January
1, 2020.
Russell
Greenberg, the Executive Vice President and Chief Financial Officer, has received the same $30,000 increase in base salary for
2019, 2018 and 2017, and for 2019 his base salary was $690,000. In connection with these increases in salary, the Compensation
Committee considered the following material factors in granting Mr. Greenberg his salary increases: his individual performance,
level of responsibility, skill and experience, as well as the recommendation of the Chief Executive Officer.
Bonus
Compensation/Annual Incentives
As
discussed above, we have paid a higher percentage of overall compensation in the form of bonus compensation to executive officers
of European operations for several years, principally because European operations historically have had higher profitability than
United States operations. As the result of this historically higher profitability, European operations have had the ability to
pay higher bonus compensation in addition to base salary. As bonus compensation is discretionary, no targets were set in order
to maintain flexibility. Further, if results of operations for European operations were not satisfactory (again, no target amounts
were set to maintain flexibility), then bonus compensation, as well as overall compensation could be lowered without otherwise
affecting base salary. Individual performance, level of responsibility, skill and experience, were the salient factors considered
by the Compensation Committee in awarding bonus compensation described below.
For
2019 Mr. Benacin, the chief decision maker for European operations, proposed and the compensation committee concurred in the payment
of discretionary bonus compensation of $110,000 for Mr. Benacin. For each of 2018 and 2017, Mr. Benacin proposed and the compensation
committee concurred in the payment of discretionary bonus compensation for Mr. Benacin of $112,000 and $102,000, respectively.
Over the past three years, this discretionary bonus compensation for Mr. Benacin has been approximately 21% of his base salary
in 2019, 2018 and 2017. In addition, bonus compensation for Messrs. Santi and Garcia-Pelayo have remained in lockstep, and each
was awarded a discretionary bonus of $324,000, $331,000 and $330,000, or approximately 73%, 73% and 74%, of their base salaries
in 2019, 2018 and 2017, respectively.
A
different approach is taken for United States operations as that segment is smaller and less profitable. As discussed above, a
more significant base salary is paid in order to attract and retain employees with the skills and talents needed to run United
States operations with a lesser emphasis placed on bonuses. Based upon the recommendation of the Chief Executive Officer, for
each of 2019, 2018 and 2017, Mr. Greenberg received a discretionary cash bonus of $50,000. The Compensation Committee considered
the following material factors in granting Mr. Greenberg his bonuses: his individual performance, level of responsibility, skill
and experience, as well as the recommendation of the Chief Executive Officer.
Mr.
Madar, the Chief Executive Officer has not received any cash bonus in the past three years.
As
required by French law, Interparfums SA maintains its own profit sharing plan for all French employees who have completed three
months of service, including executive officers of our European operations other than Mr. Benacin, the Chief Executive Officer
of Interparfums SA. Benefits are calculated based upon a percentage of taxable income of Interparfums SA and allocated to employees
based upon salary. The maximum amount payable per year per employee is approximately $34,000.
Calculation
of the total annual benefits contribution is made according to the following formula:
67%
of (Interparfums SA net income, less 2.5% of shareholders equity without net income for the year) times a fraction, the numerator
of which is wages, and the denominator of which is net income before tax + wages + taxes (other than income tax) + valuation allowances
+ amortization expenses + interest expenses.
Contribution
to individual employees is then made pro rata based upon their individual salaries for the year.
Long-Term
Incentives
Stock
Options. We link long-term incentives with corporate performance through the grant of stock options. All options are granted
with an exercise price equal to the fair market value of the underlying shares of our common stock on the date of grant, and terminate
on or shortly after severance of the executive’s relationship with us. Unless the market price of our common stock increases,
corporate executives will have no tangible benefit. Thus, they are provided with the additional incentive to increase individual
performance with the ultimate goal of increasing our overall performance. We believe that enhanced executive incentives which
result in increased corporate performance tend to build company loyalty. As a general rule, the number of options granted is determined
by several factors including individual performance, company operating results and past option grants to such executives.
For
executive officers of United States operations and European operations, we typically grant nonqualified stock options with a term
of 6 years that vest ratably over a 5-year period on a cumulative basis, so that the option will become fully exercisable at the
beginning of the sixth year from the date of grant.
We
believe that the vesting period of these options serve a dual purpose: 1. executives will not receive any benefit if they leave
prior to such portion of the option vesting; and 2. having a vesting period, matches the service period with the potential benefits
of the option. Pursuant to our stock option plan, non-qualified stock options granted to executives terminate immediately upon
the executive’s termination of association with our company. This termination provision coupled with a vesting period reduces
benefits afforded to an executive when an executive officer leaves our employ.
Over
the past several years, as our company has grown and the market price of our common stock has increased, Messrs. Madar and Benacin
have realized substantial compensation as the result of the exercise of their options. As the two executives most responsible
for continued growth and success of our company, the compensation committee believes the granting of options is an appropriate
tool to tie a substantial portion of their compensation to the success of our company and is completely warranted.
The
actual compensation realized as the result of the exercise of options in the past, as well as the future potential of such rewards,
are powerful incentives for increased individual performance and ultimately increased company performance. In view of the fact
that the executive officers named above contribute significantly to our profitable operations, the compensation committee believes
the option grants are valid incentives for these executive officers and are fair to our shareholders. Generally we grant options
to executive officers in December of each year.
In
each of December 2019, 2018 and 2017 in view of the contributions of both Messrs. Madar and Benacin to the company’s increased
profitability, upon the recommendation of the company’s Chief Executive Officer, the compensation committee granted options
to purchase a total of 25,000 shares of our common stock to the personal holding companies of each of Jean Madar and Philippe
Benacin at the fair market value on the date of grant. Option grants to the personal holding companies Messrs. Madar and Benacin
were identical as each is the Chief Executive Officer of their respective operating segments.
Also
in each of December 2019, 2018 and 2017, the compensation committee granted options to purchase 25,000 shares to Mr. Greenberg,
the Chief Financial Officer. The Compensation Committee determined that the option grants for Mr. Greenberg, which have remained
the same for more than the past three years, were reasonable, so based upon the recommendation of the Chief Executive Officer,
it determined to keep the option grants for such executive officer at the same level for 2019.
Upon
recommendation of both Messrs. Madar and Benacin, option grants for Messrs. Santi and Garcia-Pelayo remained steady at 10,000
shares each for 2019, 2018 and 2017. The compensation committee believes that these grants were proper in view of their contribution
to our company’s results in each of 2019, 2018 and 2017.
Interparfums
SA Stock Compensation Plans
2016
Plan - In September 2016, Interparfums SA approved a plan to grant an aggregate of 15,100 shares of its stock to employees
with no performance condition requirement, and an aggregate of 133,000 shares to officers and managers, subject to certain corporate
performance conditions. The corporate performance conditions were met and therefore in September 2019, 172,851 shares, adjusted
for stock splits, were distributed and the employees were permitted to trade their shares. Under this plan in September 2019 Mr.
Benacin received 3,993 shares of Interparfums SA stock, and Messrs. Santi and Garcia received 9,317shares each, all with a fair
market value of €41.75 per share on the date of issuance, as adjusted for stock splits.
The
aggregate cost of the grant of approximately $3.9 million was recognized as compensation cost by Interparfums SA on a straightline
basis over the requisite three year service period.
2019
Plan - As of December 31, 2018, Interparfums SA approved an additional plan to grant an aggregate of 26,600 shares of its
stock to employees with no performance condition requirement, and an aggregate of 133,000 shares to officers and managers, subject
to certain corporate performance conditions. The shares, subject to adjustment for stock splits, will be distributed in June 2022
and will follow the same guidelines as the September 2016 plan. Under this plan in June 2022, Mr. Benacin, Madar, Garcia Pelayo
and Santi are estimated to receive 4,000 shares each, with Mr. Greenberg estimated to receive the equivalent of 1,000 of such
shares, all subject to adjustment for stock splits.
The
fair value of the grant of €29.84 per share (approximately $34.00 per share) has been determined based on the quoted stock
price of Interparfums SA shares as reported by the NYSE Euronext on the date of grant. The estimated number of shares to be distributed
of 142,379 has been determined taking into account employee turnover. The aggregate cost of the grant of approximately $4.4 million
will be recognized as compensation cost by Interparfums SA on a straight-line basis over the requisite 3.5 year service period.
Similar
to the September 2016 plan, in order to avoid dilution of the Company’s ownership of Interparfums SA, all shares distributed or
to be distributed pursuant to these plans will be pre-existing shares of Interparfums SA, purchased in the open market by Interparfums
SA. During, 2019, the Company acquired 131,613 shares at an aggregate cost of $5.8 million.
Stock
Appreciation Rights. Our stock option plans authorize us to grant stock appreciation rights, or SARs. A SAR represents a right
to receive the appreciation in value, if any, of our common stock over the base value of the SAR. To date, we have not granted
any SARs under our plans. While the compensation committee currently does not plan to grant any SARs under our plans, it may choose
to do so in the future as part of a review of the executive compensation strategy.
Restricted
Stock. We have not in the past, and we do not have any future plans to grant restricted stock to our executive officers. However,
while the compensation committee currently does not plan to authorize any restricted stock plans, the compensation committee may
choose to do so in the future as part of a review of the executive compensation strategy. Our French operating subsidiary, Interparfums,
SA, however, has instituted its 2016 and 2019 Stock Compensation Plans as discussed above.
Other
Compensation
For
2019, Mr. Benacin received an automobile allowance of $12,093, which is the same amount paid in since 2010. For 2019 Mr. Garcia-Pelayo,
Executive Vice President and Chief Operating Officer of Interparfums SA, received an automobile allowance of $8,734.
No
Stock Ownership Guidelines
We
do not require any minimum level of stock ownership by any of our executive officers. As stated above, Messrs. Madar and Benacin,
are our largest beneficial shareholders, which aligns their interests with our shareholder base in keeping executive compensation
at a reasonable level.
Retirement
and Pension Plans
We
maintain a 401(k) plan for United States operations. However, we do not match any contributions to such plan, as we have determined
that base compensation together with annual bonuses and stock option awards, are sufficient incentives to retain talented employees.
Our European operations maintain a pension plan for its employees as required by French law. For each of 2019, 2018 and 2017,
each of Messrs. Benacin, Santi and Garcia-Pelayo received an increase of $16,789, $20,646 and $16,376, respectively, in their
vale of deferred compensation earnings.
Compensation
Committee Report
We
have reviewed and discussed with management the Compensation Discussion and Analysis provisions to be included in this Annual
Report on Form 10-K for fiscal year ended December 31, 2019 and the proxy statement for the upcoming annual meeting of shareholders.
Based on this review and discussion, we recommend to the board of directors that the Compensation Discussion and Analysis referred
to above be included in this Annual Report on Form 10-K as well as the proxy statement for the upcoming annual meeting of shareholders.
Francois
Heilbronn
Patrick
Choël and
Veronique
Gabai-Pinsky
The
following table sets forth a summary of all compensation awarded to, earned by or paid to our “named executive officers,”
who are our principal executive officer, our principal financial officer, and each of the three most highly compensated executive
officers of our company. This table covers all such compensation during fiscal years ended December 31, 2019, December 31,
2018 and December 31, 2017. For all compensation related matters disclosed in the summary compensation table, and elsewhere where
applicable, all amounts paid in euro have been converted to U.S. dollars at the average rate of exchange in each year.
|
SUMMARY COMPENSATION TABLE
|
|
Name and Principal Position
|
|
Year
|
|
Salary ($)
|
|
|
Bonus ($)
|
|
|
Stock Awards ($)
|
|
|
Option Awards ($)(1)
|
|
|
Non-Equity Incentive Plan Compensation ($)(2)
|
|
|
Change in Pension Value and Nonqualified Deferred
Compensation Earnings ($)
|
|
|
All Other Compensation ($)(3)
|
|
|
Total ($)
|
|
|
Jean Madar,
|
|
2019
|
|
|
630,000
|
|
|
|
-0-
|
|
|
|
138,320
|
|
|
|
353,092
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
1,121,412
|
|
|
Chairman and
|
|
2018
|
|
|
630,000
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
364,638
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
994,638
|
|
|
Chief Executive Officer
|
|
2017
|
|
|
630,000
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
247,237
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
877,237
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Russell Greenberg,
|
|
2019
|
|
|
690,000
|
|
|
|
50,000
|
|
|
|
34,580
|
|
|
|
353,092
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
1,127,672
|
|
|
Chief Financial Officer and
|
|
2018
|
|
|
660,000
|
|
|
|
50,000
|
|
|
|
-0-
|
|
|
|
364,638
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
1,074,638
|
|
|
Executive Vice President
|
|
2017
|
|
|
630,000
|
|
|
|
50,000
|
|
|
|
-0-
|
|
|
|
247,237
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
927,237
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philippe Benacin, President Inter
|
|
2019
|
|
|
760,583
|
|
|
|
109,731
|
|
|
|
138,320
|
|
|
|
353,092
|
|
|
|
-0-
|
|
|
|
16,789
|
|
|
|
12,093
|
|
|
|
1,390,608
|
|
|
Parfums, Inc., Chief Executive
|
|
2018
|
|
|
774,408
|
|
|
|
112,205
|
|
|
|
-0-
|
|
|
|
364,638
|
|
|
|
-0-
|
|
|
|
20,646
|
|
|
|
12,756
|
|
|
|
1,284,653
|
|
|
Officer of Interparfums SA
|
|
2017
|
|
|
723,348
|
|
|
|
101,646
|
|
|
|
-0-
|
|
|
|
247,237
|
|
|
|
-0-
|
|
|
|
16,376
|
|
|
|
12,198
|
|
|
|
1,100,805
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philippe Santi, Executive Vice
|
|
2019
|
|
|
443,401
|
|
|
|
323,593
|
|
|
|
138,320
|
|
|
|
141,237
|
|
|
|
34,028
|
|
|
|
16,789
|
|
|
|
-0-
|
|
|
|
1,097,368
|
|
|
President and Chief Financial
|
|
2018
|
|
|
453,542
|
|
|
|
330,708
|
|
|
|
-0-
|
|
|
|
189,082
|
|
|
|
33,130
|
|
|
|
20,646
|
|
|
|
-0-
|
|
|
|
1,027,108
|
|
|
Officer, Interparfums SA
|
|
2017
|
|
|
406,584
|
|
|
|
302,679
|
|
|
|
-0-
|
|
|
|
59,337
|
|
|
|
26,069
|
|
|
|
16,376
|
|
|
|
-0-
|
|
|
|
811,045
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Frédéric Garcia-Pelayo,
|
|
2019
|
|
|
443,401
|
|
|
|
323,593
|
|
|
|
138,320
|
|
|
|
141,237
|
|
|
|
34,028
|
|
|
|
16,789
|
|
|
|
8,734
|
|
|
|
1,106,102
|
|
|
Executive Vice President and
|
|
2018
|
|
|
453,542
|
|
|
|
330,708
|
|
|
|
-0-
|
|
|
|
189,082
|
|
|
|
33,130
|
|
|
|
20,646
|
|
|
|
9,213
|
|
|
|
1,036,321
|
|
|
Chief Operating Officer Interparfums SA
|
|
2017
|
|
|
406,584
|
|
|
|
302,679
|
|
|
|
-0-
|
|
|
|
59,037
|
|
|
|
26,069
|
|
|
|
16,376
|
|
|
|
8,245
|
|
|
|
819,290
|
|
1
Amounts reflected under Option Awards represent the grant date fair values in 2019, 2018 and 2017 based on the fair value of stock
option awards using a Black-Scholes option pricing model. The assumptions used in this model are detailed in Footnote 12 to the
audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2019 and filed with
the SEC.
2
As required by French law, Interparfums SA maintains its own profit sharing plan for all French employees who have completed three
months of service, including executive officers of our European operations other than Mr. Benacin, the Chief Executive Officer
of Interparfums SA Benefits are calculated based upon a percentage of taxable income of Interparfums SA and are allocated to employees
based upon salary. The maximum amount payable per year is approximately $34,000.
Calculation
of total annual benefits contribution is made according to the following formula:
67%
of (Interparfums SA net income, less 2.5% of shareholders equity without net income for the year) times a fraction, the numerator
of which is wages, and the denominator of which is net income before tax + wages + taxes (other than income tax) + valuation allowances
+ amortization expenses + interest expenses.
Contribution
to individual employees is then made pro rata based upon their individual salaries for the year.
3
The following table identifies (i) perquisites and other personal benefits provided to our named executive officers in fiscal
2019, and quantifies those required by SEC rules to be quantified and (ii) all other compensation that is required by SEC rules
to be separately identified and quantified.
|
Name and Principal
Position
|
|
Perquisites
and other Personal Benefits ($)
|
|
|
Personal
Automobile Expense($)
|
|
|
Lodging
Expense($)
|
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jean Madar, Chairman
Chief Executive Officer
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Russell Greenberg, Chief Financial
Officer and Executive Vice
President
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philippe Benacin, President of Inter
Parfums, Inc. and Chief Executive
Officer of Interparfums SA
|
|
|
-0-
|
|
|
|
12,093
|
|
|
|
-0-
|
|
|
|
12,093
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philippe Santi,
Executive Vice President and Chief
Financial Officer, Interparfums SA
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Frédéric Garcia-Pelayo,
Executive Vice President and
Chief Operating Officer,
Interparfums SA
|
|
|
-0-
|
|
|
|
8,734
|
|
|
|
-0-
|
|
|
|
8,734
|
|
Plan
Based Awards
The
following table sets certain information relating to each grant of an award made by our company to the executive officers of our
company listed in the Summary Compensation Table during the past fiscal year.
|
|
|
|
|
Grants of Plan-Based Awards
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Grant Date
|
|
Estimated
Future Payouts Under
Non-Equity Incentive Plan Awards
|
|
|
Estimated
Future Payouts Under
Equity Incentive Plan Awards
|
|
|
All Other Stock Awards:
Number
of Shares of Stock or
|
|
|
All Other Option Awards:
Number
of Securities Underlying
|
|
|
Exercise or Base Price of Option
|
|
|
Closing
|
|
|
|
|
|
|
Threshold
($)
|
|
|
Target
($)
|
|
|
Maximum
($)
|
|
|
Threshold
(#)
|
|
|
Target
(#)
|
|
|
Maximum
(#)
|
|
|
Units
(#)
|
|
|
Options
(#)
|
|
|
Awards
($/Sh)
|
|
|
Price
($/Sh)
|
|
|
Jean Madar*
|
|
12/31/19
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
25,000
|
|
|
|
73.09
|
|
|
|
72.71
|
|
|
Russell Greenberg
|
|
12/31/19
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
25,000
|
|
|
|
73.09
|
|
|
|
72.71
|
|
|
Philippe Benacin*
|
|
12/31/19
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
25,000
|
|
|
|
73.09
|
|
|
|
72.71
|
|
|
Philippe Santi
|
|
12/31/19
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
10,000
|
|
|
|
73.09
|
|
|
|
72.71
|
|
|
Frédéric Garcia-Pelayo
|
|
12/31/19
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
10,000
|
|
|
|
73.09
|
|
|
|
72.71
|
|
|
|
*
|
Options
were granted to the personal holding companies of Messrs. Madar and Benacin, as each of Messrs. Madar and Benacin own 99.99% of
their respective personal holding companies.
|
Options
As
discussed above, we typically grant nonqualified stock options with a term of 6 years that vest ratably of a 5-year period on
a cumulative basis, so that the option will become fully exercisable at the beginning of the sixth year from the date of grant.
We
believe that the vesting period of these options serves a dual purpose: 1. executives will not receive any benefit if they leave
prior to such portion of the option vesting; and 2. having a vesting period matches the service period with the potential benefits
of the option.
Under
our company’s stock option plans, the exercise price is determined by the average of the high and low price on the date
of grant, not the closing price as reported by The Nasdaq Stock Market.
We
also note that the Summary Compensation Table does not include income realized by the named executive officers as the result of
the exercise of stock options, but rather reflects the dollar amount recognized for financial statement reporting purposes for
options granted in accordance with ASC topic 718-20. However, value realized as the result of stock option exercises is set forth
in the table entitled “Option Exercises and Stock Vested”.
Interparfums
SA Stock Compensation Plan.
No
options were granted by Interparfums SA to the executive officers of our company listed in the Summary Compensation Table during
the past fiscal year.
Interparfums
SA Stock Grant Plans
2016
Plan – As discussed above, under this plan in September 2019 Mr. Benacin received 3,993 shares of Interparfums SA stock,
and Messrs. Santi and Garcia received 9,317 shares each, all with a fair market value of €41.75 per share on the date of
issuance, as adjusted for stock splits.
A
similar incentive plan was established by Interparfums SA for certain employees of Interparfums Luxury Brands, Inc. (“IPLB”),
Interparfums Singapore (“IP Singapore”) and Inter Parfums, Inc. has been implemented. The proposed incentive plan
would not provide shares but rather, would give a cash payment or bonus (“incentive” or “award”) that
mirrors the shares that Interparfums SA employees will receive. An aggregate of 47,900 “phantom” shares have been
awarded with Mr. Greenberg being awarded 1,500 of such “phantom” shares.
2019
Plan – As discussed above, under this plan in June 2022 Messrs. Benacin, Madar, Garcia Pelayo and Santi are estimated
to receive 4,000 shares each, with Mr. Greenberg estimated to receive the equivalent of 1,000 of such shares, all subject to adjustment
for stock splits.
Interparfums
SA Profit Sharing Plan
Also
as discussed above and required by French law, Inter Parfums, SA maintains its own profit sharing plan for all French employees
who have completed three months of service, including executive officers of our European operations other than Mr. Benacin, the
Chief Executive Officer of Inter Parfums, SA. Benefits are calculated based upon a percentage of taxable income of Interparfums
SA and allocated to employees based upon salary. The maximum amount payable per year per employee is approximately $34,000.
Outstanding
Equity Awards at Fiscal Year-End
The
following table sets forth certain information relating to outstanding equity awards of our Company held by the executive officers
listed in the Summary Compensation Table as of December 31, 2019.
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
|
|
|
Option
Awards
|
|
|
Name
|
|
Number of Securities
Underlying Unexercised Options (#) Exercisable(1)
|
|
|
Number of Securities
Underlying Unexercised Options (#) Unexercisable
|
|
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)
|
|
|
Option
Exercise Price ($)
|
|
|
Option
Expiration
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jean
Madar
|
|
|
19,000
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
27.795
|
|
|
|
12/30/20
|
|
|
|
|
|
15,200
|
|
|
|
3,800
|
|
|
|
-0-
|
|
|
|
23.605
|
|
|
|
12/30/21
|
|
|
|
|
|
11,400
|
|
|
|
7,600
|
|
|
|
-0-
|
|
|
|
32.825
|
|
|
|
12/30/22
|
|
|
|
|
|
10,000
|
|
|
|
15,000
|
(2)
|
|
|
-0-
|
|
|
|
43.80
|
|
|
|
12/29/23
|
|
|
|
|
|
5,000
|
(2)
|
|
|
20,000
|
(2)
|
|
|
-0-
|
|
|
|
65.25
|
|
|
|
12/30/24
|
|
|
|
|
|
-0-
|
|
|
|
25,000
|
(2)
|
|
|
-0-
|
|
|
|
73.09
|
|
|
|
12/30/25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Russell
Greenberg
|
|
|
25,000
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
27.795
|
|
|
|
12/30/20
|
|
|
|
|
|
20,000
|
|
|
|
5,000
|
|
|
|
-0-
|
|
|
|
23.605
|
|
|
|
12/30/21
|
|
|
|
|
|
15,000
|
|
|
|
10,000
|
|
|
|
-0-
|
|
|
|
32.825
|
|
|
|
12/30/22
|
|
|
|
|
|
10,000
|
|
|
|
15,000
|
|
|
|
-0-
|
|
|
|
43.80
|
|
|
|
12/29/23
|
|
|
|
|
|
5,000
|
|
|
|
20,000
|
|
|
|
-0-
|
|
|
|
65.25
|
|
|
|
12/30/24
|
|
|
|
|
|
-0-
|
|
|
|
25,000
|
|
|
|
-0-
|
|
|
|
73.09
|
|
|
|
12/30/25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philippe
Benacin
|
|
|
19,000
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
27.795
|
|
|
|
12/30/20
|
|
|
|
|
|
15,200
|
|
|
|
3,800
|
|
|
|
-0-
|
|
|
|
23.605
|
|
|
|
12/30/21
|
|
|
|
|
|
11,400
|
|
|
|
7,600
|
|
|
|
-0-
|
|
|
|
32.825
|
|
|
|
12/30/22
|
|
|
|
|
|
10,000
|
|
|
|
15,000
|
(2)
|
|
|
-0-
|
|
|
|
43.80
|
|
|
|
12/29/23
|
|
|
|
|
|
5,000
|
(2)
|
|
|
20,000
|
(2)
|
|
|
-0-
|
|
|
|
65.25
|
|
|
|
12/30/24
|
|
|
|
|
|
-0-
|
|
|
|
25,000
|
(2)
|
|
|
-0-
|
|
|
|
73.09
|
|
|
|
12/30/25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philippe
Santi
|
|
|
1,000
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
27.795
|
|
|
|
12/30/20
|
|
|
|
|
|
200
|
|
|
|
200
|
|
|
|
-0-
|
|
|
|
25.821
|
|
|
|
1/27/2021
|
|
|
|
|
|
1,200
|
|
|
|
1,200
|
|
|
|
-0-
|
|
|
|
23.605
|
|
|
|
12/30/21
|
|
|
|
|
|
1,200
|
|
|
|
2,400
|
|
|
|
-0-
|
|
|
|
32.825
|
|
|
|
12/30/22
|
|
|
|
|
|
1,200
|
|
|
|
3,600
|
|
|
|
-0-
|
|
|
|
43.80
|
|
|
|
12/29/23
|
|
|
|
|
|
800
|
|
|
|
3,200
|
|
|
|
-0-
|
|
|
|
46.903
|
|
|
|
1/18/24
|
|
|
|
|
|
2,000
|
|
|
|
8,000
|
|
|
|
-0-
|
|
|
|
65.25
|
|
|
|
12/30/24
|
|
|
|
|
|
-0-
|
|
|
|
10,000
|
|
|
|
-0-
|
|
|
|
73.09
|
|
|
|
12/30/25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Frédéric
Garcia-Pelayo
|
|
|
1,000
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
27.795
|
|
|
|
12/30/20
|
|
|
|
|
|
200
|
|
|
|
200
|
|
|
|
-0-
|
|
|
|
25.821
|
|
|
|
1/27/2021
|
|
|
|
|
|
1,200
|
|
|
|
1,200
|
|
|
|
-0-
|
|
|
|
23.605
|
|
|
|
12/30/21
|
|
|
|
|
|
1,200
|
|
|
|
2,400
|
|
|
|
-0-
|
|
|
|
32.825
|
|
|
|
12/30/22
|
|
|
|
|
|
1,200
|
|
|
|
3,600
|
|
|
|
-0-
|
|
|
|
43.80
|
|
|
|
12/29/23
|
|
|
|
|
|
800
|
|
|
|
3,200
|
|
|
|
-0-
|
|
|
|
46.903
|
|
|
|
1/18/24
|
|
|
|
|
|
2,000
|
|
|
|
8,000
|
|
|
|
-0-
|
|
|
|
65.25
|
|
|
|
12/30/24
|
|
|
|
|
|
-0-
|
|
|
|
10,000
|
|
|
|
-0-
|
|
|
|
73.09
|
|
|
|
12/30/25
|
|
[Footnotes
from table above]
|
|
1
|
All
options expire 6 years from the date of grant, and vest 20% each year commencing one year after the date of grant.
|
|
|
2
|
Options
are held in the name of personal holding company.
|
The
following table sets certain information relating to outstanding equity awards granted by Interparfums SA, our majority-owned
French subsidiary which has its shares traded on the NYSE Euronext, held by the executive officers of our company listed in the
Summary Compensation Table as of the end of the past fiscal year.
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
OF
INTERPARFUMS SA
|
|
|
Option
Awards
|
|
Stock
Awards
|
|
|
Name
|
|
Number
of Securities Underlying Unexercised Options (#) Exercisable)
|
|
Number
of Securities Underlying Unexercised Options (#) Unexercisable
|
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)
|
|
Option
Exercise Price ($)
|
|
|
Option
Expiration Date
|
|
Number
of Shares or Units of Stock that Have Not Vested (#)(1)
|
|
Market
Value of Shares or Units of Stock that Have Not Vested ($)
|
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#)
|
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jean
Madar
|
|
|
-0-
|
|
|
-0-
|
|
|
-0-
|
|
|
-0-
|
|
|
N/A
|
|
|
4,000
|
|
|
138,320
|
|
|
-0-
|
|
NA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Russell
Greenberg
|
|
|
-0-
|
|
|
-0-
|
|
|
-0-
|
|
|
-0-
|
|
|
N/A
|
|
|
1,000
|
|
|
34,580
|
|
|
-0-
|
|
NA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philippe
Benacin
|
|
|
-0-
|
|
|
-0-
|
|
|
-0-
|
|
|
-0-
|
|
|
N/A
|
|
|
4,000
|
|
|
138,320
|
|
|
-0-
|
|
NA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philippe
Santi
|
|
|
-0-
|
|
|
-0-
|
|
|
-0-
|
|
|
-0-
|
|
|
N/A
|
|
|
4,000
|
|
|
138,320
|
|
|
-0-
|
|
NA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Frédéric
Garcia-Pelayo
|
|
|
-0-
|
|
|
-0-
|
|
|
-0-
|
|
|
-0-
|
|
|
N/A
|
|
|
4,000
|
|
|
138,320
|
|
|
-0-
|
|
NA
|
|
[Footnotes
from table above]
|
|
1
|
Estimated
number of shares to be issued, with Mr. Greenberg estimated to receive the equivalent of 1,000 of such shares, only to the extent
that the performance conditions have been met.
|
Option
Exercises and Stock Vested
The
following table sets forth certain information relating to each option exercise affected during the past fiscal year, and each
vesting of stock, including restricted stock, restricted stock units and similar instruments of our company during the past fiscal
year, for the executive officers of our company listed in the Summary Compensation Table.
|
OPTION EXERCISES AND STOCK VESTED
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
Name
|
|
Number of Shares Acquired on Exercie
(#)
|
|
|
Value
Realized on Exercise
($)1
|
|
|
Number of Shares Acquired on Vesting
(#)
|
|
|
Value Realized
On Vesting
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jean Madar
|
|
|
19,000
|
|
|
|
669,689
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Russell Greenberg
|
|
|
23,941
|
|
|
|
816,859
|
|
|
|
1,997
|
|
|
|
90,000
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philippe Benacin
|
|
|
19,000
|
|
|
|
664,406
|
|
|
|
3,993
|
|
|
|
183,945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philippe Santi
|
|
|
5,600
|
|
|
|
174,929
|
|
|
|
9,317
|
|
|
|
431,905
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Frédéric Garcia-Pelayo
|
|
|
5,600
|
|
|
|
167,300
|
|
|
|
9,317
|
|
|
|
431,905
|
|
[Footnotes
from table above]
|
|
1
|
Total
value realized on exercise of options in dollars is based upon the difference between the fair market value of the common stock
on the date of exercise, and the exercise price of the option.
|
|
|
2
|
Under
French law treated as a stock appreciation right and paid in US dollars in 2019.
|
Regarding
Interparfums SA, our majority-owned French subsidiary which has its shares traded on the Euronext, no options were exercised during
the past fiscal year, and there was no vesting of stock, including restricted stock, restricted stock units and similar instruments
during the past fiscal year, for the executive officers of our company listed in the Summary Compensation Table.
Pension
Benefits
The
following table sets forth certain information relating to payment of benefits in connection with retirement plans during the
past fiscal year, for the executive officers of our company listed in the Summary Compensation Table.
PENSION
BENEFITS
|
Name
|
|
Plan Name
|
|
Number of Years Credited Service
(#)
|
|
Present
Value of
Accumulated Benefit*
($)
|
|
|
Payments During Last Fiscal Year
($)
|
|
|
Jean Madar
|
|
NA
|
|
NA
|
|
|
-0-
|
|
|
|
-0-
|
|
|
Russell Greenberg
|
|
NA
|
|
NA
|
|
|
-0-
|
|
|
|
-0-
|
|
|
Philippe Benacin
|
|
Inter Parfums SA Pension Plan
|
|
NA
|
|
|
280,000
|
|
|
|
16,789
|
|
|
Philippe Santi
|
|
Inter Parfums SA Pension Plan
|
|
NA
|
|
|
270,000
|
|
|
|
16,789
|
|
|
Frédéric Garcia-Pelayo
|
|
Inter Parfums SA Pension Plan
|
|
NA
|
|
|
270,000
|
|
|
|
16,789
|
|
|
|
*
|
Does
not include any contributions made by prior employers, or individually by the recipients as such information is confidential under
French law.
|
Interparfums
SA maintains a pension plan for all of its employees, including all executive officers. The calculation of commitments for severance
benefits involves estimating the probable present value of projected benefit obligations. This projected benefit obligations is
then prorated to take into account seniority of the employees of Interparfums SA on the calculation date.
In
calculating benefits, the following assumptions were applied:
-
voluntary retirement at age 65;
-
a rate of 45% for employer payroll contributions for all employees;
-
a 4% average annual salary increase;
-
an annual rate of turnover for all employees under 55 years of age and nil above;
-
the TH 00-02 mortality table for men and the TF 00-02 mortality table for women;
-
a discount rate of 2.0%.
The
normal retirement age is 65 years, but employees, including Messrs. Benacin, Santi and Garcia-Pelayo, can collect reduced benefits
if they retire at age 62.
Nonqualified
Deferred Compensation
We
do not maintain any nonqualified deferred compensation plans.
CEO
Pay Ratio
As
required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K,
we are providing the following information about the relationship of the annual total compensation of our mean employee and the
annual total compensation of Mr. Jean Madar, Chief Executive Officer (the “CEO”):
For
2019, our last completed fiscal year:
|
|
●
|
Our
median employee’s compensation was $67,294
|
|
|
●
|
Our
Chief Executive Officer’s total 2019 compensation was $1,121,412
|
|
|
●
|
Accordingly,
our 2019 CEO to Median Employee Pay Ratio was 16.66 to 1
|
This
pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records.
We identified our median employee using our total employee population as of December 31, 2019 by applying a consistently applied
compensation measure across our global employee population. For our consistently applied compensation measure, we used all compensation,
including actual base salary, bonuses, commissions, and any overtime paid during the 12-month period ending December 31, 2019.
We did not use any material estimates, assumptions, adjustments or statistical sampling to determine the worldwide median employee.
The
SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual
total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates
and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable
to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different
methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
Employment
and Consulting Agreements
As
part of our acquisition in 1991 of the controlling interest in Interparfums SA, now a subsidiary, we entered into an employment
agreement with Philippe Benacin. The agreement provides that Mr. Benacin will be employed as Vice Chairman of the Board and President
and Chief Executive Officer of Inter Parfums Holdings and its subsidiary, Interparfums SA. The initial term expired on September
2, 1992, and has subsequently been automatically renewed for additional annual periods. The agreement provides for automatic annual
renewal terms, unless either party terminates the agreement upon 120 days’ notice. For 2019, Mr. Benacin received an annual
salary of approximately $539,000, and automobile expenses of approximately $13,000, which are subject to increase in the discretion
of the board of directors. The agreement also provides for indemnification and a covenant not to compete for one year after termination
of employment.
In
2014, we entered into a consulting agreement with Mr. Benacin’s holding company, Philippe Benacin Holding SAS, which provides
for review on an annual basis of the amount of compensation payable to such company. The agreement also provides for indemnification
for Mr. Benacin and his holding company and a covenant not to compete for one year after termination of the agreement. The agreement
was for one year, with automatic one year renewals unless either party terminates on 120 days’ notice or Mr. Benacin ceases
to be the President of our company. For 2015 through 2018, Mr. Benacin’s personal holding company received $250,000 each
year for services rendered outside of the United States by Mr. Benacin in his capacity as President. This consulting agreement
was renewed at $250,000 for 2019. In addition, in December 2017, December 2018 and December 2019, we granted options to purchase
25,000 shares for the benefit of Mr. Benacin, and were granted to his personal holding company instead of Mr. Benacin directly.
In
2013, we enter into a consulting agreement with Mr. Madar’s holding company, Jean Madar Holding SAS, which provides for
review on an annual basis of the amount of compensation payable to such company. The agreement also provides for indemnification
for Mr. Madar and his holding company and a covenant not to compete for one year after termination of the agreement. The agreement
was for one year, with automatic one year renewals unless either party terminates on 120 days’ notice or Mr. Madar ceases
to be the Chief Executive Officer of our company. From 2013 through 2017, Mr. Madar’s personal holding company received
$250,000 each year for services rendered outside of the United States by Mr. Madar in his capacity as Chief Executive Officer.
For 2018, as the result of Mr. Madar spending more time outside of the United States, we changed the allocation of cash compensation
paid to Mr. Madar personally and to his holding company, but not the aggregate amount. The amount of salary paid to Mr. Madar
in 2018 was reduced from $380,000 to $160,000, while payments to his holding company were increased by the like amount from $250,000
to $470,000. Therefore, for 2018 total cash compensation for Mr. Madar paid to him and his personal holding company remained unchanged
at $630,000. This consulting agreement was been renewed at $470,000 for 2019. In addition, in December 2017, December 2018 and
December 2019, we granted options to purchase 25,000 shares for the benefit of Mr. Madar, which were granted to his personal holding
company instead of Mr. Madar directly.
Compensation
of Directors
The
following table sets forth certain information relating to the compensation for each of our directors who is not an executive
officer of our Company named in the Summary Compensation Table for the past fiscal year.
|
|
|
|
|
|
|
|
|
DIRECTOR COMPENSATION
|
|
|
|
|
|
|
|
|
Name
|
|
Fees Earned or Paid in Cash
($)
|
|
|
Stock
Awards
($)
|
|
|
Option Awards
($)
|
|
|
Non-Equity Incentive Plan Compensation ($)
|
|
|
Change in Pension Value and Nonqualified Deferred
Compensation Earnings
|
|
|
All
Other Compensation ($)1
|
|
|
Total ($)
|
|
|
Francois Heilbronn2
|
|
|
23,500
|
|
|
|
-0-
|
|
|
|
14,833
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
46,625
|
|
|
|
84,958
|
|
|
Robert Bensoussan3
|
|
|
14,500
|
|
|
|
-0-
|
|
|
|
14,833
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
45,908
|
|
|
|
75,241
|
|
|
Patrick Choël4
|
|
|
23,500
|
|
|
|
-0-
|
|
|
|
14,833
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
27,101
|
|
|
|
65,434
|
|
|
Michel Dyens5
|
|
|
17,500
|
|
|
|
-0-
|
|
|
|
14,833
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
73,160
|
|
|
|
105.493
|
|
|
Veronique Gabai-Pinsky6
|
|
|
23,500
|
|
|
|
-0-
|
|
|
|
14,833
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
38,333
|
|
|
Gilbert Harrison7
|
|
|
14,500
|
|
|
|
-0-
|
|
|
|
14,833
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
29,333
|
|
[Footnotes
from table above]
|
|
1.
|
Represents
gain from exercise of stock options.
|
|
|
2.
|
As
of the end of the last fiscal year, Mr. Heilbronn held options to purchase an aggregate of 4,000 shares of our common stock.
|
|
|
3.
|
As
of the end of the last fiscal year, Mr. Bensoussan held options to purchase an aggregate
of 4,000 shares of our common stock.
|
|
|
4.
|
As
of the end of the last fiscal year, Mr. Choël held options to purchase an aggregate
of 2,750 shares of our common stock.
|
|
|
5.
|
As
of the end of the last fiscal year, Mr. Dyens held options to purchase an aggregate of 4,000 shares of our common stock.
|
|
|
6.
|
As
of the end of the last fiscal year, Ms. Gabai-Pinsky held options to purchase an aggregate of 3,000 shares of our common stock.
|
|
|
7.
|
As
of the end of the last fiscal year, Mr. Harrison held options to purchase an aggregate of 3,000 shares of our common stock.
|
For
2018, all nonemployee directors received $5,000 for each board meeting at which they participate in person, and $2,500 for each
meeting held by conference telephone. In addition, the annual fee for each member of the audit committee is $6,000. In July 2019
and compensation to all nonemployee directors as increased to $6,000 for each board meeting at which they participate in person,
and $3,000 for each meeting held by conference telephone. In addition, effective January 1, 2020 the annual fee for each member
of the audit committee was raised to $8,000.
We
maintain stock option plans for our nonemployee directors. The purpose of these plans is to assist us in attracting and retaining
key directors who are responsible for continuing the growth and success of our company. Under such plans, options to purchase
1,000 shares are granted on each February 1st to all nonemployee directors for as long as each is a nonemployee director on such
date. However, if a nonemployee director does not attend certain of the board meetings, then such option grants are reduced according
to a schedule. In addition, options to purchase 2,000 shares are granted to each nonemployee director upon his or her initial
election or appointment to our board, but if such option is granted within six months of the next February 1 automatic grant,
then such nonemployee director would not be eligible to receive that February 1 grant.
On
February 1, 2019, options to purchase 1,000 shares were granted to each of our outside directors, Francois Heilbronn, Robert Bensoussan,
Patrick Choël, Michel Dyens Veronique Gabai-Pinsky and Gilbert Harrison, all at the exercise price of $66.46 per share under
the 2016 plan. All of such options were granted at the fair market value and vest ratably over a 4 year period. At our annual
meeting in September 2019 our shareholders approved a proposal to amend our 2016 Stock Option Plan to increase the number of shares
issuable upon exercise of options to be granted starting February 1, 2020 from 1,000 shares to 1,500 shares solely to nonemployee
directors annually on each February 1.
Item
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The
following table sets forth information with respect to the beneficial ownership of our common stock by (a) each person we know
to be the beneficial owner of more than 5% of our outstanding common stock, (b) our executive officers and directors and (c) all
of our directors and officers as a group. Each of Messrs. Madar and Benacin own 99.99% of their respective personal holding companies.
As of February 12, 2020 we had 31,531,418 shares of common stock outstanding.
|
Name
and Address of Beneficial Owner
|
|
Amount
of Beneficial Ownership1
|
|
|
Approximate
Percent of Class
|
|
Jean Madar
c/o Interparfums SA
4, Rond Point Des Champs Elysees
75008 Paris, France
|
|
|
7,103,823
|
2
|
|
|
22.5
|
%
|
Philippe Benacin
c/o Interparfums SA
4, Rond Point Des Champs Elysees
75008 Paris, France
|
|
|
6,906,864
|
3
|
|
|
22.0
|
%
|
Russell Greenberg
c/o Inter Parfums, Inc.
551 Fifth Avenue
New York, NY 10176
|
|
|
71,200
|
4
|
|
|
Less
than 1
|
%
|
Philippe Santi
Interparfums SA
4, Rond Point Des Champs Elysees
75008, Paris France
|
|
|
7,600
|
5
|
|
|
Less
than 1
|
%
|
Francois Heilbronn
60 Avenue de Breteuil
75007 Paris, France
|
|
|
35,563
|
6
|
|
|
Less
than 1
|
%
|
Robert Bensoussan
c/o Sirius Equity LLP
52 Brook Street
W1K 5DS London
|
|
|
8,000
|
7
|
|
|
Less
than 1
|
%
|
Patrick Choël
140 Rue de Grenelle
75007, Paris, France
|
|
|
4,000
|
8
|
|
|
Less
than 1
|
%
|
Michel Dyens
Michel Dyens & Co.
17 Avenue Montaigne
75008 Paris, France
|
|
|
4,5009
|
|
|
|
Less than 1
|
%
|
Veronique Gabai-Pinsky
Vera Wang
15 E. 26th Street
New York NY 10010
|
|
|
1,25010
|
|
|
|
Less than 1
|
%
|
Gilbert Harrison
Harrison Group
745 Fifth Avenue, Suite 514
New York, NY 10151
|
|
|
1,25011
|
|
|
|
Less than 1
|
%
|
Frederic Garcia-Pelayo
Interparfums SA
4, Rond Point Des Champs Elysees
75008, Paris France
|
|
|
7,60012
|
|
|
|
Less than 1
|
%
|
Blackrock, Inc.
55 East 52nd Street
New York, NY 10055
|
|
|
2,672,61713
|
|
|
|
8.5
|
%
|
The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355
|
|
|
1,944,81514
|
|
|
|
6.2
|
%
|
All Directors and Officers
(As a Group 10 Persons)
|
|
|
14,151,65015
|
|
|
|
44.7
|
%
|
|
|
1
|
All shares of common stock
are directly held with sole voting power and sole power to dispose, unless otherwise stated. Options which are exercisable within
60 days are included in beneficial ownership calculations. Jean Madar, the Chairman of the Board and Chief Executive Officer of
the Company and Philippe Benacin, the Vice Chairman of the Board and President of the Company, have a verbal agreement or understanding
to vote the shares each beneficially owns in a like manner.
|
|
|
2
|
Consists of 10,682 shares
held directly, 7,032,341 shares held indirectly through Jean Madar Holding SAS, a personal holding company, and options to purchase
60,800 shares.
|
|
|
3
|
Consists of 6,846,064 shares
held indirectly through Philippe Benacin Holding SAS, a personal holding company, and options to purchase 60,800 shares.
|
|
|
4
|
Consists of shares of common
stock underlying options.
|
|
|
5
|
Consists of shares of common
stock underlying options.
|
|
|
6
|
Consists of 33,063 shares
held directly and options to purchase 2,500 shares.
|
|
|
7
|
Consists of 5,500 shares
held directly and options to purchase 2,500 shares.
|
|
|
8
|
Consists of 2,750 shares
held directly and options to purchase 1,250 shares.
|
|
|
9
|
Consists of 2,000 shares
held directly and options to purchase 2,500 shares..
|
|
|
10
|
Consists of shares of common
stock underlying options.
|
|
|
11
|
Consists of shares of common
stock underlying options.
|
|
|
12
|
Consists of shares of common
stock underlying options.
|
|
|
13
|
Information based upon
Schedule 13G Amendment 4 of Blackrock, Inc. dated February 5, 2020 as filed with the Securities and Exchange Commission.
|
|
|
14
|
Information based upon
Schedule 13G Amendment 3 of The Vanguard Group, an investment advisor, dated February 12, 2020 as filed with the Securities and
Exchange Commission.
|
|
|
15
|
Consists
of 13,932,400 shares held directly or indirectly, and options to purchase 219,250 shares.
|
The
following table sets forth certain information as of the end of our last fiscal year regarding all equity compensation plans that
provide for the award of equity securities or the grant of options, warrants or rights to purchase our equity securities.
Equity
Compensation Plan Information
|
Plan category
|
|
Number of
securities to
be issued
upon
exercise
of
outstanding
options,
warrants and
rights
(a)
|
|
|
Weighted-average
exercise price of
outstanding
options,
warrants
and rights
(b)
|
|
|
Number of
securities
remaining
available for
future
issuance
under equity
compensation
plans
(excluding
securities
reflected in
column (a))
(c)
|
|
|
Equity compensation plans approved by security holders
|
|
|
815,800
|
|
|
|
49.89
|
|
|
|
573,695
|
|
|
Equity compensation plans not approved by security holders
|
|
|
-0-
|
|
|
|
N/A
|
|
|
|
-0-
|
|
|
Total
|
|
|
815,800
|
|
|
|
49.89
|
|
|
|
573,695
|
|
Item
13. Certain Relationships and Related Transactions, and Director Independence
Transactions
with European Subsidiaries
We have guaranteed the obligations of our
majority-owned, French subsidiary, Interparfums SA under our Paul Smith license agreement. We also provide (or had provided on
our behalf) certain financial, accounting and legal services for Interparfums SA, and during 2019, 2018 and 2017 fees for such
services were $483,675, $214,513 and $233,625, respectively. In 2017, Inter Parfums USA, LLC, a United States subsidiary, renewed
a license agreement for five years that was initially signed in 2012 on the same terms with Interparfums Suisse (SARL), a Swiss
subsidiary of Interparfums SA, for the right to sell amenities under the Lanvin brand name to luxury hotels, cruise lines and airlines
in return for royalty payments as are customary in our industry.
During
2018, Interparfums SA, an indirect majority-owned subsidiary of the Company, loaned the Company $10 million. This loan was repayable
in ten (10) equal monthly payments of $1,000,000 of principal plus accrued interest at 2% per annum, with the first payment due
on May 31, 2019. The last payment was made on February 28, 2020.
Consulting
Agreements
In
2014, we entered into a consulting agreement with Mr. Benacin’s holding company, Philippe Benacin Holding SAS, which provides
for review on an annual basis of the amount of compensation payable to such company. The agreement also provides for indemnification
for Mr. Benacin and his holding company and a covenant not to compete for one year after termination of the agreement. The agreement
was for one year, with automatic one year renewals unless either party terminates on 120 days’ notice or Mr. Benacin ceases
to be the President of our company. For 2015 through 2018, Mr. Benacin’s personal holding company received $250,000 each
year for services rendered outside of the United States by Mr. Benacin in his capacity as President. This consulting agreement
was renewed at $250,000 for 2019. In addition, in December 2017, December 2018 and December 2019, we granted options to purchase
25,000 shares for the benefit of Mr. Benacin, and were granted to his personal holding company instead of Mr. Benacin directly.
In
2013, we enter into a consulting agreement with Mr. Madar’s holding company, Jean Madar Holding SAS, which provides for
review on an annual basis of the amount of compensation payable to such company. The agreement also provides for indemnification
for Mr. Madar and his holding company and a covenant not to compete for one year after termination of the agreement. The agreement
was for one year, with automatic one year renewals unless either party terminates on 120 days’ notice or Mr. Madar ceases
to be the Chief Executive Officer of our company. From 2013 through 2017, Mr. Madar’s personal holding company received
$250,000 each year for services rendered outside of the United States by Mr. Madar in his capacity as Chief Executive Officer.
For 2018, as the result of Mr. Madar spending more time outside of the United States, we changed the allocation of cash compensation
paid to Mr. Madar personally and to his holding company, but not the aggregate amount. The amount of salary paid to Mr. Madar
in 2018 was reduced from $380,000 to $160,000, while payments to his holding company were increased by the like amount from $250,000
to $470,000. Therefore, for 2018 total cash compensation for Mr. Madar paid to him and his personal holding company remained unchanged
at $630,000. This consulting agreement was been renewed at $470,000 for 2019. In addition, in December 2017 and again in December
2018, we granted options to purchase 25,000 shares for the benefit of Mr. Madar, and were granted to his personal holding company
instead of Mr. Madar directly.
As
discussed above, the members of each of the Audit Committee and the Executive Compensation and Stock Option Committee (collectively
the “Committees”) reviewed two surveys of chief executive officer salaries for 2019. After review of the CEO Surveys
and the efforts of Mr. Madar and his holding company as one of the prime causes for our substantial success, in February 2020
the Committees jointly authorized the aggregate annual increase in Mr. Madar’s base salary by $600,000 to $1.23 million
effective as of January 1, 2020. The allocation was made as requested so that the annual base salary to Jean Madar individually
will be $285,000 and the fees to Jean Madar Holding SAS will be $945,000 effective as of January 1, 2020.
Investment
in Private Company
During
2019 each of our company and Interparfums SA made a $100,000 investment in a privately held start-up fragrance company controlled
by director, Veronique Gabai-Pinsky.
Procedures
for Approval of Related Person Transactions
Transactions
between related persons, such as between an executive officer or director and our company, or any company or person controlled
by such officer or director, are required to be approved by our Audit Committee of our board of directors. Our Audit Committee
Charter contains such explicit authority, as required by the applicable rules of The Nasdaq Stock Market.
Director
Independence
The
following are our directors who are “independent directors” within the applicable rules of The Nasdaq Stock Market:
Francois
Heilbronn
Robert
Bensoussan
Patrick
Choël
Michel
Dyens
Veronique
Gabai-Pinsky
Gilbert
Harrison
We
follow and comply with the independent director definitions as provided by The Nasdaq Stock Market rules in determining the independence
of our directors, which are posted on our company’s website. In addition, such rules are also available on The Nasdaq Stock
Market’s website. In addition, The Nasdaq Stock Market maintains more stringent rules relating to director independence
for the members of our Audit Committee, and the members of our Audit Committee, Messrs. Heilbronn and Choël, as well as Ms.
Gabai-Pinsky, are independent within the meaning of those rules.
Board
Leadership Structure and Risk Management
For
more than the past ten (10) years, Jean Madar has held the positions of Chairman of the Board of Directors and Chief Executive
Officer of our company. Almost since inception, Mr. Madar has been allocated the responsibility of overseeing our United States
operations and the operation of Inter Parfums, Inc., as a public company. Philippe Benacin, as Chief Executive Officer of Interparfums
SA, has been allocated the responsibility of overseeing our European operations and its operation as a public company in France.
In addition, Mr. Benacin is also the Vice Chairman of the Board of Directors of our company. Our board of directors is comfortable
with this approach, as the two largest beneficial stockholders of our company are also directly responsible for the operations
of our company’s two operating segments. Accordingly, our board of directors does not have a “Lead Director,”
a non-management director who controls the meetings of our board of directors.
Our
board of directors manages risk by (i) review of period operating reports and discussions with management; (ii) approval of executive
compensation incentive plans through its committee, the Executive Compensation and Stock Option Committee; (iii) approval of related
party transactions through its committee, the Audit Committee; and (iv) approval of material transactions not in the ordinary
course of business. Since our inception, we have never been the subject of any material product liability claims, and we have
had no recent material property damage claims.
Further,
we periodically enter into foreign currency forward exchange contracts to hedge exposure related to receivables denominated in
a foreign currency and to manage risks related to future sales expected to be denominated in a foreign currency. We enter into
these exchange contracts for periods consistent with our identified exposures. The purpose of the hedging activities is to minimize
the effect of foreign exchange rate movements on the receivables and cash flows of Interparfums SA, our French subsidiary, whose
functional currency is the Euro. All foreign currency contracts are denominated in currencies of major industrial countries and
are with large financial institutions, which are rated as strong investment grade.
In
addition, we mitigate interest rate risk by continually monitoring interest rates, and then determining whether fixed interest
rates should be swapped for floating rate debt, or if floating rate debt should be swapped for fixed rate debt.
Item
14. Principal Accountant Fees and Services
Fees
The following sets forth the fees billed to us by Mazars USA
LLP, as well as discusses the services provided for the past two fiscal years, fiscal years ended December 31, 2019 and December
31, 2018.
Audit
Fees
Fees
billed by Mazars USA LLP and its affiliate, Mazars S.A. for audit services and review of the financial statements contained in
our Quarterly Reports on Form 10-Q were $1.2 and $1.0 million for 2019 and 2018, respectively.
Audit-Related
Fees
Mazars
USA LLP did not bill us for any audit-related services during 2019 and 2018.
Tax
Fees
Mazars USA LLP billed us $41,500 and $30,000 for tax services
during 2019 and 2018, respectively.
All
Other Fees
Mazars S.A. billed us $9,000 and $8,000 for other services during
2019 or 2018.
Audit
Committee Pre-Approval Policies and Procedures
The
Audit Committee has the sole authority for the appointment, compensation and oversight of the work of our independent accountants,
who prepare or issue an audit report for us.
During
the first quarter of 2019, the audit committee authorized the following non-audit services to be performed by Mazars USA LLP.
|
|
●
|
We
authorized the engagement of Mazars USA LLP if deemed necessary to provide tax consultation
in the ordinary course of business for fiscal year ended December 31, 2019.
|
|
|
●
|
We
authorized the engagement of Mazars USA LLP if deemed necessary to provide tax consultation
as may be required on a project by project basis that would not be considered in the
ordinary course of business, of up to a $5,000 fee limit per project, subject to an aggregate
fee limit of $25,000 for fiscal year ended December 31, 2019. If we require further tax
services from Mazars USA LLP, then the approval of the audit committee must be obtained.
|
|
|
●
|
If
we require other services by Mazars USA LLP on an expedited basis such that obtaining
pre-approval of the audit committee is not practicable, then the Chairman of the Committee
has authority to grant the required pre-approvals for all such services.
|
|
|
●
|
We
imposed a cap of $100,000 on the fees that Mazars USA LLP can charge for services on
an expedited basis that are approved by the Chairman without obtaining full audit committee
approval.
|
|
|
●
|
None
of the non-audit services of either of the Company’s auditors had the pre-approval
requirement waived in accordance with Rule 2-01(c)(7)(i)(C) of Regulation S-X.
|
PART
IV
Item
15. Exhibits, Financial Statement Schedules
|
|
Page
|
|
|
|
|
(a)(1)
Financial Statements annexed hereto
|
|
|
|
|
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
|
|
|
|
Audited
Financial Statements:
|
|
|
|
|
|
Consolidated Balance Sheets as of December 31, 2019 and 2018
|
F-4
|
|
|
|
|
Consolidated Statements of Income for each of the years in the three-year period ended December 31, 2019
|
F-5
|
|
|
|
|
Consolidated Statements of Comprehensive Income (Loss) for each of the years in the three-year period ended December 31, 2019
|
F-6
|
|
|
|
|
Consolidated Statements of Changes in Shareholders’ Equity for each of the years in the three-year period ended December 31, 2019
|
F-7
|
|
|
|
|
Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, 2019
|
F-8
|
|
|
|
|
Notes to Consolidated Financial Statements
|
F-9
|
|
|
|
|
(a)(2)
Financial Statement Schedule:
|
|
|
|
|
|
Schedule II – Valuation and Qualifying Accounts
|
F-30
|
|
|
|
|
(a)(3)
Exhibits – The list of exhibits is contained in the Exhibit Index, which follows the signature page of this report.
|
|
Item
16. Form 10-K Summary
None.
INTER
PARFUMS, INC. AND SUBSIDIARIES
Consolidated Financial
Statements and Schedule
Index
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
To Shareholders and the Board of Directors
of Inter Parfums, Inc.
Opinions on the Financial Statements
and Internal Control over Financial Reporting
We have audited the accompanying consolidated
balance sheets of Inter Parfums, Inc. (the “Company”) as of December 31, 2019 and 2018, and the related consolidated
statements of income, comprehensive income, shareholders' equity, and cash flows for each of the years in the three-year period
ended December 31, 2019, and the related notes and the schedule listed in the Index in Item 15(a)(2) (collectively referred
to as the “financial statements”). We also have audited the Company's internal control over financial reporting as
of December 31, 2019, based on criteria established in Internal Control - Integrated Framework: (2013) issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31,
2019 and 2018, and the results of its operations and its cash flows for each of the years in the three-year period ended December
31, 2019, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the
Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based
on criteria established in Internal Control - Integrated Framework: (2013) issued by COSO.
Basis for Opinion
The Company’s management is responsible
for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment
of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report
on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial
statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public
accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required
to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with
the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control
over financial reporting was maintained in all material respects.
Our audits of the consolidated financial
statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements,
whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a
test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating
the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of
the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding
of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the
design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other
procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal
Control over Financial Reporting
A company’s internal control over
financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles.
A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements
in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only
in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention
or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect
on the consolidated financial statements.
Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matters communicated
below are matters arising from the current period audit of the consolidated financial statements that were communicated or required
to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated
financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical
audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not,
by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts
or disclosures to which they relate.
As described in Notes 1 and 7 to the
consolidated financial statements, the Company’s consolidated indefinite and finite – life intangible assets
balance was $202 million at December 31, 2019. Indefinite lived intangible assets principally consist of trademarks and
finite-lived intangible assets represent fees to acquire, or enter into a license.
Those intangible assets are tested for
impairment as follows:
|
|
-
|
Indefinite – life intangible assets are tested for impairment at least annually at the reporting
unit level or more frequently when events occur or circumstances change. The evaluation requires a comparison of the estimated
fair value of the asset to the carrying value of the asset. The fair value is estimated based upon discounted future cash flow
projections. If the carrying value of an indefinite-lived intangible asset exceeds its fair value, an impairment charge is recorded.
|
|
|
-
|
Finite – life intangible assets are tested for impairment testing whenever events or changes
in circumstances indicate that the carrying amount of the asset may not be recoverable. If impairment indicators exist, the undiscounted
future cash flows associated with the expected service potential of the asset are compared to the carrying value of the asset.
If the projection of undiscounted cash flows is less than the carrying value of a finite-lived intangible asset, an impairment
charge would be recorded.
|
The determination of the future cash flows
of the intangible assets requires management to make significant estimates and assumptions related to forecasts of future revenues,
operating margins and discount rates. As disclosed by management, changes in these assumptions could have a significant impact
on either the future cash flows and therefore, on the amount of any impairment charge. The determination of an impairment indicator
on the finite – life intangible assets requires management judgments and involves assumptions.
We identified the impairment assessment
of intangible assets as a critical audit matter. Auditing management’s judgments regarding the evaluation of impairment indicators,
forecasts of future revenue and operating margin, and the discount rate to be applied involve a high degree of subjectivity.
The primary procedures we performed to
address this critical audit matter included:
|
|
►
|
Reviewing the analysis of the identification of impairment
evidence for each indefinite and finite-life asset based on three indicators (sales analysis, new products launches, payment of
minimum guarantees), and then corroborate that analysis with external information and evidence obtained in other areas of the
audit.
|
|
|
►
|
Testing the effectiveness of controls relating to management’s
impairment tests, including controls over the impairment indicators and determination of the future cash flows.
|
|
|
►
|
In testing management’s process for determining
the future cash flows we evaluated the reasonableness of management’s forecasts of future revenue and operating margin by
performing a retrospective review in comparing these forecasts to historical operating results and evaluating whether the assumptions
used were reasonable considering current information as well as future expectations as well as using additional evidence obtained
in other areas of the audit.
|
|
|
►
|
Utilizing a valuation specialist to assist in auditing
the discount rate. It includes evaluating whether the assumptions used were reasonable by comparing with third party market data.
|
/s/ Mazars USA LLP
We have served as the Company's auditor
since 2004.
New York, New York
March 2, 2020
INTER PARFUMS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 2019 and 2018
(In thousands except share and per share
data)
|
Assets
|
|
2019
|
|
|
2018
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
192,417
|
|
|
$
|
193,136
|
|
|
Short-term investments
|
|
|
60,714
|
|
|
|
67,870
|
|
|
Accounts receivable, net
|
|
|
133,010
|
|
|
|
133,320
|
|
|
Inventories
|
|
|
167,809
|
|
|
|
161,778
|
|
|
Receivables, other
|
|
|
2,054
|
|
|
|
2,112
|
|
|
Other current assets
|
|
|
17,123
|
|
|
|
12,576
|
|
|
Income taxes receivable
|
|
|
169
|
|
|
|
810
|
|
|
Total current assets
|
|
|
573,296
|
|
|
|
571,602
|
|
|
Equipment and leasehold improvements, net
|
|
|
11,107
|
|
|
|
9,839
|
|
|
Right-of-use assets, net
|
|
|
28,359
|
|
|
|
|
|
|
Trademarks, licenses and other intangible assets, net
|
|
|
201,983
|
|
|
|
204,325
|
|
|
Deferred tax assets
|
|
|
8,004
|
|
|
|
5,761
|
|
|
Other assets
|
|
|
6,083
|
|
|
|
6,302
|
|
|
Total assets
|
|
$
|
828,832
|
|
|
$
|
797,829
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Current portion of long-term debt
|
|
$
|
12,326
|
|
|
$
|
23,155
|
|
|
Current portion of lease liabilities
|
|
|
5,356
|
|
|
|
|
|
|
Accounts payable - trade
|
|
|
54,098
|
|
|
|
58,328
|
|
|
Accrued expenses
|
|
|
96,421
|
|
|
|
94,668
|
|
|
Income taxes payable
|
|
|
5,865
|
|
|
|
4,396
|
|
|
Dividends payable
|
|
|
10,399
|
|
|
|
8,630
|
|
|
Total current liabilities
|
|
|
184,465
|
|
|
|
189,177
|
|
|
Long–term debt, less current portion
|
|
|
10,734
|
|
|
|
22,906
|
|
|
Lease liabilities, less current portion
|
|
|
24,635
|
|
|
|
–
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
Inter Parfums, Inc. shareholders’ equity:
|
|
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value. Authorized 1,000,000 shares; none issued
|
|
|
|
|
|
|
|
|
|
Common stock, $0.001 par value. Authorized 100,000,000 shares; outstanding, 31,513,018 and 31,382,127 shares at December 31, 2019 and 2018, respectively
|
|
|
31
|
|
|
|
31
|
|
|
Additional paid-in capital
|
|
|
70,664
|
|
|
|
69,970
|
|
|
Retained earnings
|
|
|
474,637
|
|
|
|
448,731
|
|
|
Accumulated other comprehensive loss
|
|
|
(39,853
|
)
|
|
|
(33,650
|
)
|
|
Treasury stock, at cost, 9,864,805 common shares at December 31, 2019 and 2018
|
|
|
(37,475
|
)
|
|
|
(37,475
|
)
|
|
Total Inter Parfums, Inc. shareholders’ equity
|
|
|
468,004
|
|
|
|
447,607
|
|
|
Noncontrolling interest
|
|
|
140,994
|
|
|
|
138,139
|
|
|
Total equity
|
|
|
608,998
|
|
|
|
585,746
|
|
|
Total liabilities and equity
|
|
$
|
828,832
|
|
|
$
|
797,829
|
|
See accompanying notes to consolidated financial statements.
INTER PARFUMS, INC. AND SUBSIDIARIES
Consolidated Statements of Income
Years ended December 31, 2019, 2018,
and 2017
(In thousands except share and per share
data)
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
713,514
|
|
|
$
|
675,574
|
|
|
$
|
591,251
|
|
|
Cost of sales
|
|
|
267,578
|
|
|
|
248,012
|
|
|
|
214,965
|
|
|
Gross margin
|
|
|
445,936
|
|
|
|
427,562
|
|
|
|
376,286
|
|
|
Selling, general, and administrative expenses
|
|
|
341,209
|
|
|
|
332,831
|
|
|
|
295,540
|
|
|
Impairment loss
|
|
|
–
|
|
|
|
–
|
|
|
|
2,123
|
|
|
Income from operations
|
|
|
104,727
|
|
|
|
94,731
|
|
|
|
78,623
|
|
|
Other expenses (income):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
2,146
|
|
|
|
2,578
|
|
|
|
1,992
|
|
|
Loss on foreign currency
|
|
|
1,128
|
|
|
|
251
|
|
|
|
1,549
|
|
|
Interest income
|
|
|
(3,693
|
)
|
|
|
(3,957
|
)
|
|
|
(2,983
|
)
|
|
|
|
|
(419
|
)
|
|
|
(1,128
|
)
|
|
|
558
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
105,146
|
|
|
|
95,859
|
|
|
|
78,065
|
|
|
Income taxes
|
|
|
29,076
|
|
|
|
26,144
|
|
|
|
22,812
|
|
|
Net income
|
|
|
76,070
|
|
|
|
69,715
|
|
|
|
55,253
|
|
|
Less: Net income attributable to the noncontrolling interest
|
|
|
15,821
|
|
|
|
15,922
|
|
|
|
13,659
|
|
|
Net income attributable to Inter Parfums, Inc.
|
|
$
|
60,249
|
|
|
$
|
53,793
|
|
|
$
|
41,594
|
|
|
Net income attributable to Inter Parfums, Inc. common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.92
|
|
|
$
|
1.72
|
|
|
$
|
1.33
|
|
|
Diluted
|
|
$
|
1.90
|
|
|
$
|
1.71
|
|
|
$
|
1.33
|
|
|
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
31,451,093
|
|
|
|
31,307,991
|
|
|
|
31,172,285
|
|
|
Diluted
|
|
|
31,688,700
|
|
|
|
31,522,371
|
|
|
|
31,305,101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per share
|
|
$
|
1.16
|
|
|
$
|
0.91
|
|
|
$
|
0.72
|
|
See accompanying notes to consolidated financial statements.
INTER PARFUMS, INC.
AND SUBSIDIARIES
Consolidated Statements of Comprehensive
Income
Years ended December 31, 2019, 2018,
and 2017
(In thousands except share and per share
data)
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
76,070
|
|
|
$
|
69,715
|
|
|
$
|
55,253
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net derivative instrument income, net of tax
|
|
|
22
|
|
|
|
175
|
|
|
|
54
|
|
|
Transfer of OCI into earnings
|
|
|
(136
|
)
|
|
|
(37
|
)
|
|
|
22
|
|
|
Translation adjustments, net of tax
|
|
|
(8,712
|
)
|
|
|
(22,555
|
)
|
|
|
55,995
|
|
|
|
|
|
(8,826
|
)
|
|
|
(22,417
|
)
|
|
|
56,071
|
|
|
Comprehensive income
|
|
|
67,244
|
|
|
|
47,298
|
|
|
|
111,324
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income attributable to noncontrolling
interests:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
15,821
|
|
|
|
15,922
|
|
|
|
13,659
|
|
|
Net derivative instrument income (loss), net of tax
|
|
|
(30
|
)
|
|
|
39
|
|
|
|
17
|
|
|
Transfer of OCI into earnings
|
|
|
--
|
|
|
|
--
|
|
|
|
5
|
|
|
Translation adjustments, net of tax
|
|
|
(2,593
|
)
|
|
|
(6,638
|
)
|
|
|
15,899
|
|
|
|
|
|
13,198
|
|
|
|
9,323
|
|
|
|
29,580
|
|
|
Comprehensive income attributable
to Inter Parfums Inc.
|
|
$
|
54,046
|
|
|
$
|
37,975
|
|
|
$
|
81,744
|
|
See accompanying notes to consolidated financial statements.
INTER PARFUMS, INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Shareholders’
Equity
Years ended December 31, 2019, 2018,
and 2017
(In thousands except share and per share
data)
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, beginning and end of year
|
|
$
|
31
|
|
|
$
|
31
|
|
|
$
|
31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional paid-in capital, beginning of year
|
|
|
69,970
|
|
|
|
66,004
|
|
|
|
63,103
|
|
|
Shares issued upon exercise of stock options
|
|
|
4,458
|
|
|
|
3,406
|
|
|
|
1,963
|
|
|
Purchase of subsidiary shares from noncontrolling interests
|
|
|
(5,167
|
)
|
|
|
(572
|
)
|
|
|
|
|
|
Stock-based compensation
|
|
|
1,403
|
|
|
|
1,132
|
|
|
|
938
|
|
|
Additional paid-in capital, end of year
|
|
|
70,664
|
|
|
|
69,970
|
|
|
|
66,004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retained earnings, beginning of year
|
|
|
448,731
|
|
|
|
422,570
|
|
|
|
402,714
|
|
|
Net income
|
|
|
60,249
|
|
|
|
53,793
|
|
|
|
41,594
|
|
|
Dividends
|
|
|
(36,349
|
)
|
|
|
(28,356
|
)
|
|
|
(22,460
|
)
|
|
Stock-based compensation
|
|
|
2,006
|
|
|
|
724
|
|
|
|
722
|
|
|
Retained earnings, end of year
|
|
|
474,637
|
|
|
|
448,731
|
|
|
|
422,570
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated other comprehensive loss, beginning of year
|
|
|
(33,650
|
)
|
|
|
(17,832
|
)
|
|
|
(57,982
|
)
|
|
Foreign currency translation adjustment, net of tax
|
|
|
(6,119
|
)
|
|
|
(15,917
|
)
|
|
|
40,096
|
|
|
Transfer from other comprehensive income into earnings
|
|
|
(136
|
)
|
|
|
(37
|
)
|
|
|
17
|
|
|
Net derivative instrument gain, net of tax
|
|
|
52
|
|
|
|
136
|
|
|
|
37
|
|
|
Accumulated other comprehensive loss, end of year
|
|
|
(39,853
|
)
|
|
|
(33,650
|
)
|
|
|
(17,832
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Treasury stock, beginning and end of year
|
|
|
(37,475
|
)
|
|
|
(37,475
|
)
|
|
|
(37,475
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest, beginning of year
|
|
|
138,139
|
|
|
|
137,339
|
|
|
|
113,267
|
|
|
Net income
|
|
|
15,821
|
|
|
|
15,922
|
|
|
|
13,659
|
|
|
Foreign currency translation adjustment, net of tax
|
|
|
(2,593
|
)
|
|
|
(6,638
|
)
|
|
|
15,899
|
|
|
Transfer from other comprehensive income into earnings
|
|
|
|
|
|
|
|
|
|
|
5
|
|
|
Net derivative instrument gain (loss), net of tax
|
|
|
(30
|
)
|
|
|
39
|
|
|
|
17
|
|
|
Purchase of subsidiary shares from noncontrolling interests
|
|
|
(920
|
)
|
|
|
(236
|
)
|
|
|
|
|
|
Dividends
|
|
|
(9,654
|
)
|
|
|
(8,706
|
)
|
|
|
(6,039
|
)
|
|
Stock-based compensation
|
|
|
231
|
|
|
|
419
|
|
|
|
531
|
|
|
Noncontrolling interest, end of year
|
|
|
140,994
|
|
|
|
138,139
|
|
|
|
137,339
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
$
|
608,998
|
|
|
$
|
585,746
|
|
|
$
|
570,637
|
|
See accompanying notes to consolidated financial statements.
INTER PARFUMS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years ended December 31, 2019, 2018,
and 2017
(In thousands)
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
76,070
|
|
|
$
|
69,715
|
|
|
$
|
55,253
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization including impairment loss
|
|
|
8,729
|
|
|
|
11,031
|
|
|
|
11,914
|
|
|
Provision for doubtful accounts
|
|
|
1,380
|
|
|
|
1,442
|
|
|
|
939
|
|
|
Noncash stock compensation
|
|
|
3,394
|
|
|
|
2,205
|
|
|
|
2,093
|
|
|
Lease expense
|
|
|
1,068
|
|
|
|
|
|
|
|
|
|
|
Deferred tax benefit
|
|
|
(2,330
|
)
|
|
|
(158
|
)
|
|
|
(591
|
)
|
|
Change in fair value of derivatives
|
|
|
(169
|
)
|
|
|
(302
|
)
|
|
|
(1,254
|
)
|
|
Changes in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
1,124
|
|
|
|
(21,532
|
)
|
|
|
(4,116
|
)
|
|
Inventories
|
|
|
(5,925
|
)
|
|
|
(29,341
|
)
|
|
|
(28,518
|
)
|
|
Other assets
|
|
|
(4,945
|
)
|
|
|
(1,016
|
)
|
|
|
(1,173
|
)
|
|
Accounts payable and accrued expenses
|
|
|
(4,960
|
)
|
|
|
25,592
|
|
|
|
5,696
|
|
|
Income taxes, net
|
|
|
3,016
|
|
|
|
5,405
|
|
|
|
(4,352
|
)
|
|
Net cash provided by operating activities
|
|
|
76,452
|
|
|
|
63,041
|
|
|
|
35,891
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of short-term investments
|
|
|
(38,958
|
)
|
|
|
(10,030
|
)
|
|
|
(31,874
|
)
|
|
Proceeds from sale of short-term investments
|
|
|
44,814
|
|
|
|
8,859
|
|
|
|
66,981
|
|
|
Purchase of equipment and leasehold improvements
|
|
|
(5,427
|
)
|
|
|
(3,956
|
)
|
|
|
(3,023
|
)
|
|
Payment for intangible assets acquired
|
|
|
(6,067
|
)
|
|
|
(8,509
|
)
|
|
|
(1,046
|
)
|
|
Proceeds from sale of trademark
|
|
|
|
|
|
|
|
|
|
|
5,886
|
|
|
Net cash provided by (used in) investing activities
|
|
|
(5,638
|
)
|
|
|
(13,636
|
)
|
|
|
36,924
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayment of long-term debt
|
|
|
(22,321
|
)
|
|
|
(23,487
|
)
|
|
|
(22,362
|
)
|
|
Proceeds from exercise of options
|
|
|
4,458
|
|
|
|
3,406
|
|
|
|
1,963
|
|
|
Dividends paid
|
|
|
(34,579
|
)
|
|
|
(26,287
|
)
|
|
|
(21,192
|
)
|
|
Dividends paid to noncontrolling interests
|
|
|
(9,654
|
)
|
|
|
(8,706
|
)
|
|
|
(6,039
|
)
|
|
Purchase of subsidiary shares from noncontrolling interests
|
|
|
(6,087
|
)
|
|
|
(808
|
)
|
|
|
|
|
|
Net cash used in financing activities
|
|
|
(68,183
|
)
|
|
|
(55,882
|
)
|
|
|
(47,630
|
)
|
|
Effect of exchange rate changes on cash
|
|
|
(3,350
|
)
|
|
|
(8,730
|
)
|
|
|
21,330
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(719
|
)
|
|
|
(15,207
|
)
|
|
|
46,515
|
|
|
Cash and cash equivalents – beginning of year
|
|
|
193,136
|
|
|
|
208,343
|
|
|
|
161,828
|
|
|
Cash and cash equivalents – end of year
|
|
$
|
192,417
|
|
|
$
|
193,136
|
|
|
$
|
208,343
|
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
1,764
|
|
|
$
|
1,745
|
|
|
$
|
1,813
|
|
|
Income taxes
|
|
|
26,332
|
|
|
|
24,995
|
|
|
|
24,337
|
|
See accompanying notes to consolidated financial statements.
INTER
PARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2019, 2018 and 2017
(In thousands except share and per share
data)
|
|
(1)
|
The Company and its Significant Accounting Policies
|
Business of the Company
Inter Parfums,
Inc. and its subsidiaries (the “Company”) are in the fragrance business and manufacture and distribute a wide array
of fragrances and fragrance related products.
Substantially
all of our prestige fragrance brands are licensed from unaffiliated third parties, and our business is dependent upon the continuation
and renewal of such licenses. With respect to the Company’s largest brands, we own the Lanvin brand name for our class of
trade, and license the Montblanc, Jimmy Choo, Coach, and GUESS brand names. As a percentage of net sales, product sales for the
Company’s largest brands were as follows:
|
|
|
Year Ended December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
Montblanc
|
|
|
22
|
%
|
|
|
19
|
%
|
|
|
21
|
%
|
|
Jimmy Choo
|
|
|
16
|
%
|
|
|
17
|
%
|
|
|
18
|
%
|
|
Coach
|
|
|
14
|
%
|
|
|
15
|
%
|
|
|
10
|
%
|
|
GUESS (license commenced April 1, 2018)
|
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
Lanvin
|
|
|
8
|
%
|
|
|
10
|
%
|
|
|
11
|
%
|
No other brand
represented 10% or more of consolidated net sales.
Basis of Preparation
The
consolidated financial statements include the accounts of the Company, including 73% owned Interparfums SA, a subsidiary whose
stock is publicly traded in France. In 2018, the Company formed Interstellar Brands, LLC, (“Interstellar”), a wholly
owned subsidiary in the United States. Interstellar’s partnership with IMG Models allows for the two groups to collaborate
on exploring and developing compelling e-commerce businesses for clients of IMG Models. All material intercompany balances and
transactions have been eliminated.
Management Estimates
Management makes assumptions
and estimates to prepare financial statements in conformity with accounting principles generally accepted in the United States
of America. Those assumptions and estimates directly affect the amounts reported and disclosures included in the consolidated
financial statements. Actual results could differ from those assumptions and estimates. Significant estimates for which changes
in the near term are considered reasonably possible and that may have a material impact on the financial statements are disclosed
in these notes to the consolidated financial statements.
Foreign Currency Translation
For foreign
subsidiaries with operations denominated in a foreign currency, assets and liabilities are translated to U.S. dollars at year-end
exchange rates. Income and expense items are translated at average rates of exchange prevailing during the year. Gains and losses
from translation adjustments are accumulated in a separate component of shareholders’ equity.
Cash and Cash Equivalents
and Short-Term Investments
All highly
liquid investments purchased with a maturity of three months or less are considered to be cash equivalents. From time to time,
the Company has short-term investments which consist of certificates of deposit with maturities greater than three months. The
Company monitors concentrations of credit risk associated with financial institutions with which the Company conducts significant
business. The Company believes its credit risk is minimal, as the Company primarily conducts business with large, well-established
financial institutions. Substantially all cash and cash equivalents are primarily held at financial institutions outside the United
States and are readily convertible into U.S. dollars.
INTER PARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2019, 2018 and 2017
(In thousands except share and per share
data)
Accounts Receivable
Accounts receivable
represent payments due to the Company for previously recognized net sales, reduced by allowances for doubtful
accounts or balances which are estimated to be uncollectible, which aggregated $2.5 million and $2.6 million as of December 31,
2019 and 2018, respectively. Accounts receivable balances are written-off against the allowance for doubtful accounts when they
become uncollectible. Recoveries of accounts receivable previously recorded against the allowance are recorded in the consolidated
statement of income when received. We generally grant credit based upon our analysis of the customer’s financial position,
as well as previously established buying patterns.
Inventories
Inventories,
including promotional merchandise, only include inventory considered saleable or usable in future periods, and are stated at the
lower of cost and net realizable value, with cost being determined on the first-in, first-out method. Cost components include
raw materials, direct labor and overhead (e.g., indirect labor, utilities, depreciation, purchasing, receiving, inspection and
warehousing) as well as inbound freight. Promotional merchandise is charged to cost of sales at the time the merchandise
is shipped to the Company’s customers.
Derivatives
All derivative instruments are
recorded as either assets or liabilities and measured at fair value. The Company uses derivative instruments to principally manage
a variety of market risks. For derivatives designated as hedges of the exposure to changes in fair value of the recognized asset
or liability or a firm commitment (referred to as fair value hedges), the gain or loss is recognized in earnings in the period
of change together with the offsetting loss or gain on the hedged item attributable to the risk being hedged. The effect of that
accounting is to include in earnings the extent to which the hedge is not effective in achieving offsetting changes in fair value.
For cash flow hedges, the effective portion of the derivative’s gain or loss is initially reported in equity (as a component
of accumulated other comprehensive income) and is subsequently reclassified into earnings in the same period or periods during
which the hedged forecasted transaction affects earnings. The ineffective portion of the gain or loss of a cash flow hedge is
reported in earnings immediately. The Company also holds certain instruments for economic purposes that are not designated for
hedge accounting treatment. For these derivative instruments, changes in their fair value are recorded in earnings immediately.
Equipment and Leasehold
Improvements
Equipment
and leasehold improvements are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are
provided using the straight-line method over the estimated useful lives for equipment, which range between three and ten years
and the shorter of the lease term or estimated useful asset lives for leasehold improvements. Depreciation provided on equipment
used to produce inventory, such as tools and molds, is included in cost of sales.
INTER PARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2019, 2018 and 2017
(In thousands except share and per share
data)
Long-Lived Assets
Indefinite-lived intangible
assets principally consist of trademarks which are not amortized. The Company evaluates indefinite-lived intangible assets for
impairment at least annually during the fourth quarter, or more frequently when events occur or circumstances change, such as
an unexpected decline in sales, that would more-likely-than-not indicate that the carrying value of an indefinite-lived intangible
asset may not be recoverable. When testing indefinite-lived intangible assets for impairment, the evaluation requires a comparison
of the estimated fair value of the asset to the carrying value of the asset. The fair values used in our evaluations are estimated
based upon discounted future cash flow projections using a weighted average cost of capital of 7.94% and 6.21% in 2019 and 2018,
respectively. The cash flow projections are based upon a number of assumptions, including future sales levels, future cost of
goods and operating expense levels, as well as economic conditions, changes to our business model or changes in consumer acceptance
of our products which are more subjective in nature. If the carrying value of an indefinite-lived intangible asset exceeds its
fair value, an impairment charge is recorded.
Intangible
assets subject to amortization are evaluated for impairment testing whenever events or changes in circumstances indicate that
the carrying amount of an amortizable intangible asset may not be recoverable. If impairment indicators exist for an amortizable
intangible asset, the undiscounted future cash flows associated with the expected service potential of the asset are compared
to the carrying value of the asset. If our projection of undiscounted future cash flows is in excess of the carrying value of
the intangible asset, no impairment charge is recorded. If our projection of undiscounted future cash flows is less than the carrying
value of the intangible asset, an impairment charge would be recorded to reduce the intangible asset to its fair value.
Revenue Recognition
The Company sells its products to department stores, perfumeries, specialty stores and domestic and international wholesalers and distributors. Our revenue contracts represent single performance obligations to sell our products to customers. Sales of such products by our domestic subsidiaries are denominated in U.S. dollars, and sales of such products by our foreign subsidiaries are primarily denominated in either euro or U.S. dollars. The Company recognizes revenues when contract terms are met, the price is fixed and determinable, collectability is reasonably assured and control of the assets has passed to the customer based on the agreed upon shipping terms. Net sales are comprised of gross revenues less returns, trade discounts and allowances. The Company does not bill its customers’ freight and handling charges. All shipping and handling costs, which aggregated $7.7 million, $7.1 million and $5.9 million in 2019, 2018 and 2017, respectively, are included in selling, general and administrative expenses in the consolidated statements of income. The Company grants credit to all qualified customers and does not believe it is exposed significantly to any undue concentration of credit risk. No one customer represented 10% or more of net sales in 2019, 2018 or 2017.
Sales Returns
Generally, the Company does
not permit customers to return their unsold products. However, for U.S. based customers, we allow returns if properly requested,
authorized and approved. The Company regularly reviews and revises, as deemed necessary, its estimate of reserves for future sales
returns based primarily upon historic trends and relevant current data including information provided by retailers regarding their
inventory levels. In addition, as necessary, specific accruals may be established for significant future known or anticipated
events. The types of known or anticipated events that we consider include, but are not limited to, the financial condition of
our customers, store closings by retailers, changes in the retail environment and our decision to continue to support new and
existing products. The Company records its estimate of potential sales returns as a reduction of sales and cost of sales with
corresponding entries to accrued expenses, to record the refund liability, and inventory, for the right to recover goods from
the customer. The refund liability associated with estimated returns was $4.1 million and $2.2 million at December 31, 2019 and
2018, respectively, and the amounts recognized for the rights to recover products was $1.6 million and $0.8 million at December
31, 2019 and 2018, respectively. The physical condition and marketability of returned products are the major factors we consider
in estimating realizable value. Actual returns, as well as estimated realizable values of returned products, may differ significantly,
either favorably or unfavorably, from our estimates, if factors such as economic conditions, inventory levels or competitive conditions
differ from our expectations.
INTER PARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2019, 2018 and 2017
(In thousands except share and per share
data)
Payments to Customers
The Company records revenues
generated from purchase with purchase and gift with purchase promotions as sales and the costs of its purchase with purchase and
gift with purchase promotions as cost of sales. Certain other incentive arrangements require the payment of a fee to customers
based on their attainment of pre-established sales levels. These fees have been recorded as a reduction of net sales.
Advertising and Promotion
Advertising
and promotional costs are expensed as incurred and recorded as a component of cost of goods sold (in the case of free goods given
to customers) or selling, general and administrative expenses. Advertising and promotional costs included in selling, general
and administrative expenses were $144.6 million, $139.7 million and $123.7 million for 2019, 2018 and 2017, respectively. Costs
relating to purchase with purchase and gift with purchase promotions that are reflected in cost of sales aggregated $38.9 million,
$36.4 million and $33.8 million in 2019, 2018 and 2017, respectively.
Package Development
Costs
Package development
costs associated with new products and redesigns of existing product packaging are expensed as incurred.
Operating Leases
The Company leases its offices
and warehouses, vehicles, and certain office equipment, substantially all of which are classified as operating leases. The Company
currently has no material financing leases. The Company determines if an arrangement is a lease at inception. Operating lease
assets and obligations are recognized at the lease commencement date based on the present value of lease payments over the lease
term.
License Agreements
The Company’s license
agreements generally provide the Company with worldwide rights to manufacture, market and sell fragrance and fragrance related
products using the licensors’ trademarks. The licenses typically have an initial term of approximately 5 to 15 years,
and are potentially renewable subject to the Company’s compliance with the license agreement provisions. The remaining
terms, excluding potential renewal periods, range from approximately 1 to 14 years. Under each license, the Company is required
to pay royalties in the range of 5% to 10% to the licensor, at least annually, based on net sales to third parties.
In certain cases, the Company
may pay an entry fee to acquire, or enter into, a license where the licensor or another licensee was operating a pre-existing
fragrance business. In those cases, the entry fee is capitalized as an intangible asset and amortized over its useful life.
Most license agreements require
minimum royalty payments, incremental royalties based on net sales levels and minimum spending on advertising and promotional
activities. Royalty expenses are accrued in the period in which net sales are recognized while advertising and promotional
expenses are accrued at the time these costs are incurred.
INTER PARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2019, 2018 and 2017
(In thousands except share and per share
data)
In addition, the Company is
exposed to certain concentration risk. Most of our prestige fragrance brands are licensed from unaffiliated third parties, and
our business is dependent upon the continuation and renewal of such licenses.
Income Taxes
The Company accounts for income
taxes using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been recognized in its financial statements or tax returns. The net deferred
tax assets assume sufficient future earnings for their realization, as well as the continued application of currently enacted
tax rates. Included in net deferred tax assets is a valuation allowance for deferred tax assets, where management believes
it is more-likely-than-not that the deferred tax assets will not be realized in the relevant jurisdiction. If the Company
determines that a deferred tax asset will not be realizable, an adjustment to the deferred tax asset will result in a reduction
of net earnings at that time. Accrued interest and penalties are included within the related tax asset or liability in the accompanying
financial statements.
Issuance of Common
Stock by Consolidated Subsidiary
The difference
between the Company’s share of the proceeds received by the subsidiary and the carrying amount of the portion of the Company’s
investment deemed sold, is reflected as an equity adjustment in the consolidated balance sheets.
Treasury Stock
The Board
of Directors may authorize share repurchases of the Company’s common stock (Share Repurchase Authorizations). Share repurchases
under Share Repurchase Authorizations may be made through open market transactions, negotiated purchase or otherwise, at times
and in such amounts within the parameters authorized by the Board. Shares repurchased under Share Repurchase Authorizations are
held in treasury for general corporate purposes, including issuances under various employee stock option plans. Treasury shares
are accounted for under the cost method and reported as a reduction of equity. Share Repurchase Authorizations may be suspended,
limited or terminated at any time without notice.
Recent Accounting Pronouncements
In August 2017, the Financial
Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) to improve accounting
for hedging activities. The objective of the ASU is to improve the financial reporting of hedging relationships in order to better
portray the economic results of an entity’s risk management activities in its financial statements and to make certain targeted
improvements to simplify the application of hedge accounting guidance. This ASU is effective for annual and interim periods beginning
after December 15, 2018 and early adoption is permitted. We have evaluated the standard and determined that there has been no
material impact on our consolidated financial statements.
In June 2016, the FASB issued
ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial
Instruments”, as updated in 2019 and 2020, which require a financial asset measured at amortized cost basis to be
presented at the net amount expected to be collected. The new rules eliminate the probable initial recognition threshold and,
instead, reflect an entity’s current estimate of all expected credit losses. The new rules will be effective for the
Company in the first quarter of 2020. The Company expects the new rules to apply to its trade receivables, but does not
expect the adoption to have a material impact on our consolidated financial statements.
INTER PARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2019, 2018 and 2017
(In thousands except share and per share
data)
In February 2016, the FASB issued
an ASU which requires lessees to recognize lease assets and lease liabilities arising from operating leases on the balance sheet.
This ASU is effective for annual and interim reporting periods beginning after December 15, 2018. The standard requires entities
to recognize a lease liability to cover lease payments and a lease asset representing its right to use the underlying asset for
the lease term. The Company has adopted the standard on January 1, 2019 using the modified retrospective method in the year of
adoption with certain transition practical expedients with no restatement of prior period amounts. Upon adoption, the Company
recognized right-of-use assets of $31.8 million and lease liabilities of $32.4 million and made no adjustments to retained earnings.
Adoption of the new standard did not materially impact our consolidated net income and cash flows.
There are no other recent accounting
pronouncements issued but not yet adopted that would have a material effect on our consolidated financial statements.
Reclassifications
Certain prior year’s amounts
in the accompanying consolidated balance sheet and statements of cash flows have been reclassified to conform to current period
presentation.
Abercrombie & Fitch and Hollister
In November 2019, we extended
our license for both the Abercrombie & Fitch and Hollister brands until December 31, 2022, and added automatic renewals unless
terminated on 3 years’ notice.
MCM
In September 2019, the Company
entered into an exclusive, 10-year worldwide license agreement with German luxury fashion house MCM for the creation, development
and distribution of fragrances under the MCM brand. Our rights under such license are subject to certain minimum advertising expenditures
and royalty payments as are customary in our industry.
Oscar de la Renta
In September 2019, the Company
and Oscar de la Renta entered into an amended license agreement extending their partnership through December 31, 2031, and added
an additional five-year extension option through December 31, 2036. The original license agreement, signed in October 2013, would
have expired on December 31, 2025.
Kate Spade New York
In June 2019, the Company entered
into an exclusive, 11-year worldwide license agreement with Kate Spade New York for the creation, development and distribution
of fragrances under the Kate Spade brand. This license took effect on January 1, 2020, and our rights under such license are subject
to certain minimum advertising expenditures and royalty payments as are customary in our industry.
|
|
|
December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
Raw materials and component parts
|
|
$
|
71,895
|
|
|
$
|
67,508
|
|
|
Finished goods
|
|
|
95,914
|
|
|
|
94,270
|
|
|
|
|
$
|
167,809
|
|
|
$
|
161,778
|
|
INTER PARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2019, 2018 and 2017
(In thousands except share and per share
data)
Overhead included
in inventory aggregated $4.3 million and $4.2 million as of December 31, 2019 and 2018, respectively. Included in inventories
is an inventory reserve, which represents the difference between the cost of the inventory and its estimated realizable value,
based upon sales forecasts and the physical condition of the inventories. In addition, and as necessary, specific reserves for
future known or anticipated events may be established. Inventory reserves aggregated $4.9 million as of December 31, 2019 and
2018.
|
|
(4)
|
Fair Value of Financial Instruments
|
The following
tables present our financial assets and liabilities that are measured at fair value on a recurring basis and are categorized using
the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair
value.
|
|
|
|
|
|
Fair Value Measurements at December 31, 2019
|
|
|
|
|
|
|
|
Quoted Prices in Active Markets for
|
|
|
Significant Other
|
|
|
Significant
|
|
|
|
|
|
|
|
Identical
|
|
|
Observable
|
|
|
Unobservable
|
|
|
|
|
|
|
|
Assets
|
|
|
Inputs
|
|
|
Inputs
|
|
|
|
|
Total
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term investments
|
|
$
|
60,714
|
|
|
$
|
|
|
|
$
|
60,714
|
|
|
$
|
|
|
|
Foreign currency forward exchange contracts accounted for using hedge accounting
|
|
|
16
|
|
|
|
|
|
|
|
16
|
|
|
|
|
|
|
Foreign currency forward exchange contracts not accounted for using hedge accounting
|
|
|
112
|
|
|
|
|
|
|
|
112
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
60,842
|
|
|
$
|
|
|
|
$
|
60,842
|
|
|
$
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swap
|
|
$
|
30
|
|
|
$
|
|
|
|
$
|
30
|
|
|
$
|
|
|
|
|
|
|
|
|
Fair Value Measurements at December 31, 2018
|
|
|
|
|
|
|
|
Quoted Prices in Active Markets for
|
|
|
Significant Other
|
|
|
Significant
|
|
|
|
|
|
|
|
Identical
|
|
|
Observable
|
|
|
Unobservable
|
|
|
|
|
|
|
|
Assets
|
|
|
Inputs
|
|
|
Inputs
|
|
|
|
|
Total
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term investments
|
|
$
|
67,870
|
|
|
$
|
|
|
|
$
|
67,870
|
|
|
$
|
|
|
|
Foreign currency forward exchange contracts accounted for using hedge accounting
|
|
|
179
|
|
|
|
|
|
|
|
179
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
68,049
|
|
|
$
|
|
|
|
$
|
68,049
|
|
|
$
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency forward exchange contracts not accounted for using hedge accounting
|
|
|
45
|
|
|
|
|
|
|
|
45
|
|
|
|
|
|
|
Interest rate swap
|
|
$
|
207
|
|
|
$
|
|
|
|
$
|
207
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
252
|
|
|
$
|
|
|
|
$
|
252
|
|
|
$
|
|
|
INTER PARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2019, 2018 and 2017
(In thousands except share and per share
data)
The carrying amount of cash and cash equivalents including money market funds, short-term investments, accounts receivable,
other receivables, accounts payable and accrued expenses approximates fair value due to the short terms to maturity of these instruments.
The carrying amount of loans payable approximates fair value as the variable interest rates on the Company’s indebtedness
approximate current market rates.
Foreign currency forward exchange contracts are valued based on quotations from financial institutions and the value of
interest rate swaps are the discounted net present value of the swaps using third party quotes from financial institutions.
|
|
(5)
|
Derivative Financial Instruments
|
The Company enters into foreign currency forward exchange contracts to hedge exposure related to receivables denominated
in a foreign currency and occasionally to manage risks related to future sales expected to be denominated in a foreign currency.
Before entering into a derivative transaction for hedging purposes, it is determined that a high degree of initial effectiveness
exists between the change in value of the hedged item and the change in the value of the derivative instrument from movement in
exchange rates. High effectiveness means that the change in the cash flows of the derivative instrument will effectively offset
the change in the cash flows of the hedged item. The effectiveness of each hedged item is measured throughout the hedged period
and is based on the dollar offset methodology and excludes the portion of the fair value of the foreign currency forward exchange
contract attributable to the change in spot-forward difference which is reported in current period earnings. Any hedge ineffectiveness
is also recognized as a gain or loss on foreign currency in the income statement. For hedge contracts that are no longer deemed
highly effective, hedge accounting is discontinued and gains and losses accumulated in other comprehensive income are reclassified
to earnings. If it is probable that the forecasted transaction will no longer occur, then any gains or losses accumulated
in other comprehensive income are reclassified to current-period earnings.
In connection with a 2015 brand acquisition, $108 million of the purchase price was paid in cash on the closing date and
was financed entirely through a 5-year term loan. As the payment at closing was due in dollars and we had planned to finance it
with debt in euro, the Company entered into foreign currency forward contracts to secure the exchange rate for the $108 million
purchase price at $1.067 per 1 euro. This derivative was designated and qualified as a cash flow hedge.
Gains and losses in derivatives designated as hedges are accumulated in other comprehensive income (loss) and gains and
losses in derivatives not designated as hedges are included in (gain) loss on foreign currency on the accompanying income statements.
Such gains and losses were immaterial in each of the years in the three-year period ended December 31, 2019. For the years ended
December 31, 2019 and 2018, interest expense includes a gain of $0.2 million and $0.3 million, respectively, relating to an interest
rate swap.
All derivative instruments are
reported as either assets or liabilities on the balance sheet measured at fair value. The valuation of interest rate swaps resulted
in a liability which is included in long-term debt on the accompanying balance sheets. The valuation of foreign currency forward
exchange contracts at December 31, 2019 and December 31, 2018, resulted in an asset and is included in other current assets on
the accompanying balance sheets.
At December 31, 2019, the
Company had foreign currency contracts in the form of forward exchange contracts with notional amounts of approximately U.S. $18.5 million,
GB £2.7 million and JPY ¥105.0 million, which all have maturities of less than one year.
INTER PARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2019, 2018 and 2017
(In thousands except share and per share
data)
|
|
(6)
|
Equipment and Leasehold Improvements
|
|
|
|
December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
Equipment
|
|
$
|
37,743
|
|
|
$
|
36,465
|
|
|
Leasehold improvements
|
|
|
1,760
|
|
|
|
1,639
|
|
|
|
|
|
39,503
|
|
|
|
38,104
|
|
|
Less accumulated depreciation and amortization
|
|
|
28,396
|
|
|
|
28,265
|
|
|
|
|
$
|
11,107
|
|
|
$
|
9,839
|
|
Depreciation and amortization
expense was $3.7 million, $4.1 million and $3.8 million in 2019, 2018, and 2017, respectively.
|
|
(7)
|
Trademarks, Licenses and Other Intangible Assets
|
|
2019
|
|
Gross
|
|
|
Accumulated
|
|
|
Net Book
|
|
|
|
|
Amount
|
|
|
Amortization
|
|
|
Value
|
|
|
Trademarks (indefinite lives)
|
|
$
|
121,001
|
|
|
$
|
|
|
|
$
|
121,001
|
|
|
Trademarks (finite lives)
|
|
|
43,464
|
|
|
|
67
|
|
|
|
43,397
|
|
|
Licenses (finite lives)
|
|
|
88,008
|
|
|
|
53,714
|
|
|
|
34,294
|
|
|
Other intangible assets (finite lives)
|
|
|
15,436
|
|
|
|
12,145
|
|
|
|
3,291
|
|
|
Subtotal
|
|
|
146,908
|
|
|
|
65,926
|
|
|
|
80,982
|
|
|
Total
|
|
$
|
267,909
|
|
|
$
|
65,926
|
|
|
$
|
201,983
|
|
|
2018
|
|
Gross
|
|
|
Accumulated
|
|
|
Net Book
|
|
|
|
|
Amount
|
|
|
Amortization
|
|
|
Value
|
|
|
Trademarks (indefinite lives)
|
|
$
|
123,287
|
|
|
$
|
|
|
|
$
|
123,287
|
|
|
Trademarks (finite lives)
|
|
|
44,300
|
|
|
|
69
|
|
|
|
44,231
|
|
|
Licenses (finite lives)
|
|
|
85,100
|
|
|
|
50,539
|
|
|
|
34,561
|
|
|
Other intangible assets (finite lives)
|
|
|
13,619
|
|
|
|
11,373
|
|
|
|
2,246
|
|
|
Subtotal
|
|
|
143,019
|
|
|
|
61,981
|
|
|
|
81,038
|
|
|
Total
|
|
$
|
266,306
|
|
|
$
|
61,981
|
|
|
$
|
204,325
|
|
Amortization expense was $5.0
million, $7.0 million and $6.0 million in 2019, 2018 and 2017, respectively. Amortization expense is expected to approximate $5.3
million in 2020 and 2021, $3.8 million in 2022 and 2023 and $3.6 million in 2024. The weighted average amortization period for
trademarks, licenses and other intangible assets with finite lives are 18 years, 15 years and 2 years, respectively, and 14 years
on average.
INTER PARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2019, 2018 and 2017
(In thousands except share and per share
data)
The Company reviews intangible
assets with indefinite lives for impairment whenever events or changes in circumstances indicate that the carrying amount may not
be recoverable. In 2017, the Company set in motion a plan to discontinue some of its mass market product lines. As a result, the
Company recorded an impairment loss of $2.1 million as of December 31, 2017. There were no impairment charges for trademarks
with indefinite useful lives in 2019 and 2018. The fair values used in our evaluations are estimated based upon discounted future
cash flow projections using a weighted average cost of capital of 7.94%, 6.21%, 6.22% as of December 31, 2019, 2018 and 2017, respectively.
The cash flow projections are based upon a number of assumptions, including, future sales levels and future cost of goods and operating
expense levels, as well as economic conditions, changes to our business model or changes in consumer acceptance of our products
which are more subjective in nature. The Company believes that the assumptions it has made in projecting future cash flows for
the evaluations described above are reasonable and currently no other impairment indicators exist for our indefinite-lived assets.
However, if future actual results do not meet our expectations, the Company may be required to record an impairment charge, the
amount of which could be material to our results of operations.
The cost
of trademarks, licenses and other intangible assets with finite lives is being amortized by the straight-line method over the
term of the respective license or the intangible assets estimated useful life which range from three to twenty years. If the residual
value of a finite life intangible asset exceeds its carrying value, then the asset is not amortized. The Company reviews intangible
assets with finite lives for impairment whenever events or changes in circumstances indicate that the carrying amount may not
be recoverable.
Trademarks (finite lives) primarily represent Lanvin brand names and trademarks and in connection with their purchase, Lanvin was granted the right to repurchase the brand names and trademarks in 2025 for the greater of €70 million (approximately $79 million) or one times the average of the annual sales for the years ending December 31, 2023 and 2024 (residual value). Because the residual value of the intangible asset exceeds its carrying value, the asset is not being amortized.
Accrued expenses consist of the
following:
|
|
|
December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
Advertising liabilities
|
|
$
|
25,713
|
|
|
$
|
14,868
|
|
|
Salary (including bonus and related taxes)
|
|
|
16,173
|
|
|
|
19,939
|
|
|
Royalties
|
|
|
16,646
|
|
|
|
14,533
|
|
|
Due vendors (not yet invoiced)
|
|
|
19,196
|
|
|
|
29,790
|
|
|
Retirement reserves
|
|
|
9,907
|
|
|
|
9,616
|
|
|
Refund (return) liability
|
|
|
4,131
|
|
|
|
2,200
|
|
|
Other
|
|
|
4,655
|
|
|
|
3,722
|
|
|
|
|
$
|
96,421
|
|
|
$
|
94,668
|
|
|
|
(9)
|
Loans Payable – Banks
|
Loans payable – banks consist
of the following:
The Company and its domestic
subsidiaries have available a $20 million unsecured revolving line of credit due on demand, which bears interest at the daily one-month
LIBOR plus 2% (the one-month LIBOR was 1.76% as of December 31, 2019). The line of credit which has a maturity date of December 18,
2020 is expected to be renewed on an annual basis. Borrowings outstanding pursuant to lines of credit were zero as of December
31, 2019 and 2018.
The Company’s foreign subsidiaries
have available credit lines, including several bank overdraft facilities totaling approximately $28 million. These credit lines
bear interest at EURIBOR plus between 0.5% and 0.8% (EURIBOR was minus 0.379% at December 31, 2019). Outstanding amounts were
zero as of December 31, 2019 and 2018.
As there were no borrowings outstanding
as of December 31, 2019 and 2018, there is no weighted average interest rate on short-term borrowings as of December 31, 2019 and
2018.
INTER PARFUMS,
INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2019, 2018 and 2017
(In thousands except share and per share
data)
Long-term debt consists of the following:
|
|
|
December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
$15.0 million payable in 14 equal annual installments of $1.1 million beginning in January 2020 including interest imputed at 4.1% per annum
|
|
$
|
11,806
|
|
|
$
|
11,291
|
|
|
$111.0 million 5-year term loan payable in 20 equal quarterly installments plus interest at 1.2% per annum
|
|
|
11,254
|
|
|
|
34,350
|
|
|
Other
|
|
|
|
|
|
|
420
|
|
|
|
|
|
23,060
|
|
|
|
46,061
|
|
|
Less current maturities
|
|
|
12,326
|
|
|
|
23,155
|
|
|
Total
|
|
$
|
10,734
|
|
|
$
|
22,906
|
|
The $111.0 million 5-year term
loan requires the maintenance of certain financial covenants, tested semi-annually, including a maximum leverage ratio and a minimum
interest coverage ratio. The facility also contains new debt restrictions among other standard provisions. The Company is in compliance
with all of the covenants and other restrictions of the debt agreements. In order to reduce exposure to rising variable interest
rates, the Company entered into a swap transaction effectively exchanging the variable interest rate to a fixed rate of approximately
1.2%. The swap is a derivative instrument and is therefore recorded at fair value and changes in fair value are reflected in the
accompanying consolidated statements of income. Maturities of long-term debt subsequent to December 31, 2019 are approximately
$12.3 million in 2020 and $1.1 million per year thereafter through 2033.
Leases
The Company leases its offices
and warehouses, vehicles, and certain office equipment, substantially all of which are classified as operating leases. The Company
currently has no material financing leases. The Company determines if an arrangement is a lease at inception. Operating lease assets
and obligations are recognized at the lease commencement date based on the present value of lease payments over the lease term.
In determining lease asset value,
the Company considers fixed or variable payment terms, prepayments, incentives, and options to extend or terminate, depending on
the lease. Renewal, termination or purchase options affect the lease term used for determining lease asset value only if the option
is reasonably certain to be exercised. The Company generally uses its incremental borrowing rate based on information available
at the lease commencement date for the location in which the lease is held in determining the present value of lease payments.
As of December 31, 2019, the
weighted average remaining lease term was 6.6 years and the weighted average discount rate used to determine the operating lease
liability was 2.8%. Rental expense related to operating leases was $7.5 million, $7.0 million, and $6.5 million for the years ended
December 31, 2019, 2018 and 2017, respectively. Operating lease payments included in operating cash flows totaled $6.0 million
and noncash additions to operating lease assets totaled $34.9 million.
INTER PARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2019, 2018 and 2017
(In thousands except share and per share
data)
Maturities of lease liabilities
subsequent to December 31, 2019 are as follows:
|
(In thousands)
|
|
|
|
|
|
|
2020
|
|
|
$
|
5,871
|
|
|
2021
|
|
|
|
5,159
|
|
|
2022
|
|
|
|
4,613
|
|
|
2023
|
|
|
|
3,968
|
|
|
2024
|
|
|
|
3,790
|
|
|
Thereafter
|
|
|
|
9,692
|
|
|
|
|
|
|
33,093
|
|
|
Less imputed interest (based on 2.8%
|
|
|
|
|
|
|
weighted-average discount rate)
|
|
|
|
(3,102
|
)
|
|
|
|
|
$
|
29,991
|
|
License Agreements
The Company is
party to a number of license and other agreements for the use of trademarks and rights in connection with the manufacture and
sale of its products expiring at various dates through 2033. In connection with certain of these license agreements, the Company
is subject to minimum annual advertising commitments, minimum annual royalties and other commitments as follows:
|
(In thousands)
|
|
|
|
|
|
|
2020
|
|
|
$
|
173,159
|
|
|
2021
|
|
|
|
178,951
|
|
|
2022
|
|
|
|
171,435
|
|
|
2023
|
|
|
|
177,442
|
|
|
2024
|
|
|
|
167,355
|
|
|
Thereafter
|
|
|
|
797,028
|
|
|
|
|
|
$
|
1,665,370
|
|
Future advertising commitments
are estimated based on planned future sales for the license terms that were in effect at December 31, 2019, without consideration
for potential renewal periods. The above figures do not reflect the fact that our distributors share our advertising obligations.
Royalty expense included in selling, general, and administrative expenses, aggregated $53.0 million, $48.9 million and $39.6 million,
in 2019, 2018 and 2017, respectively, and represented 7.4%, 7.2% and 6.7% of net sales for the years ended December 31, 2019, 2018
and 2017, respectively.
INTER PARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2019, 2018 and 2017
(In thousands except share and per share
data)
Share-Based Payments
The Company maintains a stock option program for key employees, executives and directors. The plans, all of which have been
approved by shareholder vote, provide for the granting of both nonqualified and incentive options. Options granted under the plans
typically have a six-year term and vest over a four to five-year period. The fair value of shares vested aggregated $1.4 million
and $1.1 million in 2019 and 2018, respectively. Compensation cost, net
of estimated forfeitures, is recognized on a straight-line basis over the requisite service period for the entire award. Forfeitures
are estimated based on historic trends. It is generally the Company’s policy to issue new shares upon exercise of
stock options.
The following
table sets forth information with respect to nonvested options for 2019:
|
|
|
Number of Shares
Grant Date
|
|
|
Weighted Average Grant Date Fair Value Grant
Date
|
|
|
Nonvested options – beginning of year
|
|
|
485,360
|
|
|
$
|
10.72
|
|
|
Nonvested options granted
|
|
|
194,050
|
|
|
$
|
14.14
|
|
|
Nonvested options vested or forfeited
|
|
|
(165,200
|
)
|
|
$
|
9.65
|
|
|
Nonvested options – end of year
|
|
|
514,210
|
|
|
$
|
12.36
|
|
The
effect of share-based payment expenses decreased income statement line items as follows:
|
|
|
Year Ended December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
Income before income taxes
|
|
$
|
3,390
|
|
|
$
|
2,200
|
|
|
$
|
2,100
|
|
|
Net income attributable to Inter Parfums, Inc.
|
|
|
2,060
|
|
|
|
1,390
|
|
|
|
1,150
|
|
|
Diluted earnings per share attributable to Inter Parfums, Inc.
|
|
|
0.07
|
|
|
|
0.04
|
|
|
|
0.04
|
|
The following
table summarizes stock option activity and related information for the years ended December 31, 2019, 2018 and 2017:
|
|
|
Year ended December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
|
|
Options
|
|
|
Weighted Average Exercise Price
|
|
|
Options
|
|
|
Weighted Average Exercise Price
|
|
|
Options
|
|
|
Weighted Average Exercise Price
|
|
|
Shares under option - beginning of year
|
|
|
776,171
|
|
|
$
|
41.33
|
|
|
|
730,980
|
|
|
$
|
31.92
|
|
|
|
684,540
|
|
|
$
|
26.94
|
|
|
Options granted
|
|
|
194,050
|
|
|
|
72.89
|
|
|
|
196,350
|
|
|
|
63.91
|
|
|
|
174,600
|
|
|
|
43.48
|
|
|
Options exercised
|
|
|
(130,891
|
)
|
|
|
34.06
|
|
|
|
(140,579
|
)
|
|
|
24.21
|
|
|
|
(103,230
|
)
|
|
|
19.03
|
|
|
Options forfeited
|
|
|
(23,530
|
)
|
|
|
45.48
|
|
|
|
(10,580
|
)
|
|
|
37.64
|
|
|
|
(24,930
|
)
|
|
|
29.49
|
|
|
Shares under option - end of year
|
|
|
815,800
|
|
|
|
49.89
|
|
|
|
776,171
|
|
|
|
41.33
|
|
|
|
730,980
|
|
|
|
31.92
|
|
INTER PARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2019, 2018 and 2017
(In thousands except share and per share
data)
At December
31, 2019, options for 573,695 shares were available for future grant under the plans. The aggregate intrinsic value of options
outstanding is $18.7 million as of December 31, 2019 and unrecognized compensation cost related to stock options outstanding aggregated
$6.0 million, which will be recognized over the next five years.
The weighted
average fair values of options granted by Inter Parfums, Inc. during 2019, 2018 and 2017 were $14.14, $14.31 and $9.82 per share,
respectively, on the date of grant using the Black-Scholes option pricing model to calculate the fair value.
The assumptions
used in the Black-Scholes pricing model are set forth in the following table:
|
|
|
Year Ended December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
Weighted-average expected stock-price volatility
|
|
|
25
|
%
|
|
|
27
|
%
|
|
|
28
|
%
|
|
Weighted-average expected option life
|
|
|
5.0 years
|
|
|
|
5.0 years
|
|
|
|
5.0 years
|
|
|
Weighted-average risk-free interest rate
|
|
|
1.7
|
%
|
|
|
2.5
|
%
|
|
|
2.2
|
%
|
|
Weighted-average dividend yield
|
|
|
2.0
|
%
|
|
|
2.0
|
%
|
|
|
2.0
|
%
|
Expected volatility
is estimated based on historic volatility of the Company’s common stock. The expected term of the option is estimated based
on historic data. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of the grant of the option
and the dividend yield reflects the assumption that the dividend payout as authorized by the Board of Directors would maintain
its current payout ratio as a percentage of earnings.
Proceeds,
tax benefits and intrinsic value related to stock options exercised were as follows:
|
|
|
Year Ended December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
Proceeds from stock options exercised
|
|
$
|
4,458
|
|
|
$
|
3,406
|
|
|
$
|
1,963
|
|
|
Tax benefits
|
|
$
|
690
|
|
|
$
|
807
|
|
|
$
|
600
|
|
|
Intrinsic value of stock options exercised
|
|
$
|
4,520
|
|
|
$
|
4,310
|
|
|
$
|
2,258
|
|
INTER PARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2019, 2018 and 2017
(In thousands except share and per share
data)
The following
table summarizes additional stock option information as of December 31, 2019:
|
|
|
|
|
Options
|
|
|
Options outstanding
weighted average remaining
|
|
Options
|
|
|
|
|
Exercise prices
|
|
|
outstanding
|
|
|
contractual life
|
|
exercisable
|
|
|
|
|
$23.61 - $27.80
|
|
|
|
179,740
|
|
|
1.52 years
|
|
|
153,820
|
|
|
|
|
$32.83 - $33.95
|
|
|
|
108,280
|
|
|
2.97 years
|
|
|
57,180
|
|
|
|
|
$40.15 - $46.90
|
|
|
|
158,380
|
|
|
3.96 years
|
|
|
55,520
|
|
|
|
|
$65.25-$66.46
|
|
|
|
181,350
|
|
|
4.97 years
|
|
|
35,070
|
|
|
|
|
$73.09
|
|
|
|
188,050
|
|
|
6.00 years
|
|
|
|
|
|
|
Totals
|
|
|
|
|
815,800
|
|
|
3.99 years
|
|
|
301,590
|
|
|
As of December 31, 2019, the weighted average exercise price of options exercisable was $35.05 and the weighted average
remaining contractual life of options exercisable is 2.62 years. The aggregate intrinsic value of options exercisable at December
31, 2019 is $11.4 million.
In September 2016, Interparfums
SA, our 73% owned French subsidiary, approved a plan to grant an aggregate of 15,100 shares of its stock to employees with no performance
condition requirement, and an aggregate of 133,000 shares to officers and managers, subject to certain corporate performance conditions.
The corporate performance conditions were met and therefore in September 2019, 172,851 shares, adjusted for stock splits, were
distributed. The aggregate cost of the grant of approximately $3.9 million was recognized as compensation cost on a straight-line
basis over the requisite three-year service period.
In December 2018, Interparfums
SA approved an additional plan to grant an aggregate of 26,600 shares of its stock to employees with no performance condition requirement,
and an aggregate of 133,000 shares to officers and managers, subject to certain corporate performance conditions. The shares, subject
to adjustment for stock splits, will be distributed in June 2022 and will follow the same guidelines as the September 2016 plan.
The fair value of the grant has
been determined based on the quoted stock price of Interparfums SA shares as reported by the NYSE Euronext on the date of grant.
The estimated number of shares to be distributed of 142,379 has been determined taking into account employee turnover. The aggregate
cost of the grant of approximately $4.4 million will be recognized as compensation cost on a straight-line basis over the requisite
three and a half year service period.
Similar to the September 2016
plan, in order to avoid dilution of the Company’s ownership of Interparfums SA, all shares distributed or to be distributed
pursuant to these plans will be pre-existing shares of Interparfums SA, purchased in the open market by Interparfums SA. During
the year ended December 31, 2019, the Company acquired 131,613 shares at an aggregate cost of $5.8 million.
All share purchases and issuances
have been classified as equity transactions on the accompanying balance sheet.
INTER PARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2019, 2018 and 2017
(In thousands except share and per share
data)
Dividends
64.
In October 2019, the Board of Directors of the Company authorized a 20% increase in the annual dividend to $1.32 per share.
The quarterly dividend aggregating approximately $10.4 million ($0.33 per share) declared in December 2019 was paid in January 2020.
The next quarterly dividend of $0.33 per share will be paid on April 15, 2020 to shareholders of record on March 31, 2020.
|
|
(13)
|
Net Income Attributable to Inter Parfums, Inc. Common Shareholders
|
Net income attributable to Inter
Parfums, Inc. per common share (“basic EPS”) is computed by dividing net income attributable to Inter Parfums, Inc.
by the weighted average number of shares outstanding. Net income attributable to Inter Parfums, Inc. per share assuming dilution
(“diluted EPS”), is computed using the weighted average number of shares outstanding, plus the incremental shares outstanding
assuming the exercise of dilutive stock options using the treasury stock method.
The reconciliation between the
numerators and denominators of the basic and diluted EPS computations is as follows:
|
|
|
Year ended December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator for diluted earnings per share
|
|
$
|
60,249
|
|
|
$
|
53,793
|
|
|
$
|
41,594
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
|
|
|
31,451,093
|
|
|
|
31,307,991
|
|
|
|
31,172,285
|
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options
|
|
|
237,607
|
|
|
|
214,380
|
|
|
|
132,816
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for diluted earnings per share
|
|
|
31,688,700
|
|
|
|
31,522,371
|
|
|
|
31,305,101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Inter Parfums, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.92
|
|
|
$
|
1.72
|
|
|
$
|
1.33
|
|
|
Diluted
|
|
|
1.90
|
|
|
|
1.71
|
|
|
|
1.33
|
|
Not included
in the above computations is the effect of anti-dilutive potential common shares, which consist of outstanding options to purchase
183,000, 89,000, and 165,000 shares of common stock for 2019, 2018, and 2017, respectively.
|
|
(14)
|
Segments and Geographic Areas
|
The Company
manufactures and distributes one product line, fragrances and fragrance
related products. The Company manages its business in two segments, European based operations and United States based operations.
The European assets are located, and operations are primarily conducted, in France. Both European and United States operations
primarily represent the sale of prestige brand name fragrances.
INTER PARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2019, 2018 and 2017
(In thousands except share and per share
data)
Information on the Company’s operations by segments is as follows:
|
|
|
Year ended December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
$
|
173,522
|
|
|
$
|
140,768
|
|
|
$
|
116,244
|
|
|
Europe
|
|
|
542,226
|
|
|
|
537,805
|
|
|
|
476,660
|
|
|
Eliminations of intercompany sales
|
|
|
(2,234
|
)
|
|
|
(2,999
|
)
|
|
|
(1,653
|
)
|
|
|
|
$
|
713,514
|
|
|
$
|
675,574
|
|
|
$
|
591,251
|
|
|
Net income attributable to Inter Parfums, Inc.:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
$
|
19,365
|
|
|
$
|
13,071
|
|
|
$
|
7,051
|
|
|
Europe
|
|
|
40,840
|
|
|
|
40,877
|
|
|
|
34,577
|
|
|
Eliminations
|
|
|
44
|
|
|
|
(155
|
)
|
|
|
(34
|
)
|
|
|
|
$
|
60,249
|
|
|
$
|
53,793
|
|
|
$
|
41,594
|
|
|
Depreciation and amortization expense including impairment loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
$
|
3,088
|
|
|
$
|
2,711
|
|
|
$
|
3,943
|
|
|
Europe
|
|
|
5,641
|
|
|
|
8,320
|
|
|
|
7,971
|
|
|
|
|
$
|
8,729
|
|
|
$
|
11,031
|
|
|
$
|
11,914
|
|
|
Interest income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
$
|
345
|
|
|
$
|
137
|
|
|
$
|
58
|
|
|
Europe
|
|
|
3,501
|
|
|
|
3,820
|
|
|
|
2,925
|
|
|
Eliminations
|
|
|
(153
|
)
|
|
|
--
|
|
|
|
--
|
|
|
|
|
$
|
3,693
|
|
|
$
|
3,957
|
|
|
$
|
2,983
|
|
|
Interest expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
$
|
673
|
|
|
$
|
419
|
|
|
$
|
--
|
|
|
Europe
|
|
|
1,626
|
|
|
|
2,159
|
|
|
|
1,992
|
|
|
Eliminations
|
|
|
(153
|
)
|
|
|
--
|
|
|
|
--
|
|
|
|
|
$
|
2,146
|
|
|
$
|
2,578
|
|
|
$
|
1,992
|
|
|
Income tax expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
$
|
3,945
|
|
|
$
|
2,264
|
|
|
$
|
3,764
|
|
|
Europe
|
|
|
25,101
|
|
|
|
23,898
|
|
|
|
19,069
|
|
|
Eliminations
|
|
|
30
|
|
|
|
(18
|
)
|
|
|
(21
|
)
|
|
|
|
$
|
29,076
|
|
|
$
|
26,144
|
|
|
$
|
22,812
|
|
|
|
|
December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
Total assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
$
|
166,180
|
|
|
$
|
133,706
|
|
|
$
|
92,909
|
|
|
Europe
|
|
|
670,657
|
|
|
|
684,485
|
|
|
|
694,385
|
|
|
Eliminations
|
|
|
(8,005
|
)
|
|
|
(20,362
|
)
|
|
|
(9,522
|
)
|
|
|
|
$
|
828,832
|
|
|
$
|
797,829
|
|
|
$
|
777,772
|
|
|
Additions to long-lived assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
$
|
5,851
|
|
|
$
|
19,181
|
|
|
$
|
980
|
|
|
Europe
|
|
|
5,643
|
|
|
|
4,188
|
|
|
|
3,089
|
|
|
|
|
$
|
11,494
|
|
|
$
|
23,369
|
|
|
$
|
4,069
|
|
|
Total long-lived assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
$
|
44,473
|
|
|
$
|
25,753
|
|
|
$
|
9,284
|
|
|
Europe
|
|
|
196,976
|
|
|
|
188,411
|
|
|
|
201,541
|
|
|
|
|
$
|
241,449
|
|
|
$
|
214,164
|
|
|
$
|
210,825
|
|
|
Deferred tax assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
$
|
705
|
|
|
$
|
650
|
|
|
$
|
781
|
|
|
Europe
|
|
|
7,241
|
|
|
|
5,023
|
|
|
|
4,987
|
|
|
Eliminations
|
|
|
58
|
|
|
|
88
|
|
|
|
69
|
|
|
|
|
$
|
8,004
|
|
|
$
|
5,761
|
|
|
$
|
5,837
|
|
INTER PARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2019, 2018 and 2017
(In thousands except share and per share
data)
United States export sales were
approximately $113.2 million, $95.5 million and $71.4 million in 2019, 2018 and 2017, respectively. Consolidated net sales to customers
by region are as follows:
|
|
|
Year ended December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
North America
|
|
$
|
234,000
|
|
|
$
|
210,200
|
|
|
$
|
176,900
|
|
|
Europe
|
|
|
240,800
|
|
|
|
233,600
|
|
|
|
214,800
|
|
|
Asia
|
|
|
106,500
|
|
|
|
109,000
|
|
|
|
88,000
|
|
|
Middle East
|
|
|
72,600
|
|
|
|
59,300
|
|
|
|
50,500
|
|
|
Central and South America
|
|
|
46,200
|
|
|
|
51,700
|
|
|
|
51,200
|
|
|
Other
|
|
|
13,400
|
|
|
|
11,800
|
|
|
|
9,900
|
|
|
|
|
$
|
713,500
|
|
|
$
|
675,600
|
|
|
$
|
591,300
|
|
Consolidated net sales to customers in major countries
are as follows:
|
|
|
Year Ended December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
United States
|
|
$
|
225,300
|
|
|
$
|
204,000
|
|
|
$
|
173,000
|
|
|
France
|
|
$
|
43,500
|
|
|
$
|
44,000
|
|
|
$
|
44,000
|
|
|
Russia
|
|
$
|
36,800
|
|
|
$
|
35,000
|
|
|
$
|
34,000
|
|
|
United Kingdom
|
|
$
|
35,800
|
|
|
$
|
36,000
|
|
|
$
|
33,000
|
|
The Company and its subsidiaries
file income tax returns in the U.S. federal, and various states and foreign jurisdictions.
The Company assessed its uncertain
tax positions and determined that it has no uncertain tax position at December 31, 2019.
The components of income before
income taxes consist of the following:
|
|
|
Year ended December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
U.S. operations
|
|
$
|
23,384
|
|
|
$
|
15,162
|
|
|
$
|
10,761
|
|
|
Foreign operations
|
|
|
81,762
|
|
|
|
80,697
|
|
|
|
67,304
|
|
|
|
|
$
|
105,146
|
|
|
$
|
95,859
|
|
|
$
|
78,065
|
|
INTER PARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2019, 2018 and 2017
(In thousands except share and per share
data)
The provision for current
and deferred income tax expense (benefit) consists of the following:
|
|
|
Year ended December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
Current:
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
$
|
3,280
|
|
|
$
|
1,629
|
|
|
$
|
4,050
|
|
|
State and local
|
|
|
713
|
|
|
|
497
|
|
|
|
302
|
|
|
Foreign
|
|
|
27,412
|
|
|
|
24,175
|
|
|
|
19,051
|
|
|
|
|
|
31,405
|
|
|
|
26,301
|
|
|
|
23,403
|
|
|
Deferred:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
|
(3
|
)
|
|
|
113
|
|
|
|
(554
|
)
|
|
State and local
|
|
|
(22
|
)
|
|
|
|
|
|
|
(55
|
)
|
|
Foreign
|
|
|
(2,304
|
)
|
|
|
(270
|
)
|
|
|
18
|
|
|
|
|
|
(2,329
|
)
|
|
|
(157
|
)
|
|
|
(591
|
)
|
|
Total income tax expense
|
|
$
|
29,076
|
|
|
$
|
26,144
|
|
|
$
|
22,812
|
|
The tax effects of temporary
differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:
|
|
|
December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
Net deferred tax assets:
|
|
|
|
|
|
|
|
Foreign net operating loss carry-forwards
|
|
$
|
362
|
|
|
$
|
468
|
|
|
Inventory and accounts receivable
|
|
|
1,231
|
|
|
|
658
|
|
|
Profit sharing
|
|
|
4,812
|
|
|
|
4,561
|
|
|
Stock option compensation
|
|
|
588
|
|
|
|
626
|
|
|
Effect of inventory profit elimination
|
|
|
4,630
|
|
|
|
3,267
|
|
|
Other
|
|
|
214
|
|
|
|
(23
|
)
|
|
Total gross deferred tax assets, net
|
|
|
11,837
|
|
|
|
9,557
|
|
|
Valuation allowance
|
|
|
(361
|
)
|
|
|
(258
|
)
|
|
Net deferred tax assets
|
|
|
11,476
|
|
|
|
9,299
|
|
|
Deferred tax liabilities (long-term):
|
|
|
|
|
|
|
|
|
|
Trademarks and licenses
|
|
|
(3,472
|
)
|
|
|
(3,538
|
)
|
|
Net deferred tax assets
|
|
$
|
8,004
|
|
|
$
|
5,761
|
|
Valuation allowances are provided
for foreign net operating loss carry-forwards, as future profitable operations from certain foreign subsidiaries might not be sufficient
to realize the full amount of net operating loss carry-forwards.
No other valuation allowances
have been provided as management believes that it is more likely than not that the asset will be realized in the reduction of future
taxable income.
Tax Cuts and Jobs Act
In December 2017, the U.S.
government passed the Tax Cuts and Jobs Act (“the Tax Act”). The Tax Act made broad and complex changes to the U.S.
tax code, including, but not limited to reducing the future U.S. federal corporate tax rate from 35% to 21% beginning in 2018,
and requiring companies to pay a one-time transition tax on certain unremitted earnings of foreign subsidiaries.
INTER PARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2019, 2018 and 2017
(In thousands except share and per share
data)
The Tax Act also established
new tax laws that took effect in 2018, including, but not limited to: (i) the reduction of the U.S. federal corporate tax
rate discussed above; (ii) a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries; (iii) a
provision designed to tax global intangible low-taxed income (“GILTI”); and (iv) a provision that allows a domestic
corporation an immediate deduction for a portion of its foreign derived intangible income (“FDII”).
The Securities and Exchange Commission
staff issued Staff Accounting Bulletin (“SAB”) 118, which provides a measurement period that was not to extend beyond
one year from the Tax Act enactment date for companies to complete the related accounting under ASC 740, Accounting for Income
Taxes. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the
accounting under ASC 740 is complete. To the extent that a company’s accounting for a certain income tax effect of the Tax
Act was incomplete, but it was able to determine a reasonable estimate, it was required to record a provisional estimate in the
financial statements.
In connection with its initial
analysis of the impact of the Tax Act, the Company recorded a tax expense of $1.1 million for the year ended December 31,
2017. This estimate consists of no expense for the one-time transition tax, and an expense of $1.1 million related to revaluation
of deferred tax assets and liabilities caused by the lower corporate tax rate. There were no material differences between the Company’s
2017 estimates and the final calculated amounts.
The Company has estimated of
the effect of GILTI and has determined that it has no tax liability related to GILTI as of December 31, 2019 and 2018.
The Tax Act also contains a provision
that allows a domestic corporation an immediate deduction for a portion of its foreign derived intangible income (“FDII”).
The Company estimated the effect of FDII and recorded a tax benefit of approximately $0.9 million and $0.6 million as of December 31,
2019 and 2018, respectively.
Income Tax Recovery
The French government had introduced
a 3% tax on dividends or deemed dividends for entities subject to French corporate income tax in 2012. In 2017, the French Constitutional
Court released a decision declaring that the 3% tax on dividends or deemed dividends is unconstitutional. As a result of that decision,
the Company filed a claim for refund of approximately $3.9 million for these taxes paid since 2015 including accrued interest of
approximately $0.4 million. The Company recorded the refund claim as of December 31, 2017 and has received the entire refund in
2018.
Other Tax Matters
The French authorities are considering
that the existence of IP Suisse, a wholly-owned subsidiary of Interparfums SA, does not, in and of itself, constitute a permanent
establishment and therefore Interparfums, SA should pay French taxes on all or part of the profits of that entity. The French Tax
Authority recently notified the Company that IP Suisse will be the subject of a tax audit covering the period January 1, 2010 through
December 31, 2018. No claim or assessment for any taxes or penalties has been made at this time. The Company disagrees and is prepared
to vigorously defend its position. Consequently, no provision has been made in the accompanying financial statements as we believe
it is more-likely-than-not that our position will be sustained based on its technical merits. Although we believe that we have
sufficient arguments to support our position, there exists a risk that the French authorities may prevail. The Company’s
exposure in connection with this matter is approximately $5.8 million, net of recovery taxes already paid to the Swiss authorities,
and excluding interest.
INTER PARFUMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2019, 2018 and 2017
(In thousands except share and per share
data)
The Company is no longer subject
to U.S. federal, state, and local or non-U.S. income tax examinations by tax authorities for years before 2016.
Differences between the United
States federal statutory income tax rate and the effective income tax rate were as follows:
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
Statutory rates
|
|
|
21.0
|
%
|
|
|
21.0
|
%
|
|
|
34.0
|
%
|
|
State and local taxes, net of Federal benefit
|
|
|
0.6
|
|
|
|
0.4
|
|
|
|
0.2
|
|
|
Benefit of Foreign Derived Intangible Income
|
|
|
(0.9
|
)
|
|
|
(0.6
|
)
|
|
|
|
|
|
Deferred tax effect of statutory tax rate changes
|
|
|
|
|
|
|
|
|
|
|
1.4
|
|
|
Foreign income tax recovery
|
|
|
|
|
|
|
|
|
|
|
(4.6
|
)
|
|
Effect of foreign taxes greater than (less than) U.S. statutory rates
|
|
|
7.5
|
|
|
|
7.3
|
|
|
|
(1.0
|
)
|
|
Other
|
|
|
(0.6
|
)
|
|
|
(0.8
|
)
|
|
|
(0.8
|
)
|
|
Effective rates
|
|
|
27.6
|
%
|
|
|
27.3
|
%
|
|
|
29.2
|
%
|
|
|
(16)
|
Accumulated Other Comprehensive Loss
|
The components of accumulated other
comprehensive loss consists of the following:
|
|
|
Year ended December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net derivative instruments, beginning of year
|
|
$
|
136
|
|
|
$
|
37
|
|
|
$
|
(17
|
)
|
|
Net derivative instrument gain (loss), net of tax
|
|
|
(84
|
)
|
|
|
99
|
|
|
|
54
|
|
|
Net derivative instruments, end of year
|
|
|
52
|
|
|
|
136
|
|
|
|
37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative translation adjustments, beginning of year
|
|
|
(33,786
|
)
|
|
|
(17,869
|
)
|
|
|
(57,965
|
)
|
|
Translation adjustments
|
|
|
(6,119
|
)
|
|
|
(15,917
|
)
|
|
|
40,096
|
|
|
Cumulative translation adjustments, end of year
|
|
|
(39,905
|
)
|
|
|
(33,786
|
)
|
|
|
(17,869
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated other comprehensive loss
|
|
$
|
(39,853
|
)
|
|
$
|
(33,650
|
)
|
|
$
|
(17,832
|
)
|
|
|
(17)
|
Net Income Attributable to Inter Parfums, Inc. and Transfers from the Noncontrolling Interest
|
|
|
|
Year ended December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Inter Parfums, Inc.
|
|
$
|
60,249
|
|
|
$
|
53,793
|
|
|
$
|
41,594
|
|
|
Decrease in Inter Parfums, Inc.’s additional
|
|
|
|
|
|
|
|
|
|
|
|
|
|
paid-in capital for subsidiary share transactions
|
|
|
(5,167
|
)
|
|
|
(572
|
)
|
|
|
|
|
|
Change from net income attributable to Inter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parfums, Inc. and transfers from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
noncontrolling interest
|
|
$
|
55,082
|
|
|
$
|
53,221
|
|
|
$
|
41,594
|
|
Schedule II
INTER
PARFUMS, INC. AND SUBSIDIARIES
Valuation and Qualifying Accounts
(In
thousands)
|
Column A
|
|
Column B
|
|
|
Column C
|
|
|
|
Column D
|
|
|
Column E
|
|
|
|
|
|
|
|
Additions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charged to
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
|
|
|
Charged to
|
|
|
other
|
|
|
|
|
|
|
|
|
|
|
|
beginning of
|
|
|
costs and
|
|
|
accounts –
|
|
|
|
Deductions –
|
|
|
Balance at
|
|
|
Description
|
|
period
|
|
|
expenses
|
|
|
describe
|
|
|
|
describe
|
|
|
end of period
|
|
|
Allowance for doubtful accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2019
|
|
$
|
2,602
|
|
|
|
1,380
|
|
|
|
(41
|
)
|
(d)
|
|
|
1,489
|
(a)
|
|
|
2,452
|
|
|
Year ended December 31, 2018
|
|
$
|
1,821
|
|
|
|
1,441
|
|
|
|
(91
|
)
|
(d)
|
|
|
569
|
(a)
|
|
|
2,602
|
|
|
Year ended December 31, 2017
|
|
$
|
2,011
|
|
|
|
843
|
|
|
|
205
|
|
(d)
|
|
|
1,238
|
(a)
|
|
|
1,821
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for sales returns, net of inventory:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2019
|
|
$
|
1,379
|
|
|
|
2,387
|
|
|
|
|
|
|
|
|
1,179
|
(b)
|
|
|
2,587
|
|
|
Year ended December 31, 2018
|
|
$
|
3,310
|
|
|
|
1,329
|
|
|
|
|
|
|
|
|
3,260
|
(b)
|
|
|
1,379
|
|
|
Year ended December 31, 2017
|
|
$
|
3,332
|
|
|
|
3,497
|
|
|
|
-
|
|
|
|
|
3,519
|
(b)
|
|
|
3,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory reserve:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2019
|
|
$
|
4,854
|
|
|
|
5,321
|
|
|
|
(70
|
)
|
(d)
|
|
|
5,196
|
(c)
|
|
|
4,909
|
|
|
Year ended December 31, 2018
|
|
$
|
5,349
|
|
|
|
4,694
|
|
|
|
(183
|
)
|
(d)
|
|
|
5,006
|
(c)
|
|
|
4,854
|
|
|
Year ended December 31, 2017
|
|
$
|
5,316
|
|
|
|
3,300
|
|
|
|
570
|
|
(d)
|
|
|
3,837
|
(c)
|
|
|
5,349
|
|
|
|
(a)
|
Write-off of bad debts.
|
|
|
(b)
|
Write-off of sales returns.
|
|
|
(c)
|
Disposal of inventory
|
|
|
(d)
|
Foreign currency translation adjustment
|
See accompanying reports of independent registered public accounting
firm.
SIGNATURES
Pursuant
to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
Inter Parfums, Inc.
|
|
|
|
|
|
By:
|
/s/ Jean Madar
|
|
|
Jean Madar, Chief Executive Officer
|
|
|
Date: March 2, 2020
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated:
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ Jean Madar
|
|
Chairman
of the Board of Directors
|
|
|
|
Jean
Madar
|
|
and Chief Executive Officer
|
|
March
2, 2020
|
|
|
|
|
|
|
|
/s/ Russell Greenberg
|
|
|
|
|
|
Russell
Greenberg
|
|
Chief
Financial and Accounting Officer and Director
|
|
March
2, 2020
|
|
|
|
|
|
|
|
/s/ Philippe Benacin
|
|
|
|
|
|
Philippe
Benacin
|
|
Director
|
|
February
28, 2020
|
|
|
|
|
|
|
|
/s/ Philippe Santi
|
|
|
|
|
|
Philippe
Santi
|
|
Director
|
|
February
28, 2020
|
|
|
|
|
|
|
|
/s/ François Heilbronn
|
|
|
|
|
|
François
Heilbronn
|
|
Director
|
|
February
28, 2020
|
|
|
|
|
|
|
|
/s/ Robert Bensoussan
|
|
|
|
|
|
Robert
Bensoussan
|
|
Director
|
|
February
28, 2020
|
|
|
|
|
|
|
|
/s/ Patrick Choël
|
|
|
|
|
|
Patrick
Choël
|
|
Director
|
|
February
28, 2020
|
|
|
|
|
|
|
|
/s/ Michel Dyens
|
|
|
|
|
|
Michel
Dyens
|
|
Director
|
|
February
28, 2020
|
|
|
|
|
|
|
|
/s/ Veronique Gabai-Pinsky
|
|
|
|
|
|
Veronique
Gabai-Pinsky
|
|
Director
|
|
February
28, 2020
|
|
|
|
|
|
|
|
/s/ Gilbert Harrison
|
|
|
|
|
|
Gilbert
Harrison
|
|
Director
|
|
February
28, 2020
|
Exhibit
Index
The
following documents heretofore filed with the Commission are incorporated by reference to the Company’s Annual Report on Form
10-K for the fiscal year ended December 31, 2015:
The
following document heretofore filed with the Commission is incorporated by reference to the Company’s Quarterly Report on Form
10-Q for the period ended March 31, 2016:
The
following document heretofore filed with the Commission is incorporated by reference to the Company’s Quarterly Report on Form
10-Q for the period ended June 30, 2016:
The
following documents heretofore filed with the Commission are incorporated by reference to the Company’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2016:
The
following documents heretofore filed with the Commission are incorporated by reference to the Company’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2017:
The
following documents heretofore filed with the Commission are incorporated by reference to the Company’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2018:
The
following document heretofore filed with the Commission is incorporated by reference to the Company’s Current Report on
Form 8-K as filed on February 7, 2020:
The
following documents heretofore filed with the Commission more than five (5) years ago are hereby filed again as exhibits to this
Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 2019:
|
Exhibit No.
|
|
Description
|
|
Page Nos.
|
|
|
|
|
|
|
|
3.1.1
|
|
Restated Certificate of Incorporation dated September 3, 1987
|
|
124
|
|
|
|
|
|
|
|
3.1.2
|
|
Amendment to Restated Certificate of Incorporation dated July 31, 1992
|
|
128
|
|
|
|
|
|
|
|
3.1.3
|
|
Amendment to Restated Certificate of Incorporation dated July 9, 1993
|
|
132
|
|
|
|
|
|
|
|
3.1.4
|
|
Amendment to Restated Certificate of Incorporation, as amended, dated July 13, 1999
|
|
134
|
|
|
|
|
|
|
|
3.1.5
|
|
Amendment to Restated Certificate of Incorporation, as amended, dated July 12, 2000
|
|
135
|
|
|
|
|
|
|
|
3.1.6
|
|
Amendment to Restated Certificate of Incorporation dated August 6, 2004
|
|
139
|
|
|
|
|
|
|
|
3.3
|
|
Articles of Incorporation of Inter Parfums Holdings, S.A.
|
|
140
|
|
|
|
|
|
|
|
3.3.1
|
|
Articles of Incorporation of Inter Parfums Holdings, S.A. (English translation)
|
|
156
|
|
|
|
|
|
|
|
3.4
|
|
Articles of Incorporation of Interparfums SA
|
|
170
|
|
|
|
|
|
|
|
3.4.1
|
|
Articles of Incorporation of Interparfums SA (English translation)
|
|
184
|
|
|
|
|
|
|
|
10.25
|
|
Employment Agreement between the Company and Philippe Benacin dated July 29, 1991
|
|
198
|
|
|
|
|
|
|
|
10.26
|
|
Lease for portion of 15th Floor, 551 Fifth Avenue, New York, New York
|
|
205
|
|
|
|
|
|
|
|
10.61
|
|
Lease for 60 Stults Road, South Brunswick, NJ between Forsgate Industrial Complex, LP, and Jean Philippe Fragrances, Inc. dated July 10, 1995
|
|
240
|
|
|
|
|
|
|
|
10.61.1
|
|
Third Amendment to Lease for 60 Stults Road, South Brunswick, NJ
|
|
269
|
|
|
|
|
|
|
|
10.161
|
|
Form of Option Agreement for Options Granted to Executive Officers on December 31, 2014 with Schedule of Option Holders and Options Granted
|
|
285
|
|
|
|
|
|
|
|
10.162
|
|
Form of Option Agreement for Options Granted to Executive Officers on January 28, 2015 with Schedule of Option Holders and Options Granted
|
|
288
|
The
following documents are filed with this report:
121
P4Y
Foreign currency translation adjustment
Write-off of sales returns.
Write-off of bad debts.
Disposal of inventory
false
--12-31
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Exhibit 3.1.1
RESTATED
CERTIFICATE OF INCORPORATION
-of-
JEAN PHILIPPE
FRAGRANCES, INC.
Pursuant
to the General Corporation Law of the State of Delaware
Jean Philippe
Fragrances, Inc. (the “Corporation”) hereby certifies that:
A. The
name of the Corporation is Jean Philippe Fragrances, Inc., and its original Certificate of Incorporation was filed with the Secretary
of State of the State of Delaware on May 6, 1985.
B. The
Certificate of Incorporation of the Corporation is hereby amended by striking out Articles Second, Third, Fourth and Sixth thereof
and by substituting in lieu of said Articles new Articles Second, Third, Fourth and Sixth and by adding the following new Articles
Seventh and Eighth, which are set forth in the Restated Certificate of Incorporation hereinafter provided for.
C. The
amendments and the restatement of the Certificate of Incorporation set forth herein were duly adopted in accordance with the provisions
of Sections 242 and 245 of the General Corporation Law of the State of Delaware by a resolution of the Board of Directors setting
forth the amendments and the restatement and declaring their advisability, and by written consents, given pursuant to Section 228
of the General Corporation Law of the State of Delaware, by the holders of all outstanding stock entitled to vote.
D. The
Certificate of Incorporation of the Corporation as now in full force and effect is hereby amended and restated to read in full
as follows:
FIRST:
The name of the Corporation is Jean Philippe Fragrances, Inc.
SECOND:
The registered office of the Corporation and place of business in the State of Delaware is to be located at 229 South State Street,
in the City of Dover, County of Kent. The name of its registered agent at that address is The Prentice-Hall Corporation System,
Inc.
THIRD:
The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware as presently in effect or as it may hereafter be amended.
FOURTH:
The Corporation shall have the authority to issue the following classes of shares in the following amounts with the respective
powers, preferences, rights, qualifications, limitations and restrictions set forth below:
The Corporation shall have
the authority to issue twenty million (20,000,000) shares of Common Stock, $.001 par value per share, each of which shall be equal
in all respects to every other share of Common Stock.
FIFTH:
In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the following provisions are
inserted in this Restated Certificate of Incorporation for the regulation and conduct of the business and affairs of the Corporation:
1. The
election of directors of the Corporation need not be by written ballot unless the By-Laws so require.
2. The
business and affairs of the Corporation shall be managed by, or under the direction of, a Board of Directors consisting of not
less than three (3) nor more than fifteen (15) persons. The exact number of directors within the minimum and maximum limitations
specified herein shall be fixed from time to time by resolution of a majority of the whole Board of Directors.
3. The
directors of the Corporation, by the affirmative vote of a majority of the whole Board, at any regular or special meeting, shall
have the power to adopt, amend or repeal By-Laws of the Corporation, provided, however, that such power of the Board shall not
divest the stockholders of the Corporation of their power to adopt, amend or repeal By-Laws of the Corporation.
4. In
addition to the powers and authorities conferred upon the Board of Directors of the Corporation by this Restated Certificate of
Incorporation, the Board of Directors of the Corporation may exercise all such powers and take all such actions as may be exercised
or taken by the Corporation, subject, however, to the provisions of the laws of the State of Delaware, this Restated Certificate
of Incorporation and the By-Laws of the Corporation.
5. Any
vote or votes authorizing liquidation of the Corporation or proceedings for its dissolution may provide, subject to the rights
of creditors and preferred Stockholders, if any, for the distribution pro rata among the Stockholders of the Corporation of the
assets of the Corporation, wholly or in part, in cash or in kind, whether such assets be in cash or other property, and any such
vote or votes may authorize the Board of Directors of the Corporation to determine the valuation of the different assets of the
Corporation for the purpose of such liquidation and may divide or authorize the Board of Directors to divide such assets or any
part thereof among the Stockholders of the Corporation, in such manner that every Stockholder will receive a proportionate amount
in value (determined as aforesaid) of cash and/or property of the Corporation upon such liquidation or dissolution even though
each Stockholder may not receive a strictly proportionate part of each such asset.
6. A director
may not be removed from office without cause, except by the holders of a majority of the outstanding shares of the class that elected
such director.
SIXTH:
No director shall be personally liable to the Corporation or any stockholder for monetary damages for breach of fiduciary duty
as a director, except in respect of which such director shall be liable under Section 174 of Title 8 of the Delaware Code (relating
to the Delaware General Corporation Law) or any amendment thereto or successor provision thereto or shall be liable by reason that,
in addition to any and all other requirements for such liability, he (i) shall have breached his duty of loyalty to the Corporation
or its stockholders, (ii) shall not have acted in good faith or, in failing to act, shall not have acted in good faith, (iii) shall
have acted in a manner involving misconduct or a knowing violation of law or, in failing to act, shall have acted in a manner involving
intentional misconduct or a knowing violation of law or (iv) shall have derived an improper benefit. Neither the amendment nor
repeal of this Article Sixth, nor any existing or subsequently adopted provisions of the Certificate of Incorporation inconsistent
with this Article Sixth, shall eliminate or reduce the effect of this Article Sixth in respect of any matter occurring, or any
cause of action, suit or claim that, but for this Article Sixth would accrue or arise, prior to such amendment, repeal or adoption
of an inconsistent provision. Any and all future amendments to the General Corporation Law of the State of Delaware, or any successor
statute thereto, which broadens the scope of limited liability for directors, shall automatically be deemed to become incorporated
into an amendment to this Restated Certificate of Incorporation without any action on the part of the stockholders, but shall be
effective as if duly authorized by
the stockholders of the Corporation.
SEVENTH:
The Corporation shall, to the fullest extent permitted by Section 145 of the General Corporation Law of the State of Delaware,
as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said section
from and against any and all of the expenses, liabilities, or other matters referred to in or covered by said section, and the
indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled
under any By-Law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director,
officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.
EIGHTH:
If any Article of this Certificate of Incorporation or any portion thereof is found to be void or unenforceable by a court of competent
jurisdiction, the remaining Articles or portions of said Article, as the case may be, shall nevertheless remain in full force and
effect as though the unenforceable part had been severed and deleted.
IN WITNESS
WHEREOF, Jean Philippe Fragrances, Inc. has caused this Restated Certificate of Incorporation to be executed by Jean Madar, its
President, and attested by its Assistant Secretary, this 3rd day of September, 1987.
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JEAN PHILIPPE FRAGRANCES, INC.
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By:
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/s/ Jean Madar
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Jean Madar, President
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Attest:
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/s/ Felice Kadanoff
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Felice Kadanoff, Assist Secretary
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4
Exhibit 3.1.2
CERTIFICATE
OF AMENDMENT
to the
RESTATED
CERTIFICATE OF INCORPORATION
of
JEAN PHILIPPE
FRAGRANCES, INC.
PURSUANT
TO THE DELAWARE GENERAL CORPORATION LAW
Jean Philippe
Fragrances, Inc. hereby certifies that:
A. The
name of the Corporation is Jean Philippe Fragrances, Inc. (the “Corporation”), and its original Certificate of Incorporation
was filed with the Secretary of State of Delaware on May 6, 1985.
B. The
Restated Certificate of Incorporation is hereby amended to increase the number of actual shares from twenty million (20,000,000)
to twenty-one million (21,000,000), by striking out Article FOURTH in its entirety, and substituting in lieu thereof the new Article
FOURTH as follows:
“FOURTH:
The aggregate number of shares which the Corporation shall have authority to issue is twenty-one million (21,000,000) shares consisting
of twenty million (20,000,000) shares, designated as Common Stock, at par value of $.001 per share, and one million (1,000,000)
shares, designated as Preferred Stock, at a par value of $.001 per share.
(1) COMMON
STOCK.
(a) DIVIDENDS.
The holders of shares of Common Stock shall be entitled to receive, when and as declared by the Board of Directors, out of the
assets of the Corporation legally available therefor, such dividends as may be declared from time to time by the Board of Directors.
(b) LIQUIDATION.
Subject to the rights of any other class or series of stock, the holders of shares of Common Stock shall be entitled to receive
all the assets of the Corporation available for distribution to shareholders in the event of the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, ratably, in proportion to the number of shares of Common Stock held by them. Neither
the merger or consolidation of the Corporation into or with any other corporation, nor the merger or consolidation of any other
corporation into or with the Corporation, nor the sale, lease, exchange or other disposition (for cash, shares of stock, securities
or other consideration) of all or substantially all the assets of the Corporation shall be deemed to be a dissolution, liquidation
or winding up, voluntary or involuntary, of the Corporation.
(c) REDEMPTION.
Common Stock shall not be subject to redemption.
(d) Voting.
Subject to the rights of any other class or series of stock and the provisions of the laws of the State of Delaware governing business
corporations, voting rights shall be vested exclusively in the holders of Common Stock. Each holder of Common Stock shall have
one vote in respect of each share of such stock held.
(2) PREFERRED
STOCK.
The Preferred
Stock may be issued, from time to time, in one or more series, with such designations, preferences and relative, participating,
optional or other rights, qualifications, limitations or restrictions thereof as shall be stated and expressed in the resolution
or resolutions providing for the issue of such series which shall be adopted by the Board of Directors from time to time, pursuant
to the authority herein given, a copy of which resolution or resolutions shall have been set forth in a Certificate made, executed,
acknowledged, filed and recorded in the manner required by the laws of the State of Delaware in order to make the same effective.
Each series shall consist of such number of shares as shall be stated and expressed in such resolution or resolutions providing
for the issuance of the stock of such series. All shares of any one series of Preferred Stock shall be alike in every particular.
The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the
following:
(a) the
number of shares constituting that series and the distinctive designation of that series;
(b) whether
the holders of shares of that series shall be entitled to receive dividends and, if so, the rates of such dividends, conditions
under which and times such dividends may be declared or paid, any preference of any such dividends to, and the relation to, the
dividends payable on any other class or classes of stock or any other series of the same class and whether dividends shall be cumulative
or noncumulative and, if cumulative, from which date or dates;
(c) whether
the holders of shares of that series shall have voting rights in addition to the voting rights provided by law and, if so, the
terms of such voting rights;
(d) whether
shares of that series shall have conversion or exchange privileges into or for, at the option of either the holder or the Corporation
or upon the happening of a specified event, shares of any other class or classes or of any other series of the same or other class
or classes of stock of the Corporation and, if so, the terms and conditions of such conversion or exchange, including provision
for adjustment of the conversion or exchange rate in such events as the Board of Directors shall determine;
(e) whether
shares of that series shall be redeemable and, if so, the terms and conditions of such redemption, including the date or dates
upon or after which they shall be redeemable and the amount per share payable in case of redemption, which amount may vary under
different conditions and at different redemption dates;
(f) whether
shares of that series shall be subject to the operation of a retirement or sinking fund and, if so subject, the extent to and the
manner in which it shall be applied to the purchase or redemption of the shares of that series, and the terms and provisions relative
to the operation thereof;
(g) the
rights of shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation
and any preference of any such rights to, and the relation to, the rights in respect thereto of any class or classes of stock or
any other series of the same class; and
(h) whether
shares of that series shall be subject or entitled to any other preferences, and the other relative, participating, optional or
other special rights and qualifications, limitations or restrictions of shares of that series and, if so, the terms thereof.”
C. The
foregoing Amendment to the Restated Certificate of Incorporation of the Corporation was authorized pursuant to Section 141(b) of
the Delaware Corporation Law by the affirmative vote of a majority of the Board of Directors of the Corporation present at a meeting
at which a quorum was present followed by the affirmative vote of a majority of all of the outstanding shares Common Stock of the
Corporation entitled to vote on the said Amendment to the Restated Certificate of Incorporation at a meeting at which a quorum
was present pursuant to Section 242 of the Delaware General Corporation Law.
D. This
Certificate of Amendment to the Restated Certificate of Incorporation shall be effective upon the filing of same with the Secretary
of State of Delaware.
IN WITNESS
WHEREOF, we have subscribed this document on the date set forth below and do hereby affirm, under the penalties of perjury, that
the statements contained therein have been examined by us and are true and correct.
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Dated: July 31, 1992
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/s/ Jean Madar
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Jean Madar, President
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/s/ Neil Fogel
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Neil Fogel, Assistant Secretary
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4
Exhibit 3.1.3
CERTIFICATE
OF AMENDMENT
to the
RESTATED
CERTIFICATE OF INCORPORATION
of
JEAN PHILIPPE
FRAGRANCES, INC.
pursuant
to the
DELAWARE
GENERAL CORPORATION LAW
Jean
Philippe Fragrances, Inc. hereby certifies that:
A. The
name of the Corporation is Jean Philippe Fragrances, Inc. (the “Corporation”), and its original Certificate of Incorporation
was filed with the Secretary of State of Delaware on May 6, 1985.
B. The
Restated Certificate of Incorporation is hereby amended to increase the number of actual shares from twenty-one million (21,000,000)
to thirty-one million (31,000,000), by striking out the first full paragraph of Article FOURTH in its entirety, and substituting
in lieu thereof the new first full paragraph of Article FOURTH as follows:
“FOURTH:
The aggregate number of shares which the Corporation shall have authority to issue is thirty-one million (31,000,000) shares consisting
of thirty million (30,000,000) shares, designated as Common Stock, at par value of $.001 per share, and one million (1,000,000)
shares, designated as Preferred Stock, at a par value of $.001 per share.”
C. The
foregoing Amendment to the Restated Certificate of Incorporation of the Corporation was authorized pursuant to Section 141(b) of
the Delaware Corporation Law by the affirmative vote of a majority of the Board of Directors of the Corporation present at a meeting
at which a quorum was present followed by the affirmative vote of a majority of all of the outstanding shares Common Stock of the
Corporation entitled to vote on the said Amendment to the Restated Certificate of Incorporation at a meeting at which a quorum
was present pursuant to Section 242 of the Delaware General Corporation Law.
D. This
Certificate of Amendment to the Restated Certificate of Incorporation shall be effective upon the filing of same with the Secretary
of State of Delaware.
IN WITNESS
WHEREOF, we have subscribed this document on the date set forth below and do hereby affirm, under the penalties of perjury, that
the statements contained therein have been examined by us and are true and correct.
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Dated: July 9, 1993
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/s/ Jean Madar
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Jean Madar, President
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/s/ Neil Fogel
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Neil Fogel, Secretary
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-Seal-
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2
Exhibit 3.1.4
CERTIFICATE
OF AMENDMENT
to the
RESTATED
CERTIFICATE OF INCORPORATION
of
JEAN PHILIPPE
FRAGRANCES, INC.
Pursuant
to the Delaware General Corporation Law
Jean Philippe
Fragrances, Inc. hereby certifies that:
A. The
name of the Corporation is Jean Philippe Fragrances, Inc. (the “Corporation”), and its original Certificate of Incorporation
was filed with the Secretary of State of Delaware on May 6, 1985.
B. The
Restated Certificate of Incorporation is hereby amended in order to change the name of the Corporation. To accomplish the foregoing
amendment, Article FIRST is stricken out in its entirety, and the new Article FIRST is substituted in lieu thereof as follows:
FIRST.
The name of the Corporation is INTER PARFUMS, INC.
C. The
foregoing Amendment to the Restated Certificate of Incorporation of the Corporation was authorized pursuant to Section 141(b) of
the Delaware Corporation Law by the affirmative vote of a majority of the Board of Directors of the Corporation present at a meeting
at which a quorum was present followed by the affirmative vote of a majority of all of the outstanding shares Common Stock of the
Corporation entitled to vote on the said Amendment to the Restated Certificate of Incorporation at a meeting at which a quorum
was present pursuant to Section 242 of the Delaware General Corporation Law.
D. This
Certificate of Amendment to the Restated Certificate of Incorporation shall be effective upon the filing of same with the Secretary
of State of Delaware.
IN WITNESS
WHEREOF, we have subscribed this document on the date set forth below and do hereby affirm, under the penalties of perjury, that
the statements contained therein have been examined by us and are true and correct.
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Dated: July 13, 1999
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/c/ Jean Madar
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Jean Madar, Chief Executive Officer
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/s/ Annie Failler
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Annie Failler, Secretary
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Exhibit 3.1.5
CERTIFICATE
OF AMENDMENT
to the
RESTATED
CERTIFICATE OF INCORPORATION
of
INTER
PARFUMS, INC.
Pursuant
to the Delaware General Corporation Law
Inter
Parfums, Inc. hereby certifies that:
A. The
name of the Corporation is Inter Parfums, Inc. (the “Corporation”), and its original Certificate of Incorporation was
filed with the Secretary of State of Delaware on May 6, 1985.
B. The
Restated Certificate of Incorporation is hereby amended in order to add a new Article NINTH. To accomplish the foregoing amendment,
the new Article NINTH is added as follows:
“NINTH:
Without in any way limiting the power and authority of the Board of Directors as otherwise provided for herein, the following corporate
actions shall require the approval of the Board of Directors:
(a) any
sale, transfer, pledge or other disposition of all or any material portion of the assets of the Company (including, without limitation,
any shares of any subsidiary of the Company or any of its subsidiaries);
(b) the
acquisition by the Company or any of its subsidiaries of shares, securities or assets of any company or entity, whether by merger,
consolidation or other business combination, share purchase, asset purchase, contribution to capital or otherwise (other than short-term
financial investments in the ordinary course of business consistent with past practice);
(c) the
entry, renewal or termination by the Company or any of its subsidiaries into/of any trademark license agreement; or
(d) any
material agreement or material transaction involving the Company or any of its subsidiaries and not in the ordinary course of business.
Notwithstanding
anything in these Articles to the contrary, the following corporate actions shall require the unanimous approval of the Board of
Directors (as constituted without any vacancies):
(a) any
material change in the business of the Company and its subsidiaries from Business of the Company and its subsidiaries;
(b) issuance
by the Company or any of its subsidiaries of any securities in return for consideration less than the Fair Market Value thereof
(except for stock splits, stock dividends and employee and nonemployee director options to acquire Common Stock granted with an
exercise price per share at the Fair Market Value of the Common Stock on the date of grant);
(c) borrowing
or issuing any evidence of indebtedness by the Company or any of its subsidiaries unless, after giving effect thereto, the aggregate
amount of indebtedness of the Company and its subsidiaries on a consolidated basis is not greater than the consolidated stockholder’s
equity as shown in the audited Consolidated Balance Sheet of the Company for the then most recently completed fiscal year;
(d) any
transaction by the Company or any of its subsidiaries with a Majority Shareholder or any Affiliate of a Majority Shareholder; notwithstanding
the foregoing, unanimous board consent shall not apply to executive compensation issues or reimbursement of expenses incurred on
behalf of the Company, both in the ordinary course of business in accordance with its past practices;
(e) declaration
or payment of dividends if the aggregate amount of dividends paid by the Company and its subsidiaries (excluding wholly-owned subsidiaries)
in respect of any fiscal year is more than thirty percent (30%) of the annual net income of the Company for the then most recently
completed fiscal year, as indicated by the audited Consolidated Statements of Income of the Company;
(f) direct
or indirect sale or other disposition of all or any substantial portion of the business of or a controlling interest in, or all
or substantially all of the assets of, Inter Parfums, S.A., the Company’s indirect, French subsidiary; notwithstanding the foregoing,
unanimous board consent shall not be deemed to apply to discontinuance of any product line, unless such discontinuance involves
a sale or other disposition, and the net sales attributable to all such product lines exceeds in the aggregate five percent (5%)
of the net sales of the Company for the then most recently completed fiscal year as indicated by the audited Consolidated Statements
of Income of the Company;
(g) merger
or consolidation or other business combination involving the Company or any of its subsidiaries (i) if not for fair value; or (ii)
with a person not engaged primarily in the Business of the Company and its Subsidiaries (except for one or a series of mergers
or consolidations, the value of which does not singularly or in the aggregate exceed five percent (5%) of the total assets of the
Company as of the then most recently completed fiscal year (valued at historical cost) as reflected on the audited Consolidated
Balance Sheets of the Company);
(h) any
change in the number of the members of the Board of Directors to less than six (6) or more than ten (10) members; and
(i) any
amendment to the certificate of incorporation or by-laws of the Company. In addition, the Company shall cause its subsidiaries
not to take any of the foregoing actions except with the unanimous approval of the Board of Directors of the Company (as constituted
without any vacancies).
As used
in this Article Ninth, the following terms shall have the meanings as hereinafter set forth:
1. Affiliates.
Solely for purposes of this Article Ninth, an “Affiliate,” in the case of LV Capital, shall mean a corporation, entity
or person which directly or indirectly controls or is controlled by or is under common control with LV Capital, including but not
limited to, those persons and entities listed in the Schedule 13D dated August 5, 1999, filed by LVMH, but not the Company; in
the case of Corporation, shall mean a corporation, entity or person which directly or indirectly controls or is controlled by or
is under common control with the Company, including but not limited to, the Majority Shareholders, but not LV Capital; and in the
case of the Majority Shareholders, shall mean a corporation, entity or person which directly or indirectly controls or is controlled
by or is under common control with the Majority Shareholders including but not limited to, each of the Majority Shareholders and
the Company, but not LV Capital.
2. Business
of the Company and its Subsidiaries. The term “Business of the Company and its Subsidiaries” shall be defined to mean
the production, manufacture, marketing, distribution and sale of fragrance products, perfumes, eau de toilette, eau de cologne,
deodorants, cosmetics, health and beauty and personal care products, for men, women and children.
3. Fair
Market Value. The term “Fair Market Value” of the Common Stock or other security of the Company shall be determined by
the Board of Directors in the exercise of its good faith discretion. The determination of the Board of Directors shall be conclusive
in determining the Fair Market Value of the Common Stock in good faith; provided that if LV Capital disagrees with such determination,
it shall be entitled, at its own cost and expense, to select (with the consent of the Majority Shareholders, such consent not to
be unreasonably withheld) an investment banking or accounting firm of nationally recognized standing to arbitrate such dispute,
and the decision of such arbitrator will be binding upon the parties.
4. Majority
Shareholders. The “Majority Shareholders” means Jean Madar and Philippe Benacin.
5. LV
Capital and LVMH. The term “LV Capital” means LV Capital USA, Inc., a Delaware corporation and an indirect subsidiary
of LVMH, and the term LVMH means LVMH Moet Hennessy Louis Vuitton, S.A., a French corporation.
C. The
foregoing Amendment to the Restated Certificate of Incorporation of the Corporation was authorized pursuant to Section 141(b) of
the Delaware Corporation Law by the affirmative vote of a majority of the Board of Directors of the Corporation present at a meeting
at which a quorum was present followed by the affirmative vote of a majority of all of the outstanding shares Common Stock of the
Corporation entitled to vote on the said Amendment to the Restated Certificate of Incorporation at a meeting at which a quorum
was present pursuant to Section 242 of the Delaware General Corporation Law.
D. This
Certificate of Amendment to the Restated Certificate of Incorporation shall be effective upon the filing of same with the Secretary
of State of Delaware.
IN WITNESS
WHEREOF, we have subscribed this document on the date set forth below and do hereby affirm, under the penalties of perjury, that
the statements contained therein have been examined by us and are true and correct.
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Dated: July 12, 2000
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/s/ Jean Madar
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Jean Madar, Chief Executive Officer
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/s/ Annie Failler
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Annie Failler, Secretary
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4
Exhibit
3.1.6
CERTIFICATE
OF AMENDMENT
to
the
RESTATED CERTIFICATE OF INCORPORATION
of
INTER PARFUMS, INC.
Pursuant
to the Delaware General Corporation Law
Inter Parfums, Inc. hereby certifies that:
A. The name of the Corporation is Inter Parfums, Inc. (the "Corporation"), and its original Certificate of Incorporation
was filed with the Secretary of State of Delaware on May 6, 1985.
B. The Restated Certificate of Incorporation is hereby amended to increase the number of actual shares that the Corporation has
the authority to issue from thirty-one million (31,000,000) to one hundred one million (101,000,000), by striking out the first
full paragraph of Article FOURTH in its entirety, and substituting in lieu thereof the new first full paragraph of Article FOURTH
as follows:
"FOURTH: The aggregate number of shares which the Corporation shall have authority
to issue is one hundred one million (101,000,000) shares, consisting of one hundred million
(100,000,000) shares, designated as Common Stock, at par value of $.001 per share, and
one million (1,000,000) shares, designated as Preferred Stock, at a par value of $.001
per share."
C. The foregoing Amendment to the Restated Certificate of Incorporation of the Corporation was authorized pursuant to Section
141(b) of the Delaware Corporation Law by the affirmative vote of a majority of the Board of Directors of the Corporation present
at a meeting at which a quorum was present followed by the affirmative vote of a majority of all of the outstanding shares Common
Stock of the Corporation entitled to vote on the said Amendment to the Restated Certificate of Incorporation at a meeting at which
a quorum was present pursuant to Section 242 of the Delaware General Corporation Law.
D. This Certificate of Amendment to the Restated Certificate of Incorporation shall be effective upon the filing of same with
the Secretary of State of Delaware.
IN
WITNESS WHEREOF, we have subscribed this document on the date set forth below and do hereby affirm, under the penalties of perjury,
that the statements contained therein have been examined by us and are true and correct.
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Dated: August 6, 2004
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/s/ Jean Madar
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Jean Madar, Chief Executive Officer
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/s/ Michelle Habert
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Michelle Habert, Secretary
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-Seal-
Exhibit 3.3
Exhibit 3.3.1
INTER PARFUMS HOLDING
Business Corporation - with capital of
7,109,430 Euros
Head Office: 4 Rond-point des Champs
Elysées - 75008 PARIS
325 951 937 RCS PARIS
BYLAWS
In coordination with the Law of August 1st,
2003
Updated on 04/26/2004
…/…
ARTICLE 1 – FORM
The company is a corporation. It is governed by the current
laws and regulations and these Bylaws.
ARTICLE 2 – PURPOSE
The Company's purpose in France and abroad is:
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Any equity participation, direct or indirect, in any commercial or industrial, or real estate business deal, alone or with a third party, on its own behalf or that of a third party, through purchases, contributions, sales or exchanges of any stocks, corporate shares or securities of any kind, and generally, by the holding of any corporate securities. To this end, the company can participate in all such subscriptions, make any uses of funds, manage and operate any interests in any real estate or other companies,
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Any provisions of services concerning group leadership, the creation, organization, development, management, oversight, administration, and business policy for any companies, whether subsidiaries or not, the granting of any rights, patents, brands and more generally, any benefits related directly or indirectly to this purpose,
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All transactions for financing, credit, cash management and advances on all investments, and in general, all transactions related directly or indirectly to this purpose. The import or export of products for mass consumption, as well as the creation or acquisition and use of all other funds or similar institution, and all transactions that can be linked directly or indirectly to the company’s purpose or likely to facilitate its expansion or development.
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ARTICLE 3 - NAME
The name of the Company is: INTER PARFUMS HOLDING
ARTICLE 4 - HEAD OFFICE
The head office is located at:
4 Rond-Point des Champs-Elysées,
75008 PARIS.
…/…
It can be transferred to any other place
in the same Department or a neighboring Department by a simple decision of the Board of Directors, subject to ratification by the
next ordinary general shareholders meeting, and anywhere else pursuant to a resolution of the extraordinary general shareholders
meeting, subject to current legal provisions. The Board of Directors that transfers the head office, as provided by law, is authorized
to amend the Bylaws accordingly.
ARTICLE 5 - TERM
The term of the Company shall be NINETY NINE (99) years from
the date of its registration in the Trade and Companies Registry, except early dissolution or extension.
ARTICLE 6 - SHARE CAPITAL
Share capital is fixed at the amount of SEVEN MILLION ONE HUNDRED
NINE THOUSAND FOUR HUNDRED THIRTY Euros (7,109,430 Euros). It is divided into TWO MILLION THREE HUNDRED SIXTY NINE THOUSAND EIGHT
HUNDRED TEN (2,369,810) subscribed and fully paid shares of 3 Euros par value each.
ARTICLE 7 - CHANGES IN SHARE CAPITAL
Share capital can be increased, reduced or amortized in accordance
with current laws and regulations.
ARTICLE 8 - RELEASE OF SHARES
Shares subscribed in cash must be paid upon subscription, by
at least half their face value and, where applicable, the entire share premium.
The release of the surplus must take place one or more times
upon appeal to the Board of Directors, within five years from the registration in the Trade and Companies Registry, as regards
the initial capital, and within five years from the date when the transaction becomes final in the event of a capital increase.
However, the new shares for cash resulting from a mixed transaction
providing for release partly in cash and partly by incorporation of reserves, profits or premiums must be paid in full upon subscription.
…/…
Calls for capital shall be made known to
shareholders one month before the date set for each payment, either by registered letter with return receipt or by a notice in
a legal announcement newspaper in the county of the head office and in the BALO [Required Legal Announcements Bulletin].
Payments are made either at headquarters or at any other place
indicated for that purpose.
Shareholders shall, at any time, have the right to be
discharged in advance, but they cannot claim any interest or first dividend, in respect of the payments made by them before
the date fixed for the calls for funds.
Any delay in payment of amounts due on the unpaid amount of
shares automatically carries interest at the legal rate from the due date, without prejudice to the personal action that the Company
may take against the defaulting shareholder and the enforcement measures provided by law.
ARTICLE 9 - FORM OF SHARES
The shares are registered. The materiality of the shares results
from their inclusion in the name of the holder or holders on accounts held for that purpose by the Company, under the conditions
and terms provided by law.
ARTICLE 10 - TRANSMITTAL OF SHARES
The shares are negotiable only after the Company’s registration
in the Trade and Companies Registry. In case of a capital increase, shares are negotiable as of when this is carried out.
The shares remain negotiable after the dissolution of the Company
until the completion of the liquidation.
Ownership of the shares results from their inclusion in the
individual account in the name of the holder(s) on the registries that the Company keeps to this effect at the head office.
The transfer of shares takes place with regards to the Company
and third parties by a transfer order signed by the assignor or his representative and the assignee if the shares are not fully
paid. The transfer order is recorded on the day of its receipt in a numbered and initialed registry kept chronologically, called
the “transfer registry.”
…/…
Transfers between shareholders, or for the benefit of spouses,
ancestors and descendants are free.
Shares may not be sold to third parties outside the Company
without the approval of the Board of Directors under the conditions and according to the procedure prescribed by law.
ARTICLE 11 - RIGHTS AND OBLIGATIONS ATTACHED TO SHARES
Each share provides entitlement to the profits, corporate assets
and liquidation dividend in proportion to the share capital it represents.
It also gives the right to vote and to representation at the
general shareholders meetings, as well as the right to be informed of the Company’s course and to obtain disclosure of certain
corporate documents at such times and under the conditions prescribed by law and the Bylaws.
The shareholders are only responsible for corporate liabilities
up to the extent of their contributions.
The rights and obligations follow the share regardless of the
owner.
Ownership of a share carries full adherence to the Bylaws of
the Company and the decisions of the general shareholders meeting.
Whenever it is necessary to own a certain number of shares in
order to exercise any right, the owners who do not have this number shall make it their personal business to group together, and
possibly purchase or sell the number of shares necessary.
ARTICLE 12 - BOARD OF DIRECTORS
The Company is administered by a Board of Directors composed
of at least three members and eighteen members at most, subject to the exemption provided by law in case of merger.
During the life of the corporation, the directors are appointed,
renewed or revoked by the ordinary general shareholders meeting. They can always be re-elected.
…/…
The tenure of directors is SIX (6) years; they expire at the
end of the ordinary general shareholders meeting called to approve the accounts for the last fiscal year that are kept for the
year during which their mandate expires.
The number of directors over the age of EIGHTY (80) years shall
not exceed one third of the directors in office. If this statutory limitation comes to be exceeded, the oldest director shall be
deemed to have resigned on the date of the ordinary general shareholders meeting that rules on the accounts for the fiscal year
during which this event shall have occurred.
Each director must own one share. If on the day of his appointment,
a director does not own the required number of shares or if, during his tenure, he ceases to be their owner, he is automatically
deemed to have resigned if he has not resolved his situation within three months.
ARTICLE 13 - ORGANIZATION AND OPERATION OF THE BOARD OF DIRECTORS
The Board of Directors elects a Chairman from among its individual
members and determines his compensation. It fixes the Chairman’s tenure, which cannot exceed his term as director.
No person shall be appointed Chairman of the Board of Directors
if he is over EIGHTY years (80 years) of age. If the incumbent Chairman has reached this age, he is deemed to have resigned.
He is eligible for reelection. The Board of Directors may remove
him at any time.
ARTICLE 14 - BOARD PROCEEDINGS
The Board of Directors meets as often as the Company’s
interests require, upon convocation by its Chairman or by one third or more of its members if the Board has not met for over two
months. The Chairman is bound by the requests that are sent to him in this regard.
In the event that the Company’s management is assumed
by a CEO, the latter may ask the Chairman of the Board of Directors to convene the Board on a specific agenda.
The convocations are made by any means, even verbally. The meeting
takes place either at the head office or at any other location specified in the convocation.
…/…
The Board’s proceedings shall be valid only if at least
half the directors are present. Decisions are taken by a majority vote of members present or represented. In case of a tie vote,
the Chairman of the meeting casts the deciding vote.
Directors who attend the Board meeting by means of videoconferencing
are deemed to be present for calculating the quorum and the majority, in accordance with the laws and regulations. This provision
is not applicable to the adoption of decisions concerning the appointment of the Chairman, the CEO, the dismissal of the CEO, the
closing of the annual and consolidated accounts, and the preparation of the management report for the Company and/or the group.
ARTICLE 15 - POWERS OF THE BOARD OF DIRECTORS
The Board of Directors determines the direction of the business
of the Company and oversees the implementation, within the limits of the corporate purpose and the powers expressly granted by
law to shareholders' meetings. All questions regarding the proper conduct of the Company are referred to it, and it rules through
its deliberations on the matters that concern it. The Board of Directors shall conduct inspections and audits as it deems appropriate.
The Chairman or CEO of the Company is bound to provide to each
director all the documents and information necessary to accomplish his mission.
In dealings with third parties, the Company is bound even by
actions of the Board of Directors that are not within the corporate purpose, unless it proves that the third party knew that the
action exceeded that purpose or that he could not ignore that given the circumstances, it being excluded that the mere publication
of the Bylaws is sufficient to constitute such evidence.
ARTICLE 16 - POWERS OF THE CHAIRMAN OF THE BOARD OF DIRECTORS
The Chairman organizes and directs the work of the Board of
Directors, which reports to the general shareholders meeting. He ensures the proper functioning of the corporate bodies and ensures
in particular that the directors are able to fulfill their mission. In a report attached to the annual report, he reports in particular
on the conditions of operation of the Board of Directors and the internal oversight procedures.
In case of temporary incapacity or death of the Chairman, the
Board of Directors may delegate a director to carry out the duties of the Chairman.
In case of temporary impediment, such delegation is given for
a limited period and is renewable. In case of death, it shall be valid until the election of the new Chairman.
…/…
ARTICLE 17 - GENERAL MANAGEMENT - DELEGATION OF POWERS
The general management of the Company is assumed, under his
responsibility, either by the Chairman of the Board of Directors or by another physical person, whether a director or not, appointed
by the Board of Directors, for whom it sets the tenure and who holds the title of CEO.
The CEO, who must be a physical person, whether chosen from
among the directors or not, can be dismissed at any time by the Board of Directors. If he is dismissed without just cause, he is
entitled to damages, unless he also fulfills the duties of Chairman of the Board of Directors.
The Board of Directors chooses, in accordance with the legal
and regulatory requirements in force, between two methods of exercising the general management of the Company, upon any appointment
or renewal of the Chairman of the Board of Directors, or the CEO if these duties are not assumed by the Chairman of the Board of
Directors. This choice remains valid until the expiration of any of these terms or, if necessary, until the day the Chairman of
the Board of Directors decides to no longer serve as CEO or, upon decision by the Board of Directors, for a shorter period, which
may be one year.
Shareholders and third parties shall be informed of this choice
under the conditions prescribed by current law and regulations.
If the Board of Directors chooses not to separate the functions
of Chairman of the Board of Directors, the Chairman assumes, under his responsibility, the general management of the Company. In
this case, the provisions below relating to the CEO apply to him with the exception of compensation for wrongful dismissal from
his duties as CEO.
If the Board of Directors chooses to separate the duties of
Chairman of the Board of Directors and CEO, and subject to the powers that the law expressly attributes to shareholder meetings
and to the Board of Directors, and within the limits of the corporate purpose, the CEO is then invested with the broadest powers
to act in all circumstances on behalf of the Company. He represents the Company in its dealings with third parties. He can grant
to any agent of his choice all delegations of powers within the limits of those conferred upon him by law and these Bylaws. Any
limitation on his powers by a decision of the Board of Directors is not effective against third parties.
…/…
When he is a director, his term in office cannot exceed that
of his mandate.
Whatever the term for which the duties of CEO were conferred
on him, such duties shall terminate, automatically, at the latest after the first ordinary general shareholders meeting held after
the date on which he has attained EIGHTY (80) years of age.
The Board of Directors determines the CEO’s compensation.
The Board of Directors may, upon the CEO's suggestion, mandate
a physical person, director or otherwise, to assist the CEO, with the title of Deputy CEO, who may not be older than EIGHTY (80)
years of age on the day of their appointment. In agreement with the CEO, or the Chairman of the Board of Directors if the latter
serves as the CEO, the Board of Directors determines the extent and duration of the powers delegated to each Deputy CEO.
ARTICLE 18 – STATUTORY AUDITORS
The auditing of the Company is carried out by one or more statutory
auditors, appointed and performing their duties according to law.
One or more substitute auditors called upon to replace the statutory
auditor(s) in case of refusal, incapacity, resignation or death, are appointed at the same time as the statutory auditor(s) for
the same period.
ARTICLE 19 – REGULATED AGREEMENTS
Any agreement shall be submitted for prior approval by the Board
of Directors, other than those that bear on current operations and are concluded under normal conditions, directly with or through
an intermediary, between the Company and its CEO, one of its Deputy CEOs, one of its directors, one of its shareholders who holds
a fraction of the voting rights in excess of 10%, or, if it involves a corporate shareholder, the company that controls it according
to the meaning of Article L. 233-3 of the new Commercial Code.
The same holds for agreements in which one of these people is
indirectly involved.
Are also subject to prior approval; any agreements between the
Company and a business that the CEO, a Deputy CEO, or a director of the Company owns, or is an unlimited partner, manager, director,
CEO or member of the board of directors or supervisory board, or is in general, an officer of this business.
…/…
Persons who hold an interest are required to inform the Board
of Directors when they become aware of an agreement subject to approval. They cannot claim to take part in the voting on the authorization
sought.
The Chairman of the Board gives an opinion to the Statutory
Auditors on all the agreements authorized and submits them for approval by the general shareholders meeting.
These agreements are authorized under the applicable legal and
regulatory requirements.
The above provisions do not apply to agreements relating to
current operations that are concluded under normal conditions. However, these agreements, except when they are not significant
for any of the parties because of their purpose or their financial implications, shall be provided to the Chairman of the Board
of Directors by the party who holds an interest. The list and the purpose of such agreements are communicated by the Chairman
to the members of the Board of Directors and to the Statutory Auditors.
ARTICLE 20 - PROHIBITED AGREEMENTS
Directors, other than legal entities, are prohibited from contracting
loans from the Company in any form whatsoever, from being granted an overdraft on current account and otherwise by it, and to have
their commitments towards third parties be guaranteed or secured by it.
The same prohibition applies to the CEO, the Deputy CEO and
the permanent representatives of corporate entity directors. It also applies to spouses, ancestors and descendants of the persons
referred to in this article, as well as to any intermediary third party.
ARTICLE 21 - GENERAL MEETINGS
General shareholders meetings are convened and deliberate under
the conditions laid down by law.
The collective decisions of shareholders are made in ordinary,
extraordinary or special general shareholders meetings depending on the nature of the decisions they are called upon to make.
…/…
General meetings shall be convened either
by the Board of Directors or by the Statutory Auditors, or by a court-appointed trustee under the conditions provided by law.
Meetings are held at the head office or at any other location
specified in the convocation.
The convening of general meetings shall be carried out fifteen
days before the date of the meeting, either by a notice in a newspaper authorized to receive legal announcements in the Department
of the head office, or by letter addressed to each shareholder.
When a meeting has been unable to deliberate for lack of the
required quorum, the second meeting and, where applicable, the extended second meeting is convened at least six days in advance
in the same form as the first. The notice and letters of convocation to this second meeting shall repeat the date and agenda of
the first one.
Any shareholder may attend meetings in person or by proxy, regardless
of the number of shares he owns, upon proof of his identity and ownership of his shares in the Company accounts. He can only be
represented by his spouse or by another shareholder: to this end the proxy must show proof of his mandate.
Any shareholder may, if the Board of Directors so decides upon
convening the meeting, also participate in that meeting by videoconference or by any means of telecommunication and remote transmission
including the Internet, under the conditions provided by the regulations applicable at the time of its use.
Are deemed present, in calculating the quorum and the majority,
the shareholders attending the meeting by videoconference, Internet or by any means of telecommunication that allows their identification,
whose nature and conditions are determined by Decree.
Any shareholder may vote by mail using a form prepared and sent
to the Company under the conditions laid down by law and regulations. This form must reach the Company FIVE (5) days before the
date of the meeting in order to be taken into account.
Any shareholder has the right to obtain disclosure of the documents
necessary to enable him to act in full knowledge of cause concerning the management and workings of the Company.
The nature of these documents and the conditions of their sending
or being made available are determined by law and regulations.
…/…
An attendance sheet, duly signed by the shareholders present
and the proxies, to which are annexed the powers given to each proxy and, where appropriate the forms for voting by mail, is certified
correct by the executive committee of the meeting.
The meetings are chaired by the Chairman of the Board of Directors
or, in his absence, by a Vice-Chairman or a director specifically designated for that purpose by the Board. Otherwise, the assembly
itself designates its Chairman.
The duties of the vote-counter are fulfilled by the two shareholders,
present and willing, who hold, on their own behalf as well as by proxy, the largest number of votes.
The executive committee thus comprised, appoints a secretary
who may not be a shareholder.
The minutes are prepared and copies or excerpts from the deliberations
are delivered and certified according to law.
The ordinary and extraordinary general shareholders meetings
acting under the conditions of quorum and majority required by the provisions that govern them respectively, exercise the powers
conferred on them by law.
ARTICLE 22 - FISCAL YEAR
Each fiscal year has a period of one year, which begins January
1 and ends December 31.
ARTICLE 23 - INVENTORY - ANNUAL FINANCIAL STATEMENTS
There shall be a regular accounting of corporate operations,
according to law.
At the close of each fiscal year, the Board of Directors draws
up an inventory of the various assets and liabilities that exist on that date.
It also draws up the balance sheet describing the assets and
liabilities, showing the equity separately, the income statement summarizing revenues and expenses during the fiscal year, as well
as the appendix that supplements and comments on the information given by the balance sheet and the income statement.
The Board of Directors prepares the management report on the
Company’s situation during the past fiscal year, its foreseeable development, the significant events that occurred between
the closing date of the fiscal year and when it is prepared, and its research and development activities.
…/…
ARTICLE 24 - ALLOCATION AND DISTRIBUTION OF PROFITS
If the fiscal year accounts approved by the general shareholders
meeting show a distributable profit as defined by law, the general shareholders meeting decides to include it in one or more reserve
items for which it shall decide on its allocation or use, whether to carry it forward or distribute it.
The general shareholders meeting may grant to the shareholders
for all or part of the dividend distributed or interim dividends, an option between payment of the dividend in cash or in shares
under the legal conditions.
Losses, if any exist, are carried forward again, after approval
of the financial statements by the general shareholders meeting, to be offset against profits for subsequent years until extinction.
ARTICLE 25 - SHAREHOLDER EQUITY LESS THAN HALF OF SHARE CAPITAL
If, due to losses recorded in the accounting records, the Company’s
equity falls below half of the share capital, the Board of Directors shall, within four months following approval of the accounts
that reflect these losses, convene an extraordinary general meeting of shareholders for the purpose of deciding whether premature
dissolution of the Company is warranted.
If dissolution is not decided on, the share capital must, subject
to the legal provisions relating to minimum share capital for a business corporations, and within the deadline set by law, be reduced
by an amount equal to the losses that were not charged against reserves, if, within that period the equity does not once again
equal at least half the share capital.
If a general shareholders meeting does not take place, as in
the case that this meeting was unable to validly deliberate, any interested party may request court-ordered dissolution of the
Company.
ARTICLE 26 - CONVERSION OF THE COMPANY
The Company can be converted into another form of corporation,
if, at the time of its conversion, it has been in existence for at least two years, and if the balance sheets for its first two
years have been drawn up and approved by the shareholders.
…/…
The decision to convert is made on the report of the Statutory
Auditors for the Company, who must certify that the equity is at least equal to the share capital.
The conversion into a partnership requires the agreement of
all the partners. In this case, the conditions above are not required.
The conversion into a limited liability company or a joint stock
company is decided upon under the conditions provided for an amendment to the bylaws and with the agreement of all the partners
who agree to be active partners.
The conversion into a limited liability company is decided upon
under the conditions provided for an amendment to the articles of incorporation for companies of that form.
ARTICLE 27 - DISSOLUTION - LIQUIDATION
At the expiration of the term set by the Company or in case
of early dissolution, the general shareholders meeting sets the terms and conditions for the liquidation and appoints one or more
liquidators, whose powers they shall determine and who shall perform their duties according to law.
ARTICLE 28 - DISPUTES
All disputes that may arise during the term of the Company or
upon its liquidation, either between the Company and the shareholders or directors, or between the shareholders themselves, which
involve corporate business, shall be judged according to law and subject to the jurisdiction
of the courts.
*
* *
…/…
Exhibit 3.4
Exhibit 3.4.1
INTER
PARFUMS
Business
Corporation with capital of 40,181,742 Euros
Head
Office: 4 Rond-Point des Champs-Elysées - 75008 PARIS
350.219.382
RCS PARIS
BY
LAWS
Updated:
May 20, 2009
ARTICLE
1 – FORM
The
company is a corporation. It is governed by the current laws and regulations and these Bylaws.
ARTICLE
2 – PURPOSE
The
Company's purpose in France and abroad is:
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The
purchase, sale, manufacture, import and export of all products connected with perfumery and cosmetics,
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The
exploitation of licenses,
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The
provision of all services relating to the activities referred to above,
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The
participation of the Company, by any means, directly or indirectly, in any transactions that may be related to its purpose
through the creation of new companies, contribution, subscription or purchase of securities or corporate rights, mergers or
otherwise, of creation, acquisition, lease, lease management of any business assets or facilities; the holding, acquisition,
exploitation or disposition of all processes and patents concerning these activities.
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And
generally, any industrial, commercial, financial, civil, securities or property transactions, which may be connected directly
or indirectly to the corporate purpose or any similar or related purpose.
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ARTICLE
3 - NAME
The
name of the Company is:
INTER
PARFUMS
ARTICLE
4 - HEAD OFFICE
The
head office is located at: 4 Rond-Point des Champs-Elysées, 75008 PARIS
It
can be transferred to any other place in the same Department or a neighboring Department by a simple decision of the Board of
Directors, subject to ratification by the next Ordinary General Shareholders Meeting, and anywhere else pursuant to a resolution
of the Extraordinary General Shareholders Meeting, subject to current legal provisions. The Board of Directors that transfers
the head office, as provided by law, is authorized to amend the Bylaws accordingly.
ARTICLE
5 - TERM
The
term of the Company is set for NINETY NINE (99) years from the date of its registration in the Trade and Companies Registry, except
early dissolution or extension.
ARTICLE
6 - SHARE CAPITAL
Share
capital is fixed at the amount of forty million one hundred eighty-one thousand seven hundred and forty two Euros (€ 40,181,742).
It is divided into thirteen million three hundred ninety three thousand nine hundred and fourteen (13,393,914) subscribed and
fully paid shares of 3 Euros par value each.
ARTICLE
7 - CHANGES IN SHARE CAPITAL
Share
capital can be increased, reduced or amortized in accordance with current laws and regulations.
ARTICLE
8 - RELEASE OF SHARES
Shares
subscribed in cash must be fully paid up upon subscription, by at least half their face value and, where applicable, the entire
share premium.
The
release of the surplus must take place one or more times upon appeal to the Board of Directors, within five years from the registration
in the Trade and Companies Registry, as regards the initial capital, and within five years from the date when the transaction
becomes final in the event of a capital increase.
However,
the new shares for cash resulting from a mixed transaction providing for release partly in cash and partly by incorporation of
reserves, profits or premiums must be paid in full upon subscription.
Calls
for capital shall be made known to shareholders one month before the date set for each payment, either by registered letter with
return receipt or by a notice in a legal announcement newspaper in the county of the head office and in the B.A.L.O. [Required
Legal Announcements Bulletin].
Payments
are made either at headquarters or at any other place indicated for that purpose.
Shareholders
shall, at any time, have the right to be released in advance, but they cannot claim any interest or first dividend, in respect
of the payments made by them before the date set for the calls for funds.
Any
delay in payment of amounts due on the unpaid amount of shares automatically bears interest at the legal rate from the due date,
without prejudice to the personal action that the Company may take against the defaulting shareholder and the enforcement measures
provided by law.
ARTICLE
9 - FORM OF SHARES - IDENTIFICATION OF SHAREHOLDERS
The
shares are, at the shareholder’s choice, registered or bearer.
Until
they are fully paid, the shares must be registered in the name of their holder to an account held by the company.
Pursuant
to Article 94-II of Law No. 81-1160 of December 30, 1980 (Finance Act of 1982) and Decree No. 83-359 of May 2, 1983 relating to
securities regimes, holders’ rights shall be represented by an accounting entry in their name:
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With
the intermediary of their choice for bearer securities,
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With
the Company, and, if they so desire, with the financial intermediary of their choice for registered shares.
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The
Company may request at any time, in accordance with the laws and regulations, and in return for payment at its expense, that the
agency responsible for securities compensation provide information relating to holders of securities issued by it, which give
immediate or future voting rights, as well as to the securities. Upon seeing the list transmitted by that body, the company may,
in particular, pursuant to the legal and regulatory requirements, ask the people shown on this list that it believes may have
registered them on behalf of third parties, for information concerning the owners of these securities.
With
the reservations and conditions provided by law and regulations, any intermediary may be registered on behalf of owners of Company
securities referred to in Article L. 228-1 paragraph 7 of the Commercial Code (owners not having their domicile on French territory,
as defined in Article 102, Civil Code) subject, in particular, to the agent having declared at the time of opening of its account
with the company or with the financial intermediary that is custodian of the account in accordance with the laws and regulations,
in its capacity as a third party holder of securities on behalf of others. The intermediary registered as holder of securities
is bound, without prejudice to the obligations of owners of securities, to make the declarations regarding the crossing of ownership
thresholds, for all Company shares or securities for which it is recorded in the account, under penalty of punishment by law.
ARTICLE
10 - TRANSMISSION OF SHARES
The
shares are only negotiable after the Company’s registration in the Trade and Companies Registry. In case of a capital increase,
shares are negotiable as of when this is carried out.
The
shares remain negotiable after the dissolution of the Company until the completion of the liquidation.
Ownership
of the shares results from their registration in the individual account in the name of the holder(s) on the registries that the
Company keeps to this effect at the head office.
The
transfer of shares takes place with regards to the Company and third parties by a transfer order signed by the assignor or his
representative and the assignee if the shares are not fully paid. The transfer order is recorded on the day of its receipt in
a numbered and initialed registry kept chronologically, called the “transfer registry.”
Shares
are freely transferable, unless there are laws or regulations to the contrary.
ARTICLE
11 - RIGHTS AND OBLIGATIONS ATTACHED TO SHARES
Each
share provides entitlement to the profits, the corporate assets and the liquidation dividend in proportion to the share capital
it represents.
It
also gives the right to vote and to representation at general shareholders meetings, as well as the right to be informed of the
Company’s course and to obtain disclosure of certain corporate documents at such times and under the conditions prescribed
by law and the Bylaws.
The
shareholders are only responsible for corporate liabilities up to the extent of their contributions. The rights and obligations
follow the share regardless of the owner.
Ownership
of a share carries full adherence to the Bylaws of the Company and the decisions of the General Shareholders Meeting.
Whenever
it is necessary to own a certain number of shares in order to exercise any right, the owners who do not own this number shall
make it their own personal business to gather, and possibly to purchase or sell the number of shares necessary.
The
fully paid and registered shares recorded for at least three years in the name of the same shareholder confer double voting rights.
In case of a capital increase by incorporation of reserves, profits or share premiums, the double voting rights may be conferred
upon issuance, to shares allotted free of charge to a shareholder in respect of existing shares which have this right.
ARTICLE
12 - BOARD OF DIRECTORS
The
Company is administered by a Board of Directors comprised of at least three members and at most eighteen members, subject to the
exemption provided by law in case of merger.
During
the life of the corporation, the directors are appointed, renewed or revoked by the Ordinary General Shareholders Meeting. They
can always be re-elected.
The
tenure of directors is SIX (6) years; they expire at the end of the Ordinary General Shareholders Meeting called
to approve the accounts for the last fiscal year that are kept for the year during which their mandate expires.
The
number of directors over the age of EIGHTY (80) years shall not exceed one third of the directors in office. If
this statutory limitation comes to be exceeded, the oldest Director shall be deemed to have resigned on the date of the Ordinary
General Shareholders Meeting that rules on the accounts for the fiscal year during which this event shall have occurred.
Each
director must own one share.
ARTICLE
13 - ORGANIZATION OF THE BOARD
The
Board of Directors elects a Chairman from among its physical entity members and determines his compensation. It fixes the Chairman’s
tenure, which cannot exceed his term as a director.
No
person shall be appointed Chairman of the Board of Directors if he is over EIGHTY years (80 years) of age. If the incumbent Chairman
has reached this age, he is automatically deemed to have resigned.
The
Chairman organizes and directs the work of the Board of Directors, which reports to the general shareholders meeting. He ensures
the proper functioning of the corporate bodies and ensures in particular that the directors are able to fulfill their mission.
In a report attached to the annual report, he reports in particular on the conditions of operation of the Board of Directors and
the internal oversight procedures.
He
is eligible for reelection. The Board of Directors may remove him at any time. In case of temporary incapacity or death of the
Chairman, the Board of Directors may delegate an administrator in the office of Chairman.
ARTICLE
14 - BOARD PROCEEDINGS
The
Board of Directors meets as often as the Company’s interests require, upon convocation by its Chairman or by at least one
third of its members, if the Board has not met for over two months. The Chairman is bound by the requests that are sent to him
in this regard.
In
the event that the Company’s management is assumed by a CEO, the latter may ask the Chairman of the Board of Directors to
convene the Board on a specific agenda.
The
convocations are made by any means, even verbally. The meeting takes place either at the head office or at any other location
specified in the convocation.
The
Board’s proceedings shall be valid only if at least half the directors are present. Decisions are taken by a majority vote
of members present or represented. In case of a tie vote, the Chairman of the meeting casts the deciding vote.
Directors
who attend the Board meeting by means of videoconferencing are deemed to be present for calculating the quorum and the majority,
in accordance with the laws and regulations. This provision is not applicable to the adoption of decisions concerning the appointment
of the Chairman, the CEO, the dismissal of the CEO, the closing of the annual and consolidated accounts, and the preparation of
the management report for the Company and/or the group.
ARTICLE
15 - POWERS OF THE BOARD OF DIRECTORS
The
Board of Directors sets the guidelines for the Company’s business activity and oversees the implementation, within the limits
of the corporate purpose and the powers expressly granted by law to shareholders' meetings. It is submitted all questions regarding
the proper conduct of the Company, and it rules through its deliberations on the matters that concern it. The Board of Directors
shall conduct inspections and audits as it deems appropriate.
The
Chairman or the CEO of the Company is bound to provide to each director all the documents and information necessary to accomplish
his mission.
In
dealings with third parties, the Company is bound even by actions of the Board of Directors that are not within the corporate
purpose, unless it proves that the third party knew that the action exceeded that purpose or that he could not ignore that given
the circumstances, it being excluded that the mere publication of the Bylaws is sufficient to constitute such evidence.
ARTICLE
16 - GENERAL MANAGEMENT - DELEGATION OF POWERS
The
general management of the Company is assumed, under its responsibility, either by the Chairman of the Board of Directors or by
another physical person, whether a director or not, appointed by the Board of Directors, for whom it sets the tenure and who holds
the title of CEO.
The
CEO, who must be a physical person, whether chosen from among the directors or not, can be dismissed at any time by the Board
of Directors. If he is dismissed without just cause, he is entitled to damages, unless he also fulfills the duties of Chairman
of the Board of Directors.
The
Board of Directors chooses, in accordance with the legal and regulatory requirements in force, between two methods of exercising
the general management of the Company, upon any appointment or renewal of the Chairman of the Board of Directors, or the CEO if
these duties are not assumed by the Chairman of the Board of Directors. This choice remains valid until the expiration of one
of these terms or, if necessary, until the day the Chairman of the Board of Directors decides to no longer serve as CEO or, upon
decision of the Board of Directors, for a shorter period, which may not be one year.
Shareholders
and third parties shall be informed of this choice under the conditions prescribed by current law and regulations.
If
the Board of Directors chooses not to separate the duties of Chairman of the Board of Directors, the Chairman assumes, under his
responsibility, the general management of the Company. In this case, the provisions relative to the CEO can be applied
to him with the exception of the compensation in case of unjustified dismissal.
If
the Board of Directors chooses to separate the duties of Chairman of the Board of Directors and CEO, and subject to the powers
that the law expressly attributes to shareholder meetings and to the Board of Directors, and within the limits of the corporate
purpose, the CEO is then invested with the broadest powers to act in all circumstances on behalf of the Company. He represents
the Company in its dealings with third parties. He can grant to any agent of his choice all delegations of powers within the limits
of those conferred upon him by law and these Bylaws. Any limitation on his powers by a decision of the Board of Directors is not
effective against third parties.
When
he is a director, his term in office cannot exceed that of his mandate.
Whatever
the term for which the duties of CEO were conferred on him, such duties shall terminate, automatically, at the latest after the
first Ordinary General Shareholders Meeting held after the date on which he has attained EIGHTY (80) years of age.
The
Board of Directors determines the CEO’s compensation.
The
Board of Directors may, upon the CEO's proposal, give a mandate to a physical person, director or otherwise, to assist the CEO,
with the title of Deputy CEO, who may not be older than EIGHTY (80) years of age on the day of their appointment. In agreement
with the CEO, or the Chairman of the Board of Directors if the latter serves as the CEO, the Board of Directors determines the
extent and duration of the powers delegated to each Deputy CEO.
ARTICLE
17 - STATUTORY AUDITORS
The
auditing of the Company is carried out by one or more Statutory Auditors, appointed and performing their duties according to law.
One
or more substitute Statutory Auditors called upon to replace the statutory auditor(s) in case of refusal, incapacity, resignation
or death, are appointed at the same time as the statutory auditor(s) for the same period.
ARTICLE
18 - REGULATED AGREEMENTS
Any
agreement shall be submitted for prior approval by the Board of Directors, other than those that bear on current operations and
are concluded under normal conditions, which are directly with or through an intermediary, between the Company and its CEO, one
of its Deputy CEOs, one of its directors, one of its shareholders who holds a fraction of the voting rights in excess of 10%,
or, if it involves a corporate shareholder, the company that controls it according to the meaning of Article L. 233-3 of the new
Commercial Code.
The
same holds for agreements in which one of these people has an indirect interest.
Are
also subject to prior approval; any agreements between the Company and a business if the CEO, one of the Deputy CEOs, or one of
the directors of the Company is the owner, or is an unlimited partner, manager, director, CEO or member of the board of directors
or supervisory board, or is in general, an officer of this business.
Persons
who hold an interest are bound to inform the Board of Directors when they become aware of an agreement subject to approval. They
cannot claim to take part in the voting on the authorization sought.
These
agreements are authorized under the applicable legal and regulatory requirements.
The
above provisions do not apply to agreements relating to current operations that are concluded under normal conditions. However,
these agreements, except when they are not significant for any of the parties because of their purpose or their financial implications,
shall be provided to the Chairman of the Board of Directors by the party who holds an interest. The list and the purpose of such
agreements are communicated by the Chairman to the members of the Board of Directors and to the Statutory Auditors.
ARTICLE
19 - GENERAL MEETINGS
General
Shareholders Meetings are convened and deliberate under the conditions laid down by law.
The
collective decisions of shareholders are made in Ordinary, Extraordinary or Special General Shareholders Meetings depending on
the nature of the decisions they are called upon to make.
General
meetings are convened either by the Board of Directors or by the Statutory Auditors, or by a court-appointed trustee under the
conditions provided by law.
Meetings
are held at the head office or at any other location specified in the convocation.
In
case of a public offering, a notice of meeting containing the information required by Article 130 of the Decree of March 23, 1967
is published in the B.A.L.O. at least thirty five days before the Shareholders Meeting.
The
convening of general shareholders meetings shall be made by a notice printed in a newspaper authorized to receive legal notices
in the Department of the head office and in the B.A.L.O., at least fifteen days before the date of the Meeting.
If
all the shares are registered, the insertions under the preceding paragraph may be replaced by a convocation given within the
same time period, at the company’s expense, by ordinary or registered letter sent to each shareholder.
Shareholders,
who hold shares for at least one month from the date of publication of the notice of convocation, shall also be invited to any
meeting by ordinary mail or, upon request and at their expense, by registered letter.
When
a meeting has been unable to deliberate for lack of the required quorum, the second meeting and, where applicable, the extended
second meeting is convened at least six days in advance in the same form as the first. The notice and letters of convocation to
this second meeting shall repeat the date and agenda of the first one.
Any
shareholder may attend meetings in person or by proxy, regardless of the number of shares he owns, upon proof of identity and
ownership of his shares in the form of a registration in his name, or by a certificate from the authorized financial intermediary
account keeper declaring that the shares registered in the account are unavailable until the date of the meeting.
These
formalities must be completed at least three days before the meeting. The Board of Directors has the option, for any meeting,
to reduce the above time limit, or even to not require any time limit.
Any
shareholder may be represented by their spouse or by another shareholder: to this purpose the proxy has to prove his mandate.
If he has no domicile on French territory, as defined in Article 102 of the Civil Code, he may be represented at general shareholder
meetings by a registered intermediary in accordance with the current laws and regulations. He is then deemed to be present at
such meeting for the calculation of the quorum and majority.
Any
shareholder may, if the Board of Directors so decides upon convening the meeting, also participate in that meeting by videoconference
or by any means of telecommunications and remote transmission including the Internet, under the conditions provided by the regulations
applicable at the time of its use.
Are
deemed present, in calculating the quorum and the majority, the shareholders attending the meeting by videoconference, Internet
or by any means of telecommunication that allows their identification, whose nature and conditions are determined by Decree.
Any
shareholder may vote by mail using a form prepared and sent to the Company under the conditions laid down by law and regulations.
This form must reach the Company THREE (3) days before the date of the meeting in order to be taken into account.
Any
shareholder has the right to obtain disclosure of the documents necessary to enable him to act in full knowledge of cause concerning
the management and workings of the Company.
The
nature of these documents and the conditions of their sending or being made available are determined by law and regulations.
An
attendance sheet, duly signed by the shareholders present and the proxies, to which is annexed the powers given to each proxy
and, where appropriate the forms for voting by mail, is certified correct by the executive committee of the Meeting.
The
Meetings are chaired by the Chairman of the Board of Directors or, in his absence, by a Vice-Chairman or a director specially
appointed for this purpose by the Board. Otherwise, the Meeting itself designates its Chairman.
The
duties of the vote-counter are fulfilled by the two shareholders, present and willing, who hold, on their own behalf as well as
by proxy, the largest number of votes.
The
executive committee thus comprised, appoints a secretary who may not be a shareholder.
The
minutes are prepared and copies or excerpts from the deliberations are delivered and certified according to law.
The
Ordinary and Extraordinary General Shareholders Meetings acting under the conditions of quorum and majority required by the provisions
that govern them respectively, exercise the powers conferred on them by law.
ARTICLE
20 - PARTICIPATION THRESHOLDS
Pursuant
to the provisions of Article L.233-7 of the Commercial Code, any person or entity, acting alone or in concert, who owns a number
of shares of the Company representing more than one twentieth, one tenth, three twentieths, one fifth, one fourth, one third,
one half, two-thirds, eighteen twentieths or nineteen twentieths of the capital or voting rights of the Company shall inform the
Company by registered letter with return receipt requested, within five trading days, after crossing the threshold of participation,
of the total number of shares or voting rights he holds.
The
information mentioned in the preceding paragraph is also given within the same time period when the equity stake or voting rights
fall below the thresholds mentioned in that paragraph.
The
person who is bound to provide the information referred to in the first paragraph specifies the number of shares he owns that
give future access to the Company's share capital as well as the voting rights attaching thereto.
Upon
crossing the threshold of one tenth or one fifth of the share capital or voting rights, the person required to give information
above also states the objectives it intends to continue over the twelve months in accordance with the provisions of Article L.233-7
VII of the Commercial Code.
ARTICLE
21 - PURCHASE BY THE COMPANY OF ITS OWN SHARES
In
the case where the company shares are traded on a regulated market, the Ordinary General Assembly may authorize the Board of Directors
for a term not exceeding eighteen months, to purchase its own shares in accordance with Articles L.225-209 et seq. of the Commercial
Code and under the conditions described in those sections.
This
meeting must set the terms of the transaction, including the maximum purchase price and minimum selling price, the maximum number
of shares to be acquired, and the period within which the acquisition must be made.
ARTICLE
22 - FISCAL YEAR
Each
fiscal year has a period of one year, which begins January 1 and ends December 31.
ARTICLE
23 - INVENTORY - ANNUAL FINANCIAL STATEMENTS
There
shall be a regular accounting of corporate operations, according to law.
At
the close of each fiscal year, the Board of Directors draws up an inventory of the various assets and liabilities that exist on
that date.
It
also draws up the balance sheet describing the assets and liabilities, showing the equity separately, the income statement summarizing
revenues and expenses during the fiscal year, as well as the appendix that supplements and comments on the information given by
the balance sheet and the income statement.
The
Board of Directors prepares the management report on the Company’s situation during the past fiscal year, its foreseeable
development, the significant events that occurred between the closing date of the fiscal year and when it is prepared, and its
research and development activities.
ARTICLE
24 - ALLOCATION AND DISTRIBUTION OF PROFITS
If
the fiscal year accounts approved by the General Shareholders Meeting show a distributable profit as defined by law, the General
Shareholders Meeting decides to include it in one or more reserve items for which it shall decide on its allocation or use, whether
to carry it forward or distribute it.
The
General Shareholders Meeting may grant to the shareholders for all or part of the dividend distributed or interim dividends, an
option between payment of the dividend in cash or in shares under the legal conditions.
Losses,
if any exist, are carried forward again, after approval of the financial statements by the General Shareholders Meeting, to be
offset against profits for subsequent years until extinction.
ARTICLE
25 - SHAREHOLDER EQUITY LESS THAN HALF OF SHARE CAPITAL
If,
due to losses recorded in the accounting records, the Company’s equity falls below half of the share capital, the Board
of Directors shall, within four months following approval of the accounts that reflect these losses, convene an extraordinary
general meeting of shareholders for the purpose of deciding whether premature dissolution of the Company is warranted.
If
dissolution is not decided on, the share capital must, subject to the legal provisions relating to minimum share capital for a
business corporation, and within the deadline set by law, be reduced by an amount equal to the losses that were not charged against
reserves, if, within that period the equity does not once again equal at least half the share capital.
ARTICLE
26 - CONVERSION OF THE COMPANY
The
Company can be converted into another form of corporation, if, at the time of its conversion, it has been in existence for at
least two years, and if the balance sheets for its first two years have been drawn up and approved by the shareholders.
The
decision to convert is made on the report of the Statutory Auditors for the Company, who must certify that the equity is at least
equal to the share capital.
The
conversion into a partnership requires the agreement of all the partners. In this case, the conditions above are not required.
The
conversion into a limited liability company or a joint stock company is decided upon under the conditions provided for an amendment
to the bylaws and with the agreement of all the partners who agree to be active partners.
The
conversion into a limited liability company is decided upon under the conditions provided for an amendment to the articles of
incorporation for companies of that form.
ARTICLE
27 - DISSOLUTION - LIQUIDATION
At
the expiration of the term set by the Company or in case of early dissolution, the General Shareholders Meeting sets the terms
and conditions for the liquidation and appoints one or more liquidators, whose powers they shall determine and who shall perform
their duties according to law.
ARTICLE
28 - DISPUTES
All
disputes that may arise during the term of the Company or upon its liquidation, either between the Company and the shareholders
or directors, or between the shareholders themselves, which involve corporate business, shall be judged according to law and subject
to the jurisdiction of the courts.
14
Exhibit 10.25
Exhibit 10.26
Exhibit 10.61
6/21/95
LEASE-1/SG7907
ROSNER AND FELTMAN
70 GRAND AVENUE
RIVER EDGE, NJ 07661
TABLE OF CONTENTS
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LANDLORD:
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FORSGATE INDUSTRIAL COMPLEX
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TENANT:
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JEAN PHILIPPE FRAGRANCES, INC.
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PREMISES:
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60 STULTS ROAD, SOUTH BRUNSWICK, NEW JERSEY
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ARTICLE 1
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DEMISED PREMISES - TITLE - TERM OF LEASE
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ARTICLE 2
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USE OF PREMISES
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ARTICLE 3
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RENT AND OTHER CHARGES
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ARTICLE 4
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TAXES
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ARTICLE 5
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COMMENCEMENT DATE OF LEASE
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ARTICLE 6
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INSURANCE TO BE PROVIDED BY TENANT
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ARTICLE 7
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RESTORATION OF DEMISED PREMISES IN THE EVENT OF FIRE OR OTHER CASUALTY
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ARTICLE 8
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REPAIRS, MAINTENANCE, UTILITIES, CHANGES AND ALTERATIONS, COMPLIANCE WITH ORDERS, ETC., EASEMENTS
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ARTICLE 9
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LEASE PROVISION AGAINST ASSIGNMENT, MORTGAGE OR SUBLET BY TENANT WITHOUT LANDLORD’S PERMISSION - LANDLORD’S RIGHT OF RECAPTURE
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ARTICLE 10
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LANDLORD’S REMEDIES IN EVENT OF TENANT’S DEFAULT OR BANKRUPTCY
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ARTICLE 11
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SUBORDINATION OF LEASE TO MORTGAGE ON THE DEMISED PREMISES
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ARTICLE 12
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EXONERATION OF INDIVIDUALS
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ARTICLE 13
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COVENANT AGAINST LIENS
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ARTICLE 14
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EMINENT DOMAIN
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ARTICLE 15
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ACCESS TO PREMISES
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ARTICLE 16
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NOTICES
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ARTICLE 17
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ACCEPTANCE
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ARTICLE 18
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QUIET ENJOYMENT - CONVEYANCE BY LANDLORD
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ARTICLE 19
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ESTOPPEL CERTIFICATE
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ARTICLE 20
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FINANCIAL INFORMATION
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ARTICLE 21
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NO ABATEMENT OF RENT
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ARTICLE 22
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NONRECORDATION OF LEASE
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ARTICLE 23
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SURRENDER
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ARTICLE 24
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SECURITY
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ARTICLE 25
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MISCELLANEOUS
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SCHEDULE A
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DEMISED PREMISES
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SCHEDULE B
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RULES AND REGULATIONS
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LEASE
THE INDENTURE OF LEASE (hereinafter called
“LEASE”) dated the 10th day of July, 1995, by and between FORSGATE INDUSTRIAL COMPLEX, a Limited Partnership, with offices
at c/o Charles Klatskin Co., Inc., 400 Hollister Road, Teterboro, New Jersey 07608, (hereinafter called “LANDLORD”),
and JEAN PHILIPPE FRAGRANCES, INC., a corporation of the State of Delaware having its principal office at 551 Fifth Avenue, New
York, New York 10176 (hereinafter called “TENANT”).
W I T N E S S E T H:
ARTICLE 1
DEMISED PREMISIS - TITLE - TERM OF LEASE
Section 1.01 Demised Premises. Landlord,
for and in consideration of the rents, covenants and agreements hereinafter reserved, mentioned and contained on the part of the
Tenant, its successors and assigns, to be paid, kept and performed, has demised and leased, and by these presents does demise and
lease, unto the Tenant, and the Tenant does hereby take and hire upon subject to the conditions hereinafter expressed, the real
property together with the building thereon (the “Building”), commonly known as 60 Stults Road, in the Township of South
Brunswick, County of Middlesex and State of New Jersey, as more particularly described on Schedule “A” (hereinafter sometimes
referred to as “Demised Premises”).
Section 1.02 Title. At the commencement of the term of the Lease
(“Term”), Landlord shall own the fee title to the Demised Premises, subject to restrictions of record, if any, zoning
regulations affecting such Demised Premises and any state of facts shown on an accurate survey or as a visual inspection of the
premises would disclose, provided the same does not prohibit or unduly restrict the use of the premises for warehousing and offices,
as presently constructed.
Section 1.03 Term of Lease. To have and to hold unto the Tenant,
its permitted successors and permitted assigns, for a Term of eight (8) years, commencing on the commencement date as defined in
ARTICLE 5 hereof and ending eight (8) years thereafter, unless sooner terminated, plus the number of days required, if any, to
have such Term expire on the last day on the calendar month.
Section 1.04 Acknowledgment of Commencement. Upon the commencement
of the Term, the parties shall execute and exchange a recordable Lease instrument, specifying the commencement and expiration dates
of the Term.
Section 1.05 Definitions. (i) As used herein, “Hazardous
Substance” includes any pollutant, dangerous substance, toxic substances, any hazardous chemical, hazardous substance, hazardous
pollutant, hazardous waste or any similar term as defined in or pursuant to the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. Section 9601, et seq. (“CERCLA”); Industrial Site Recovery Act, N.J.S.A. 13:1K-6,
et seq. (“ISRA”); the New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10- 23.11, et seq. (“Spill Act”);
the Solid Waste Management Act, N.J.S.A. 13:1E-1, et seq. (“SWMA”); the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq. (“RCRA”); the New Jersey Underground Storage of Hazardous Substances Act, N.J.S.A. 58:10A- 21,
et seq. (“USTA”); Clean Air Act, 42 U.S.C. Section 7401, et seq. (“CAA”); Air Pollution Control Act, N.J.S.A.
26:2C-l, et seq. (“APCA”); New Jersey Water Pollution Control Act, N.J.S.A. 58:10A- 1, et seq. (“WPCA”); and
any rules or regulations promulgated thereunder or in any other applicable federal, state or local law, rule or regulation dealing
with environmental protection. It is understood and agreed that the provisions contained in the Lease shall be applicable notwithstanding
whether any substance shall not have been deemed to be a hazardous substance at the time of its use or Release but shall thereafter
be deemed to be a Hazardous Substance.
(ii) “Release” means spilling, leaking, disposing,
pumping, pouring, discharging, emitting, emptying, ejecting, depositing, injecting, leaching, escaping or dumping, however defined,
and whether intentional or unintentional, of any Hazardous Substance.
(iii) “Notice” means any summons, citation, directive,
order, claim, litigation, investigation, proceeding, judgment, letter or other communication, written or oral, actual or threatened,
from the New Jersey Department of Environmental Protection (“NJDEP”), the United States Environmental Protection Agency
(“USEPA”), the United States Occupational Safety and Health Administration (“OSHA”) or other federal, state
or local agency or authority, or any other entity or any individual, concerning any act or omission relating or which may result
in the Releasing of Hazardous Substances into the waters or onto the lands of the State of New Jersey, or into the waters outside
the jurisdiction of the State of New Jersey, or into the environment.
(iv) “Environmental Laws” mean any and all present
or future laws, statutes, ordinances, regulations and executive orders, federal and state and local in any related to the protection
of human health or the environmental, including, but not limited to, (i) CERCLA; (ii) RCRA; (iii) ISRA; (iv) Spill Act; (v) USTA;
(vi) WPCA; (vii) APCA; (viii) SWMA; (ix) CAA; and (x) USTA.
ARTICLE 2
USB OF PREMISES
Section 2.01 Use. The Tenant shall use and occupy the Demised
Premises for offices, warehousing and distribution of cosmetics, fragrances and personal care items, and for repackaging of cosmetics,
fragrances and personal care items only, and for no other purpose. If Tenant desires to expand or change the aforementioned uses,
Tenant shall not do so without first obtaining Landlord’s written consent. Landlord agrees not to unreasonably withhold its consent,
if the use is for warehousing only of products which are consumer products, and are non-hazardous and are not toxic pollutants.
In all other events, Landlord may, for no reason or for any reason, not consent to a change or expansion of use. It being a consideration
of this Lease, that the use of the premises shall be limited, to those uses as otherwise hereinbefore specified, and Tenant may
not, use the premises for manufacturing or the warehousing of any product which is a hazardous substance as that term is more particularly
hereinafter defined. Such use does not permit the stacking of merchandise or materials against the walls, so as to create a load
or weight factor upon the walls, or to tie in, Tenant’s racking systems with such walls, nor the hanging of equipment from (or
otherwise loading) the roof or structural members of the building without the express written consent of the Landlord. The Tenant
shall not use or occupy or permit the Demised Premises to be used or occupied, nor do or permit anything to be done in or on the
Demised Property, in a manner which will in any way violate any Certificate of Occupancy affecting the Demised Premises, or make
void or voidable any insurance then in force with respect thereto, or which will make it impossible to obtain fire or other insurance
required to be furnished by the Tenant hereunder, at regular rates, or which will cause or be likely to cause structural damage
to the Building or any part thereto, or which will constitute a public or private nuisance, or which would adversely affect the
then value thereof, and shall not use or occupy or permit the Demised Premises to be used or occupied in any manner which will
violate any present or future laws or regulations of any governmental authority. Except for the products contemplated by the permitted
uses in this Section 2.01, Tenant shall not, during the term of this Lease store upon the premises, hazardous substances as that
term may be defined from time to time by the New Jersey Department of Environmental Protection or, by the Federal Environmental
Protection Agency pursuant to Section 311 of the “Federal Water Pollution Act, amendments of 1972” (33 U.S.C. Section
1321) and the list of toxic pollutants designated by Congress or the Environmental Protection Agency pursuant to Section 307 of
that Act (33 U.S.C. Section 1317). The storage of products contemplated by the permitted uses in this Section 2.01 shall during
the term of this Lease be in compliance with all applicable laws and regulations, whether federal, state or local, and whether
environmental or otherwise. Nothing herein contained shall be deemed or construed to constitute a representation or guaranty by
the Landlord that any specific business may be conducted in the Demised Premises or is lawful under the certificate of occupancy.
In the event the Tenant cannot obtain the continued certificate of occupancy for the uses of the Demised Premises described in
the first sentence of this Section 2.01, then in such event, Tenant shall have the right, prior to Tenant taking occupancy, to
terminate this Lease; such right of termination in all events to be exercised no later than ten (10) days from the date Landlord
advises Tenant, TIME BEING OF THE ESSENCE, that the municipality will not issue the continued Certificate of Occupancy.
Tenant acknowledges and recognizes that Tenant will have to
undertake ordinary and usual improvements required by the municipality, such as, but not limited to, in rack sprinklers, exit areas
marked on the floor, exit signs, etc. If Tenant is required to undertake other improvements in order to obtain the continued certificate
of occupancy, such improvements specifically required by the municipality by reason of Tenant’s peculiar use, and if the collective
cost thereof is more than FIVE THOUSAND and NO/100 Dollars ($5,000.00), then Tenant shall have the right to terminate this Lease,
such right to be exercised, in all events, within the ten (10) day time period as heretofore provided, TIME BEING OF THE ESSENCE.
ARTICLE 3
RENT AND OTHER CHARGES
Section 3.01 Net Basic Rent. The Tenant shall pay to the Landlord
as net annual basic rent (the “Basic Rent”) for the Demised Premises during the Term the sum of SIX HUNDRED EIGHTY- FOUR
THOUSAND and NO/100 Dollars ($684,000.00) per annum, payable in equal monthly installments of FIFTY-SEVEN THOUSAND and NO/100 Dollars
($57,000.00) due and payable the first day of each and every month, in advance, except, the first month’s rent which shall be paid
upon the execution hereof. Said rent and all payments due hereunder shall be paid to the Landlord at its address hereinabove first
specified, or as the Landlord may otherwise direct in writing. It is the intention of the parties that the Basic Rent shall be
net to the Landlord, so that this Lease shall yield to the Landlord, the Basic Rent during the Term and that all costs, expenses
and obligations of every kind and nature whatsoever relating to the Demised Premises shall be paid by the Tenant, except as otherwise
specifically provided in this Lease. Whenever the rent as hereinabove set forth is stated as an annual rent, and if there shall
be less than twelve (12) months in any year, the rate therein referred to shall be the “annualized rate”.
Section 3.02 First Month Proration. If the Term shall begin
on a date other than the first day of a calendar month, the Basic Rent for the initial month of the Term shall be prorated.
Section 3.03 Rent Credit to Tenant. Landlord, as an accommodation
to Tenant to reimburse Tenant for its initial moving/rental expenses, will extend a credit to Tenant in an amount equal to the
lesser of FORTY-TWO THOUSAND and NO/100 Dollars ($42,000.00) or, if less, the net monthly rent paid by Tenant in its present leased
premises to be applied against the rent accruing as of the second month of the Lease Term.
Section 3.04 Additional Rent. All payments other than Basic
Rent Tenant is required to make pursuant to this Lease shall constitute additional rent (“Additional Rent”) and, if Tenant
defaults in any such payment so as to create an Event of Default (as hereinafter defined), Landlord shall have (in addition to
any rights and remedies granted hereby) all rights and remedies provided by law for nonpayment of Basic Rent.
Section 3.05 Late Charge. If a payment of Basic Rent or Additional
Rent or any part thereof shall not be made on or prior to a date which is five (5) days after the date on which it is due and payable,
a late charge of $500.00 per day shall become due and payable to Landlord as liquidated damages for the administrative costs and
expenses incurred by Landlord by reason of Tenant’s failure to make prompt payment and said late charge shall be payable by Tenant
on the first day of the following month. No failure by Landlord to insist upon the strict performance by Tenant of Tenant’s obligations
to pay late charges shall constitute a waiver by Landlord of its rights to enforce the provisions of this Section in any instance
thereafter occurring, nor shall acceptance of late charges be deemed to extend the time of payment of Basic Rent or Additional
Rent or any part thereof. The provisions of this Section 3.05 shall not be construed in any way to extend the grace periods or
notice periods as otherwise provided for in this Lease. In the first three (3) instances in each calendar year when Landlord is
asserting a late charge, Landlord agrees that, prior to asserting the late charge, Landlord shall give to Tenant five (5) days’
prior written notice and Tenant shall have five (5) days after receipt of such notice to make payment. If Tenant fails to make
payment within five (5) days after receipt of written notice by Landlord, then the late charge shall be effective. Landlord’s obligation
to give notice shall only accrue in the first three (3) instances that failure to pay occurs in each calendar year, and not thereafter.
Section 3.06 Additional Security Deposit. In the event a late
charge is payable hereunder pursuant to Section 3.05, whether or not collected, for three (3) installments of rent or other monetary
obligations of Tenant under the terms of this Lease during any twelve-month period, Tenant shall pay to the Landlord, if Landlord
shall so request, in addition to any other payments required under this Lease, an additional security deposit as estimated by Landlord
in an amount equal to rent and additional rent for three (3) months. Such additional security shall be established to insure payment
when due before delinquency of all rent and additional rent, and shall be held pursuant to the security clause provisions as provided
in Article 24 hereof. Such additional security deposit shall be returned to the Tenant upon termination of the Lease, less any
amount of the security deposit so expended by Landlord, to cure Tenant’s defaults hereunder, together with interest as otherwise
provided in Article 24 hereof.
Section 3.07 No Abatement, Deduction, or Set-off etc. There
shall be no abatement, diminution or reduction of Basic Rent, or Additional Rent or other charges or other compensation due to
the Landlord by Tenant or any person claiming under it under any circumstances, including, but not limited to, any inconvenience,
discomfort, interruption of business or otherwise, except as specifically provided herein.
Section 3.08 Common Area Charge. The Premises to be demised
are located within an office/industrial park known as Forsgate Industrial Complex. Landlord, from time to time, will incur various
expenses to maintain the Park for the benefit of all tenants. The Tenant shall pay three percent (3.0%) (“Tenant’s Share”)
of the total costs and expenses incurred by Landlord in maintaining certain areas of the Park for items as follows: (i) the cost
of maintaining Park signs and tenant directories; (ii) the cost of water, electricity and other utilities used in connection with
the operation and maintenance of the Park and not part of any area demised to a tenant; (iii) the cost of insurance, including
general liability insurance, which is carried by Landlord and is usual and customary under the circumstances; (iv) other costs
reasonably incurred by Landlord to maintain the Park or costs incurred for services benefiting all tenants or occupants of the
Park which, in the reasonable opinion of Landlord, are a service desirable to operate the Park. The cost of maintaining common
facilities used by all tenants, such as common grass areas, boulevard dividers, curbing and lighting. Tenant shall pay to the Landlord
as an additional charge, annually, Tenant’s Share of such common Park expenses for each calendar year. At the end of each calendar
year, Landlord shall furnish Tenant with a statement called “Landlord’s Expense Statement” setting forth in reasonable
detail the common area Complex expenses for such calendar year. Tenant’s share of such charges shall not exceed, on an annual basis,
FIVE THOUSAND TWO HUNDRED FIFTY and NO/100 Dollars ($5,250.00), such sum adjusted to be increased per annum by the percentage increase,
if any, of the cost of living from January 1, 1996 to December 31 of the year for which the bill is rendered by Landlord to Tenant.
The cost of living increase shall be measured by the Consumer Price Index for “All Items”, the “Index” issued
by the U.S. Department of Labor. In the event the Index is no longer issued or available or commonly used at the time a determination
is to be made, the Landlord shall designate another index or criteria which will accurately reflect the increase in the cost of
living which has occurred for the time period so to be determined.
Tenant’s Share of common area charges for Forsgate Industrial
Complex, which shall become payable by Tenant during the calendar year in which this Lease commences or ends, shall be apportioned
between Landlord and Tenant in accordance with the portion of such calendar year within the Term.
ARTICLE 4
TAXES
Section 4.01 Real Estate Taxes. Tenant shall, throughout the
Term, pay directly to the appropriate taxing authorities, at least one (1) day before the same shall become due and payable, without
interest or penalty, all water and sewer rents, rates and charges, licenses and permit fees, real estate taxes and assessments
levied, assessed, confirmed, imposed upon or against the Demised Premises or any part thereof, including those presently in effect
as well as those which may be enacted in the future (collectively the “Impositions”). Tenant shall forward copies of
all receipted bills or statements therefor to Landlord upon receipt thereof from said taxing authorities.
Section 4.02 Other Taxes and Payment Thereof.
(a) Other Taxes Arising Out of Tenant’s Use and Occupancy. In
addition to the Impositions, Tenant shall pay, at least one (1) days prior to its due date, each and every item of expense in the
nature of a tax or charge or assessment for which Landlord is or shall become liable by reason of its estate or interest in the
Demised Premises, or any part thereof, including, without limiting the generality thereof, all personal property taxes, gross receipts
taxes, use and occupancy taxes, and excise taxes levied or assessed against Landlord or Tenant by reason of the use, occupancy
or any other activity by the Tenant in connec- tion with the Demised Premises or any part thereof, or which may be levied or assessed
or imposed upon any rents or rental income, as such, payable to Landlord or payable to Tenant from any sub-Tenant in connection
with the Demised Premises or any part thereof. Tenant shall forthwith forward copies of receipted bills or cancelled checks therefor
to Landlord evidencing the payment thereof.
(b) Payment of Bills. In the event that the bills or statements
issued by the appropriate taxing authorities in respect of any Imposition or tax required to be paid by Tenant pursuant to paragraph
(a) of this Section 4.02 shall be forwarded directly to Landlord, Landlord shall promptly forward the same to Tenant, and Tenant
shall pay the same before expiration of the time period set forth above or within ten (10) days after receipt of such bill or statement,
whichever is later.
Section 4.03 Certain Taxes Not Payable by Tenant. Tenant shall
not be required to pay any of the following taxes or governmental impositions which shall be levied or imposed against Landlord
by any governmental authority:
(i) Any estate inheritance, devolution, succession, transfer,
legacy or gift tax which may be imposed upon or with respect to any transfer of Landlord’s interest in the demised premises.
(ii) Any income tax levied upon or against the profits of the
Landlord from all sources provided, however, that if at any time during the Term the method of taxation prevailing at the commencement
of the Term shall be altered so that any new tax, assessment, levy, imposition or charge, shall be measured by or be based in whole
or in part upon the Demised Premises or the income thereof and shall be imposed upon Landlord then all such taxes, assessments,
levies, imposition or charges to the extent that they are so measured or based, shall be deemed to be an Imposition for the purpose
hereof, to the extent that such Imposition would be payable if the Demised Premises were the only property of Landlord subject
to such Imposition and Tenant shall pay and discharge the same as herein provided in respect of the payment of any Imposition.
Section 4.04 Apportionment During First and Last Year of Term.
All Impositions which shall become payable during the fiscal tax year in which this Lease commences or ends shall be apportioned
between Landlord and Tenant in accordance with the portion of the tax year within the Term.
Section 4.05 Tenant’s Right to Contest. Tenant may contest any
Imposition by diligently conducting proceedings in which event, upon Tenant’s request and if permitted by law, Tenant may postpone
payment of such Imposition during such contest if:
(a) Such postponement would not constitute a default under any
Landlord’s mortgage;
(b) Landlord’s interest in the Demised Premises would not be
endangered thereby; and
(c) Tenant deposits with Landlord the amount so contested and
unpaid, and annually thereafter adds to such deposit such accrued interest and penalties as Landlord reasonably estimates might
be assessed against the Demised Premises in such proceeding.
Upon the termination of such proceeding, Tenant shall pay the
amount of such Imposition (as finally therein determined) remaining unpaid and all interest and penalties relating thereto or,
upon Tenant’s request, Landlord shall pay such amount to the extent of the funds so deposited. Upon payment in full of such amount,
interest and penalties (whether by Landlord or Tenant), Landlord shall return any then balance of the amount so deposited. If,
during such proceeding, Landlord in good faith deems the amount so deposited insufficient, Tenant shall upon Landlord’s demand,
deposit such additional funds as Landlord reasonably requests. If Tenant fails to deposit such additional funds, the funds theretofore
deposited may be applied by Landlord to the payment of such Imposition, interest and penalties and any balance shall be returned
to Tenant. Landlord shall, if required through such proceedings and requested by Tenant, join in such proceedings, cooperate with
Tenant and execute requisite documents, provided Tenant pays Landlord’s resultant expenses.
Section 4.06 Assessments Payable in Installments. With respect
to any assessment levied by any governmental or municipal agency or authority which is or may be payable, at the option of the
taxpayer, in installments, Tenant agrees to pay Landlord, in lieu of paying the assessment directly to the appropriate governmental
or municipal agency, as additional rent, annually, from the date of payment of the assessment, the installment due therefor, at
least five (5) days before the last day on which each such installment may be paid without penalty or interest. Tenant shall not
be required to pay any installment which shall fall due after the expiration of this Lease.
ARTICLE 5
COMMENCEMENT DATE OF THE LEASE - DELAYED
COMMENCEMENT
Section 5.01 Commencement Date of the Lease - Delayed Commencement.
The Commencement Date of this Lease shall occur on the earlier of: (i) the date Landlord substantially completes Landlord’s work
as otherwise set forth in Section 5.02 and delivers possession of the Premises to Tenant, or (ii) the earlier occupancy of the
Tenant.
The premises are presently occupied pursuant to the terms and
conditions of a certain Lease between Forsgate Industrial Complex, as Landlord, and Midlantic Distribution Inc., as Tenant, as
amended, which Lease provides that either Landlord or Tenant on thirty (30) days’ prior written notice may terminate the Lease.
Landlord agrees, within three (3) business days of the execution of this Lease, to serve notice of termination upon Midlantic Distribution,
Inc. In the event Midlantic Distribution Inc. shall fail to vacate the Premises and deliver possession to the Landlord in accordance
with the thirty (30) day notice of cancellation, then the Commencement Date of this Lease shall be delayed until Landlord can deliver
possession to the Tenant. Landlord agrees to institute summary dispossess proceedings or take such other action as is reasonably
necessary to secure possession for Tenant hereunder. If the Landlord is unable to obtain possession of the Premises on or before
the seventy-fifth (75th) day from the date of this Lease, then Tenant shall have the right prior to the date Landlord notifies
Tenant that the Premises are vacant to terminate this Lease. Upon termination of this Lease, both parties shall be releaaed thereafter
from and after further liability to the other, except the return to Tenant of prepaid rent and the security deposit. If Landlord
has failed to obtain possession from the existing tenant by December 31, 1995, then, if Tenant has not theretofore terminated this
Lease, this Lease shall terminate as of December 31, 1995. All such notices shall be in conformance with Article 16 of this Lease.
Section 5.02 Landlord’s Work. Landlord, at no cost to Tenant,
agrees, upon obtaining possession, to paint the second floor offices, remove ground floor offices except for lobby and tollets,
and install two overhead doors between warehouse and demolished office area, and clean and seal the warehouse floor, repave the
parking lot, clean and wash all windows and repair landscaping where necessary. Landlord shall immediately and in a diligent manner,
undertake Landlord’s work upon obtaining possession of the Premises and obtaining, if required, governmental building permits,
and shall substantially complete such work not later than sixty (60) days thereafter, which date shall be an estimated completion
date, provided, however, that such date shall be extended by any delay occasioned by scarcity of materials, entry or occupancy
by Tenant which inhibits, delays or increases the cost of construction, strikes, labor disputes, weather conditions which inhibit
construction, fires or other casualties, governmental restrictions and regulations, delays in obtaining governmental permits, delays
in transportation and other delays beyond the reasonable control of Landlord.
Section 5.03 Continued Certificate of Occupancy. Upon Landlord
completing Landlord’s work as set forth in Section 5.02, Tenant shall be responsible to obtain a Continued Certificate of Occupancy.
Tenant shall be required to undertake such work, such as installation of in-rack sprinklers, exit lines and signs, and other requirements
as imposed by the municipality, as required for the issuance of the Continued Certificate of Occupancy permitting Tenant to use
and occupy the Demised Premises for the uses described in the first sentence of Section 2.01.
Section 5.04 Tenant’s License to Install a Racking System Prior
to the Commencement Date. At such time as Landlord has completed its work regarding cleaning and sealing of the warehouse floor,
Landlord shall grant a revocable license to Tenant, to install in the Premises Tenant’s racking system. Such license shall be subject
to revocation by Landlord at any time, upon written notice, in the event Landlord reasonably determines that Tenant’s exercise
of the license is delaying, interfering or otherwise impeding Landlord’s Work.
The installation of racking as contemplated by this Section
5.04 shall not be deemed, for purposes of Section 5.01, occupancy of the Premises by the Tenant. However, Tenant shall be deemed
to have accepted that portion of the Premises so used for racking upon installation thereof by Tenant. Tenant, however, prior to
exercising the license, shall deliver an insurance certificate to Landlord, in compliance with the provisions of Paragraph (iv)
of Section 6.01. Tenant acknowledges that neither Landlord nor its agents or employees shall have any liability to Tenant as to
Tenant’s property as may placed pursuant to the license in the Demised Premises.
ARTICLE 6
INSURANCE TO BE PROVIDED BY TENANT
Section 6.01 Coverage and Amount. During the Term, Tenant shall
maintain policies of insurance at its sole cost and expense as follows:
(i) Insurance against loss or damage to the Demised Premises
by fire and from such other hazards as may be covered by the form of all risk coverage then in effect (including specifically damage
by water, flood or earthquake) all in an amount sufficient to prevent any coinsurance provision from becoming effective but in
any event ln an amount not less than 100% of the then replacement value of the Building without depreciation except for flood and
earthquake insurance which shall be in the amount of One Million Dollars ($1,000,000.00). This insurance shall include but not
be limited to the following:
a. Boiler and other pressure vessels, plate glass and elevator
insurance, if appropriate (Tenant shall have the right to be self-insured as to plate glass); and
b. Insurance against riot or civil commotion, vandalism, aircraft,
sprinkler leakage, all risk endorsement rider (the SMP allrisk form) or the equivalent, and “Demolition” and “Increased
Cost of Construction”. In addition to the foregoing, such insurance shall include, but not be limited to windstorm, hail,
explosion, flood or earthquake, riot and civil commotion, damage from aircraft and vehicles, smoke damage, and such coverage as
may be deemed necessary by the Landlord. These insurance provisions shall in no way limit or modify any of the obligations of the
Tenant under any provision of this Lease to restore the Demised Premises.
Anything contained herein to the contrary not- withstanding,
the insurance required by this paragraph shall in all events be sufficient to comply with the requirements of any fee mortgage
and the replacement value shall in no event be less than FIVE MILLION FIVE HUNDRED THOUSAND and NO/100 Dollars ($5,500,000.00)
except for flood and earthquake insurance which shall be in the amount of One Million Dollars ($1,000,000.00). Landlord may demand
that such replacement value be determined from time to time by an appraiser, engineer, architect or contractor designated and paid
for by Tenant and approved in writing by Landlord. No omission on the part of Landlord to request any such determination shall
relieve Tenant of any of its obligations under this Article 6.
(ii) Rent insurance, with all risk coverage, in an amount not
less than one year’s current Basic Rent and Additional Rent and one year’s taxes and premiums for the insurance required by this
Article 6.
(iii) If appropriate, boiler and machinery insurance including
coverage for pressure vessels with such limits as from time to time may be reasonably required by Landlord, but not less than $300,000.00
per occurrence with endorsement for actual replacement cost without depreciation.
(iv) Commercial General Liability Insurance, including property
damage, insuring Landlord and Tenant (and any Mortgagee or other person or persons whom Landlord may designate, called “Additional
Insured” in this Lease) from and against all claims, demands, actions or liability for injury to, or death of any persons
and for damage to property arising from or related to the use or occupancy of the Premises or the operation of Tenant’s business.
This policy must contain, but not be limited to, coverage for premises and operations, products and completed operations, blanket
contractual, personal injury, operations, ownership, maintenance and use of owned, non-owned, or hired automobiles, bodily injury,
and property damage. The policy must have limits in an amount not less than THREE MILLION and NO/100 Dollars ($3,000,000.00) per
occurrence and THREE MILLION and NO/100 Dollars ($3,000,000.00) in the aggregate. This insurance will include a contractual coverage
endorsement specifically insuring the performance by Tenant of its indemnity agreements contained in this Lease. To the extent
Tenant carries commercial general liability insurance in excess of THREE MILLION and NO/100 Dollars ($3,000,000.00), which protects
Tenant as to the Demised Premises, then Landlord shall have the advantage of the availability of such insurance and shall be named
as an additional insured on such liability insurance in excess of THREE MILLION and NO/100 Dollars ($3,000,000.00).
(v) If a sprinkler shall be located in any part of the Demised
Premises, sprinkler leakage insurance in amounts reasonably satisfactory to Landlord.
(vi) Such other insurance and in such amounts as may from time
to time be reasonably required by any fee mortgagee holding a first mortgage on the Demised Premises against other insurable hazards,
which at the time are commonly insured against, in the case of premises similarly situated.
If by reason of changed economic conditions Landlord’s insurance
advisor reasonably concludes that these amounts of coverage or coverages are no longer adequate, then such amount or coverage will
be appropriately increased, or obtained as the case may be.
All policies of insurance carried pursuant to this Article 6
shall name as insured the Landlord, and if required, any fee mortgagee, as may be specifically designated by Landlord, as their
respective interests may appear, provided however, that rent insurance shall be carried solely in favor of Landlord. To the extent
Landlord receives and applies proceeds of rent insurance, Tenant shall receive a credit against rent payable hereunder.
Subject to the rights of any fee mortgagee, all losses paid
under the policy or policies under Article 6 shall be adjusted by Landlord and the proceeds thereof shall be payable to the Landlord
and all such policies shall so provide.
Section 6.02 Forms, Certificates, Blanket Policies, Renewals,
Cancellation. All premiums on policies referred to in this Lease shall be paid by the Tenant. The originals of such policies or
certificates shall be delivered to Landlord except when such originals are required to be held by any fee mortgagee, in which case,
certificates of insurance shall be delivered to Landlord. Policies or certificates with respect to renewal policies shall be delivered
to Landlord by Tenant not Iess than thirty (30) days prior to the expiration of the original policies or succeeding renewals, as
the case may be, together with receipts or other evidence that the premiums thereon have been paid for at least one year. In the
event the Tenant is not able to deliver the insurance policies or certificates prior to the renewal date as aforesaid, the Tenant
may deliver binders in lieu of such policies or certificates to the Landlord, provided, however, that the insur- ance policies
or certificates shall be delivered within sixty (60) days after the expiration of the original policies or succeeding renewals
but in no event later than fifteen (15) days prior to the expiration date of the binder. Premiums on policies shall not be financed
in any manner whereby the lender, on default or otherwise, shall have the right or privilege of surrendering or cancelling the
policies. Each policy of insurance required under this paragraph shall have attached thereto an endorsement that such policy shall
not be cancelled or modified without at least thirty (30) days prior written notice to the Landlord, and if required, to any fee
mortgagee, as specifically designated by Landlord. Each such policy shall contain a provision that no act or omission of Tenant
shall affect or limit the obligation of the insurance company to pay the amount of any loss sustained and a provision waiving any
right of the insured aga1nst the Landlord. Tenant’s obligations to carry insurance required by this Lease may be brought within
the coverage of a so-called blanket policy or policies of insurance carried and maintained by Tenant, so long as (i) Landlord and
such other persons will be named as additional insureds under such policies as their interests may appear; and (ii) the coverage
afforded to Landlord and such other persons will not be reduced or diminished by reason of the use of such blanket policy of insurance;
and (iii) all other requirements set forth herein are otherwise satisfied.
Section 6.03 Recognized Insurance Companies. All insurance provided
for in this Article 6 shall be effected under valid and enforceable policies issued by insurers which are licensed to do business
in the State of New Jersey and shall be written on the standard policies of such companies and provide for no deductibles.
Section 6.04 Landlord’s Non-Liability, Tenant’s Own Insurance.
Tenant hereby waives all right of recovery which it might have against Landlord, Landlord’s agents and employees, for loss or damage
to Tenant’s furniture, furnishings, fixtures, equipment, chattels and articles of personal property located on the Demised Premises,
nor shall Landlord be liable for any business interruption, or injury to or death of persons occurring in the Demised Premises,
or in any manner growing out of or in connection with Tenant’s use and occupation of the leased premises or the condition thereof,
notwithstanding that such loss or damage may result from the negligence or fault of Landlord. Tenant shall obtain insurance policies
covering its furnishings, fixtures, equipment and articles of personal property (collectively, “Personal Property”) in
the Demised Premises, and Tenant shall either cause Landlord to be named as an insured party under such policies (without entitling
Landlord to receive any loss proceeds thereof) or obtain the insurer’s waiver of all rights of subrogation against Landlord with
respect to losses insured under such policies.
Tenant shall advise Landlord promptly of the applicable provisions
of such insurance policies and notify Landlord promptly of any cancellation or change therein.
All insurance carried by Tenant as to the Demised Premises or
as to any property located thereon or therein, whether or not such insurance is carried pursuant to this Lease, shall provide that
the insurer waives all rights of subrogation against Landlord with respect to losses insured under such policies.
Section 6.05 Indemnity. Tenant is and shall be in exclusive
control and possession of the Demised Premises as provided herein, and Landlord shall not in any event whatsoever be liable for
any injury or damage to any property or to any person happening on or about the Demised Premises, nor for any injury or damage
to the Demised Premises, nor to any property of Tenant, or of any other person contained therein.
Tenant shall indemnify and save Landlord harmless against and
from all liabilities, claims, suits, fines, penalties, damages, losses, fees, costs and expenses (including reasonable attorneys’
fees) which may be imposed upon, incurred by or asserted against Landlord by reason of:
(i) Any work or thing done in, on or about the Demised Premises
or any part thereof;
(ii) Any use, occupation, condition, operation of the Demised
Premises or any part thereof or of any street, alley, sidewalk, curb, vault, passageway, or space adjacent thereto or any occurrence
on any of the same;
(iii) Any act or omission on the part of Tenant or any subtenant
or any employees, licensees or invitees;
(iv) Any accident injury (including death) or damage to any
person or property occurring in, on or about the Demised Premises; or any part thereof or in, on or about any street, alley, sidewalk,
curb, vault, passageway or space adjacent thereto; and
(v) Any failure on the part of Tenant to perform or comply with
any of the covenants, agreements, terms or conditions contained in this Lease, or recording of this Lease. The provisions of this
paragraph shall survive the expiration or earlier termination hereof.
Section 6.06 Fire Insurance Rate and Requirements. Tenant agrees,
at its own cost and expense, to comply with all of the rules and regulations of the Fire Insurance Rating Organization having jurisdiction
and any similar body, and the insurance company insuring the building.
Section 6.07 Waiver of Subrogation. All insurance carried by
Tenant as to the Demised Premises or as to any property located thereon or therein, whether or not such insurance is carried pursuant
to this Lease, shall provide that the insurer waives all rights of subrogation against the Landlord with respect to losses insured
under such policies.
ARTICLE 7
RESTORATION OF DEMISED PREMISES IN THE EVENT
OF FIRE OR OTHER CASUALTY
Section 7.01 No Abatement. No damage to the Building by fire
or other casualty shall terminate the Lease or relieve Tenant either from payment of Basic Rent, Impositions and Additional Rent,
or from the performance of Tenant’s other obligations hereunder. Such damage or destruction shall not affect the termination of
this Lease. Tenant expressly waives the provisions of N.J.S.A. 46:8- 6 and 46:8-7 and agrees that the foregoing provisions of this
Article shall govern and control in lieu thereof.
Section 7.02 Tenant’s Restoration. During the Term, Tenant shall
promptly notify Landlord of any damage to the Demised Premises and shall, at its own cost and regardless of the suf- ficiency of
insurance proceeds restore the Building subject to Section 8.07 as nearly as possibIe to its condition immediately prior to the
damage. Restoration shall be commenced promptly after the occurrence of any such damage and completed with due diligence.
As promptly as reasonably possible after damage, Tenant shall
notify Landlord of its estimate of the cost of restoration certified correct by Tenant’s architect, which architect to be reasonably
approved by Landlord, and provide Landlord with such substantiation thereof as Landlord reasonably requests. If the estimated cost
of the restoration exceeds the insurance proceeds, Tenant shall, prior to the commencement of the restoration, deposit the deficiency
in accordance with Section 7.03. If such determina- tion has not been made when the restoration is to commence, Tenant shall so
deposit the difference between Landlord’s estimate of the cost of the restoration and the insurance proceeds (any deposit by Tenant
pursuant to this Section 7.03 being hereinafter referred to as the “deficiency deposit”) and, upon the determination
of the estimated cost of the restoration, any excess amount so deposited shall promptly be refunded to Tenant. Before commencing
with any restoration which would cost more than $50,000.00, Tenant’s architect shall prepare plans and specifications therefor,
for Landlord’s and any fee mortgagee’s approval. There shall be no material deviation from such plans and specifications without
Landlord’s and the fee mortgagee’s approval. The reasonable expenses of Landlord and the fee mortgagee in reviewing such plans
and specifications and reviewing requests for disbursements shall be paid by Tenant as Additional Rent.
Section 7.03 Disbursement of Insurance Funds. In the event of
such damage or destruction, which would cost more than FIFTY THOUSAND and NO/100 Dollars ($50,000.00) to restore, any insurance
money recovered by the Landlord shall be paid over to a banking company selected by the Landlord to act as an Insurance depository,
and such Insurance Depository shall pay out such money from time to time to the Tenant as the repairing, restoration and rebuilding
(collectively called the “work”) progresses. All amounts received shall be applied by Tenant to the cost of repairing
such damage and restoring the Demised Premises, and the Tenant shall proceed with reasonable diligence to repair such damage and
to restore the Demised Premises substantially to the condition thereof existing immediately prior to the occurrence of such damage
or destruction. The insurance proceeds shall be paid out by the Insurance Depository from time to time upon Tenant’s written request,
accompanied by:
(a) A certificate signed by the Tenant and the architect or
engineer in charge of the work, dated not more than thirty (30) days prior to such request, setting forth the following:
(i) That the sum then requested either has been paid by Tenant,
or is justly due to contractors, subcontracitors, materialmen, engineers, architects or other persons who have rendered services
or furnished materials for the restoration therein specified, the names and addresses of such persons, a brief description of such
services and materials, the several amounts so paid or due to each of said persons in respect thereof, that no part of such expenditures
has been or is being made the basis, in any previous or then pending request, for the withdrawal of insurance money or has been
made out of the proceeds of insurance received by Tenant, and that the sum then requested does not exceed the value of the services
and materials described in the certificate.
(ii) That except for the amount, if any, stated (pursuant to
the foregoing subclause (a)(i) in such certificate to be due for services or materials, there is no outstanding indebtedness known
to the persons signing such certificate, after due inquiry, which is then due for labor, wages, materials, supplies or services
in connection with such restoration which, if unpaid, might become the basis of a vendor’s, mechanic’s laborer’s or materialman’s
statutory or similar lien upon such restoration or upon the demised premises, or any part thereof, or upon Tenant’s leasehold interest
therein.
(iii) That the cost, as estimated by the persons signing such
certificate, of the restoration required to be done subsequent to the date of such certificate in order to complete the same, does
not exceed the insurance money, plus any amount deposited by Tenant to defray such cost and remaining in the hands of the Insurance
Depository after payment of the sum requested in such certificate.
(iv) The Tenant shall furnish the Insurance Depository at the
time of any such payment with an official search or evidence satisfactory to the Insurance Depository that there has not been filed
with respect to the Demised Premises any mechanic’s or other liens which have not been discharged of record.
(b) An opinion of counsel or other evidence, reasonably satisfactory
to the Insurance Depository, to the effect that there has not been filed with respect to the Demised Premises, or any part thereof,
or upon Tenant’s leasehold interest therein any vendor’s, mechanic’s, laborer’s, materialman’s or other lien which has not been
discharged of record, except such as will be dis- charged by payment of the amount then requested.
(c) If the insurance money in the hands of the Insurance Depository
and such other sums, if any, deposited with the Insurance Depository shall be insufficient to pay the entire cost of such work,
the Tenant agrees to pay the deficiency. Upon completion of the work and payment in full thereof by the Tenant, the Insurance Depository
shall turn over to the Tenant, upon sub- mission of proof satisfactory to the Landlord that the work has been paid for in full,
any insurance money then remaining and such other sums, if any, deposited with the Insurance Depository then remaining in the hands
of the Insurance Depository.
(d) Tenant shall pay all charges and fees, including attorneys’
fees, of any bank, trust company or other entity that performs the functions provided for in Section 7.03 hereof.
Section 7.04. Damage to or destruction of the Demised Premises
as aforesaid shall not reduce or abate to rent herein reserved. Such damage or destruction shall not effect a termination of this
Lease. Tenant expressly waives the provisions of N.J.S.A. 46:8-6 and 46:8-7 and agrees that the foregoing provisions of this paragraph
shall govern and control in lieu thereof.
ARTICLE 8
REPAIRS, MAINTENANCE, UTILITIES, CHANGES
AND ALTERATIONS COMPLIANCE WITH ORDERS,
ETC., EASEMENTS
Section 8.01 Tenant’s Repairs and Maintenance. Tenant for and
during the Term, at Tenant’s sole cost and expense, assumes all responsibility and obligation for the physical condition of the
Demised Premises and its sidewalks, curbs, grounds, parking area and utilities and shall keep the same in good order and first
class condition free of accumulation of dirt, rubbish, snow and ice, and shall make all necessary repairs thereto, interior and
exterior, structural and non-structural, ordinary and extraordinary and foreseen and unforeseen. When used in this Article, the
term “repairs” shall include all necessary replacements and renewals. All repairs made by Tenant shall be equal in quality
to the original work. The lawns, shrubs and other vegetation will be maintained and, when required, replaced or renewed. Tenant
shall obtain a roof maintenance contract and a maintenance contract for the heating, ventilation and air conditioning systems in
the building. Such contract shall provide for semi-annual maintenance of the roof and the HVAC systems, and copies of the maintenance
agreements shall be submitted to Landlord, together with an annual report of the maintenance company as to the condition and repairs
made to the roof and the systems. In the event the Tenant shall fail to maintain the premises as afoeesaid, the Landlord may serve
notice upon the Tenant to correct same and if the Tenant shall fail to do so within 15 days after notice, the Landlord is authorized
to take whatever action the Landlord deems reasonably necessary to maintain the Demised Premises, all at the expense of the Tenant.
The Tenant shall under no circumstances, paint either the inside or the outside of the masonry walls or the concrete floors without
first obtaining Landlord’s written consent. Upon surrender, if Tenant shall violate this undertaking, then, Tenant shall cause
any such painting to be removed and the finish restored to its original condition.
Section 8.02 Landlord’s Responsibility. Provided Tenant notifies
Landlord of the necessity of the repair prior to the last day of the twelfth (12th) month of the Term, Landlord, at its sole cost
and expense, shall at the request of Tenant remedy all material defects in workmanship and materials used in the construction of
the building which results in an interference with Tenant’s reasonable use of the Premises, evidence of which shall appear or be
discovered on or before the last day of the twelfth (12th) month of the Lease Term. Notwithstanding the foregoing, if Tenant shall
make any change or alteration, structural or otherwise, to any portion of the building or lands, Landlord’s obligations as heretofore
provided shall not thereafter extend to the portion of the building or the Premises so changed or altered by Tenant to the extent
any portion thereof is adversely affected by the change or alteration. If such change or alteration made by Tenant affects any
warranty which Landlord obtained, Landlord shall be excused from Landlord’s obligation to the extent such warranty is abrogated,
voided or diminished. Landlord’s liability under this section is limited to repair or correction of the defect or condition to
be rectified and Landlord shall not be liable for any consequential loss or damage.
On the commencement date of the Lease, the roof will be free
of leaks.
Section 8.03 Utilities. Tenant shall make arrangements directly
with the appropriate utility companies for the supply of gas, electricity, water, light, power, telephone and shall pay all fees,
expenses and charges therefore to such companies.
Section 8.04 Tenant’s Responsibility. Landlord shall not be
required to furnish any services or facilities or to make any repairs or alterations on or to the Building or the Demised Premises
and Tenant assumes the full responsibility for the condition, operation, repair, replacement, maintenance and management of the
Demised Premises.
Section 8.05 Compliance. During the Term, Tenant, at its cost,
shall promptly comply with all present and future laws, ordinances, or other governmental regulations (including, but not limited
to, the Americans with Disabilities Act of 1990-ADA) and all present and future applicable requirements of the Fire Insurance Rating
Organization of New Jersey (or other body exercising similar functions), whether or not the same requires structural repairs or
alterations, foreseen or unforeseen, ordinary as well as extraordinary, which may be applicable to the Demised Premises, the fixtures
and equipment thereof, or the use or manner of use of the Demised Premises. Tenant agrees to comply with all zoning ordinances
and the responsibility for specific use or uses shall be that of the Tenant and the Landlord makes no representation as to any
permissive use.
Tenant may contest the validity of any such requirement at its
expense and defer compliance therewith pending such contest, provided such deferral shall neither constitute a default under any
mortgage of the Landlord or cause the imposition of any lien against the Demised Premises nor subject Landlord to any criminal
or civil liability.
Section 8.06 Environmental Compliance. Tenant agrees, that under
all circumstances, Tenant shall comply with all federal, state and local laws, ordinances, rules and regulations which are applicable,
as to the conduct of Tenant’s business as it relates, to the environment, including but not limited to, spillage, pollution, and
storage. Tenant hereby represents that its Standard Industrial Classification number (“S.I.C.”) is 5190 and its operations
shall consist of only those activities otherwise set forth in the first sentence of Section 2.01. Tenant will not permit the operations
at the Premises to so change so that the S.I.C. designation heretofore enumerated will change.
Tenant shall, prior to July 30, 1995, obtain its own environmental
consultant to do such audit and investigation of the Demised Premises as Tenant deems appropriate or necessary, to satisfy Tenant
as to the environmental condition of the Premises. If, in the sole judgment of the Tenant, such environmental audit and investigation
is not satisfactory to Tenant, then Tenant shall have the right to terminate this Lease, provided and subject, however, that such
right shall be exercised on or before July 30, 1995, TIME BEING OF THE ESSENCE, and such notice of termination is served together
with a copy of all of Tenant’s environmental reports so obtained. The right to terminate this Lease shall be void and without further
force and effect subsequent to July 30, 1995, if Tenant has not theretofore exercised its right of termination. All such notices
shall be in conformance with Article 16 of this Lease.
Notwithstanding any provision of the Industrial Site Recovery
Act, N.J.S.A. 13:lK-6, et seq., and the regulations promulgated thereunder, and any successor or amended legislation or regulations
(“ISRA”) to the contrary, if Tenant is operating an “industrial establishment” as that term is defined in ISRA,
Tenant shall, at its own cost and expense, comply with ISRA whenever an obligation to do so arises, including by reason of a closing,
terminating or transferring operations. Tenant shall, at its own cost and expense, make all submissions to, provide all information
to, and comply with all requirements of the New Jersey Department of Environmental Protection & Energy (“DEPE”) pursuant
to ISRA. Should the DEPE determine that a Remediation Action Work Plan must be prepared and that remediation must be undertaken
because of any spills or discharge of a hazardous substance or hazardous waste (as those terms are defined in ISRA) at the premises,
then Tenant shall, at Tenant’s own expense, prepare and submit the required documents and remediation funding source, and carry
out the approved plans. Landlord covenants and agrees with Tenant that Tenant shall not be responsible for any environmental cleanup
costs solely related to a spill or discharge of hazardous substance or hazardous waste which occurred prior to the commencement
date of the Lease. At no expense to the Landlord, Tenant shall promptly provide all information requested by Landlord regarding
or in furtherance of ISRA compliance. Tenant shall sign any affidavit submitted to it by Landlord which is true, accurate and complete;
and if an affidavit is not true, accurate and complete, Tenant shall supply the necessary information to make it true, accurate
or complete and shall then sign the same. Tenant shall promptly supply Landlord with any notices, correspondence or submissions
of any nature made by Tenant to, or received by Tenant from, the DEPE, United States Environmental Protection Agency, or any local,
state or federal authority concerning compliance with applicable Environmental Law. In the event Tenant uses, stores or generates
hazardous substances, as that term is otherwise defined in this Lease, Tenant will so advise Landlord. In such event, Tenant shall,
if requested by Landlord, but no more frequently than annually, supply the Landlord a list of all such hazardous substances used,
generated or stored at the Demised Premises during the preceding twelve (12) months. Information to be provided shall be in a narrative
report, including a description and quantification of hazardous substances and wastes which were generated, manufactured, stored
or disposed of at the Premises during the preceding twelve (12) months. In addition to the foregoing, if Tenant uses, stores or
generates hazardous substances, as that term is otherwise herein defined in this Lease, then Landlord shall have the right to require
Tenant to hire a consultant, reasonably satisfactory to the Landlord, to undertake an Environmental Site Assessment and Site Investigation,
as those terms are defined in ISRA, and if that report indicates a spill or discharge of hazardous substance at the Premises, an
appropriate report will be filed with the applicable governmental agencies and Tenant shall Remediate the spill or discharge in
accordance with ISRA and other applicable Environmental Laws.
In the event a lien shall be filed (i) against the Premises
during the term of this Lease arising out of hazardous substances or hazardous waste spilled or discharged after the commencement
date of this Lease, or (ii) after the commencement of the term of this Lease arising from a violation of applicable Environmental
Law which occurred during the term of this Lease, then Tenant shall, within thirty (30) days from the time Tenant is given notice
of the lien, pay the claim and remove the lien from the Premises.
Subject to the last paragraph of this Section 8.06, Tenant shall
indemnify, defend and hold harmless from all fines, suits, procedures, claims, liabilities, costs and actions of any kind, including
counsel fees (including those to enforce this indemnity), arising out of or in any way connected with any spills or discharges
of hazardous substances or hazardous waste at the Premises, except those which occurred as otherwise provided in the immediately
succeeding paragraph of this section; and from all fines, suits, procedures, claims, liabilities, costs and actions of any kind,
including counsel fees (including those to enforce this indemnity), arising out of Tenant’s failure to comply with the provisions
of this Section 8.06. Tenant’s obligations and liabilities under this Section 8.06 shall survive the expiration or earlier termination
of this Lease and shall continue so long as Landlord remains responsible or liable for either any spills or discharges of hazardous
substances or hazardous waste at the Premises or any violation of applicable Environmental Laws. Tenant’s failure to abide by the
terms of this Section 8.06 shall be enforceable by injunction. The undertaking of the Tenant hereunder shall survive termination
of this Lease, provided and subject, however, that Tenant’s responsibility shall only apply as to violation of Environmental Laws
which occurred during Tenant’s Lease term. If Tenant can prove in a reasonable manner that a violation of Environmental Laws did
not occur during Tenant’s Lease term, then, after such events, Tenant shall have no responsibility or liability as to any such
noncompliance.
Landlord covenants and agrees with Tenant that Tenant shall
not have any liability for either the storage of, a spill of or discharge of a Hazardous Substance which occurred prior or subsequent
to this Lease Term, or occurred by reason of a spill or discharge of a Hazardous Substance on lands other than the Demised Premises
and such storage of, spill of or discharge is not due to any act or omission of Tenant or Tenant’s officers, directors, employees,
agents or invitees.
If Landlord or Landlord’s prior tenants at the Demised Premises
caused a spill or discharge of hazardous substance or hazardous waste at the Premises, then as to either of such events, Landlord
will defend, indemnify and hold Tenant harmless from all fines, suits, proceedings, claims, liabilities, costs and actions of any
kind, including counsel fees (including those to enforce this indemnity), arising out of or in any way connected with a spill or
discharge of hazardous substance or hazardous waste at the Premises directly caused by Landlord or by a prior tenant of Landlord.
Section 8.07 Alterations. During the Term, Tenant shall not
make structural alterations but may, at its cost, make non-structural alterations to the Demised Premises necessary for the conduct
of its business, subject to the following:
(a) Tenant shall first obtain requisite permits and authorizations
from governmental authorities having jurisdiction;
(b) Obtain Landlord’s, and if required, the fee mortgagee’s,
prior written consent, (which Landlord’s consent not to be withheld if the change or alteration would not, in the reasonable opinion
of the Landlord, impair the value or usefulness of the Building or any part of the Demised Premises).
(c) Any alterations shall be made promptly (unavoidable delays
excepted), in a workmanlike manner in accordance with any alteration plans and in compliance with applicable laws and governmental
regulations;
(d) The cost of the alterations shall be paid by Tenant so that
the Demised Premises remains free of any liens;
(e) If requested by Landlord, post with Landlord adequate security
to assure restoration of the premises at the end of the Term;
(f) Tenant shall maintain Workmen’s Compensation Insurance covering
all persons on whose behalf death or injury claims could be asserted, until the alteration is completed;
(g) No change or alterations shall, when completed, tie in or
connect the Demised Premises with any other building on adjoining property.
(h) During such time as Tenant shall be constructing any improvements,
Tenant, at its sole cost and expense, shall carry, or cause to be carried, (i) Workmen’s Compensation Insurance covering all persons
employed in connection with the improvements in statutory limits, (ii) a completed operations endorsement to the Commercial General
Liability Insurance policy referred to in Section 6.1(iv), (iii) Builder’s Risk Insurance, completed value form, covering all physical
loss, in an amount reasonably satisfactory to Landlord, and (iv) such other insurance, in such amounts, as Landlord deems reasonably
necessary to protect Landlord’s interest in the Demised Premises from any act or omission of Tenant’s contractors or subcontractors.
(i) No permitted alteration shall be undertaken until detailed
Plans and Specifications have first been submitted to and approved in writing by Landlord, and, if required, by the fee mortgagee.
At the completion of the alteration or restoration under Article 7, “as-built” plans shall be delivered to Landlord.
Section 8.08 Restoration. Any alteration made by Tenant under
Article 8 hereof shall, at Landlord’s option, become Landlord’s property, or, at the election of Landlord, shall be removed by
the Tenant thirty (30) days prior to the termination of the Term and the Demised Premises shall be restored to its condi- tion
prior to such alteration. The security deposited under Section 8.06(e) hereof shall be returned to the Tenant at the end of the
Term if Landlord elects to have such improvement remain, or, returned to Tenant after restoration by Tenant if Landlord directs
that said alteration be removed and the premises restored.
Section 8.09. Landlord hereby reserves to itself its successors
and assigns the right to construct, maintain and use ingress and egress easements, railroad easements, utility ease- ments, drainage
easements, across, over and under the Demised Premises, to or from other lands now owned or in the future ac- quired by the Landlord,
provided however, that the same be at the cost of the Landlord and does not unreasonably interfere with the use of the Demised
Premises by the Tenant.
ARTICLE 9
LEASE PROVISION AGAINST ASSIGNMENT, MORTGAGE,
OR SUBLET BY TENANT WITHOUT LANDLORD’S PERMISSION,
LANDLORD’S RIGHT OF RECAPTURE
Section 9.01. Tenant covenants and agrees for Tenant and its
successors, assigns, and legal representatives, that neither this Lease nor the term and estate hereby granted, nor any part hereof
or thereof, will be assigned, mortgaged, pledged, encumbered or otherwise transferred (whether voluntarily, involuntarily, by operation
of law, or otherwise), and that neither the Demised Premises, nor any part thereof, will be encumbered in any manner by reason
of any act or omission on the part of Tenant, or will be used or occupied, or permitted to be used or occupied, or utilized for
desk space or for mailing privileges or as a concession, by anyone other than Tenant, or for any purpose other than as hereinbefore
set forth, or will be sublet, without the prior written consent of Landlord in every case; provided, however, that, if Tenant is
a corporation, the assignment or transfer of this Lease, and the term and estate hereby granted, to any corporation into which
Tenant is merged or consolidated or to which its assets are sold (such corporation being hereinafter in this Article called “Assignee”)
without the prior written consent of Landlord shall not be deemed to be prohibited hereby if, and upon the express condi- tion
that, Assignee shall promptly execute, acknowledge, and deliver to Landlord an agreement in form and substance satis- factory to
Landlord whereby Assignee shall assume and agree to perform and to be personally bound by and upon, all the covenants, agreements,
terms, provisions, and conditions set forth in this Lease on the part of Tenant to be performed, and whereby Assignee shall expressly
agree that the provisions of this Article shall, notwithstanding such assignment or transfer, continue to be binding upon it with
respect to all future assignments and transfers and provided such Assignee shall prove to the satisfaction of Landlord that its
net worth is at least equal to that of Tenant as of the date hereof.
Section 9.02. Subject to Section 9.01 hereof, which shall take
precedence over the provisions hereof, in the event Tenant desires Landlord’s consent to an assignment or subletting of all or
any part of the Demised Premises, Tenant, by notice in writing, (a) shall notify Landlord of the name of the proposed assignee
or subtenant, such information as to the proposed assignee’s or sub-tenant’s financial responsibility and standing as Landlord
may require, and a copy of the proposed assignment or sublease executed by all parties; and (b) shall offer to vacate the space
covered by the proposed area to be subleased or the entire Demised Premises in the event of an assignment (as the case may be)
and to surrender the same to Landlord as of a date (the “Surrender Date”) specified in said offer that shall be the last
day of any calendar month during the term hereof, provided, however, that the Surrender Date shall not be earlier than the date
occurring ninety (90) days after the giving of such notice nor be later than the effective date of the proposed assignment or the
commencement date of the term of the proposed sublease. Landlord may accept such offer in writing by notice to Tenant given within
thirty (30) days after the receipt of such notice from Tenant. If Landlord accepts such offer, Tenant shall surrender to Landlord,
effective as of the Surrender Date, all Tenant’s right, title, and interest in and to the portion of the Demised Premises covered
by the proposed sublease, or, if Tenant proposes to sublet the entire Demised Premises, or assign this Lease, all Tenant’s right,
title and interest in and to the entire Demised Premises. In the event of such surrender by Tenant of a portion of the Demised
Premises, then, effective as of the date immediately following the Surrender Date, the Basic Rent shall be reduced by an amount
equal to that portion of the Basic Rent that is allocable to the space so surrendered, and the Additional Rent shall be equitably
adjusted. If the entire premises be so surrendered by Tenant, this Lease shall be cancelled and terminated as of the Surrender
Date with the same force and effect as if the Surrender Date were the date hereinbefore specified for the expiration of the full
term of this Lease.
In the event of any such surrender by Tenant of the Demised
Premises or a portion thereof, Landlord and Tenant shall, at the request of either party, execute and deliver an agreement in recordable
form to the effect(s) hereinbefore stated.
Section 9.03. In the event Landlord does not accept such offer
of Tenant referred to in Section 9.02 hereof, Landlord covenants not to unreasonably withhold its consent to such proposed assignment
or subletting by Tenant of such space to the proposed assignee or subtenant on said covenants, agreements, terms, provisions, and
conditions set forth in the notice to Landlord referred to in clause (a) of the first sentence of Section 9.02 hereof; provided,
however, that Landlord shall not in any event be obligated to consent to any such proposed assignment or subletting unless:
(a) The use of the proposed assignee or subtenant is (i) for
warehousing of products which are non-hazardous and are not “toxic pollutants” (ii) does not violate any of the negative
covenants as to use as contained in this lease and (iii) is in keeping with the then standards of Landlord as to the use of the
Building.
(b) The proposed assignee or subtenant shall be the actual user
of the premises and shall agree that it shall not have the right to sublease the premises or subsequently assign the Lease;
(c) The proposed assignee or subtenant is not then a tenant
or occupant of any part of the industrial park in which the Demised Premises are located;
(d) There shall be no default by Tenant under any of the terms,
covenants, and conditions of this Lease at the time that Landlord’s consent to any such assignment or subletting is requested and
on the effective date of the assignment or the proposed sublease;
(e) Tenant shall reimburse Landlord for any reasonable expenses
that may be incurred by Landlord in connection with the proposed assignment or sublease, including without limitation the reasonable
costs of making investigations as to the acceptability of a proposed assignee or subtenant and reasonable legal expenses incurred
in connection with the granting of any requested consent to the assignment or sublease;
(f) The proposed assignment shall be for a consideration or
the proposed subletting shall be at a rental rate not less than the rental rates then being charged under leases being entered
into by landlord for comparable space in the Building and any other similar buildings owned or operated by Landlord in a radius
of five (5) miles from the Demised Premises and for a comparable term.
(g) Such permitted assignment shall be conditioned upon Tenant’s
delivery to Landlord of an executed instrument of assignment (wherein the assignee assumes, jointly and severally with Tenant,
the performance of Tenant’s obligations hereunder).
(h) Such permitted sublease shall be conditioned upon Tenant’s
delivery to Landlord of an executed instrument of sublease (wherein Tenant and such sublessee agree that such sublease is subject
to the Lease and such sublessee agrees that, if the Lease is terminated because of Tenant’s default, such sublessee shall, at Landlord’s
option, attorn to Landlord).
(i) Tenant shall at Tenant’s own expense first comply with ISRA
and fulfill all of Tenant’s environmental obligations under this Lease which also arise upon termination of Tenant’s Lease term.
If this condition shall not be satisfied, then Landlord shall have the right, to withhold consent to a sublease or assignment.
Section 9.04. Each subletting pursuant to this Article shall
be subject to all the covenants, agreements, terms, provisions, and conditions contained in this Lease. Tenant covenants and agrees
that, notwithstanding such assignment or any such subletting to any subtenant and/or acceptance of Basic Rent or Additional Rent
by Landlord from any subtenant, Tenant shall and will remain fully liable for the payment of the Basic Rent and Additional Rent
due and to become due hereunder and for the performance of all the covenants, agreements, terms, provisions, and conditions contained
in this Lease on the part of Tenant to be performed. Tenant further covenants and agrees that, notwithstanding any such assignment
or subletting, no other and further assignment, underletting, or subletting of the Demised Premises or any part thereof shall or
will be made except upon compliance with the subject to the provisions of this Article. Tenant shall promptly furnish to Landlord
a copy of each such sublease.
Section 9.05. If this Lease be assigned, or if the Demised Premises
or any part thereof be sublet or occupied by anybody other than Tenant, Landlord may, after default by Tenant, collect rent from
the assignee, subtenant, or occupant, and apply the net amount collected to the rent herein reserved, but no such assignment, subletting,
occupancy, or collection shall be deemed a waiver by Landlord of any of Tenant’s covenants contained in this Article or the acceptance
of the assignee, subtenant, or occupant as Tenant, or a release of Tenant from the further performance by Tenant of covenants on
the part of Tenant herein contained.
Section 9.06. If for any assignment or sublease, Tenant receives
rent or other consideration, either initially, or over the term of the assignment or sublease, in excess of the rent called for
hereunder, or in the case of the sublease of a portion of the demised premises, in excess of such rent fairly allocable to such
portion, after appropriate adjustment to assure that all other payments called for hereunder are appropriately taken into account,
Tenant shall pay the Landlord, as additional rent hereunder, one half (1/2) of the excess of each such payment of rent or other
consideration received by Tenant promptly after its receipt.
Section 9.07 In the event Tenant subleases a portion of the
premises to an entity which is a wholly owned subsidiary or division of the Tenant, then in such event, the provisions of Section
9.06 shall not be applicable as to any such sublease, and the provisions of Section 9.02 shall not be applicable to any such sublease.
However, Tenant shall comply with the other provisions of this Article 9. Tenant shall not be prohibited from permitting wholly
owned subsidiaries or a division thereof from occupancy of the premises under Tenant’s leasehold rights.
Section 9.08 As to Section 9.03, Landlord agrees within fifteen
(15) business days of receipt of Tenant’s request for a consent to an assignment of subletting, to respond to Tenant.
ARTICLE 10
LANDLORD’S REMEDIES IN EVENT OF THE TENANT’S
DEFAULT OR BANKRUPTCY
Section 10.01 Events of Default. If any one or more of the following
events (hereinafter called “events of default”) occurs:
(a) Tenant shall default in payment of any installments of rent
or other sums required to be paid by Tenant under this Lease, which default shall continue for ten (10) days after written notice
thereof by Landlord to Tenant; or in the observance or performance of any other covenant or provision of this Lease and such default
continues for thirty (30) days after notice of such default from Landlord (unless such default cannot be cured within (30) days)
and Tenant commences to cure such default within such 30 days and diligently proceeds to cure such default; or
(b) If the Demised Premises shall be left vacant or unoccupied
or be deserted for a period of sixty (60) days; or
(c) Tenant shall make an assignment for the benefit of creditors;
(d) Tenant shall attempt to transfer, assign or sublet or hypothecate
this Lease except as otherwise specifically permitted in Article 9 hereof; or
(e) A voluntary petition is filed by Tenant under any laws for
the purpose of adjudication of Tenant as a bankrupt or the extension of the time of payment, composition, arrangement, adjustment,
modification, settlement or satisfaction of the liabilities of Tenant, or the reorganization of Tenant under the Bankruptcy Act
of the United States or any future laws of the United States having the same general purpose, or receivers appointed for Tenant
by reason of insolvency or alleged insolvency of Tenant; an involuntary petition shall be filed against Tenant for such relief
and shall not be dismissed within sixty (60) days;
Upon the happening of an event of default, and such event of
default is not cured within the time periods as otherwise hereinbefore set forth, then Landlord, notwithstanding any other right
or remedy it may have under the Lease, at law or in equity, may terminate the Lease, by notice to Tenant setting forth the basis
therefor and effective not less than seven (7) days thereafter, whereupon, upon such effective date, the Lease shall terminate
(with the same effect as if such date were the date fixed herein for the natural expiration of the Term), Tenant shall surrender
the demised premises to Landlord and Tenant shall have no further rights hereunder, but Tenant shall remain liable as hereinafter
provided. In such event, Landlord may, without further notice, enter the demised premises, repossess the same and dispossess Tenant
and all other persons and property therefrom.
Section 10.02 Landlord’s Damages. If Landlord so terminates
the Lease, Tenant shall pay Landlord, as damages:
(a) A sum which represents any excess of (i) the aggregate of
the rent, impositions and additional rent for the balance of the term if the Lease were not so terminated, over (ii) the net rental
value of the demised premises at the effective date of such termination, both discounted at the rate of four (4) percent per annum;
or, at Landlord’s option,
(b) Sums equal to the rent, impositions and additional rent,
when the same would have been payable if not for such termination, less any net rents received by Landlord from any reletting,
after deducting all costs incurred in connection with such termination and reletting (but Tenant shall not receive any excess of
such net rents over such sums).
Landlord may commence actions or proceedings to recover such
damages or installments thereof at any lawful time. No provision hereof shall be construed to preclude Landlord’s recovery from
Tenant of any other damages to which landlord is lawfully entitled.
Section 10.03 Nonexclusivity. No right or remedy herein con-
ferred upon Landlord is intended to be exclusive of any other right or remedy herein or by law provided, but each shall be cumulative
and subject to the grace and notice provisions of Section 10.01 hereof, in addition to every other right or remedy given herein
or now or hereafter existing at law or in equity or by statute. Landlord shall be entitled, to the extent permitted by law, to
injunctive relief in case of the violation, or attempted or threatened violation, of any of the provisions of this Lease, or to
a decree compelling observance or performance of any provision of this Lease, or to any other legal or equitable remedies. Nothing
herein contained shall limit or prejudice the right of the Landlord in any bankruptcy or reorganization or insolvency proceeding,
to prove for and obtain as liquidated damages by reason of such termination an amount equal to the maximum allowed by any bankruptcy
or reorganization or insolvency proceedings, or to prove for and obtain as liquidated damages by reason of such termination, an
amount equal to the maximum allowed by any statute or rule of law, whether such amount shall be greater or less than the excess
referred to in Section 10.02.
Section 10.04 Landlord’s Right to Perform Tenant’s Covenants.
If Tenant shall fail to pay any tax, pay for or maintain or deliver any of the insurance policies or shall fail to make any other
payment or perform any other act which Tenant is obligated to make or perform under this Lease, then, Landlord after notice to
Tenant may perform for the account of Tenant any covenant in the perfor- mance of which Tenant is in default. Tenant shall pay
to the Landlord as additional rent, upon demand, any amount paid by Landlord in the performance of such covenant in any amount
which Landlord shall have paid by reason of failure of Tenant to comply with any covenant or provision of this Lease, including
reasonable attorneys fees incurred in connection with the prosecution or defense of any proceedings instituted by reason of default
of Tenant, together with interest at the maximum lawful rate of in- terest then allowed by the State of New Jersey, but not more
than two (2%) percent per month from the date of payment by Landlord until paid by Tenant.
Section 10.05 No Waiver. No waiver by Landlord of any breach
by Tenant of any of Tenant’s obligations hereunder shall be a waiver of any subsequent breach or of any obligation, agreement or
covenant, nor shall any forbearance by Landlord to seek a remedy for any breach by Tenant be a waiver by Landlord of Landlord’s
rights and remedies with respect to such or by subsequent breach.
Section 10.06 Right of Re-Entry. In the event that the termination
of this Lease is the result of any election exercised by Landlord pursuant to the terms of this Article, the Landlord shall be
entitled to the rights, remedies and damages set forth in this Article and elsewhere in this Lease. Tenant waives the service of
notice of intention to re-enter as provided for in any statute and also waives any and all right of redemption in case Landlord
obtains possession by reason of Tenant’s default. Tenant waives any and all right to a trial by a jury in the event that summary
proceedings shall be instituted by Landlord. The terms “enter”, “re-enter”, “entry” or “reentry”,
as used in this Lease are not restricted to their technical legal meaning.
Section 10.07 Payment of Landlord’s Counsel Fees and Other Costs.
Tenant shall pay the Landlord as additional rent, upon demand, Landlord’s reasonable attorneys fees incurred by Landlord in connection
with the prosecution or defense of any proceeding instituted by reason of default of Tenant, together with interest on such sum
at the rate of two (2%) percent per month from the date of payment by Landlord until repaid by Tenant to Landlord, this covenant
to survive the expiration or sooner termination of this Lease.
Section 10.08 Noncurable Default. If Tenant fails, on four (4)
separate occasions in any twelve (12) month period during the Term hereof, to make payment of the rent and or additional rent and
or late charges on or before the due date, then, whether or not Tenant ultimately makes and Landlord accepts the required payment
after the due date, such failure shall entitle Landlord, upon or at any time after such fourth separate occasion, to pursue the
remedies provided in this Article, said circumstances being hereby declared a default no longer susceptible of being cured or removed
by Tenant.
ARTICLE 11
SUBORDINATION OF LEASE TO MORTGAGE ON THE
DEMISED PREMISES
Section 11.01 Subordination to Mortgages. At the option of Landlord,
this Lease shall either be:
(a) Subject and subordinate to all mortgages which may now or
hereafter affect the Demised Premises, and to all renewals, modifications, consolidations, replacements or extensions thereof,
provided however, that the holder of any such mortgage shall execute with Tenant a Non-Disturbance Agreement hereinafter described;
or
(b) This lease shall be paramount in priority as an encumbrance
against the Demised Premises with respect to the lien of any mortgage which may now or hereafter affect the Demised Premises and
to all renewals, modifications, consolidations, replacements and extensions thereof.
Section 11.02 Non-Disturbance Agreement. The non- disturbance
agreement referred in Section 11.01 shall be an agreement in recordable form between Tenant and the holder of such mortgage, binding
on such holder and on future holders of such mortgages, or an agreement by such holder expressed in such mortgage, which shall
provide in substance that, so long as Tenant is not in default under any of the terms, covenants, provisions or conditions of this
Lease, neither such holder nor any other holder of such mortgage shall name or join Tenant as a party-defendant or otherwise in
any suit, action or proceeding to enforce, nor will this Lease or the term hereof be terminated (except as permitted by the provisions
of this Lease) or otherwise affected by enforcement of, any rights given to any holder of such mortgage, pursuant to the terms,
covenants or conditions contained in such mortgage or any other document held by any holder or any rights given to any holder as
a matter of law. Upon request of holder of a mortgage to which this Lease becomes subordinate, Tenant shall execute, acknowledge
and deliver to such holder an agreement to attorn to such holder as Landlord if such holder becomes Landlord hereunder and/or execute,
acknowledge and deliver to such holder an agreement not to pay the Basic Rent for a period of more than one (1) month in advance.
ARTICLE 12
EXONERATION OF INDIVIDUALS
Section 12.01 Exoneration. Neither Landlord, nor its successors
or assigns, shall have any personal liability in respect to any of the covenants or conditions of this Lease. The Tenant shall
look solely to the equity of the Landlord in the Demised Premises for satisfaction of the remedies of the Tenant in the event of
a breach by the Landlord of any of the covenants or conditions of this Lease and no other property or assets of Landlord shall
be subject to levy, execution or other enforcement procedure for the satisfaction of Tenant’s remedies in the event of a breach
or violation by Landlord of any of the terms of this Lease or any other liability which the Landlord might have to the Tenant.
Whenever Tenant claims that Landlord is liable to Tenant by reason of any obligation of Landlord under this Lease, Tenant’s remedies
shall be restricted to a declaratory judgement and injunction for the relief sought, and shall exclude money damages in excess
of in total One Million ($1,000,000.00 Dollars.
Section 12.02 The provisions of this Section 12.01 shall not
be applicable to Landlord’s obligations under Article 23 “Security.”
ARTICLE 13
COVENANT AGAINST LIENS
Section 13.01 No Liens. Tenant shall neither create nor permit
to be created or exist any lien or encumbrance affecting the Demised Premises and shall discharge, promptly upon notice, any lien
or encumbrance arising out of any act or omision of Tenant. Notice its hereby given that Landlord shall not be liable for any work
performed or to be performed at the Demised Premises for Tenant, or for any materials furnished or to be furnished at the Demised
Premises for Tenant, upon credit and that no mechanic’s or other lien for such work or materials shall attach to or affect the
estate or interest of Landlord in and to the Demised Premises.
ARTICLE 14
EMINENT DOMAIN
Section 14.01 Total Condemnation. If at any time during the
Term the whole of the Building shall be taken for any public or quasi-public use under any statute, or by right of eminent domain,
or a part of the Building consisting of more than fifty (50%) percent of the Building area shall be so taken, the Term and all
rights of the Tenant shall immediately cease and terminate as of the date of such taking, and the Basic Rent and Additional Rent
shall be apportioned and paid to the time of such termination.
Section 14.02 Partial. In the event that only a part of the
Building area constituting fifty (50%) percent or less shall be so taken, the Landlord or Tenant may elect to cancel this Lease
provided Landlord, within ninety (90) days after such taking, gives notice to that effect and upon the giving of such notice, the
Basic Rent and Additional Rent shall be apportioned and paid to the date of the expiration of the Term and this Lease and the Term
shall cease, expire and come to an end upon the expiration of said ninety (90) days specified in said notice. If the Landlord shall
not elect to terminate as heretofore provided, this Lease shall remain unaffected except the Tenant shall be entitled to a pro
rata reduction of Basic Rent, based on the proportion which the area of the Building so taken bears to the area of the Building
immediately prior to such taking.
Section 14.03 Award. In case of any taking, whether involving
the whole or any part of the Demised Premises and regardless of whether this Lease survives, the entire award shall be paid to
the Landlord and the Tenant hereby assigns such award or awards to the Landlord. It is specifically understood and agreed between
Tenant and Landlord that Tenant shall have no right to participate in any condemnation award for any claim whatsoever for the unexpired
leasehold, claims for fixtures, claims for improvements, claims for value of options, if any, granted hereunder, or options to
extend the term of this Lease, or any other claims whatsoever. Tenant hereby waives all rights to any portion of the Award including,
without limitation, any such rights arising from any termination of Tenant’s leasehold interest hereunder.
Section 14.04 Definition of “Taking”. For purpose
of this Article 14, a “Taking” shall include any conveyance made in response to a bona fide threat of condemnation.
Section 14.05 Tenant’s Moving Expense. If the condemning authority
permits Tenant, in a proceeding separate from Landlord’s proceeding, to seek recovery of its moving expenses, and if such recovery
shall not diminish or affect the Award otherwise payable to Landlord, then Tenant may, in such separate proceeding, seek recovery
for its moving expenses.
Section 14.06 Other Tenant’s Rights. Tenant shall have the right,
in the event of any Taking which results in termination of this Lease, to remove its trade fixtures and other personal property
from the Demised Premises.
ARTICLE 15
ACCESS TO PREMISES
Section 15.01 Access. The Tenant agrees to permit the Landlord
and the authorized representatives of the Landlord to enter the Demised Premises at all times during usual business hours upon
reasonable notice, provided Landlord does not unreasonably interfere with the normal business operations of Tenant, for the purpose
of inspecting the same and upon Tenant’s failing to make repairs or failing to comply with laws, ordinances, rules, regulations
or requirements, etc., making all necessary repairs to the Demised Premises and performing any work therein that may be necessary
to comply with any laws, ordinances, rules, regulations or requirements of any public authority or of the Board of Fire Underwriters
or any similar body or that the Landlord may deem necessary to prevent waste or deterioration in connection with the Demised Premises.
Nothing herein shall imply any duty upon the part of the Landlord to do any such work which, under any provision of this Lease,
the Tenant may be required to perform, and the performance thereof by the Landlord shall not constitute a waiver of the Tenant’s
default in failing to perform the same. The landlord may during the progress of any work in the Demised Premises keep and store
upon the Demised Premises all necessary materials, tools and equipment. The Landlord shall not in any event be liable for inconvenience,
annoyance, disturbance, loss of business or other damage of the Tenant by reason of making repairs or the performance of any work
in the Demised Premises, or on account of bringing materials, supplies and equipment into or through the Demised Premises during
the course thereof, and the obligations of the Tenant under this Lease shall not thereby be affected in any manner whatsoever.
The Landlord is hereby given the right during usual business
hours to enter the Demised Premises upon reasonable notice, provided that Landlord does not unreasonably interfere with the normal
business operations of Tenant, and to exhibit the same for the purposes of sale or hire during the final nine months of the Term
and the Landlord shall be entitled to display, on the Demised Premises in such manner as not unreasonably to interfere with the
Tenant’s business, the usual “For Sale” or “To Let” signs, and the Tenant agrees that such signs may remain
unmolested upon the Demised Premises.
ARTICLE 16
NOTICES
Section 16.01 Notices. All notices, demands and requests which
may or are required to be given by either party to the other shall be in writing. All notices, demands and requests by the Landlord
to the Tenant shall be sent by United States Certified Mail, postage prepaid, addressed to the Tenant at the address specified
on the first page of this Lease or at such other place as the Tenant may from time to time designate in a written notice to the
Landlord. All notices, demands and requests by the Tenant to the Landlord shall be sent by United States Certified Mail, postage
prepaid, Return Receipt Requested, addressed to the Landlord at the address shown on the first page of this Lease or at such other
place as the Landlord may from time to time designate in a written notice to the Tenant. Notices, demands and requests which shall
be served upon the Landlord or the Tenant in the manner aforesaid shall be deemed sufficiently served or given for all pur- poses
hereunder at the time such notice, demand or request shall be mailed.
ARTICLE 17
ACCEPTANCE
Section 17.01 Acceptance. The Demised Premises includes a building
previously erected on the land which Tenant acknowledges it has inspected and is fully familiar with and its conditions and is
leasing the land and building in a “as is” condition. The Demised Premises constitutes a self-contained unit, and nothing
in this Lease shall impose any obligation upon Landlord to provide any service for the benefit of Tenant, including, but not limited
to, water, gas, electricity, heat, air conditioning, janitorial, or any other service or utility.
ARTICLE 18
QUIET ENJOYMENT - CONVEYANCE BY LANDLORD
Section 18.01 Ouiet Enjoyment. Tenant, upon paying the Basic
Rent and all Additional Rent and other charges herein provided for and performing all covenants and conditions of this Lease, on
its part to be performed, shall quietly have and enjoy the Demised Premises during the Term, without hindrance or molestation by
Landlord or any other person claiming through Landlord, subject, however, to the terms of this Lease and to any Mortgage.
Section 18.02 Conveyance by Landlord. If Landlord shall convey
the Demised Premises, all liabilities and obligations on the part of Landlord under this Lease shall terminate upon such conveyance
and thereafter all such liabilities and obligations shall be the liabilities and obligations of such transferee and shall be binding
upon such transferee of the Demised Premises.
ARTICLE 19
ESTOPPEL CERTIFICATE
Section 19.01 Estoppel Certificate. Either party shall, without
charge, at any time from time to time hereafter, within ten (10) days after written request to the other, certify by written instrument
duly executed and acknowledged to any mortgagee or purchaser or proposed mortgagee or proposed purchaser, or any other person specified
in such request; (a) as to whether this Lease has been supplemented or amended and if so, the substance and manner of such supplement
or amendment; (b) as to the validity and force and effect of this Lease in accordance with its tenor as then constituted; (c) as
to the existence of any default or event of default; (d) as to the existence of any offsets, counterclaims or defenses thereto
on the part of such other party; (e) as to the term commencement date and stated expiration dates; and (f) as to any other matters
as may be reasonably so requested. Any such certificate may be relied upon by the party requesting it and any other person to whom
the same may be exhibited or delivered and the contents of such certificate shall be binding on the party executing same. Tenant
shall, in addition, within five business days of the term commencement date, execute and deliver to Landlord a Tenant Estoppel
Letter certifying and stating to those matters above referred to.
ARTICLE 20
FINANCIAL INFORMATION
Section 20.01 Financial Information. Tenant has furnished the
Landlord with Profit and Loss Statements and Balance Sheets for the fiscal years ending December 31, 1994, prepared by a Certified
Public Accountant. Tenant further agrees that it will furnish to the Landlord a Certified Profit and Loss statement and Certified
Balance Sheet prepared by a Certified Public Accountant for the preceding fiscal year, when required by Landlord.
ARTICLE 21
NO ABATEMENT OF RENT
Section 21.01 No Abatement of Rent. Except as otherwise specifically
provided in this Lease, there shall be no abatement, diminution or reduction of Basic Rent, Additional Rent, other charges or other
compensation due to the Landlord by the Tenant or any person claiming under it, under any circumstances including but not limited
to the complete or partial destruction of the Building or any inconveniences, discomfort, interruption of business or otherwise
caused by a taking or destruction of the premises or any building thereon except as otherwise specifically provided herein.
ARTICLE 22
NONRECORDATION OF LEASE
Section 22.01 Nonrecordation of Lease. Tenant shall not record
the within Lease. Should Tenant record this Lease, Landlord may at its option, cause the within Lease to be terminated, cancelled
and of no further force and effect or it may bring suit against Tenant for damages arising therefrom, providing, however, that
Tenant or Landlord shall have the right to record a short form of lease.
ARTICLE 23
SECURITY
Section 23.01 Security. Tenant has deposited with Landlord ONE
HUNDRED SEVENTY-ONE THOUSAND and NO/100 Dollars ($171,000.00) as security for the performance of Tenant’s obligations under the
Lease. Landlord may use, apply or retain the whole or any part of the security to the extent required to cure any default of Tenant’s
and to reimburse Landlord for any damages or expenses (including, without limitation, counsel fees) incurred by reason of such
default, including, but not limited to, any damages, deficiency or expenses in the reletting of the Demised Premises, whether accrued
before or after summary proceedings or other re-entry by Landlord. If Landlord applies any part of said security deposit to remedy
any default of Tenant, Tenant shall, upon demand, deposit with Landlord the amount so applied so that Landlord shall have the full
deposit on hand at all times during the term of this Lease. If Tenant complies with all of its obligations hereunder, the security
shall be returned to it after the end of the Term and delivery of possession of the Demised Premises to Landlord. In the event
the Landlord shall sell or assign the premises then, upon such transfer, Landlord agrees to transfer the security deposit to such
transferee and Landlord shall thereupon be released from all liability with respect to such security. Tenant shall not assign or
encumber the security and neither Landlord nor its successors or assigns shall be bound by any such assignment or encumbrance.
Landlord agrees that, as of December 31 of each calendar year,
Landlord shall pay to Tenant an interest factor on the security deposit equal to the interest paid by United Jersey Bank on “Preferred
Money Market Accounts” during that calendar year. The foregoing shall not require Landlord to escrow or otherwise deposit
such sum or segregate same, and Tenant recognizes and understands that Landlord shall have the right to use these funds for Landlord’s
general purposes. The interest shall be calculated at the rate in effect as of the opening of business of each day during that
year. Landlord, with the sum of ONE THOUSAND and NO/100 Dollars ($l,000.00) on the Commencement Date of this Lease will open such
an account, and the interest rate so reflected on such account during that calendar year shall be the interest rate applied to
the amount of the security deposit held by the Landlord during that year.
Section 23.02 The provisions of Section 12.01 shall not be applicable
to this Article.
ARTICLE 24
SURRENDER
Section 24.01. On the last day or sooner termination of the
Lease, Tenant shall quit and surrender the Demised Premises broom-clean, in good condition and repair, together with all alterations,
additions and improvements which may have been made in, on, or to the Demised Premises, except movable furniture or unattached
movable trade fixtures put in at the sole expense of the Tenant (provided Tenant has not been in default under this Lease) provided,
however, that Tenant shall ascertain from Landlord at least thirty (30) days before the end of the Term whether Landlord desires
to have the Demised Premises, or any part thereof, restored to the condition in which it was originally delivered to Tenant, and
if Landlord shall so desire, then Tenant, at its own cost and expense, shall restore the same before the end of the Term. Landlord
shall, in response to Tenant’s request, or otherwise, advise Tenant as to the repairs and restoration to be undertaken by Tenant
prior to the expiration of the Lease Term. Tenant shall, at least six (6) months before the end of the Term, advise the New Jersey
Department of Environmental Protection and Energy of the termination of Tenant’s use of the premises, and file, with said Department,
such information, affidavits, forms, remedial action work plan and such other information as said Department may require and undertake
such action or work as required by the Department of Environmental Protection and Energy pertaining to Tenant’s use and occupancy
of the premises as it relates to remedial action or a remedial action work plan for the removal of hazardous substances and wastes
that remain on the premises demised by reason thereof. Tenant agrees upon termination of the lease, the air-conditioning, cooling
systems, heating equipment and plumbing and electrical systems shall be in good, operable condition. All light fixtures and bulbs
shall be operable, cleaned and in good working order, rugs cleaned, and the warehouse floor washed and sealed. Tenant shall obtain
from Landlord Landlord’s approval as to the sealer used by Tenant. The condition of the building and premises shall be in such
a condition upon surrender as though the premises were used exclusively for warehousing and offices, and the Tenant made all repairs
and replacements as were necessary during the term of the Lease so that after surrender, the building and premises are in good
condition and ready to be re-rented. Tenant and Landlord understand that during the term of this Lease, the building and its equipment
may be subject to reasonable wear and tear. However, Landlord and Tenant specifically agree that wear and tear shall not excuse
Tenant from undertaking its repair and maintenance obligations, and the provisions as herein provided, by way of example, that
the various systems shall be in good operating condition, are intended to be the standard by which the building and its systems
shall be returned to Landlord by Tenant. If the Demised Premises is not surrendered as and when aforesaid, Tenant shall indemnify
Landlord against loss or liability resulting from the delay by Tenant in so surrendering the premises including, without limitation,
any claims made by any succeeding occupant founded on such delay. Tenant’s obligations under this section shall survive the expiration
or sooner termination of the Term. In the event Tenant, prior to termination of the Lease, fails to comply with the Rules and Regulations
of the Department of Environmental Protection of the State of New Jersey or other applicable Federal agencies having jurisdiction
over the storage or use of hazardous substances then, Tenant, at the option of the Landlord, shall be deemed to be occupying the
Demised Premises as a tenant from month-to-month, at the monthly rental indicated below. In the event Tenant remains in possession
of the Demised Premises after the expiration of the term and without execution of a new Lease, or, Tenant fails to restore the
premises, or fails to comply with its other obligations which must be complied with prior to the termination date of the Lease,
then Tenant, at the option of the Landlord, shall be deemed to be occupying the Demised Premises as a tenant from month-to-month,
at the monthly rental equal to the higher of 150% of market rent plus one-twelfth (1/12th) of all items of Additional Rent such
as, but not limited to, taxes, insurance payable or paid during the last lease year or, four (4) times the sum of (i) the Basic
Rent payable for the last month of the Term under Article 3 hereof and, (ii) one twelfth (l/12th) of all items of Additional Rent,
such as, but not limited to, taxes, insurance payable or paid during the last lease year.
Tenant shall on a date no later than six (6) months prior to
the termination date of this Lease obtain from the New Jersey Department of Environmental Protection and Energy (“DEPE”)
a non-applicability letter and/or a de minimis quantity exception and/or a negative declaration approval and/or a written determination
by DEPE that there are no discharged hazardous materials at the site that occurred during the Lease Term and, if any had occurred,
have been remedied in accordance with applicable regulations, such determination presently referred to as a No Further Action letter
(“NFA”). If Tenant obtains a non-applicability exemption or otherwise is not required to undertake sampling then Tenant
shall, at Landlord’s option, hire a consultant satisfactory to Landlord to undertake sampling in a manner consistent with applicable
environmental law sufficient to determine whether or not Tenant’s operations have resulted in any spill or discharge of hazardous
substances or waste at the premises. Should the sampling reveal any spills or discharges of a hazardous substance or waste which
occurred during the Lease Term, then Tenant shall, at Tenant’s expense, promptly clean up the premises to the satisfaction of the
applicable governmental agencies which have jurisdiction of the matter and to the reasonable satisfaction of the Landlord. If Tenant
shall fail to comply with the preceding sentence of this subparagraph prior to termination of the Lease, then Tenant’s obligations
to pay rent and additional rent shall continue until the earlier of either Landlord rerenting the Premises and a new tenant takes
occupancy and commences to pay rent, or such date as Tenant shall comply with the foregoing, such rent to be computed as though
the Tenant was occupying the demised premises as a Tenant from month to month as otherwise set forth in the preceding paragraph.
ARTICLE 25
MISCELLANEOUS
Section 25.01 Table of Contents. The Table of Contents and headings
of this Lease are for convenience of reference only and in no way define, limit or describe the scope or intent of this Lease nor
in any way affect this Lease.
Section 25.02 No Reservations. Submission of this instrument
for examination or signature by Tenant does not constitute a reservation of or option to lease, and it is not effective as a Lease
or otherwise until execution and delivery by both Landlord and Tenant.
Section 25.03 Laws. This Lease shall be governed by and construed
in accordance with the laws of the State of New Jersey.
Section 25.04 Brokers. Tenant represents that it has dealt with
no realtors, brokers or agents in connection with the negotiation of this Lease and the renting of the Demised Premises hereunder,
other than Charles Klatskin Company, Inc. and Cushman and Wakefield. Should any claims be made for brokerage commissions, other
than those payable to the brokers specified in this Section, through or on account of dealings of Tenant or its agents or representatives,
Tenant shall indemnify and hold Landlord harmless against any liability in connection therewith, including without limitation reasonable
claims, damages or counsel fees.
Section 25.05 Broker’s Signs. The Tenant shall not permit, at
any time during the term of this Lease, any broker signs to be attached to, exhibited or placed upon the Demised Premises, which
signs offer the premises for let or for sale unless such broker has obtained Landlord’s prior written consent and presents such
consent to the Tenant.
Section 25.06 Rules and Regulations. The rules and regulations
attached to this Lease are made a part of this Lease, and Tenant shall comply with them. Landlord shall have the right, from time
to time, to promulgate amendments and additional rules and regulations for the safety, care and cleanliness of the premises, or
for the preservation of good order. On delivery of a copy of such amendments and additional rules and regulations to Tenant, Tenant
shall comply with the rules and regulations, and a material violation of any of them shall constitute a default by Tenant under
this Lease, subject to Tenant’s right to cure, as set forth in Section 10.01 hereof. Irrespective of the foregoing, Landlord will
have the right to strictly enforce the provisions of Rule 2 as set forth on the Rules and Regulations attached. As to the enforcement
of other Rules and Regulations, whether now existing or amended, Landlord agrees to permit Tenant, after notice, to comply in a
reasonable manner with such Rules and Regulations. If there is a conflict between the rules and regulations and any other provisions
of this Lease, the provisions of this Lease shall prevail.
Section 25.07 Waste. The Tenant covenants not to do or suffer
any waste or damage, disfigurement or injury to any building or improvement now or hereafter on the Demised Premises, or the fixtures
and equipment thereof, or permit or suffer any overloading of the floors thereof.
Section 25.08 Compactor. If the municipality or other governmental
agency shall require Tenant to install a garbage compactor or other storage or waste management facility at the premises, Tenant
shall, at Tenant’s expense, install such equipment and/or storage facility.
Section 25.09 Underground Tanks. Tenant warrants and represents
that it will, at no time, install any underground storage tanks on the Demised Premises. A breach of this covenant shall be deemed
a default under the Lease and Landlord shall have the right to terminate the Lease upon the happening of such event.
Section 25.10 Declaratory Judgment. Wherever in this Lease Landlord’s
consent or approval is required, if Landlord shall refuse such consent or approval, Tenant in no event shall be entitled to make,
nor shall Tenant make any claim, and Tenant hereby waives any claim for money damages (nor shall Tenant claim any money damages
by way of setoff, counterclaim or defense), based upon any claim or assertion by Tenant that Landlord unreasonably withheld or
unduly delayed its consent or approval. Tenant’s sole remedy in such event shall be an action or proceeding to enforce any such
provision, for specific performance injunction or declaratory judgment.
Section 25.11 Corporate Authority. If Tenant is a corporation,
each individual executing this Lease on behalf of said corporation represents and warrants that he is duly authorized to execute
and deliver this Lease on behalf of said corporation in accordance with a duly adopted resolution of the Board of Directors of
said corporation or in accordance with the By-Laws of said corporation, and that this Lease is binding upon said corporation in
accordance with its terms. If Tenant is a corporation, Tenant shall, within thirty (30) days after execution of this Lease, deliver
to Landlord a certified copy of a resolution of the Board of Directors of said corporation authorizing or ratifying the execution
of this Lease.
IN WITNESS WHEREOF, the parties have hereunto set their hands
and seals on the date first above written.
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Witness:
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FORSGATE INDUSTRIAL COMPLEX, a Limited Partnership, Landlord
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/s/ ELAINE G. SCHADE
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By:
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/s/ STEPHEN P. SEIDEN
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STEPHEN P. SEIDEN, GENERAL PARTNER
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By:
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/s/ CHARLES KLATSKIN
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CHARLES KLATSKIN, GENERAL PARTNER
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Attest:
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JEAN PHILIPPE FRAGRANCES,
INC.
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Tenant
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/s/
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By:
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/s/ Russell Greenberg
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Name: Russell Greenberg
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Title: Executive V.P.
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STATE OF NEW JERSEY
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)
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)
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ss.:
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COUNTY OF BERGEN
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)
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BE IT REMEMBERED, that on this 10th day of July 1995 before
me, the subscriber, personally appeared Charles Klatskin, Stephen Seiden, who, I am satisfied, is the person named in and who executed
the within Instrument, and thereupon he/they acknowledged that he/they signed, sealed and delivered the same as his/their act and
deed, and the act and deed of the said FORSGATE INDUSTRIAL COMPLEX, a partnership, for the uses and purposes therein expressed.
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/s/ ELAINE G. SCHADE
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ELAINE G. SCHADE
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NOTARY PUBLIC OF NEW JERSEY
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My Commission Expires Sept. 17, 1995
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STATE OF NEW YORK
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)
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)
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ss.:
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COUNTY OF NEW YORK
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)
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BE IT REMEMBERED, that on this 26th day of June, 1995 before
me, the subscriber, personally appeared, Russell Greenberg, who, I am satisfied, is the person who signed the within instrument
as Executive V.P. of JEAN PHILIPPE FRAGRANCES, INC., the corporation named therein and he/she thereupon acknowledged that the said
instrument made by the corporation and sealed with its corporate seal, was signed, sealed with the corporate seal and delivered
by him/her as such officer and is the voluntary act and deed of the corporation, made by virtue of authority from its Board of
Directors.
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/s/ ANNIE FAILLER
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ANNIE FAILLER
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Notary Public, State of New York
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No. 01FA5023811
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Qualified in Queens County
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Commission Expires Feb. 14, 1996
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CORPORATE RESOLUTION
This is to certify that a meeting of the Board of Directors
of JEAN PHILIPPE FRAGRANCES, INC., a corporation of the State of ,
held on the day of ,
1995, at its principal office at ,
Kearny, New Jersey, at which time there was a quorum present, the following Resolution was duly adopted and unanimously passed:
BE IT RESOLVED, that the Corporation entered into an Agreement
with FORSGATE INDUSTRIAL COMPLEX for premises commonly known as 60 Stults Road, South Brunswick, New Jersey, for a period of eight
(8) years in accordance with a certain draft of lease attached.
BE IT FURTHER RESOLVED, that the President and/or Vice President
and Secretary be and they are hereby authorized to execute the Agreement (Lease) and to affix the corporate seal thereto.
That the officers referred to in the foregoing Resolution are
as follows:
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President:
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__________________
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Vice President:
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__________________
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Secretary:
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__________________
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I hereby certify that the foregoing Resolution was duly adopted
by the Board of Directors of JEAN PHILIPPE FRAGRANCES, INC., a corporation of the State of ,
at a meeting held on the day of ,
1995, and that the above- named officers are duly qualified and hold the offices stated aforesaid.
SCHEDULE A
DESCRIPTION OF TAX LOT 16, BLOCK 10,
STULTS ROAD, TOWNSHIP OF SOUTH BRUNSWICK,
MIDDLESEX COUNTY, NEW JERSEY.
Begining at a point in the southerly line of Stults Road (as
widened to thirty-three (33) feet from the center line ), where the same is intersected by the division line between lot 15 and
lot l6 in Tax Block 10, said point being one thousand one hundred forty-nine and twenty-seven hundredths (1,149.27) feet northwesterly
from the point of intersection formed by the northeasterly prolongation of the westerly line of Cranbury-South River Road (as widened)
and the southeasterly prolongatlon of the southerly line of Stults Road (as widened); and running: -
Thence (l) northwesterly, along the southerly line of Stults
Road (as widened) north seventy-two degrees fifty-one minutes west (N 72 degrees-51‘W), six hundred forty-four and no hundredths
(644.00) feet to a point;
Thence (2) southwesterly along the easterly line of Lot 18 in
Tax Block 10, south seventeen degrees nine minutes west (S 17 degrees--O9‘W), five hundred ninety and eighty-two hundredths (590.82)
feet to a point;
Thence (3) southeasterly, parallel to Stults Road, south seventy-two
degrees fifty-one minutes east (72 degrees-51’ E ), six hundred forty-four and no hundredths (644.00) feet to a point;
Thence (4) northeasterly, along the division line between Lot
15 and Lot 16 in Tax Block 10; north seventeen degrees nine minutes east (N 17 degrees-09’ E), five hundred ninety and eighty-two
hundredths (590.82) feet to the point and place of beginning.
Containing an area of eight and seven hundred thirty-four thousandths
(8.734) Acres.
Being the premises known and designated as Lot 16 in Block 10
in the Tax Records of the Township of South Brunswick.
Being Lot 16 and Lot 17 in Block 10 as shown on a certain map
entitled “Final Subdivision Plat, Section One, Forsgate Industrial Complex, Township of South Brunswick, Middlesex County,
New Jersey”., which map was filed in the Middlesex County Clerk’s Office as filed map No. 3992, File No. 963 on September
30, 1977. The said Lot 16 and Lot 17 were combined by Reverse Minor Subdivision No. 820 which was approved by the Township of South
Brunswick Plannlng Board on December 13, 1977. A deed description was filed in the Middlesex County Clerk’s office on April 7,
1975 in Deed Book 3024, Page 796.
Subject to a fifty (50) foot wide easement southerly to and
contiguous with the first course herein above described for the purpose of installing and maintaining Detention Ponds and Storm
Drainage installations.
Subject to a ten (10) foot wide easement easterly to and contiguous
with the second course herein above described and a ten (10) foot wide easement westerly to and contiguous with the fourth course
herein above described for the installation, replacement and maintenance of above ground and below ground utlilties and channelized
surface drainage. In the event that Lot 16 and Lot 18 in Tax Block 10 shall be combined, any easement along a common property
line shall be null and vold.
Subject to a fifty (50) foot wide easement northerly to and
contiguous with the third course herein above described for the installation, replacement and maintenance of Railroad facilities,
above ground and below ground utilities and channelized surface drainage.
[PROPERTY MAP]
SCHEDULE B
RULES AND REGULATIONS
The Tenant covenants and agrees with the Landlord to obey the
following rules and regulations:
1. All garbage and refuse shall be kept in containers inside
the premises. If the Landlord shall provide or designate a service for picking up refuse and garbage, Tenant shall use same at
its cost; the Tenant shall pay the cost to remove any of its rubbish or refuse. The Tenant shall not burn any trash or garbage
of any kind in or about the building.
2. The Tenant shall maintain, at its expense, a landscaping
service and shall provide that the lawns shall be watered, reseeded, fertilized and regularly mowed and maintained, and debris
shall be removed, if any, and all shrubery shall likewise be fertilized, maintained, pruned and replaced when necessary. The sidewalks
or entrances shall not be obstructed or encumbered by Tenant or used for any purposes other than ingress and egress and the parking
lot shall be used exclusively for the parking of motor vehicles of Tenant’s employees and invitees. The parking lot shall be swept,
maintained, retarred when necessary and striped. Tenant shall not be required to retar in the last three years of the Lease.
3. The Tenant shall not store any material, supplies, semi-finished
products or anything whatsoever outside of the building. In the event Tenant requires temporary outside storage for any reason
whatsoever, Tenant must first obtain written approval of the Landlord.
4. The Tenant shall, at its cost and expense, use a pest extermination
service so as to keep the premises free of same.
5. The Tenant will undertake a general maintenance program,
either through its own employees or outside contractors which shall provide amongst other things for general and periodic window
cleaning, when necessary and painting of trim and the like.
6. Tenant shall not at any time, without first obtaining Landlord’s
consent, change, by alteration or replacement, rebuilding or otherwise, the exterior color or architectural treatment of the leased
bullding.
7. Tenant shall not use or permit to be used any loud speaker
or sound amplifier which may be heard outside of the leased property.
8. Tenant shall not suffer, allow or permit any offensive or
obnoxious vibration, noise, odor, or other undesirable effect to emanate from the leased property, or any machine or other installation
therein, or otherwise suffer, allow or permit the same to constitute a nuisance or otherwise unreasonably interfere with the safety,
comfort or convenience of adjoining properties.
9. Tenant shall not erect a ground sign or building sign without
prior written consent of Landlord. Landlord will not unreasonably withhold its consent or delay the same if the sign does not damage
the building, and any such sign is dignified.
10. Tenant shall maintain and keep lit any and all exterior
architectural lighting which may be installed by the Landlord.
11. Tenant shall have the right, provided same is done in accordance
with the zoning ordinance of the municipality, to park trucks on the property along the area wherein are located the loading docks.
The Tenant shall not park trucks in any other portion of the Demised Premises.
Upon notice by the Landlord to the Tenant of a breach of any
of the rules and regulations, Tenant shall, within thirty (30) days thereafter, comply with such rule and regulation and in the
event Tenant shall not comply, then the Landlord may, at its discretion, either: (1) cure such condition and add any cost and expense
incurred by the Landlord therefor to the next install- ation of rental due under this Lease, and the Tenant shall then pay such
amount, as additional rent hereunder; or (2) treat such failure on the part of the Tenant to remedy such condition as a material
default of this Lease on the part of the Tenant hereunder.
Landlord reserves the right, from time to time, to promulgate
additional rules and regulations as Landlord, provided that Landlord gives notice to Tenant not less than sixty (60) days prior
to the effective date of new or revised rules; such new or revised rule is applied uniformly to all tenants in the industrial park
in which the Demised Premises are located, and such new or revised rule does not interfere with the normal business operations
of Tenant.
Exhibit
10.61.1
THIRD
AMENDMENT OF LEASE
THIS
THIRD AGREEMENT, made this _______ day of May, 2010, by and among FORSGATE INDUSTRIAL COMPLEX, a limited partnership with offices
at 400 Hollister Road, Teterboro, New Jersey (hereinafter called “Landlord”) and JEAN PHILIPPE FRAGRANCES, LLC, a
New York limited liability company having its principal office at 551 Fifth Avenue, New York, New York 10176 (hereinafter called
“Tenant”) and Inter Parfums, Inc., (hereinafter called “Guarantor”), a Delaware corporation and parent
of Tenant, its wholly-owned subsidiary, with its principal office at 551 Fifth avenue, New York, New York 10176.
WITNESSETH:
WHEREAS,
Guarantor, as the original tenant and formerly known as Jean Philippe Fragrances, Inc., and Landlord, entered into a Lease dated
July 10, 1995 for premises commonly known as 60 Stults Road in the Township of South Brunswick, County of Middlesex, State of
New Jersey (the “Original Lease”); and
WHEREAS,
Tenant, Guarantor and Landlord entered into a letter agreement dated June 30, 1999 (the “First Amendment”), whereby
Guarantor assigned the Original Lease to Tenant, Guarantor guaranteed the obligations of Tenant, and landlord consented to such
assignment; and
WHEREAS,
Tenant, Guarantor and Landlord entered into a Second Amendment of Lease dated April 22, 2003 (the “Second Amendment”)
to extend the term of the Original Lease (the Original Lease and the First Amendment and Second Amendment are collectively referred
to as the “Lease”); Capitalized items used herein and not others defined shall have the meaning set forth in the Lease;
and
WHEREAS,
Tenant and Landlord have agreed to amend the Lease to, among other things, extend the terms of the Lease to October 31, 2018.
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree
as follows:
1. The Term of the lease is hereby extended to October 31, 2018.
2. Basic
Rent from November 1, 2010 to October 31, 2018 shall be in the amounts set forth below, payable in equal monthly installments
as set forth below, due and payable the first day of each month in advance.
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Annual
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Monthly
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Basic
Rent
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Basic
Rent
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11/01/2010
- 10/31/2013
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$
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515,160.00
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$
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42,930.00
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11/01/2013
– 4/30/2016
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$
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592,434.00
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$
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49,369.50
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05/01/2016
– 10/31/2018
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$
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642,006.00
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$
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53,500.50
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Provided
this Lease is in full force and effect and no default has occurred, Basic Rent shall abate from November 1, 2010 to April 30,
2011.
3. (a) Landlord
shall, at Landlord’s sole cost, perform the work more particularly set forth on Schedule A attached hereto, including all
labor, materials, equipment and services necessary to fulfill the Landlord's obligation to complete such work. (”Landlord’s
Work”). Landlord shall perform Landlords' Work in a professional manner and in compliance with all applicable law, including
but not limited to, applicable building codes and permitting requirements, and shall not unduly interfere with the normal business
operations of Tenant. Landlord's Work shall be completed by no later than December 31, 2010.
(b)
Tenant acknowledges that Landlord’s Work will generate noise
and dust and the Building will be open and unsecured at times during the construction. Tenant further acknowledges that Landlord
shall not supply any dust protection or security, and Landlord shall have no liability with respect thereto. Tenant shall be solely
responsible for protecting its personal property and providing security during the performance of Landlord’s Work. Landlord
agrees to provide Tenant with reasonable prior notice of the commencement of Landlord’s Work so that Tenant may take adequate
precautions to protect its property and provide security.
(c) Tenant
shall cooperate with Landlord and shall not interfere with Landlord during the performance of Landlord’s Work, including,
without limitation, Tenant shall at all times: (i) move its personal property as may be necessary so as not to interfere with
Landlord’s Work; (ii) make available a tailgate door for access and the drive-indoor for lift access; (iii) provide a clear
route from such doors to the work areas, and (iv) provide uninterrupted access to the Building no later than 7 a.m. until 4 p.m.
during the performance of Landlord’s Work. Landlord shall have the right to enter the Demised Premises at any time during
business or other hours to perform Landlord’s Work.
4. Guarantor
hereby consents to this Amendment, and hereby unconditionally guarantees to the Landlord, the due performance of any and all obligations
of Tenant under the Lease, including but not limited to, any and all payments due to the Landlord, past, present and future, under
the Lease as amended hereby, together with all future, assignments, renewals, extensions and amendments thereof, if any.
5. Except
as modified herein, all of the provisions of the Lease shall remain unchanged and in full fore and effect.
IN
WITNESS WHEREOF the parties have executed this Third Amendment as of the day and year first above written.
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FORSGATE
INDUSTRIAL COMPLEX
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By:
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/s/
Charles Klatskin
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Charles
Klatskin, General Partner
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By
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/s/
Stephen Seiden
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Stephen
Seiden, General Partner
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JEAN
PHILIPPE FRAGRANCES, LLC
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By:
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Inter Parfums, Inc., Sole Member
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By:
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/s/
Russell Greenberg
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Name:
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Russell
Greenberg
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Title:
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Executive
Vice President
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INTER
PARFUMS, INC.
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By:
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/s/
Russell Greenberg
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Name:
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Russell
Greenberg
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Title:
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Executive
Vice President
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STATE
OF NEW JERSEY
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SS:
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COUNTY
OF
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BE
IT REMEMBERED, that on this ______ day of _______________, 20__, before me, the subscriber, a Notary Public of New Jersey, personally
appeared Charles Klatskin who, I am satisfied, is the person named in and who executed the within Instrument, and thereupon he
acknowledged that he signed and delivered the same as his act and deed, for the uses and purposes therein expressed.
Sworn
to and subscribed
before
me the date aforesaid.
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STATE
OF NEW JERSEY
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SS:
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COUNTY
OF
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BE
IT REMEMBERED, that on this ______ day of _______________, 20__, before me, the subscriber, a Notary Public of New Jersey, personally
appeared Stephen Seiden who, I am satisfied, is the person named in and who executed the within Instrument, and thereupon he acknowledged
that he signed and delivered the same as his act and deed, for the uses and purposes therein expressed.
Sworn
to and subscribed
before
me the date aforesaid.
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STATE
OF
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ss.:
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COUNTY
OF
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BE
IT REMEMBERED, that on this _____ day of __________, 20__, before me, the subscriber, personally appeared, Russell Greenberg,
who, I am satisfied, is the person who signed the within instrument as Executive Vice President of Inter Parfums, Inc., the Corporation
named therein and he thereupon acknowledged that the said instrument made by the Corporation and delivered by him is the voluntary
act and deed of the Corporation made by virtue of the authority from its Board of Directors.
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STATE
OF
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ss.:
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COUNTY
OF
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BE
IT REMEMBERED, that on this _____ day of __________, 20__, before me, the subscriber, personally appeared, Russell Greenberg,
who, I am satisfied, is the person who signed the within instrument as Executive Vice President of Inter Parfums, Inc., the Sole
Member of Jean Philippe Fragrances, LLC, the limited liability company named therein and he thereupon acknowledged that the said
instrument made by the limited liability company and delivered by him is the voluntary act and deed of the limited liability company
for the uses and purposes therein expressed.
Schedule
A
1. Replace
10 HVAC units (Office area only)*
2. Replace
all overhead doors (9)
3. Inspect
and replace dock seals on the east side of the building (up to 6 doors)
4. Repave
parking lot:
A.
Entrance way and front of building,
B.
East side of building (1/2 lot)
5. Dolly
pads to be installed for all six (6) doors on the east side
6. Replace
boiler*
*All
replacements units for HVAC units and boiler shall (i) be new and not used equipment, (ii) be free and clear of all purchase money
security interests, liens and encumbrances, and (iii) meet or exceed the performance specifications of the units being replaced.
All such replacement units shall carry manufacturer's warranties of the type and duration normally associated with such replacement
units.
7
Exhibit 10.160
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT
(this “Agreement”) is made and entered into effective as of the first day of January 2013, between Inter Parfums,
Inc., a Delaware corporation (“Company”), with offices at 551 Fifth Avenue, New York, NY 10176, and Philippe Benacin
Holding SAS, a French corporation (“Consultant”) with is offices at 4, rond point des Champs Elysees, 75008 Paris.
WITNESSETH:
Whereas,
Company desires to be assured of the association and services of Consultant in order to avail itself of Consultant’s experience,
skills and abilities, and background and knowledge, and is willing to engage Consultant upon the terms and conditions set forth
herein; and
Whereas,
Consultant agrees to be engaged and retained by Company upon the terms and conditions as set forth herein.
NOW, THEREFORE, in
consideration of the recitals, promises and conditions in the Agreement, Consultant and Company agree as follows:
1. Consulting Services.
Company hereby retains
Consultant and Consultant accepts such retention to become a consultant to Company, in general to supervise the operations of Company
and its subsidiaries commensurate with the responsibilities and obligations of the President of Company. In addition Consultant
is to render advice, consultation and information to the Board of Directors or the officers of Company in such places as may be
agreed upon between Company and Consultant, provided that no services shall be rendered within the United States. In particular
Consultant agrees to:
(a) Provide advice with regard to
internal business operations of Company, including but not limited to, advise relating to (i) strategic direction of Company,
corporate goals and their implementation; (ii) operations of Company and its divisions or subsidiaries or any programs and
projects; (iii) financing; (iv) corporate organization and personnel; (v) and developing new international markets to
United States existing operations, as well as procuring new international brand licensing and distribution of international brands
for United States operations; and
(b) Identity
and, if authorized by the board of directors of Company, negotiate potential business combination transactions for United States
operations, whether in the form of licensing, asset purchases, stock purchases, mergers, joint ventures, strategic alliances or
otherwise.
2. Term. The term of this
Agreement shall be for a period of one (1) year commencing on January 1, 2014, and shall continue in effect for subsequent annual
periods unless
(a) either party provides the other
party with 120 days advance notice,
(b) Philippe Benacin, the President
of Company, ceases to be the President of Company, in which case this Agreement shall terminate coterminous with such cessation;
or
(c) as otherwise specifically provided
in this Agreement.
3. Compensation and Reimbursement of Expenses.
(a) In
full consideration of the services to be performed hereunder by Consultant throughout the first year of this Agreement, i.e.,
calendar year 2014, Company agrees to pay to Consultant the sum of $250,000, payable in equal monthly installments. For subsequent
years, the remuneration to be paid from Company to Consultant shall be as negotiated between Consultant and the Executive Compensation
and Stock Option Committee of the Board of Directors of Company (the “Committee”). Any remuneration in addition to
the agreed upon for any year, if any, shall be determined in the discretion of the Committee, taking into account such factors
as the Committee deems appropriate, including but not limited to, the services rendered, results of such services and profitability
of Company.
(b) Company
agrees to reimburse Consultant for reasonable out-of-pocket expenses incurred by Consultant on behalf of Company, provided Consultant
submits proper documentation for such expenses, which are reasonably acceptable to Company.
4. Warranties and Representations
of Consultant. Consultant hereby warrants and represents to Company that:
(a) the execution and delivery of
this Agreement and the consummation by Consultant of the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Consultant;
(b) this
Agreement constitutes a valid and binding agreement of Consultant, enforceable against it in accordance with its terms.
5. Confidentiality, Disclosure of Information.
(a) Consultant recognizes and acknowledges
that Consultant has had and will have access to Confidential Information (as defined below) relating to the business or interests
of Company or of persons with whom Company may have business relationships. Except as permitted herein, Consultant will not during
the Term, or at any time thereafter, use, disclose or permit to be known by any other person or entity, any Confidential Information
of Company (except as required by applicable law or in connection with the performance of Consultant’s duties and responsibilities
hereunder). The term “Confidential Information” shall include, but not be limited to, information relating to Company’s
business affairs, proprietary technology, trade secrets, patented processes, research and development data, know-how, market studies
and forecasts, competitive analyses, pricing policies, employee lists, employment agreements (other than this Agreement), personnel
policies, the substance of agreements with customers, suppliers and others, marketing arrangements, customer lists, commercial
arrangements, Company Materials (as defined herein) or any other information relating to Company’s business that is not generally
known to the public or to actual or potential competitors of Company (other than through a breach of this Agreement). This obligation
shall continue until such Confidential Information becomes publicly available, other than pursuant to a breach of this Section
5 by Consultant, regardless of whether Consultant continues to be employed by Company.
(b) It is further
agreed and understood by and between the parties to this Agreement that all “Company Materials,” which include, but
are not limited to, computers, computer software, computer disks, tapes, printouts, source, HTML and other code, flowcharts, schematics,
designs, graphics, drawings, photographs, charts, graphs, notebooks, customer lists, sound recordings, other tangible or intangible
manifestation of content, and all other documents whether printed, typewritten, handwritten, electronic, or stored on computer
disks, tapes, hard drives, or any other tangible medium, as well as samples, prototypes, models, products and the like, shall be
the exclusive property of Company and, upon termination of Consultant’s employment with Company, and/or upon the request
of Company, all Company Materials, including copies thereof, as well as all other Company property then in Consultant’s possession
or control, shall be returned to and left with Company.
6. Inventions Discovered by Consultant.
Consultant shall promptly
disclose to Company any invention, improvement, discovery, process, formula, or method or other intellectual property, whether
or not patentable or copyrightable (collectively, “Inventions”), conceived or first reduced to practice by Consultant,
either alone or jointly with others, while performing services hereunder (or, if based on any Confidential Information, at any
time during or after the Term), (a) which pertain to any line of business activity of Company, whether then conducted or then being
actively planned by Company, with which Consultant was or is involved, (b) which is developed using time, material or facilities
of Company, whether or not during working hours or on Company premises, or (c) which directly relates to any of Consultant’s
work during the Term, whether or not during normal working hours. Consultant hereby assigns to Company all of Consultant’s
right, title and interest in and to any and all such Inventions. During and after the Term, Consultant shall execute any and all
documents necessary to perfect the assignment of such Inventions to Company and to enable Company to apply for, obtain and enforce
patents, trademarks and copyrights in any and all countries on such Inventions, including, without limitation, the execution of
any instruments and the giving of evidence and testimony, without further compensation beyond Consultant’s agreed compensation
during the course of Consultant’s employment. Without limiting the foregoing, Consultant further acknowledges that all original
works of authorship by Consultant, whether created alone or jointly with others, related to Consultant’s employment with
Company and which are protectable by copyright, are “works made for hire” within the meaning of the United States Copyright
Act, 17 U.S.C. § 101, as amended, and the copyright of which shall be owned solely, completely and exclusively by Company.
If any Invention is considered to be work not included in the categories of work covered by the United States Copyright Act, 17
U.S.C. § 101, as amended, such work is hereby assigned or transferred completely and exclusively to Company. Consultant hereby
irrevocably designates counsel to Company as Consultant’s agent and attorney-in-fact to do any and all lawful acts necessary
to apply for and obtain patents and copyrights and to enforce Company’s rights under this Section. Company need not take
any other action, nor have any other documents executed, to affect such power of attorney. Consultant expressly acknowledges and
agrees that such power of attorney is irrevocable and shall be deemed to be coupled with an interest. This Section 6 shall
survive the termination of this Agreement. Any assignment of copyright hereunder includes all rights of paternity, integrity, disclosure
and withdrawal and any other rights that may be known as or referred to as “moral rights” (collectively “Moral
Rights”). To the extent such Moral Rights cannot be assigned under applicable law and to the extent the following is allowed
by the laws in the various countries where Moral Rights exist, Consultant hereby waives such Moral Rights and consents to any action
of Company that would violate such Moral Rights in the absence of such consent. Consultant agrees to confirm any such waivers and
consents from time to time as requested by Company.
7. Non-Competition and Non-Solicitation.
Consultant acknowledges
that Company has invested substantial time, money and resources in the development and retention of its Inventions, Confidential
Information (including trade secrets), customers, accounts and business partners all of which constitute legitimate business interests
of Company, and further acknowledges that during the course of Consultant’s employment with Company Consultant has had and
will have access to Company’s Inventions and Confidential Information (including trade secrets), and will be introduced to
existing and prospective customers, accounts and business partners of Company. Consultant acknowledges and agrees that any and
all “goodwill” associated with any existing or prospective customer, account or business partner belongs exclusively
to Company, including, but not limited to, any goodwill created as a result of direct or indirect contacts or relationships between
Consultant and any existing or prospective customers, accounts or business partners. Additionally, the parties acknowledge and
agree that Consultant possesses skills that are special, unique or extraordinary and that the value of Company depends upon his
use of such skills on its behalf.
In recognition of this,
Consultant covenants and agrees that:
(a) During the
Term, and for a period of one (1) year thereafter, Consultant may not, without the prior written consent of the President of Company,
(whether as an employee, agent, servant, owner, partner, consultant, independent contractor, representative, stockholder or in
any other capacity whatsoever) participate in any business that offers products or services competitive in any way to those offered
by Company or that were under active development by Company during the Term.
(b) During the
Term, and for a period of one (1) year thereafter, Consultant may not entice, solicit or encourage any Company employee to leave
the employ of Company or any independent contractor to sever its engagement with Company, absent prior written consent to do so
from the Board.
(c) During the
Term, and for a period of one (1) year thereafter, Consultant may not, directly or indirectly, entice, solicit or encourage any
customer or prospective customer of Company to cease doing business with Company, reduce its relationship with Company or refrain
from establishing or expanding a relationship with Company.
8. Non-Disparagement.
Consultant hereby agrees
that during the Term, and at all times thereafter, Consultant will not make any statement that is disparaging about Company, any
of its management, officers, owners or employees, including, but not limited to, any statement that disparages the products, services,
finances, financial condition, capabilities or other aspect of the business of Company. Consultant further agrees that during the
same period Consultant will not engage in any conduct that is intended to inflict harm upon the professional or personal reputation
of Company or any of its management, officers, owners, or employees.
9. Relationship of Consultant to Company.
Consultant shall be
an independent contractor; in no event shall Consultant be considered an agent of Company.
10. Provisions Necessary and Reasonable.
(a) Consultant
agrees that (i) the provisions of Sections 5, 6, 7 and 8 of this Agreement are necessary and reasonable to protect
Company’s Confidential Information, Inventions, and goodwill; (ii) the specific temporal, geographic and substantive provisions
set forth in Section 10 of this Agreement are reasonable and necessary to protect Company’s business interests; and
(iii) in the event of any breach of any of the covenants set forth herein, Company would suffer substantial irreparable harm and
would not have an adequate remedy at law for such breach. In recognition of the foregoing, Consultant agrees that in the event
of a breach or threatened breach of any of these covenants, in addition to such other remedies as Company may have at law, without
posting any bond or security, Company shall be entitled to seek and obtain equitable relief, in the form of specific performance,
and/or temporary, preliminary or permanent injunctive relief, or any other equitable remedy which then may be available. The seeking
of such injunction or order shall not affect Company’s right to seek and obtain damages or other equitable relief on account
of any such actual or threatened breach.
(b) If any of
the covenants contained in Sections 5, 6, 7 and 8 hereof, or any part thereof, are hereafter construed to be invalid
or unenforceable, then the same shall not affect the remainder of the covenant or covenants, which shall be given full effect without
regard to the invalid portions.
(c) If any of
the covenants contained in Sections 5, 6, 7 and 8 hereof, or any part thereof, are held to be unenforceable by a
court of competent jurisdiction because of the temporal or geographic scope of such provision or the area covered thereby, then
the parties agree that the court making such determination shall have the power to reduce the duration and/or geographic area of
such provision and, in its reduced form, such provision shall be enforceable.
11. Termination – Other.
Company shall have
the right to terminate this Agreement on notice to Consultant
(a) for commission
of a fraud against Company, provided that Company provides thirty (30) days’ notice to Consultant of the charges of fraud,
and Consultant has had the opportunity to respond to such charges, or such longer period as the parties may agree in writing, or
(b) upon the
material breach of Sections 5, 6, 7 and 8 of this Agreement or, provided that Consultant shall have the right to
cure any such material breach within forty-five (45) days from the effective date of notice (as hereinafter provided) from Company
to Consultant of such material breach; provided, however, that if such cure cannot be reasonably be effected within such
forty-five (45) day period, cure is being diligently prosecuted by Consultant with reasonable prospects for a cure within a commercially
reasonable time, but in no event longer than ninety (90) days.
12. Indemnification.
(a) Company
agrees to provide Consultant with indemnification insurance to the same extent it covers officers and directors of Company and
its subsidiaries, and indemnify and hold harmless Consultant, its officers and directors, and each controlling person of Consultant,
from and against any and all losses, claims, damages, or liabilities, joint or several, to which they or any of them may become
subject for acts committed within the scope of this Agreement.
(b) Company
agrees to pay and advance all expenses incurred or to be incurred by Consultant, including reasonable attorneys’ fees and
expenses, in connection with the defense by Consultant its officers and directors, and each controlling person of Consultant, in
connection with any and all litigation or adversary proceedings commenced, which arose out of action or inaction by Consultant
during the term of this Agreement. Notwithstanding the foregoing, in the event any court of competent jurisdiction determines that
Consultant has committed any fraud with respect to Company or any other intentional tort wherein Consultant has procured a pecuniary
benefit at the expense of Company, then this Section 12(b) shall be void, and Consultant shall reimburse Company for all
expenses advanced hereunder.
13. Survival.
The provisions of Sections 5-12 shall survive the termination of this Agreement.
14. Taxes.
All taxes, duties and other governmental fees or charges arising from Consultant’s receipt of remuneration shall be borne by Consultant.
15. Cumulative
Rights. The rights and remedies granted in this Agreement are cumulative and not exclusive, and are in addition to any and
all other rights and remedies granted and permitted under and pursuant to law.
16. No Waiver.
The failure of any of the parties hereto to enforce any provision hereof on any occasion shall not be deemed to be a waiver of
any preceding or succeeding breach of such provision or any other provision.
17. Entire Agreement.
This Agreement constitutes the entire agreement and understanding of the parties hereto and no amendment, modification or waiver
of any provision herein shall be effective unless in writing, executed by the party charged therewith.
18. Governing
Law. This Agreement shall be construed, interpreted and enforced in accordance with and shall be governed by the laws of the
State of New York without regard to the principles of conflicts of laws. Each party hereto hereby irrevocably consents to
the exclusive jurisdiction and venue of the state courts and of any United States District Court located within the State of New
York, County of New York, with regard to any and all actions or proceedings arising out of, or relating to, this Agreement, irrevocably
waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court
has been brought in an inconvenient forum.
19. Assignment
and Delegation of Duties. This Agreement may not be assigned by Consultant, and any attempted assignment hereof shall be void
and of no effect. This Agreement is in the nature of a personal service contract and the duties imposed hereby are non-delegable.
20. Paragraph
Headings. The paragraph headings herein have been inserted for convenience of reference only, and shall in no way modify or
restrict any of the terms or provisions hereof.
21. Notices.
Any notice or other communication under the provisions of this Agreement shall be in writing, and shall be given by postage prepaid,
registered or certified mail, return receipt requested, by hand delivery with an acknowledgment copy requested, or by the Express
Mail service offered by the United States Post Office, directed to the addresses set forth above, or to any new address of which
any party hereto shall have informed the others by the giving of notice in the manner provided herein. Such notice or communication
shall be effective, if sent by mail, three (3) days after it is mailed within the continental United States; if sent by Express
Mail service, one day after it is mailed; or by hand delivery, upon receipt.
22. Unenforceability; Severability.
If any provision of this Agreement is found to be void or unenforceable by a court of competent jurisdiction, then the remaining
provisions of this Agreement, shall, nevertheless, be binding upon the parties with the same force and effect as though the unenforceable
part had been severed and deleted.
23. No Third
Party Rights. The representations, warranties and other terms and provisions of this Agreement are for the exclusive benefit
of the parties hereto, and no other person shall have any right or claim against any party by reason of any of those terms and
provisions or be entitled to enforce any of those terms and provisions against any party.
24. Counterparts.
This Agreement may be executed in counterparts, all of which shall be deemed to be duplicate originals.
[Balance of Page Intentionally Left Blank
– Signature Page(s) Follow]
IN WITNESS WHEREOF, the
parties have executed this Agreement on the dates set forth below.
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Inter Parfums, Inc.
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Philippe Benacin Holding SAS
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By:
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/s/ Russell Greenberg
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By:
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/s/ Philippe Benacin
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Russell Greenberg, Chief Executive Officer
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Philippe Benacin, President
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Dated: March 27, 2014
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Dated: March 27, 2014
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Exhibit 10.161
This document constitutes part of a prospectus covering securities
that have been registered under the Securities Act of 1933.
Nonqualified
Stock Option Contract
THIS NONQUALIFIED
STOCK OPTION CONTRACT is entered into effective as of the 31st day of December, 2014, by and between INTER PARFUMS, INC.,
a Delaware corporation (the “Company”) and ___________ (“Option
Holder”).
WITNESSETH:
1. The Company, in
accordance with the resolutions adopted by the Company’s Executive Compensation and Stock Option Committee (the “Committee”),
and the terms and subject to the conditions of the Company’s 2004 Stock Option Plan, as amended (the “2004 Plan”),
hereby grants to the Option Holder as of December 31, 2014, a nonqualified stock option to purchase an aggregate of ______ shares
(the “Shares”) of the common stock, $.001 par value per share, of the Company (the “Common Stock”), at
the exercise price of $27.795 per share.
2. Subject to earlier
termination as provided in the 2004 Plan, the term of this option shall be six (6) years from the date hereof; provided that,
such option shall vest and become exercisable to purchase shares of Common Stock as follows: 20% one year after the date of grant,
and then 20% on each of the second, third, fourth and fifth consecutive years from the date of grant on a cumulative basis, so
that each option shall become fully vested and exercisable on the fifth year from the date of grant.
3. (a) Subject to the
provisions contained in Section 2 hereof, this option may be exercised from time to time in whole or in part prior to the end of
the term of the option (but not with respect to less than 100 Shares (unless less than 100 Shares remain to be purchased, then
such amount remaining), or fractional Shares), by giving written notice to the Company at its principal office, presently 551 Fifth
Avenue, New York, New York 10176, stating that the Option Holder is exercising this option, specifying the number of Shares purchased
and accompanied by payment in full of the aggregate purchase price therefor (i) in cash or certified check or (ii) with previously
acquired shares of Common Stock or a combination of the foregoing if permitted in the sole discretion of the Company’s Executive
Compensation and Stock Option Committee (the “Committee”).
(b) In addition, upon
the exercise of this option, the Company may withhold cash and/or Shares to be issued with respect thereto, having an aggregate
fair market value equal to the amount which it determines is necessary to satisfy its obligation to withhold federal, state and
local income taxes or other taxes incurred by reason of such exercise. Alternatively, the Company may require the holder to pay
to the Company such amount, in cash, promptly upon demand. The Company shall not be required to issue any Shares pursuant to this
option until all required payments have been made.
4. This option is not
transferable otherwise than by will or the laws of descent and distribution and may be exercised, during the lifetime of the Option
Holder, only by the Option Holder or his legal representatives.
5. Nothing in the 2004
Plan or herein shall confer upon the Option Holder any right to continue in the employ of, or be associated with, the Company,
its Parent or any of its Subsidiaries, or interfere in any way with the right to employment or association of the Option Holder
with the Company, its Parent or any of its Subsidiaries.
6. The Option Holder
understands that the Shares have been registered for issuance to the Option Holder in Registration Statement No. 333-136988 under
the Securities Act of 1933, as amended (the “Act”). Resale to the public by the Option Holder is to be made under Rule
144 under the Act in accordance with the procedure for resale of “affiliate shares” in the absence of a subsequent
effective registration statement for the resale of the Shares. Notwithstanding registration under the Act, the Option Holder understands
that in accordance with the provisions of the Company’s Code of Business Conduct, (i) the Option Holder must obtain permission
from the Company’s Chief Financial Officer prior to any sale of the Shares; and (ii) the use of material non-public information
in connection with the sale of the Company’s shares (“Insider Trading”) or the communication of such information
to others who use it in trading the Company’s shares (“Tipping”) is strictly prohibited.
7. (a) The Option Holder
understands that the Company maintains its internet website at www.interparfumsinc.com which is linked to the SEC Edgar
database. The Option Holder can obtain through the Company’s website, free of charge, its annual reports on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a)
or 15(d) of the Exchange as soon as reasonably practicable after the Company has electronically filed with or furnished them to
the SEC.
(b) In addition, the
Company will cause to be delivered to the Option Holder, upon request to the Company directed to either the Chief Financial Officer
or the Controller, without charge to the Option Holder, a copy of the documents incorporated by reference into the Registration
Statement, other than exhibits (unless such exhibits are specifically incorporated by reference into the Registration Statement).
8. Notwithstanding
anything to the contrary, if at any time the Chief Executive Officer, Board of Directors of the Company or the Committee shall
determine it its discretion that the listing or qualification of the Shares on any securities exchange, with national securities
association or under any applicable law, or the consent or approval of any governmental regulatory body, is necessary or desirable
as a condition of, or in connection with, the granting of an option, or the issue of Shares thereunder, or the sale of the Shares,
then this option may not be exercised in whole or in part unless such listing, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Chief Executive Officer, Board of Directors or the Committee.
9. (a) The Company
and the Option Holder further agree that they will both be subject to and bound by all of the terms and conditions of the 2004
Plan, which is incorporated by reference herein and made a part hereof as if fully set forth herein.
(b) In the event the
Option Holder's employment by, or association with, the Company, its Parent or any of its Subsidiaries terminates, or in the event
of the death or disability of the Option Holder, the rights hereunder shall be governed by, and made subject to, the provisions
of the 2004 Plan.
(c) In the event of
a conflict between the terms of this Contract and the terms of the 2004 Plan, then in such event, the terms of 2004 Plan shall
govern.
(d) Except as otherwise
provided herein, all capitalized terms used herein shall have the same meaning ascribed to them in the 2004 Plan.
(e) The Option Holder
agrees that the Company may amend the 2004 Plan and the options granted to the Option Holder under the 2004 Plan, subject to the
limitations contained in the 2004 Plan.
10. This Contract shall
be binding upon and inure to the benefit of any successor or assign of the Company and to any executor, administrator or legal
representative entitled by law to the Option Holder's right hereunder.
11. This Contract shall
be governed by and construed in accordance with the laws of the State of New York, without regard to the principles of conflicts
of laws.
IN WITNESS WHEREOF,
the parties hereto have entered into this Contract effective as of the date first above written.
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INTER PARFUMS, INC.
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By:
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[Name and Title]
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Schedule of Executive Officers and Number
of Shares Underlying Option
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Executive Officer
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Number of Shares
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Jean Madar
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19,000
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Philippe Benacin
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19,000
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Russell Greenberg
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25,000
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Philippe Santi
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5,000
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Frederic Garcia-Pelayo
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5,000
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Henry B. “Andy” Clarke
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7,500
|
|
3
Exhibit 10.162
This document constitutes part of a prospectus covering securities
that have been registered under the Securities Act of 1933.
Nonqualified
Stock Option Contract
THIS NONQUALIFIED
STOCK OPTION CONTRACT is entered into effective as of the 28th day of January, 2015, by and between INTER PARFUMS, INC.,
a Delaware corporation (the “Company”) and ___________ (“Option
Holder”).
WITNESSETH:
1. The
Company, in accordance with the resolutions adopted by the Company’s Executive Compensation and Stock Option Committee (the
“Committee”), and the terms and subject to the conditions of the Company’s 2004 Stock Option Plan, as amended
(the “2004 Plan”), hereby grants to the Option Holder as of January 28, 2015, a nonqualified stock option to purchase
an aggregate of ______ shares (the “Shares”) of the common stock, $.001 par value per share, of the Company (the “Common
Stock”), at the exercise price of $25.82 per share.
2. Subject
to earlier termination as provided in the 2004 Plan, the term of this option shall be six (6) years from the date hereof; provided
that, such option shall vest and become exercisable to purchase shares of Common Stock as follows: 20% one year after the date
of grant, and then 20% on each of the second, third, fourth and fifth consecutive years from the date of grant on a cumulative
basis, so that each option shall become fully vested and exercisable on the fifth year from the date of grant.
3. (a) Subject
to the provisions contained in Section 2 hereof, this option may be exercised from time to time in whole or in part prior to the
end of the term of the option (but not with respect to less than 100 Shares (unless less than 100 Shares remain to be purchased,
then such amount remaining), or fractional Shares), by giving written notice to the Company at its principal office, presently
551 Fifth Avenue, New York, New York 10176, stating that the Option Holder is exercising this option, specifying the number of
Shares purchased and accompanied by payment in full of the aggregate purchase price therefor (i) in cash or certified check or
(ii) with previously acquired shares of Common Stock or a combination of the foregoing if permitted in the sole discretion of the
Company’s Executive Compensation and Stock Option Committee (the “Committee”).
(b) In
addition, upon the exercise of this option, the Company may withhold cash and/or Shares to be issued with respect thereto, having
an aggregate fair market value equal to the amount which it determines is necessary to satisfy its obligation to withhold federal,
state and local income taxes or other taxes incurred by reason of such exercise. Alternatively, the Company may require the holder
to pay to the Company such amount, in cash, promptly upon demand. The Company shall not be required to issue any Shares pursuant
to this option until all required payments have been made.
4. This
option is not transferable otherwise than by will or the laws of descent and distribution and may be exercised, during the lifetime
of the Option Holder, only by the Option Holder or his legal representatives.
5. Nothing
in the 2004 Plan or herein shall confer upon the Option Holder any right to continue in the employ of, or be associated with, the
Company, its Parent or any of its Subsidiaries, or interfere in any way with the right to employment or association of the Option
Holder with the Company, its Parent or any of its Subsidiaries.
6. The
Option Holder understands that the Shares have been registered for issuance to the Option Holder in Registration Statement No.
333-136988 under the Securities Act of 1933, as amended (the “Act”). Resale to the public by the Option Holder is to
be made under Rule 144 under the Act in accordance with the procedure for resale of “affiliate shares” in the absence
of a subsequent effective registration statement for the resale of the Shares. Notwithstanding registration under the Act, the
Option Holder understands that in accordance with the provisions of the Company’s Code of Business Conduct, (i) the Option
Holder must obtain permission from the Company’s Chief Financial Officer prior to any sale of the Shares; and (ii) the use
of material non-public information in connection with the sale of the Company’s shares (“Insider Trading”) or
the communication of such information to others who use it in trading the Company’s shares (“Tipping”) is strictly
prohibited.
7. (a) The
Option Holder understands that the Company maintains its internet website at www.interparfumsinc.com which is linked to
the SEC Edgar database. The Option Holder can obtain through the Company’s website, free of charge, its annual reports on
Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant
to Section 13(a) or 15(d) of the Exchange as soon as reasonably practicable after the Company has electronically filed with or
furnished them to the SEC.
(b) In
addition, the Company will cause to be delivered to the Option Holder, upon request to the Company directed to either the Chief
Financial Officer or the Controller, without charge to the Option Holder, a copy of the documents incorporated by reference into
the Registration Statement, other than exhibits (unless such exhibits are specifically incorporated by reference into the Registration
Statement).
8. Notwithstanding
anything to the contrary, if at any time the Chief Executive Officer, Board of Directors of the Company or the Committee shall
determine it its discretion that the listing or qualification of the Shares on any securities exchange, with national securities
association or under any applicable law, or the consent or approval of any governmental regulatory body, is necessary or desirable
as a condition of, or in connection with, the granting of an option, or the issue of Shares thereunder, or the sale of the Shares,
then this option may not be exercised in whole or in part unless such listing, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Chief Executive Officer, Board of Directors or the Committee.
9. (a) The
Company and the Option Holder further agree that they will both be subject to and bound by all of the terms and conditions of the
2004 Plan, which is incorporated by reference herein and made a part hereof as if fully set forth herein.
(b) In
the event the Option Holder’s employment by, or association with, the Company, its Parent or any of its Subsidiaries terminates,
or in the event of the death or disability of the Option Holder, the rights hereunder shall be governed by, and made subject to,
the provisions of the 2004 Plan.
(c) In
the event of a conflict between the terms of this Contract and the terms of the 2004 Plan, then in such event, the terms of 2004
Plan shall govern.
(d) Except
as otherwise provided herein, all capitalized terms used herein shall have the same meaning ascribed to them in the 2004 Plan.
(e) The
Option Holder agrees that the Company may amend the 2004 Plan and the options granted to the Option Holder under the 2004 Plan,
subject to the limitations contained in the 2004 Plan.
10. This
Contract shall be binding upon and inure to the benefit of any successor or assign of the Company and to any executor, administrator
or legal representative entitled by law to the Option Holder’s right hereunder.
11. This
Contract shall be governed by and construed in accordance with the laws of the State of New York, without regard to the principles
of conflicts of laws.
IN WITNESS WHEREOF,
the parties hereto have entered into this Contract effective as of the date first above written.
|
|
INTER PARFUMS, INC.
|
|
|
|
|
|
|
By:
|
|
|
|
[Name and Title]
|
|
|
|
|
|
|
Schedule of Executive Officers and Number
of Shares Underlying Option
|
Executive Officer
|
|
Number of Shares
|
|
|
|
|
|
|
|
Philippe Santi
|
|
|
1,000
|
|
|
Frederic Garcia-Pelayo
|
|
|
1,000
|
|
|
Axel Marot
|
|
|
1,000
|
|
3
Exhibit 10.172
This document constitutes part of a prospectus covering securities
that have been registered under the Securities Act of 1933.
Nonqualified
Stock Option Contract
THIS NONQUALIFIED STOCK
OPTION CONTRACT is entered into effective as of the 31st day of December, 2019, by and between INTER PARFUMS, INC.,
a Delaware corporation (the “Company”) and ___________ (“Option
Holder”).
W I T N E S S E T H:
1. The
Company, in accordance with the resolutions adopted by the Company’s Executive Compensation and Stock Option Committee (the
“Committee”), and the terms and subject to the conditions of the Company’s 2016 Stock Option Plan, as amended,
(the “2016 Plan”), hereby grants to the Option Holder as of December 31, 2019, a nonqualified stock option to purchase
an aggregate of ______ shares (the “Shares”) of the common stock, $.001 par value per share, of the Company (the “Common
Stock”), at the exercise price of $73.09 per share.
2. Subject
to earlier termination as provided in the 2016 Plan, the term of this option shall be six (6) years from the date hereof; provided
that, such option shall vest and become exercisable to purchase shares of Common Stock as follows: 20% one year after the date
of grant, and then 20% on each of the second, third, fourth and fifth consecutive years from the date of grant on a cumulative
basis, so that each option shall become fully vested and exercisable on the fifth year from the date of grant.
3. (a) Subject to
the provisions contained in Section 2 hereof, this option may be exercised from time to time in whole or in part prior to the end
of the term of the option (but not with respect to less than 100 Shares (unless less than 100 Shares remain to be purchased, then
such amount remaining), or fractional Shares), by giving written notice to the Company at its principal office, presently 551 Fifth
Avenue, New York, New York 10176, stating that the Option Holder is exercising this option, specifying the number of Shares purchased
and accompanied by payment in full of the aggregate purchase price therefor (i) in cash or certified check or (ii) with previously
acquired shares of Common Stock or a combination of the foregoing if permitted in the sole discretion of the Company’s Executive
Compensation and Stock Option Committee (the “Committee”).
(b) In
addition, upon the exercise of this option, the Company may withhold cash and/or Shares to be issued with respect thereto, having
an aggregate fair market value equal to the amount which it determines is necessary to satisfy its obligation to withhold federal,
state and local income taxes or other taxes incurred by reason of such exercise. Alternatively, the Company may require the holder
to pay to the Company such amount, in cash, promptly upon demand. The Company shall not be required to issue any Shares pursuant
to this option until all required payments have been made.
4. This
option is not transferable otherwise than by will or the laws of descent and distribution and may be exercised, during the lifetime
of the Option Holder, only by the Option Holder or his legal representatives.
5. Nothing
in the 2016 Plan or herein shall confer upon the Option Holder any right to continue in the employ of, or be associated with, the
Company, its Parent or any of its Subsidiaries, or interfere in any way with the right to employment or association of the Option
Holder with the Company, its Parent or any of its Subsidiaries.
6. The
Option Holder understands that the Shares have been registered for issuance to the Option Holder in Registration Statement No.
333-216705 under the Securities Act of 1933, as amended (the “Act”). Resale to the public by the Option Holder is to
be made under Rule 144 under the Act in accordance with the procedure for resale of “affiliate shares” in the absence
of a subsequent effective registration statement for the resale of the Shares. Notwithstanding registration under the Act, the
Option Holder understands that in accordance with the provisions of the Company’s Code of Business Conduct, (i) the Option
Holder must obtain permission from the Company’s Chief Financial Officer prior to any sale of the Shares; and (ii) the use
of material non-public information in connection with the sale of the Company’s shares (“Insider Trading”) or
the communication of such information to others who use it in trading the Company’s shares (“Tipping”) is strictly
prohibited.
7. (a) The Option
Holder understands that the Company maintains its internet website at www.interparfumsinc.com
which is linked to the SEC Edgar database. The Option Holder can obtain through the Company’s website, free of charge, its
annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed
or furnished pursuant to Section 13(a) or 15(d) of the Exchange as soon as reasonably practicable after the Company has electronically
filed with or furnished them to the SEC.
(b) In addition,
the Company will cause to be delivered to the Option Holder, upon request to the Company directed to either the Chief Financial
Officer or the Controller, without charge to the Option Holder, a copy of the documents incorporated by reference into the Registration
Statement, other than exhibits (unless such exhibits are specifically incorporated by reference into the Registration Statement).
8. Notwithstanding
anything to the contrary, if at any time the Chief Executive Officer, Board of Directors of the Company or the Committee shall
determine it its discretion that the listing or qualification of the Shares on any securities exchange, with national securities
association or under any applicable law, or the consent or approval of any governmental regulatory body, is necessary or desirable
as a condition of, or in connection with, the granting of an option, or the issue of Shares thereunder, or the sale of the Shares,
then this option may not be exercised in whole or in part unless such listing, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Chief Executive Officer, Board of Directors or the Committee.
9. (a) The Company
and the Option Holder further agree that they will both be subject to and bound by all of the terms and conditions of the 2016
Plan, which is incorporated by reference herein and made a part hereof as if fully set forth herein.
(b) In
the event the Option Holder’s employment by, or association with, the Company, its Parent or any of its Subsidiaries terminates,
or in the event of the death or disability of the Option Holder, the rights hereunder shall be governed by, and made subject to,
the provisions of the 2016 Plan.
(c) In
the event of a conflict between the terms of this Contract and the terms of the 2016 Plan, then in such event, the terms of 2016
Plan shall govern.
(d) Except
as otherwise provided herein, all capitalized terms used herein shall have the same meaning ascribed to them in the 2016 Plan.
(e) The
Option Holder agrees that the Company may amend the 2016 Plan and the options granted to the Option Holder under the 2016 Plan,
subject to the limitations contained in the 2016 Plan.
10. This
Contract shall be binding upon and inure to the benefit of any successor or assign of the Company and to any executor, administrator
or legal representative entitled by law to the Option Holder’s right hereunder.
11. This
Contract shall be governed by and construed in accordance with the laws of the State of New York, without regard to the principles
of conflicts of laws.
IN WITNESS WHEREOF,
the parties hereto have entered into this Contract effective as of the date first above written.
|
|
INTER PARFUMS, INC.
|
|
|
|
|
|
|
By:
|
/s/ [Officer]
|
|
|
|
[Officer Name & Title]
|
|
|
|
|
|
|
|
[Option Holder from table from below]
|
|
|
|
|
|
|
|
_______________________
|
Schedule of Executive Officers and Number
of Shares Underlying Option
|
Executive Officer
|
|
Number of Shares
|
|
|
|
|
|
|
|
Jean Madar Holding SAS
|
|
|
25,000
|
|
|
Philippe Benacin Holding SAS
|
|
|
25,000
|
|
|
Russell Greenberg
|
|
|
25,000
|
|
|
Philippe Santi
|
|
|
10,000
|
|
|
Frederic Garcia-Pelayo
|
|
|
10,000
|
|
3
Exhibit
10.173
BAIL
COMMERCIAL
Entre
NOTAPIERRE
ET
INTER
PARFUMS
En
date du 10 DECEMBRE 2019
BAIL
COMMERCIAL
ENTRE
LES SOUSSIGNEES :
La
personne morale désignée à l’article CP. 1.1.
Ci-après
dénommée le "Bailleur" d’une part,
ET
La
personne morale désignée à l’article CP.1.2.
Ci-après
dénommée le "Preneur" d’autre part.
Le
Bailleur et le Preneur sont appelés, individuellement une "Partie" et, collectivement, les "Parties".
PREALABLEMENT
AU BAIL OBJET DES PRESENTES, LES PARTIES ONT RAPPELE CE QUI SUIT :
EXPOSE
PREALABLE
|
|
(A)
|
La
société GEMFI, aux droits de laquelle est venue la société
NOTAPIERRE, ainsi qu’il sera dit ci-après, a consenti à la société
INTERPARFUMS un bail commercial en date à PARIS, du 12 mai 2010 portant sur un
entrepôt à usage de stockage et de bureaux d’une SHON totale de 31.029
m² (d’après le mesurage réalisé par Jean-Claude BERSON,
géomètre-expert, en date du 12 avril 2011) situé sur la Commune
de Criquebeuf-Sur-Seine (27340), Parc d’Activités « Le Bosc Hétrel »
et cadastré section ZD, n° 250, 257, 259, 278, 297, 298, 299, 300, 301, 302,
303, 304, 305, 306, 308, 310, 312, 314, 317 pour une contenance de 8ha 00a 00ca.
|
Ladite
construction dite « Phase 1 ».
Le
bail a pris effet le 1er juin 2011 pour une durée de neuf (9) ans, la date d’expiration étant au 31 mai 2020.
Audit
acte, il a été prévu au profit du preneur une option d’extension du bâtiment initial d’une
ou deux nouvelles cellules d’une superficie d’environ 6.000 m² pouvant être exercée au plus
tard jusqu’au 30 avril 2012.
|
|
(B)
|
Aux
termes d’un acte sous seing privé en date du 1er avril 2011,
GEMFI et INTERPARFUMS ont signé un avenant n°1 au bail du 12 mai 2010 portant
sur l’extension du « plot bureaux » n°1 en rez-de-chaussée
d’une SHON de 175 m² (dite « Phase 2 »), afin
que le preneur puisse y installer des locaux sociaux et locaux à usage de vestiaires
complémentaires.
|
|
|
(C)
|
Aux
termes d’un acte sous seing privé en date du 1er avril 2011,
GEMFI et INTERPARFUMS ont signé un avenant n°2 au bail du 12 mai 2010 portant
sur une nouvelle option d’extension au profit du Preneur, remplaçant purement
et simplement l’option d’extension telle que prévue initialement dans
le bail du 12 mai 2010. Il a été convenu audit acte que le Preneur bénéficiait
d’une option d’extension portant sur les cellules 6 et 7 d’une SHON
de 6.000 m² chacune, qu’il pourra exercer du 30 avril 2012 au 31 décembre
2015.
|
|
|
(D)
|
Aux
termes d’un acte sous seing privé en date du 16 janvier 2012, GEMFI et INTERPARFUMS
ont signé un avenant n° 3 au bail du 12 mai 2010 portant notamment sur :
|
(i)
une désignation des biens loués conforme aux autorisations administratives délivrées et au mesurage
effectué par Jean-Claude BERSON, géomètre-expert, en date du 12 avril 2011, de sorte que le bâtiment
donné à bail consiste en un bâtiment d’une SHON globale de 31.220 m² comprenant :
-
entrepôt de 30.182 m² comprenant cinq (5) cellules et des locaux techniques ;
-
bureaux, locaux sociaux et local gardiennage : 1.038 m² SHON (dont 173 m² de SHON de locaux sociaux supplémentaires
ayant fait l’objet de l’avenant n°1 sus visé)
-
emplacements de stationnement de véhicules légers : 116 places.
Dans
le corps du présent acte, le bâtiment ci-dessus décrit (y compris les 116 emplacements de stationnement de
véhicules légers) sera désigné sous le vocable « Locaux Loués Initiaux ».
Le
tableau récapitulatif des SHON réalisé par Jean-Claude BERSON, le 12 avril 2011, est demeuré annexé
aux présentes après mention.
(ii)
l’existence de servitudes sur le terrain d’assiette des Locaux Loués Initiaux pour la desserte, l’approvisionnement
et les rejets des eaux de la zone et corrélativement, la création d’une association syndicale libre pour la
gestion de ces servitudes (entretien, réparation, remise en état tant des voieries que des réseaux).
Dans
le corps du présent acte, le bail du 12 mai 2010 et ses trois avenants seront désignés sous le vocable « Bail
Initial ».
|
|
(E)
|
Les
Locaux Loués Initiaux ont été construits en vertu des autorisations
administratives suivantes :
|
|
|
a-
|
Permis
de construire initial
|
Un
permis de construire portant le numéro PC 027 188 08 A0022 a été délivré le 2 décembre
2008.
Le
permis a autorisé la réalisation sur un terrain d’assiette de 78.230m² la construction d’un bâtiment
à usage de stockage et de bureaux d’une SHON globale de 37.730 m² s’appliquant savoir :
|
|
-
|
Bureaux
et locaux sociaux : 1.698 m² ;
|
|
|
-
|
Et
197 emplacements de stationnement pour véhicules légers.
|
Ledit
arrêté a acquis un caractère définitif.
|
|
b-
|
Transfert
du permis de construire initial
|
L’arrêté
de permis de construire susvisé a fait l’objet d’un arrêté de transfert le 4 juin 2010 sous le
numéro PC 027 188 08 A0022-01 au profit de la société GEMFI.
Ledit
arrêté a acquis un caractère définitif.
|
|
c-
|
Permis
de construire modificatif
|
Aux
termes d’un arrêté de permis de construire modificatif délivré le 12 octobre 2011 sous le numéro
PC 027 188 08 A0022-02, il a été entériné les modifications apportées au projet, savoir :
|
|
-
|
Surface
terrain : 80.000 m² ;
|
|
|
-
|
Surface
SHON bâtiment : 31.220 m² ;
|
|
|
-
|
Entrepôt
et Locaux techniques : 30.182 m² ;
|
|
|
-
|
Bureaux
et Locaux sociaux : 1.038 m² ;
|
|
|
-
|
Emplacements
de stationnement VL : 116.
|
Ledit
arrêté a acquis un caractère définitif.
|
|
d-
|
Déclaration
d’achèvement des travaux et Conformité
|
Pour
la Phase 1, la société GEMFI a notifié à la Mairie de Criquebeuf-sur-Seine, l’achèvement
des constructions et leur conformité aux prescriptions du permis de construire, le 17 juin 2011.
Pour
la Phase 2, la société GEMFI a notifié à la Mairie de Criquebeuf-sur-Seine, l’achèvement
des constructions et leur conformité aux prescriptions du permis de construire, le 19 octobre 2011.
Aux
termes d’une attestation en date du 10 novembre 2011, la Mairie de Criquebeuf-sur-Seine a notifié la non contestation
à la conformité.
|
|
e-
|
Déclaration
préalable (construction d’un auvent)
|
La
société GEMFI a présenté le 22 novembre 2011 une déclaration préalable enregistrée
à la Mairie de Criquebeuf-sur-Seine sous le numéro DP 027 188 11 A 0027.
Par
arrêté en date du 7 décembre 2011, le Maire de CRIQUEBEUF-SUR-SEINE n’a pas été fait opposition
à ladite déclaration préalable autorisant ainsi l’agrandissement et l’installation d’un
auvent à l’extérieur des Locaux Loués Initiaux, au droit de l’entrée des locaux sociaux
représentant un total de SHOB de 56,57 m², sans création de SHON.
|
|
(F)
|
Un
arrêté préfectoral a été délivré sous
le n° D1-B1-11-183 en date du 30 mars 2011 (Ci-après l’« Arrêté
d’Exploiter ») au profit de la société GICRAM autorisant
l’exploitation dans les Locaux Loués Initiaux d’une installation classée
pour la protection de l’environnement sous les rubriques suivantes :
|
▪
1412 (A), 1432-2 (A), 1510 (A), 1530 (A), 1532 (A), 2662 (A), 2663-1 (A), 2663-2 (A), 2910-A (NC) et 2925 (D).
Aux
termes d’une convention sous seing privé quadripartite en date du 26 avril 2011 entre les sociétés
GEMFI (en sa qualité de bailleur au titre du Bail Initial), le Preneur, GICRAM (en sa qualité de titulaire initial
de l’Autorisation d’Exploiter) et SAGA France (en sa qualité de prestataire logistique du Preneur) sont convenues
que le bénéfice de l’autorisation d’exploiter faisant l’objet de l’Arrêté d’Exploiter
devait être transféré à la société SAGA France de sorte qu’elle devienne titulaire
de l’autorisation d’exploiter correspondante.
Ce
transfert a été agréé par la société GEMFI, ès qualité de bailleur, et
le Preneur sous certaines conditions et notamment que la société SAGA France (i) s’interdise de procéder
à une quelconque cessation d’activité auprès des services de l’environnement à l’expiration
de son contrat de prestation logistique signé avec le Preneur et (ii) s’oblige à l’expiration
de son contrat de prestation logistique signé avec le Preneur à apporter son concours au transfert de l’autorisation
d’exploiter soit au Bailleur (en cas de résiliation ou non renouvellement du Bail Initial), soit au Preneur ou au
tiers désigné par le Preneur si la prise à bail des Locaux Loués Initiaux par le Preneur se poursuivait.
La
préfecture de l’Eure a délivré sous le n° D-11-E3-040 le 15 juin 2011 le récépissé
de déclaration de changement d’exploitant.
L’Arrêté
d’Exploiter, la convention quadripartite du 26 avril 2011 ainsi que le récépissé de déclaration
de changement d’exploitant sont demeurés ci-annexés (Annexe 4).
|
|
(G)
|
Aux
termes d’un acte reçu par Maître Christophe PERRIN, notaire à
ATHIS-MONS, les 18 et 19 janvier 2012, la société GEMFI a vendu à
la société NOTAPIERRE, les biens immobiliers donnés à bail
au Preneur, venant ainsi aux droits de la société GEMFI.
|
|
|
(H)
|
Aux
termes d’un acte reçu par Maître LUCIEN-COIRRE, notaire à PARIS,
le 6 juin 2016, il a été constitué des servitudes non aedificandi
réciproques, sur les terrains appartenant à la société
INS CRIQUEBEUF, d’une part, propriétaire d’un bâtiment à
usage principal d’entrepôt cadastré section ZD, n° 348 et à
la société NOTAPIERRE, d’autre part, propriétaire de l’immeuble
visé au « (A) a- » ci-dessus.
|
Une
copie de l’acte et du plan matérialisant ces servitudes sont annexés aux présentes (Annexe 5)
|
|
(I)
|
Aux
termes d’un acte reçu par Maître PERRIN, notaire sus nommé,
le 27 décembre 2018, la société GEMFI a vendu à la société
NOTAPIERRE, sur la commune de CRIQUEBEUF SUR SEINE (27340), Le Clos Gillet, un terrain
d’une superficie de 11.686 m² cadastré section ZD, n° 329 et 338 ;
lesdites parcelles étant contiguës au terrain acquis par NOTAPIERRE visé
au C) a- ci-dessus.
|
|
|
(J)
|
Suivant
procès-verbal de décisions unanimes des associés en date du 31 décembre
2015, la société SAGA France a fait apport à titre de fusion de
tous ses éléments d’actifs à la société SDV
Logistique internationale – SDV-LI.
|
L’absorption
par voie de fusion de la société SAGA France par la société SDV-LI est devenue définitive à
la date du 31 décembre 2015.
Par
suite de l’absorption par voie de fusion de la société SAGA France et de la société KERNE FINANCE,
les associés de la société SDV-LI ont décidé de changer sa dénomination sociale pour
adopter statutairement à compter du 1er janvier 2016 celle de BOLLORE LOGISTICS.
|
|
(K)
|
Le
Preneur s’est rapproché du Bailleur pour lui faire part de son besoin d’agrandir
l’entrepôt et les bureaux existants par la construction d’une sixième
cellule sur le Terrain appartenant au Bailleur pour le développement de son activité
(ci-après désignée sous le vocable « Cellule 6 »)
En conséquence de quoi, le Bailleur s’est rapproché de la société
GEMFI à l’effet de régulariser un contrat de promotion immobilière
(ci-après le « CPI »), afin que le bailleur puisse
procéder à la construction de la Cellule 6 et à sa livraison au
Preneur ;
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|
|
(L)
|
La
société BOLLORE LOGISTICS, prestataire logistique du Preneur, exploitant
des Locaux Loués Initiaux pour le compte du Preneur (l’« Exploitant »),
a de son côté déposé auprès de la Préfecture
de l’Eure, un dossier de « porter à connaissance »
(Ci-après le « Porter à Connaissance ») relatif
au projet de Cellule 6 modifiant l’Arrêté d’Exploiter et plus
particulièrement à :
|
(i)
mettre à jour les rubriques de classement de l’arrêté préfectoral du 30 mars 2011 et de modifier
le régime du site au titre de la règlementation des installations classées pour la protection de l’environnement,
et
(ii)
étendre les installations du site Bolloré Logistics par la création d’une sixième cellule d’entrepôt.
La
Direction Régionale de l’Environnement, de l’Aménagement et du Logement de Normandie a délivré
le 30 juin 2017 un avis favorable au dossier déposé en concluant ce qui suit littéralement retranscrit
:
« Les
modifications apportées dans ce porter à connaissance par rapport à votre arrêté préfectoral
du 30 mars 2011 n’étant ni notables ni substantielles, l’inspection prend acte de la création de cette
sixième cellule. Par ailleurs, concernant le changement d’un statut Seveso seuil bas à un statut de simple
autorisation, un arrêté complémentaire sera pris afin de modifier le dernier paragraphe de l’article
1.2.1 de l’arrêté précité ».
Par
arrêté n° DELE/BERPE/18/681 du 9 mai 2018 (« l’Arrêté d’Exploiter »),
venant modifier l’arrêté préfectoral du 30 mars 2011 et abrogeant l’arrêté préfectoral
complémentaire du 15 février 2018, le Préfet de l’EURE a autorisé la modification de l’Arrêté
d’Exploiter du 30 mars 2011.
Le
Porter à Connaissance, l’avis favorable délivré par la DREAL le 30 juin 2017 et l’Arrêté
d’Exploiter du 9 mai 2018 sont demeurés ci-annexés (Annexe 6).
L’Arrêté
d’Exploiter du 30 mars 2011 et l’Arrêté d’Exploiter du 9 mai 2018 sont ci-après dénommés
l’Autorisation d’Exploiter.
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|
(M)
|
En
vue de la réalisation de la Cellule 6 et conformément à la notice
descriptive technique agréé par le Preneur, le Bailleur et la société
GEMFI, ès qualité de futur promoteur du projet construction de la Cellule
6 (ci-après le « Promoteur »), la société
GEMFI a déposé une demande de permis de construire auprès des services
compétents de la Mairie de Criquebeuf-sur-Seine, le 3 août 2017 sous le
numéro PC 27188 17 A0013 pour (i) la construction d’une extension
d’un bâtiment à usage d’entrepôt et de bureaux d’une
surface plancher totale créée de 6.066 m² se répartissant à
hauteur de 328 m² de bureaux et 5.738 m² d’entrepôt (ii)
le prolongement de la voirie lourde sur cour camions et de la voirie pompier de contournement
(iii) la création de deux poteaux incendie supplémentaires pour
un total de 7 sur le site (iv) le raccordement pour stationnement de 22 véhicules
électriques (v) le déplacement de 5 emplacements de stationnement
de la zone d’attente poids lourds et (vi) la création de 6 places
de stationnement pour véhicules légers.
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|
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(N)
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L’arrêté
accordant le permis de construire pour la construction de la Cellule 6 a été
délivré par Monsieur le Maire de la Commune de Criquebeuf-sur-Seine, le
10 octobre 2017 sous le numéro PC 27188 17 A0013 (ci-après le « Permis
de Construire »).
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|
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(O)
|
La
Cellule 6 sera édifiée conformément au dossier de permis
de construire susvisé et à la notice descriptive technique du projet d’extension
annexée au CPI dans sa version V4a du 22 octobre 2019 et figurant ci-après
en Annexe 8.
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|
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(P)
|
C’est
dans ses conditions que les Parties sont convenues d’ores et déjà
de conclure un nouveau bail faisant l’objet des présentes (ci-après
le « Bail ») portant sur les Locaux Loués Initiaux
et les conditions de l’extension de la Cellule 6 à construire, aux charges
et conditions prévues ci-après.
|
Le
Bail prend effet le 1er juin 2020 et prend la suite du Bail Initial lequel arrive à son terme.
|
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(Q)
|
Le
présent Bail est constitué de l’Exposé Préalable, d’une
première partie (Partie 1) convenant de la résiliation, amiable
et à son terme, du Bail Initial et d’une deuxième partie (Partie
2) convenant des termes et conditions du nouveau Bail portant sur les Locaux Loués.
|
Cette
Partie 2 est elle-même constituée :
|
|
(i)
|
de
conditions générales (Titre 1 - Conditions générales) ;
|
|
|
(ii)
|
de
conditions particulières (Titre 2 - Conditions particulières),
|
Ces
deux parties formant un tout indivisible, étant précisé que s’il y a contradiction entre l’une
ou l’autre des dispositions des présentes conditions générales et des conditions particulières,
ces dernières prévaudront. Les Titre 1 et Titre 2 du Bail sont destinés à régir, à titre
de dispositions pérennes, les conditions de la location des Locaux Loués à compter de la Date d'Effet du
Bail ;
|
|
(iii)
|
des
dispositions spécifiques, à la période de construction de la Cellule
6 (Titre 3 – Dispositions spécifiques à la période de construction
de la Cellule 6).
|
Il
est d'ores et déjà rappelé que le Bailleur procède à la construction de la Cellule 6 à
la demande du Preneur et pour ses besoins spécifiques.
En
conséquence, le respect par le Preneur de chacun des termes et conditions des présentes et notamment le respect
par le Preneur de son engagement de prendre à bail les Locaux Loués pour l'intégralité de la durée
ferme qui y est stipulée constitue une cause essentielle et déterminante de l'accord du Bailleur de faire construire
la Cellule 6.
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(R)
|
Toute
référence dans le Bail à l'"Exposé", un
"Article", un "Titre" ou une "Annexe"
doit être interprétée comme une référence à
l'exposé, un article, un titre ou une annexe du Bail.
|
|
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(S)
|
Le
présent Exposé fait partie intégrante des clauses et conditions
du Bail ainsi que ses annexes.
|
Définitions
Dans
le corps du présent acte, certaines dénominations correspondent à des définitions précises,
ainsi qu’il suit :
|
Activité
Spécifique :
|
Désigne
l’activité spécifique exercée par le Preneur, ou tous occupants de son chef, dans les Locaux Loués
conformément aux rubriques 4320, 4331 de la nomenclature des Installations Classées pour la Protection de l’Environnement
(ICPE) (la/les « Activités Spécifiques »)
|
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Achèvement
de la Cellule 6 :
|
Désigne
l’achèvement de la Cellule 6 tel que défini à l’Article DP. 3.2.
|
|
Annexes :
|
Désigne
tous les documents joints au Bail et formant corps avec celui-ci.
|
|
Arrêté
d’Exploiter :
|
A
la signification qui est lui est donné en Exposé.
|
|
Arrêté
d’Exploiter Complémentaire :
|
A
la signification qui est lui est donné en Exposé.
|
|
Autorisation
d’Exploiter :
|
A
la signification qui est lui est donné en Exposé.
|
|
Bail :
|
Désigne
le présent bail.
|
|
Bail
Initial :
|
A
la signification qui est lui est donné en Exposé.
|
|
Bailleur :
|
Désigne
la société dénommée « NOTAPIERRE », société civile de placement
immobilier à capital variable, dont le siège social est à PARIS (75017) – 7-7 bis, rue Galvani
et immatriculée au Registre du Commerce et des Sociétés de PARIS sous le numéro 347 726 812.
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|
Cause(s)
Légitime(s) de Prorogation de Délai :
|
A
la signification qui lui est donnée à l’Article DP. 4.
|
|
Cellule
1 à 5 :
|
Désigne
les cellules matérialisées sur le plan des Locaux Loués figurant en Annexe 20.
|
|
Cellule
6 :
|
A
la signification qui lui est donnée à l’Article CP. 3.2.
|
|
Comité
de Suivi :
|
A
la signification qui lui est donnée à l’Article DP. 4.
|
|
CPI :
|
Désigne
le contrat de promotion immobilière consenti par le Bailleur, ès qualité de maître d’ouvrage,
au Promoteur aux fins de construction de la Cellule 6 visé en Exposé.
|
|
Date
d’Effet du Bail :
|
A
la signification qui lui est donnée à l’Article CP. 5.
|
|
Date
d’Effet de la Résiliation du Bail Initial
|
A
la signification qui lui est donnée en Partie 1 du Bail ci-après.
|
|
Documents
Techniques :
|
Désigne
ensemble la Notice Descriptive Technique, les Plans, le Permis de Construire et son dossier de demande et le cas échant
les permis de construire modificatifs.
|
|
Expert :
|
L’expert
sera désigné d’un commun accord entre les Parties ou, à défaut d’accord, par Monsieur
le Président du Tribunal de Grande Instance compétent, statuant par voie de référé
et ce, à la requête de la Partie la plus diligente.
L’Expert
sera désigné, pour trancher toute contestation pour laquelle compétence lui est reconnue au titre
du Bail, en qualité de mandataire commun des Parties et agira dans les conditions prévues à l’article
1592 du Code civil.
Les
frais et honoraires de l’Expert seront supportés par la Partie qui succombe dans ses prétentions ou
dans la proportion qui sera déterminée par l’Expert.
La
décision de l’Expert ne sera pas susceptible de recours par voie d’appel ou de cassation ou de contestation
quelconque de la part de l’une ou l’autre des Parties.
|
|
Expert
1 :
|
A
la signification qui lui est donnée à l’Article CG. 6.2.
|
|
Expert
2 :
|
A
la signification qui lui est donnée à l’Article CG. 6.2.
|
|
Expert
3 :
|
A
la signification qui lui est donnée à l’Article CG. 6.2.
|
|
Exploitant :
|
Désigne
le prestataire logistique du Preneur, à savoir, à la date des présentes, la société dénommée
« BOLLORE LOGISTICS », société par actions simplifiée au capital de 44.051.200
€, dont le siège social est à PUTEAUX (92806) – 31-32, Quai de Dion Bouton et immatriculée
au Registre du Commerce et des Sociétés de NANTERRE sous le numéro 552 088 536.
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|
Gestionnaire :
|
Désigne
le gestionnaire des Locaux Loués, mandaté par le Bailleur ou tout nouveau gestionnaire qui serait mandaté
par le Bailleur à cet effet.
|
|
Groupe
Interparfums :
|
Désigne
toute société contrôlée directement ou indirectement par le Preneur au sens de l’article
L.233-3 du Code de commerce ainsi que toute société qui contrôlerait directement ou indirectement le Preneur
au sens dudit article L.233-3 du Code de commerce, ou toute société qui serait sous le même contrôle,
direct ou indirect, que le Preneur, au sens de cet article.
|
|
Jour(s)
Ouvré(s) :
|
Désigne
tout jour de la semaine autre qu’un samedi, dimanche ou jour férié. Il est précisé que si
l’une quelconque des obligations des Parties doit être exécutée un jour qui n’est pas un Jour
Ouvré, elle devra alors être exécutée le Jour Ouvré suivant, et que si l’un quelconque
des avis devant être donné aux termes des présentes doit être donné un jour qui n’est
pas un Jour Ouvré, cet avis devra alors être donné au plus tard le Jour Ouvré suivant.
|
|
Locaux
Loués :
|
Désigne
à la Date d’Effet du Bail les Locaux Loués Initiaux auxquels s’ajouteront à compter de leur
achèvement les surfaces constituées par la Cellule 6 qui formeront ensemble les Locaux Loués.
|
|
Locaux
Loués Initiaux :
|
Désigne
les locaux loués en application du Bail Initial dont la désignation est précisée à l’Article CP.
3.1
|
|
Loyer :
|
A
la signification qui lui est donnée à l’Article CP. 11.
|
|
Notice
Descriptive Technique :
|
Désigne
la notice descriptive de la Cellule 6 dont copie figure en Annexe 8.
|
|
Partie/Parties :
|
Désigne
le Bailleur et/ou le Preneur.
|
|
Permis
de Construire :
|
Désigne
le permis de construire délivré par Monsieur le Maire de CRIQUEBEUF-SUR-SEINE le 10 octobre 2017, enregistré
sous le numéro PC 27188 17 A0013 dont copie figure en Annexe 7.
|
|
Plans :
|
Désigne
les plans de la Cellule 6 dont copie figure en Annexe 7.
|
|
Porter
à connaissance :
|
A
la signification qui lui est donnée à l’Article G (c) de l’Exposé.
|
|
Preneur :
|
Désigne
la société dénommée « INTERPARFUMS », société anonyme au capital
de 41 786 570 €, dont le siège social est à PARIS (75008) – 4, rond-point des Champs Elysées
et immatriculée au Registre du Commerce et des Sociétés de PARIS sous le numéro 350 219 382.
|
|
Promoteur :
|
Désigne
la société dénommée « G E M F I », société par actions simplifiée
au capital de 150.000 €, dont le siège social est à MONTROUGE (92120) – 28 bis, rue Barbes et immatriculée
au Registre du Commerce et des Sociétés de NANTERRE sous le numéro 339 753 725.
|
|
Terrain :
|
Désigne
le terrain d’assiette des Locaux Loués et identifié par un plan figurant en Annexe 14.
|
|
Travaux
Modificatifs :
|
A
la signification qui lui est donnée à l’Article DP 9.
|
CECI
ETANT EXPOSE, IL A ETE CONVENU CE QUI SUIT :
PARTIE
1 - RÉSILIATION DU BAIL INITIAL A LA DATE D’EFFET DU BAIL
Le
Bail Initial arrive à son terme le 31 mai 2020 à minuit. Les Parties reconnaissent expressément que le Bail
objet des présentes entre en vigueur immédiatement après.
Le
Bail prenant effet à la date de fin du Bail Initial pour les Locaux Loués Initiaux (cf. Partie 2 des présentes),
la résiliation du Bail Initial ne donnera pas lieu, d’un commun accord entre les Parties, à la restitution
des Locaux Loués Initiaux au Bailleur.
Le
Preneur ne pourra exiger du Bailleur, à la Date d’Effet du Bail, aucune modification ou remise en état, ni
aucun changement de quelque nature que ce soit des Locaux Loués Initiaux et ne disposera d’aucun recours ou garantie
du Bailleur, du fait de l’état des Locaux Loués Initiaux à la Date d’Effet du Bail.
De
convention expresse entre les Parties, le sort des aménagements, installations, améliorations et embellissements
effectués par le Preneur dans les Locaux Loués Initiaux, effectués au cours du Bail Initial ainsi que l’état
de restitution desdits locaux seront réglés en fin de jouissance du Preneur, et ce conformément aux stipulations
du Bail.
En
conséquence de ce qui précède, les aménagements, installations, améliorations et embellissements
effectués par le Preneur dans les Locaux Loués Initiaux, préalablement à la Date d’Effet du
Bail, resteront la propriété du Preneur jusqu’à la fin de jouissance du Preneur au titre du Bail.
PARTIE
2 – CONTRAT DE BAIL
Déclarations
préalables
Le
Bailleur et le Preneur conviennent expressément de soumettre le Bail aux dispositions des articles L.145-1 à L.145-60
du Code de Commerce, R.145-1 à R.145-11, R.145-20 à R145-33, D.145-12 à D.145-19 du Code de Commerce ainsi
qu’aux dispositions non abrogées du décret n° 53-960 du 30 septembre 1953 modifié et des textes
subséquents, que le Preneur s’engage à respecter.
L’ensemble
des clauses et conditions prévues au Bail demeureront applicables à l’égard tant du Preneur que de
tout cessionnaire ou occupant des Locaux Loués se trouvant régulièrement aux droits de celui-ci, au cours
du Bail comme de ses éventuels avenants et renouvellements.
Le
Bail et ses Annexes constituent et expriment la totalité de l’accord entre les Parties. Ils annulent et remplacent
tout accord, promesse ou engagement préliminaire qui aurait pu être antérieurement signés par les Parties
ou conclus entre elles au sujet de la prise à bail des Locaux Loués.
En
outre, le Preneur renonce à se prévaloir de tout document, plaquette commerciale, site web ou autres relatifs aux
Locaux Loués, que le Bailleur ou toute autre personne lui aurait remis, ou dont il aurait pu avoir connaissance, reconnaissant
que les Locaux Loués et leur environnement sont définis uniquement par le Bail et ses annexes.
La
notion de bail recouvre, aux termes des présentes, le présent bail, ses éventuels renouvellements et/ou ses
éventuelles prorogations, de sorte que, sauf stipulations contraires, toutes les obligations contractées au titre
des présentes le sont pour toute la durée du présent Bail, de ses éventuels renouvellements et/ou
de ses éventuelles prorogations.
Les
Parties déclarent que le présent contrat est un contrat de gré à gré tel que défini
par l’article 1110 du Code civil, introduit par l’ordonnance 2016-131 du 10 février 2016 portant réforme
du droit des contrats. Elles reconnaissent que nonobstant sa présentation en conditions générales, conditions
particulières et dispositions spécifiques, le présent contrat a été librement négocié
entre elles, tant s’agissant de ses conditions générales, de ses conditions particulières et de ses
dispositions spécifiques et qu’il n’est donc pas un contrat d’adhésion, en tout ou partie. Les
Parties reconnaissent également qu’elles ont eu un égal pouvoir de négociation.
Par
ailleurs, les Parties déclarent accepter pleinement les stipulations des présentes, notamment celles régissant
les loyers et les charges dues par le Preneur, et acceptent pleinement le risque d’un changement imprévisible ou
d’une exécution devenue excessivement onéreuse et conviennent, par conséquence, de renoncer expressément
et irrévocablement à invoquer les dispositions de l’article 1195 du code civil poursuivre la révision
ou la résolution du Bail.
Les
présentes clauses sont déterminantes de la commune intention des Parties.
TITRE
1 – CONDITIONS GENERALES
|
|
CG.
1.1.
|
Le
Bailleur donne à bail au Preneur, qui accepte, les Locaux Loués tels que
désignés à l’Article CP. 3.
|
Les
états des lieux établis pour la Date d’Effet du Bail sont détaillés ci-après à
l’Article CP. 8.
Il
est précisé que toute erreur dans la désignation ou la contenance des Locaux Loués ne pourra justifier
aucune diminution ou augmentation de loyer, lequel a été notamment fixé en fonction de l'appréciation
globale et de la parfaite connaissance des Locaux Loués par le Preneur.
Le
Preneur ne pourra de même exiger du Bailleur, à quelque titre que ce soit, ni à la Date d’Effet du Bail
ni en cours de Bail, aucune modification ou remise en état, aucun changement de quelque nature que ce soit des Locaux Loués
(en ce compris leurs aménagements, équipements techniques et notamment les câblages existants dans les Locaux
Loués, s’il y a lieu), ni aucune diminution du loyer et ne disposera d’aucun recours ou garantie du Bailleur
pour quelque cause que ce soit, du fait de l’état des Locaux Loués à la Date d’Effet du Bail.
Le
Preneur reconnaît que le Bailleur aura ainsi pleinement exécuté son obligation de délivrance des Locaux
Loués conformément à l’article 1719 al.1 du Code civil à la Date d’Effet du Bail.
Les
Locaux Loués constituent un tout unique et indivisible dans la commune intention des Parties. En cas de pluralité
de locaux (cellules d’entrepôt, bureaux, locaux techniques…) objet du Bail, la location sera considérée
comme indivisible pour le tout.
|
|
CG.2.
|
DESTINATION
DES LIEUX
|
Le
Preneur devra utiliser les Locaux Loués conformément aux articles 1728 et 1729 du Code civil paisiblement et uniquement
à l’usage d’entrepôt et de bureaux annexes ainsi que prévu à l’Article CP. 7, pour
ses activités, dans le cadre de l’Autorisation d’Exploiter, à l’exclusion de toute autre utilisation
et notamment de toute activité industrielle ou artisanale, de toute vente ou exposition de marchandise et de toute réception
de clientèle (et notamment de toute réception du public au sens de l’article R123-2 du Code de la construction
et de l’habitation dans les Locaux Loués ou de clientèle).
Le
Bailleur déclare qu’à sa connaissance, rien dans la situation administrative et juridique des Locaux Loués
ne s’oppose à l’exercice d’activités conformes à cette destination.
Les
emplacements de stationnement devront être utilisés uniquement pour le stationnement d'au maximum d’un véhicule
par emplacement, à l’exclusion de toute activité de réparation, vidange, lavage.
Sans
préjudice de ce qui est prévu à l’article CG. 11.14 ci-après, le Preneur fera son affaire
personnelle de l'obtention et du maintien en vigueur de toute licence, autorisation, permis ou autre requis par la législation
et la réglementation en vigueur ou à venir, et du paiement de toutes sommes, redevances, taxes et autres droits
afférents aux activités devant être exercées dans les Locaux Loués, et à leur utilisation.
Il devra en justifier à toute réquisition du Bailleur.
|
|
CG.
2.3.
|
Respect
de la réglementation applicable
|
Le
Preneur, qui assume pendant toute la durée du Bail la responsabilité de chef d’établissement, devra
se conformer scrupuleusement et faire respecter par ses préposés, clients, visiteurs, fournisseurs, prestataires
et Exploitant, l’ensemble des lois, règlements, ordonnances en vigueur ou à venir, applicables aux Locaux
Loués, et notamment, sans que cette liste soit limitative, en ce qui concerne la voirie, la police, l’hygiène,
la salubrité, l’environnement (notamment en matière d’installations classées pour la protection
de l’environnement – ICPE – ainsi que détaillé à l’article CG. 11.14 ci-après
et la performance environnementale), la réglementation du travail, la réglementation applicable en matière
d’accessibilité et la sécurité (et notamment les règles en matière de lutte contre l’incendie
et les prescriptions des pompiers et des mandataires de sécurité), le tout de façon à ce que le Bailleur
ne soit jamais inquiété ni recherché à ce sujet et soit garanti de toutes les conséquences
qui pourraient en résulter.
Le
Preneur prend l'engagement d'exécuter ou de déférer, à ses frais exclusifs, en ce qui concerne les
réglementations visées ci-dessus, à toute prescription, réclamation ou injonction qui pourrait légalement
émaner, au cours du Bail et de ses renouvellements, des autorités administratives compétentes, concernant
les Locaux Loués ou les modalités de son occupation, étant précisé que si des travaux visés
à l’article CG. 8.1.2 doivent être réalisés à cet effet, le Preneur se rapprochera
du Bailleur afin que ce dernier réalise les travaux qui lui incomberaient au titre du Bail.
|
|
CG.
3.1.
|
Le
Bail est consenti et accepté pour la durée visée à l’Article CP.
5 qui commencera à courir à la Date d’Effet du Bail.
|
|
|
CG.
3.2.
|
La
durée de l'engagement ferme de location du Preneur constitue une condition essentielle
et déterminante des présentes sans laquelle le Bailleur n'aurait pas contracté.
En conséquence, dans l’hypothèse où le Preneur cesserait de
son fait d’occuper les Locaux Loués avant l’expiration de cette période
ferme, le Bailleur serait en droit de poursuivre l’exécution forcée
du Bail jusqu’à son terme, en toutes ses clauses, charges et obligations.
|
|
|
CG.
3.3.
|
Le
Bailleur aura la faculté de résilier le Bail à l’expiration
d’une période triennale, s'il entend invoquer les dispositions des articles
L. 145-18, L. 145-21, L. 145-23-1 et L. 145-24 du même code,
afin de construire, de reconstruire les Locaux Loués, de les surélever,
de construire un local d'habitation sur un terrain loué nu ou dans les conditions
et les secteurs ou périmètres prévus aux articles L. 313-1
et suivants et L. 313-4 et suivants du Code de l’urbanisme et en cas de démolition
des Locaux Loués dans le cadre d’un projet de renouvellement urbain.
|
En
cas de renouvellement du Bail, ledit renouvellement interviendra pour une durée de neuf (9) années, le Preneur disposant
de la faculté de résiliation à l'expiration de chaque période triennale, sous réserve d'un
congé adressé au Bailleur au plus tard six (6) mois avant l’expiration de la période en cours. Les
Parties conviennent expressément que tout congé ou demande de renouvellement devra être donné(e) par
acte extrajudiciaire.
Le
Bail est consenti et accepté moyennant le loyer annuel hors taxes et hors charges précisé à l’Article
CP. 11, le Preneur étant tenu de supporter tous droits, taxes ou impôts de quelque nature que ce soit (y inclus toute
variation du taux de la T.V.A), qui pourraient être exigibles sur lesdits loyers, charges et autres paiements prévus
par le Bail.
|
|
CG.5.
|
INDEXATION
DU LOYER
|
|
|
CG.
5.1.
|
Le
loyer sera indexé, de plein droit et sans aucune formalité ni demande,
à compter de la Date d’Effet du Bail, tous les ans à la date anniversaire
de la Date d'Effet du Bail en fonction de la variation de l'Indice des Loyers des Activités
Tertiaires (ILAT) publié par l'INSEE. Cet indice est reconnu par les Parties comme
ayant une relation directe avec l'objet de la présente convention.
|
Pour
la première indexation qui devra intervenir à la première date anniversaire de la Date d’Effet,
le taux de variation indiciaire annuel sera calculé en fonction de la variation entre l’indice de base, qui sera
le dernier indice publié à la Date d’Effet du Bail et l’indice de révision, qui sera l’indice
du même trimestre calendaire de l’année suivante. Pour les indexations suivantes, l’indice de base sera
l’indice de révision ayant servi pour la précédente indexation et l’indice de révision
sera celui du même trimestre calendaire de l’année suivante et ainsi de suite pour les années successives.
Le
fait de ne pas avoir immédiatement ajusté le loyer n'entraînera aucune déchéance dans le droit
des Parties de réclamer l'application ultérieure de la présente clause avec effet rétroactif.
|
|
CG.
5.2.
|
En
cas de retard ou d’absence de publication de l’indice applicable à
une date d’indexation donnée, un loyer provisionnel sera appelé.
Celui-ci sera calculé sur la base du dernier indice publié au moment de
l’appel de loyer. Ce loyer provisionnel donnera lieu à régularisation
(complément ou restitution) une fois l’indice définitif publié.
|
Lors
de la publication de l’indice définitif, le Bailleur informera le Preneur de toute modification éventuelle
du loyer résultant du jeu de l’indice et les Parties s’engagent à régulariser aussitôt
les comptes résultant de l’application de la clause d’indexation, c’est-à-dire le montant du nouveau
loyer ainsi que l’augmentation consécutive du dépôt de garantie.
|
|
CG.
5.3.
|
En
cas d’absence de publication ou de disparition de l’indice retenu par les
Parties ou dans le cas où l’indice choisi ne pourrait recevoir application
pour quelque cause que ce soit, les Parties conviennent expressément :
|
|
|
-
|
de
lui substituer soit le nouvel indice légal qui serait publié en remplacement
et qui serait obligatoirement applicable, aux termes des lois et règlements, au
Bail, soit, à défaut, un indice similaire choisi d’accord entre elles ;
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|
|
-
|
faute
d’indice de remplacement ou d’accord des Parties, de lui substituer l’indice
du coût de la construction ; et
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|
|
-
|
en
cas d’absence de publication ou de disparition de l’indice du coût
de la construction, de faire désigner par ordonnance de Monsieur le Président
du Tribunal de Grande Instance du lieu de situation des Locaux Loués et statuant
par ordonnance de référé, à la requête de la partie
la plus diligente, un expert qui aura les pouvoirs de mandataire commun des parties;
ce mandataire commun dont la décision sera définitive et sans recours,
aura pour mission de choisir, ou au besoin de reconstituer, un indice reflétant
le plus exactement possible les loyers des activités tertiaires à l’échelon
national. L’indice choisi par l’expert ayant les pouvoirs de mandataire commun
s’appliquera rétroactivement à partir de la date de la première
indexation contractuellement applicable après la disparition de l’indice
retenu initialement par les Parties. Les honoraires et les frais de procédure,
ainsi que ceux de l’expert seront supportés par moitié par le Bailleur
et le Preneur.
|
Il
est d'ores et déjà convenu entre les Parties que le nouvel indice se substituant à l’indice initialement
retenu par les Parties ne pourra pas conduire à une remise en cause du niveau de loyer antérieur et résultant
de l’indexation, sur la base de l’indice initialement retenu, jusqu’à l’application effective du
nouvel indice, sauf le cas où la substitution d’indice résulterait d’une inapplicabilité de l’indice
choisi initialement par les Parties dans le cadre du Bail, compte tenu de l’ordre public monétaire, auquel cas le
nouvel indice applicable en application de la présente clause sera purement et simplement substitué à l’indice
initialement choisi pour la période où l’indexation sur la base de l’indice initialement choisi serait
remise en cause.
|
|
CG.
5.4.
|
Dans
l'attente de la décision de l'expert, le Preneur ne pourra pas différer
le paiement et devra verser, à titre provisionnel, dès la présentation
de la quittance, une somme égale à celle acquittée précédemment,
le réajustement intervenant rétroactivement à la date d'effet de
l’indexation.
|
|
|
CG.
5.5.
|
Le
fait pour le Bailleur de ne pas appliquer la présente clause d’indexation,
nonobstant la variation de l’indice de référence ne pourra en aucun
cas être considéré comme une renonciation implicite au jeu de celle-ci.
|
|
|
CG.
5.6.
|
Dans
la commune intention des Parties, les stipulations du présent Article CG.5. sont
divisibles, de sorte qu'en cas d'inapplicabilité de l'une d'entre elles quelle
qu'en soit la cause, les autres demeureraient en vigueur et applicables entre les Parties.
|
|
|
CG.
5.7.
|
Nonobstant
la clause d’indexation ci-dessus, les Parties restent fondées à voir
réviser le loyer en application des dispositions d’ordre public des articles
L.145-37, L.145-38 et L.145-39 du Code de commerce.
|
|
|
CG.6.
|
LOYER
DE RENOUVELLEMENT
|
|
|
CG.
6.1.
|
Fixation
du loyer de renouvellement à la Valeur Locative
de Marché
|
En
cas de renouvellement du Bail, les Parties conviennent expressément que le loyer du bail renouvelé sera fixé
à la valeur locative de marché, telle que définie ci-après (la « Valeur Locative de
Marché »), conformément à l’ensemble des dispositions de l’article L.145-34 du
code de commerce.
La
Valeur Locative de Marché visée ci-dessus sera calculée exclusivement par comparaison avec les loyers du
marché, c’est-à-dire :
|
|
-
|
des
prix librement conclus entre bailleurs et preneurs lors de la prise à bail de
nouveaux locaux, en dehors de toute notion de renouvellement amiable ou judiciaire, au
cours des trois (3) ans précédant la date de prise d’effet du renouvellement
du Bail,
|
|
|
-
|
pour
des biens immobiliers comparables aux Locaux Loués, c'est-à-dire des immeubles
de même nature, situés dans un périmètre proche, permettant
l’exploitation d’une activité sous les mêmes rubriques ICPE
que celles de l’Autorisation d’Exploiter, présentant les mêmes
caractéristiques que celles des Locaux Loués, le même standard de
qualité, de construction, d’équipement technologique, de fonctionnalité,
d’utilisation des espaces, de modernité et les mêmes services collectifs,
même desserte de transports en commun et dans le même secteur d’activité,
sauf à corriger si ces éléments venaient à manquer par d'autres
critères de référence à la condition toutefois qu'ils soient
comparables.
|
Les
travaux réalisés par le Preneur, de quelque nature qu’ils soient, et même s’il s’agit de
travaux d’adaptation des locaux loués à leur destination contractuelle ou de mise en conformité avec
la réglementation, seront également pris en considération pour la détermination de la valeur locative,
dès le premier renouvellement du bail au cours duquel ils auront été réalisés (en ce compris
pour les travaux réalisés avant la conclusion du Bail qui n’auront pas fait accession au Bailleur lors de
la conclusion du Bail ainsi que rappelé en Partie 1 des présentes) par dérogation aux dispositions de l’article
R.145-8 du Code de commerce.
Les
Parties conviennent, toutefois, qu’à l’occasion du premier renouvellement suivant la conclusion du présent
Bail, [_____].
Le
plafond conventionnel susvisé concernera tous les renouvellements consécutifs à la conclusion du présent
Bail.
|
|
CG.
6.2.
|
Détermination
de la Valeur Locative de Marché
|
La
Partie la plus diligente fera connaître à l’autre Partie, par lettre recommandée avec accusé
de réception, son intention de faire fixer la Valeur Locative de Marché (la « Notification »)
en indiquant les coordonnées de l’expert qu’elle aura choisi (l’« Expert 1 ») parmi
les sociétés d’expertises immobilières ou personnalités ci-après (la « Liste
d’Experts ») : les experts figurant sur la liste des membres de l’AFREXIM (Association Française
des Sociétés d'Expertises Immobilières), le Président et/ou un ancien Président de la Compagnie
des Experts en estimation de fonds de commerce, indemnités d’éviction et valeurs locatives près la
Cour d’appel du lieu de situation des Locaux Loués ou tout expert spécialisé en estimations immobilières
et de valeur locative figurant sur la liste de la Cour de cassation.
La
Partie notifiée fera connaître dans le délai de quinze (15) jours ouvrables suivant la réception de
la Notification, par lettre recommandée avec accusé de réception, les coordonnées de l’expert
(autre que l’Expert 1) qu’elle aura choisi dans la Liste d’Experts (l’« Expert 2 »).
A défaut de réponse dans le délai susvisé, l’Expert 2 sera désigné par le Président
du Tribunal de Grande Instance du lieu de situation des Locaux Loués, statuant en référé à
la demande de la Partie notifiante, par une décision insusceptible de tout recours.
L’Expert
1 et l’Expert 2 devront, dans les meilleurs délais suivant la Notification :
|
|
-
|
estimer
la Valeur Locative de Marché, conformément à la définition
donnée ci-dessus ;
|
|
|
-
|
se
notifier leur estimation, ainsi qu’aux Parties.
|
Dans
l’hypothèse où il y aurait une différence de moins de 10% entre les estimations de l’Expert 1
et de l’Expert 2, les Parties conviennent expressément, sans recours possible, de retenir l’estimation la plus
élevée comme Valeur Locative de Marché.
Dans
l’hypothèse où la différence entre les estimations de l’Expert 1 et de l’Expert 2 serait
égale ou supérieure à 10%, les Experts 1 et 2 choisiront d’un commun accord, dans un délai raisonnable,
un troisième expert dans la Liste d’Experts autre que ceux déjà choisis (l’« Expert
3 »).
A
défaut de désignation de l’Expert 3 dans le délai ci-dessus, la Partie la plus diligente pourra demander
au Président du Tribunal de Grande Instance du lieu de situation des Locaux Loués, statuant en référé,
par une décision insusceptible de tout recours, de désigner l’Expert 3.
L’Expert
3 devra accepter ou refuser sa mission dans un délai de huit (8) jours ouvrables de la notification de sa désignation.
En cas de refus, il pourra être remplacé par un autre expert choisi dans la Liste
susvisée par simple ordonnance de référé rendue par le Président
du Tribunal de Grande Instance du lieu de situation des Locaux Loués, statuant en référé, par une
décision insusceptible de tout recours.
L’Expert
3 devra :
|
|
-
|
donner
son avis sur la Valeur Locative de Marché, conformément à la définition
précitée en prenant en compte les estimations données par l’Expert
1 et l’Expert 2,
|
|
|
-
|
rendre
sa décision dans les meilleurs délais suivant la notification de sa désignation.
|
Les
Parties conviennent expressément, sans recours possible, de retenir comme Valeur Locative de Marché la moyenne entre
l’estimation donnée par l’Expert 3 et l’estimation la plus élevée proposée par l’Expert
1 et l’Expert 2.
Les
Parties devront fournir à chaque expert les informations nécessaires à la bonne exécution de leur
mission.
Chaque
Partie conservera à sa charge les frais et honoraires de son expert (y compris s’il a été désigné
judiciairement), ceux de l’Expert 3 étant supportés pour moitié par chacune des Parties.
Le
présent Article n’affecte pas la faculté pour le Bailleur de refuser le renouvellement du Bail, ni celle du
Preneur de mettre un terme au Bail.
Pour
sûreté et garantie de l’exécution des obligations de toute nature résultant du présent
Bail à la charge du Preneur, et notamment pour sûreté et garantie du paiement à bonne date des loyers,
charges et impôts remboursables, indemnités d’occupation, charges, travaux, pénalités, indemnités,
sans que cette liste ne soit limitative, le Preneur versera au Bailleur, à la Date d’Effet, [_____].
La
somme remise à titre de dépôt de garantie sera augmentée ou diminuée en même temps et
dans les mêmes proportions que le loyer, chaque fois que celui-ci subira une indexation ou une modification, la différence
étant versée avec le premier terme modifié, [_____].
Le
Bailleur aura la faculté à tout moment d’utiliser, sans autre formalité tout ou partie du dépôt
de garantie pour le règlement par compensation des sommes dues au titre du présent Bail et de ses renouvellements
éventuels. Dans cette hypothèse, le Preneur devra reconstituer ledit dépôt de garantie, dans son intégralité,
à première demande du Bailleur, sous la sanction de l’application de la clause résolutoire, si bon
semble au Bailleur.
Cette
somme sera conservée par le Bailleur pendant toute la durée du Bail et de ses renouvellements et sera remboursée
au Preneur en fin de jouissance, après déménagement, remise des clés, et exécution de tous
travaux éventuels de remise en état des Locaux Loués, déduction faite de toutes sommes dues au Bailleur
à quelque titre que ce soit.
Cette
somme restera au Bailleur à titre de premiers dommages et intérêts et sans préjudice de tous autres
dans le cas de résiliation du présent Bail par suite de l’inexécution par le Preneur de l’une
quelconque de ses obligations.
Ce
dépôt de garantie ne sera pas productif d’intérêts au profit du Preneur.
En
aucun cas, le Preneur ne sera en droit de compenser le dernier terme de loyer et charges avec le dépôt de garantie.
Si
les Locaux Loués devaient être vendus, le montant du dépôt de garantie en possession du Bailleur sera
transféré au nouveau bailleur sur simple notification au Preneur. Le Preneur le reconnaît expressément,
de telle sorte qu’il ne pourra formuler quelque demande de remboursement de dépôt de garantie que ce soit à
l’encontre du Bailleur, sa créance éventuelle de restitution au titre du dépôt de garantie étant
alors détenue contre le nouveau bailleur.
|
|
CG.8.
|
ACCESSOIRES
DU LOYER
|
|
|
CG.
8.1.1.
|
A
titre de condition essentielle du Bail sans laquelle le Bailleur ne se serait pas engagé,
il est expressément convenu que le loyer est considéré comme net
de toutes charges, impôts et taxes pour le Bailleur, au titre des Locaux Loués
hors (i) les dépenses visées par l’article R145-35 du Code de commerce
comme devant impérativement demeurer à la charge du Bailleur et (ii) les
travaux de mise en conformité qui ne seraient pas liés à l’Activité
Spécifique du Preneur définie ci-après.
|
|
|
CG.
8.1.2.
|
Le
Bailleur conservera à sa charge :
|
|
|
-
|
les
dépenses relatives aux grosses réparations mentionnées à
l’article 606 du Code civil ainsi que les honoraires liés à la réalisation
de ces travaux ;
|
|
|
-
|
les
dépenses relatives aux travaux ayant pour objet de remédier à la
vétusté dès lors que ces travaux relèveront des grosses réparations
visées à l’article 606 du Code civil ;
|
|
|
-
|
les
dépenses relatives aux travaux ayant pour objet de mettre les Locaux Loués
en conformité avec la réglementation dès lors que ces travaux ne
seraient pas liés à l’Activité Spécifique ou relèveraient
des grosses réparations mentionnées à l’article 606 du Code
civil.
|
|
|
-
|
Les
honoraires de gestion des loyers des Locaux Loués.
|
|
|
-
|
les
travaux susvisés ne soient la conséquence de désordres résultant
d’un fait du Preneur, de ses salariés, prestataires, fournisseurs, visiteurs
ou clientèle, auquel cas le coût de ces travaux ou remplacements sera à
la charge du Preneur, par dérogation à ce qui précède.
|
|
|
-
|
les
travaux de mise en conformité susvisés ne soient liés à des
travaux d’aménagement du Preneur, auquel cas le coût de ces travaux
ou remplacements sera à la charge du Preneur, quand bien même ils ne seront
pas liés à l’Activité Spécifique du Preneur.
|
Le
Preneur supportera ainsi intégralement, à compter de la Date d’Effet, toutes les charges toutes taxes comprises,
impôts et taxes de toute nature, afférentes aux Locaux Loués (y compris s’agissant de leurs façades,
de leurs abords et de leurs équipements), à la seule exception des charges et dépenses susvisées comme
demeurant à la charge du Bailleur.
L’Inventaire
détaillant les différentes catégories de charges, impôts, taxes et redevances incombant ainsi au Preneur
est annexé aux présentes en (Annexe 19).
Selon
le cas, les dépenses visées à cette Annexe seront prises en charge par le Preneur directement dans le cadre
de son exploitation des Locaux Loués et de son obligation d’entretien telle que rappelée par ailleurs dans
le Bail ou indirectement par avance ou remboursement au Bailleur lorsque ce dernier en conservera la gestion, dans le cadre des
charges générales des Locaux Loués.
Il
est ici précisé que les énumérations figurant à cette Annexe y sont détaillées
aux seules fins d’illustrer les catégories de charges incombant au Preneur et ne peuvent être considérée
comme une liste exhaustive et intangible des installations équipant l’Immeuble ou des prestations les concernant,
ni constituer inversement pour le Bailleur une obligation d’installer lesdits équipements, ni d'assurer lesdites
prestations dans l’Immeuble si ceux-ci n’y sont pas prévus
L’inventaire
des charges consigné dans cette Annexe est susceptible d’être modifié en fonction d’évolutions
de la règlementation ou de demandes émanant du Preneur.
Le
Bailleur ayant opté, en application de l’article 260-2b° du Code général des impôts, au paiement
de la TVA, le loyer et les accessoires du loyer seront majorés de la TVA au taux en vigueur lors de la facturation.
Dans
l’éventualité où le Preneur serait non assujetti à la TVA, il donne son accord exprès
à cette option et accepte en conséquence la facturation de la TVA en sus du loyer et de ses accessoires.
Si
une évolution de la réglementation consistant en une cessation d’opter pour l’application au Bail de
la TVA venait à s’imposer au Bailleur, d’un commun accord, les parties conviennent que le loyer donnera lieu
au paiement du droit de bail ou de tout autre droit ou taxe de remplacement ou de substitution, qui sera supporté par le
Preneur, de même que la taxe additionnelle au droit de bail que le Preneur s’engage à rembourser au Bailleur,
si les lieux loués s’y trouvent assujettis.
Le
Preneur communiquera au Bailleur :
|
|
-
|
son
numéro de TVA intracommunautaire,
|
|
|
-
|
son
centre des impôts de rattachement.
|
|
|
CG.10.
|
MODALITES
DE PAIEMENT DU LOYER ET DE SES ACCESSOIRES
|
Le
Preneur s’oblige à payer au Bailleur le loyer et de ses accessoires en quatre termes de paiement égaux et
d’avance les premier janvier, premier avril, premier juillet et premier octobre de chaque année et pour la première
fois à la Date de Prise d’Effet du Bail, au prorata temporis du trimestre civil en cours.
Les
paiements seront réalisés entre les mains du Bailleur ou du mandataire désigné par lui, par virement
bancaire sur le compte désigné par le Bailleur.
Les
quittances de loyers seront adressées au Preneur à l’adresse de son siège social au moins trente (30)
jours calendaires avant chaque échéance.
En
cas de non-paiement à échéance du loyer dû par le Preneur ou de toute autre somme due en vertu du Bail
et qui n’aurait pas été réglée dans les délais requis, les sommes dues produiront de
plein droit et après l’envoi au Preneur d’une mise en demeure par lettre recommandée avec accusé
de réception demeurée infructueuse pendant un délai de cinq (5) jours ouvrés suivant sa réception
des intérêts au taux légal en France en vigueur lors de la date d’exigibilité de la (ou des)
somme(s) due(s), majoré de 300 points de base sans que le taux ne soit négatif (ci-après les « Intérêts
de Retard »), l’ensemble de ces sommes étant facturé avec la T.V.A., sans que cette majoration
puisse valoir délai de règlement, à compter de la date d’échéance jusqu’au jour
de leur paiement.
Dans
le cas où le défaut de paiement excéderait vingt (20) jours calendaires à compter de la date d’échéance
prévue, une mise en demeure sera adressée par le Bailleur au Preneur par lettre recommandée avec accusé
de réception actant que toutes sommes alors exigibles seront majorées forfaitairement de plein droit d’une
pénalité de 10%, majorée de la TVA, en sus des Intérêts de Retard et ce sans préjudice
de l’application de la clause résolutoire prévue à l’Article CG.13 ci-dessous. Tout mois commencé
sera considéré comme entier.
Le
paiement tardif de trois avis d’échéance, consécutifs ou non, constituera un motif grave et légitime
de refus de renouvellement de Bail.
|
|
CG.11.
|
CHARGES
ET CONDITIONS GENERALES
|
Le
Bail est fait, en outre, aux conditions limitatives suivantes :
Une
fois ses éventuels travaux d’aménagement terminés, le Preneur devra tenir les Locaux Loués constamment
garnis pendant toute la durée du Bail, de meubles, matériels et/ou marchandises en quantité et valeur suffisantes
pour répondre du paiement des loyers et de l’exécution du présent Bail.
|
|
CG.
11.2.
|
Travaux
du Preneur
|
|
|
CG.
11.2.1.
|
Le
Preneur prend en toute connaissance de cause les Locaux Loués dans l’état
où ils se trouveront lors de la Date d’Effet du Bail dans la mesure où
il les occupe depuis leur origine. Un procès-verbal de prise de possession sera
établi entre les Parties au jour de la mise à disposition de la Cellule
6 qui vaudra état des lieux d’entrée conformément à
l’Article CP. 8 pour la Cellule 6.
|
|
|
CG.
11.2.2.
|
Le
Preneur ne pourra faire, dans les Locaux Loués aucun travaux de construction ou
touchant à la structure de la dalle, la solidité et/ou au gros Œuvre
et/ou à la sécurité et/ou aux équipements et/ou au fonctionnement
des Locaux Loués et/ou de l’Immeuble, aucun travaux qui puisse changer la
destination des Locaux Loués ni aucun changement de distribution qui affecterait
les parois ou portes coupe-feu ou les installations techniques sans le consentement exprès
et écrit du Bailleur, sauf s’il s’agit de travaux de mise en conformité
qui seraient imposés par la réglementation ou une injonction de l’Administration.
|
Le
Preneur adressera au Bailleur, préalablement à tout début de réalisation de tous travaux soumis à
autorisation préalable du Bailleur, par lettre recommandée avec accusé de réception ou contre récépissé,
une demande d’autorisation accompagnée d’un dossier comprenant :
|
|
■
|
un
descriptif détaillé des travaux et équipements prévus (pièces
écrites et graphiques) préparé par un maître d’Œuvre,
|
|
|
■
|
un
calendrier prévisionnel de réalisation des travaux préparé
par un maître d’Œuvre,
|
|
|
■
|
le
dossier de demande d'autorisation éventuellement nécessaire (déclaration
de travaux, demande de permis de construire et/ou de démolir, etc.),
|
|
|
■
|
la
liste des entreprises qui interviendront pour la réalisation des travaux concernés,
|
|
|
■
|
la
justification de la souscription des assurances construction en tant que maître
d’ouvrage des travaux (assurance dommage, ouvrage avec une extension de couverture
incluant la garantie de bon fonctionnement des biens d’équipement, les dommages
immatériels et les dommages aux existants, pour des montants appropriés ;
assurance tous risques chantier portant sur l’intégralité des travaux
et comportant une extension de couverture incluant les dommages aux structures préexistantes
ainsi que la responsabilité civile du Bailleur et du Preneur pour les dommages
causés aux tiers du fait de l’exécution des travaux pour des montants
appropriés, etc.) et des assurances de responsabilité inhérentes
aux travaux à réaliser couvrant le Preneur et les intervenants sur le chantier
(notamment responsabilité civile et décennale) avec indication, pour toutes
les assurances, des plafonds de garantie,
|
|
|
■
|
un
rapport écrit émanant d’un bureau de contrôle notoirement connu
qui confirmera que les travaux ne portent pas atteinte à la solidité des
Locaux Loués et/ou de l’immeuble et de ses structures et que, par voie de
conséquence, ils peuvent être réalisés sans inconvénient
ni danger. Le bureau de contrôle du Preneur aura au minimum les études et
le suivi des prestations suivantes : solidité des ouvrages existants et créés,
sécurité des personnes, conformité de toutes les installations électriques,
de climatisation ou autres. Le rapport précisera également les conséquences
des travaux envisagés sur les garanties biennale et décennale en vigueur,
le cas échéant, au titre notamment de précédents travaux
réalisés par le Preneur tant dans le cadre du Bail, le Preneur n’ayant
aucun recours contre le Bailleur si ces garanties sont affectées par les travaux
envisagés.
|
Le
Bailleur s’oblige à notifier sa réponse et, le cas échéant, celle de l’architecte des
Locaux Loués, techniquement motivé(e)s, au Preneur, dans un délai d’un (1) mois maximum à compter
de la notification visée ci-dessus. A défaut de réponse dans ce délai, le Bailleur sera réputé
avoir refusé le projet de travaux du Preneur.
Dans
le cas où l’autorisation serait accordée, le Bailleur pourra exiger que les travaux soient exécutés
sous le contrôle d’un architecte et/ou d’un bureau de contrôle choisi d’un commun accord entre les
parties et/ou de tout autre homme de l’art.
Les
honoraires de l’architecte et/ou du bureau de contrôle et/ou de l’homme de l’art mandaté seront
à la charge du Preneur.
L’autorisation
du Bailleur, dans le cas où elle est accordée, ne sera en rien susceptible d’engager la responsabilité
du Bailleur au titre des travaux réalisés par le Preneur dans les Locaux Loués.
|
|
CG.
11.2.3.
|
Avant
de commencer ses travaux (et après autorisation préalable du Bailleur s’il
y a lieu), le Preneur devra faire son affaire personnelle, à ses frais, du dépôt
à son nom et de l’obtention de toutes les autorisations administratives
éventuellement requises pour la réalisation des travaux (et des formalités
usuelles permettant de s’assurer avant le démarrage des travaux qu’elle
sont purgées de tout recours), de tous les certificats, études et autorisations
de toute sorte qui seraient nécessaires à la réalisation des travaux
(administrations, architectes, voisinage, etc.) ainsi que du paiement de toutes taxes
et participations liées à ces autorisations.
|
Le
Bailleur ne pourra encourir aucune responsabilité en cas de refus ou de retard dans l’obtention de ces autorisations
ainsi que dans le règlement des taxes et participations susvisées.
|
|
CG.
11.2.4.
|
En
cas de travaux soumis à autorisation préalable, et après réalisation
des travaux, le Preneur adressera à l’architecte des Locaux Loués
tout document permettant de vérifier la conformité des travaux exécutés
par rapport au projet initialement notifié au Bailleur.
|
Dans
tous les cas, et même pour les travaux qui ne nécessitent pas l'autorisation préalable du Bailleur, le Preneur
tiendra le Bailleur informé de la réalisation de ses travaux et lui transmettra, dans les meilleurs délais
après achèvement desdits travaux, les plans à jour des Locaux Loués.
|
|
CG.
11.2.5.
|
Sous
réserve du respect des modalités prévues au présent Article
CG. 11.2, le Preneur sera autorisé à accomplir toutes démarches
administratives (y compris toutes demandes de permis de construire et/ou de démolir)
et toute action en référé préventif à compter de la
date à laquelle il aura obtenu l'accord du Bailleur pour la réalisation
de ses travaux dans les Locaux Loués. Le Bailleur devra alors signer tout document
nécessaire à cet effet.
|
|
|
CG.
11.2.6.
|
Le
Preneur devra faire exécuter ses travaux par des entreprises dûment qualifiées,
assurées et expérimentées.
|
|
|
CG.
11.2.7.
|
Le
Preneur ne devra en aucun cas, pour lesdits travaux, utiliser des matières polluantes
ou toxiques ou susceptibles de causer un trouble à l’environnement.
|
|
|
CG.
11.2.8.
|
Il
est interdit au Preneur d’effectuer une quelconque installation pouvant gêner
l’accès aux ventilo-convecteurs, installations d’air conditionné,
trappes de visite, siphons de vidange, robinets d’arrêts et compteurs, tuyauteries,
ou autre installation quelconque qui pourrait exister dans les Locaux Loués.
|
|
|
CG.
11.2.9.
|
En
cas de travaux dont la nature et l’importance le rendent obligatoire, le Preneur
s’engage à souscrire avant le démarrage des travaux les polices d’assurance
suivantes :
|
|
|
a)
|
une
assurance « Dommages-Ouvrage », garantissant le préfinancement
des réparations de dommages de la nature de ceux engageant les responsabilités
des constructeurs au titre des articles 1792 et suivants du Code civil, et ce conformément
à l’article L.242-1 du Code des assurances ;
|
|
|
b)
|
une
assurance « Constructeur Non Réalisateur » selon l’obligation
qui lui en est faite au titre de l’article L.242-2 du Code des assurances ;
|
|
|
c)
|
une
assurance « Responsabilité Civile » garantissant les conséquences
de la responsabilité civile lui incombant en sa qualité de maître
de l’ouvrage en raison de dommages causés aux tiers du fait de tels travaux ;
|
|
|
d)
|
une
assurance « Tous Risques Chantier » garantissant les dommages matériels
aux travaux en cours de réalisation. Celle-ci devra être souscrite pour
le compte commun de tous les intervenants et comporter une clause de renonciation à
recours contre ceux-ci. De même, elle comportera obligatoirement une extension
« dommages aux existants » pour garantir sans recherche de responsabilité,
les dommages occasionnés aux Locaux Loués lors de la réalisation
des travaux.
|
|
|
e)
|
Au
titre de ces polices, le Preneur est seul responsable du paiement des primes afférentes
et supportera seul la charge des franchises éventuelles ainsi que des éventuelles
conséquences de clauses de non garanties ou d’exclusion.
|
Dans
la mesure où les travaux du Preneur auraient pour effet le paiement de surprimes d’assurance par le Bailleur, celles-ci
seront refacturées au Preneur.
|
|
CG.
11.2.10.
|
Le
Preneur devra se conformer, pour la réalisation de ses travaux, aux règles
de l’art, aux dispositions légales et règlementaires, faire son affaire
personnelle de toute déclaration et/ou de l’obtention de toute autorisation
administrative nécessaire pour la réalisation de ses travaux et payer toutes
taxes dont ces autorisations seraient le fait générateur (notamment, le
cas échéant, la taxe locale d’équipement), de telle manière
que le Bailleur ne soit jamais inquiété, ni recherché.
|
|
|
CG.
11.2.11.
|
Tous
les aménagements, installations, améliorations ou embellissements faits
par le Preneur ayant la nature d’immeuble par destination deviendront la propriété
du Bailleur en fin de jouissance pour quelque motif que ce soit (en ce compris en cas
de résiliation judiciaire), sans indemnité au profit du Preneur. Le Bailleur
aura également la faculté d’exiger du Preneur la remise en tout ou
partie des Locaux Loués dans leur état initial, sans qu’aucune indemnité
ne soit due au profit du Preneur.
|
|
|
CG.
11.2.12.
|
Par
dérogation à ce qui précède, le Preneur pourra reprendre
la possession des éléments d’équipement informatique et de
sécurité (caméras, etc.), à charge pour lui d’effectuer
les travaux de remise en état qui s’avèreraient nécessaires
de ce fait.
|
|
|
CG.
11.3.
|
Entretien
- Réparations
|
|
|
CG.
11.3.1.
|
Le
Preneur devra, pendant toute la durée du Bail et de ses renouvellements, maintenir
l’intégralité des Locaux Loués ainsi que les aménagements,
installations, améliorations et embellissements effectués par lui ayant
la nature d’immeubles par destination, en bon état d’entretien et
de réparations locatives, à l'exception des travaux visés à
l’Article CG. 8.1.2 comme demeurant à la charge du Bailleur. Etant
ici précisé que la dalle constitue un élément de structure
et à ce titre est intégré aux dispositions de l’article CG
8.1.2 tandis qu’il incombera au Preneur d’assurer l’entretien et la
réparation de la chape qui assure la finition de la dalle et constitue un support
de revêtements.
|
|
|
CG.
11.3.2.
|
Le
Preneur devra notamment faire entretenir, réparer et/ou remplacer, si besoin est,
tout ce qui concerne les installations à son usage personnel, ainsi que notamment
les équipements, fermetures et serrures des fenêtres, portes et volets,
les glaces et vitres. Il devra maintenir particulièrement les sols et revêtements
de sol des cellules logistiques en bon état et remédier à tout défaut.
Le Preneur prendra à sa charge plus généralement la réparation
des dégradations sur les Locaux Loués, qu'elles soient causées par
lui-même ou par un tiers, identifié ou non identifié. Tout remplacement
se fera obligatoirement à l'identique, sauf accord préalable, exprès
et écrit du Bailleur.
|
|
|
CG
.11.3.3.
|
Le
Preneur fera son affaire personnelle, à ses frais exclusifs, pendant toute la
durée du Bail, des travaux de maintien en conformité des Locaux Loués
au regard de toutes les réglementations en vigueur qui seraient liés aux
activités exercées par le Preneur dans les Locaux Loués, à
la seule exception des travaux visés à l’Article CG. 8.1.2 comme
demeurant à la charge du Bailleur.
|
|
|
CG.
11.3.4.
|
Le
Preneur s’engage à se conformer à toute évolution de la règlementation
applicable à ses activités et à respecter scrupuleusement et à
mettre en Œuvre à ses frais exclusifs toutes les prescriptions de mise en
conformité ou autres qui seraient imposées par toute autorité administrative
au titre de la règlementation sur les installations classées (DREAL, etc
…) directement et exclusivement liées aux activités exercées
par le Preneur dans le locaux Loués à compter de la Date d’Effet
du Bail et jusqu’à l’expiration du Bail et de ses renouvellements
successifs, quelle que soit la forme par laquelle ces prescriptions auront été
imposées et à réaliser à ses frais tous les travaux nécessaires
à la seule exception des travaux visés à l’Article CG.
8.1.2 comme demeurant à la charge du Bailleur.
|
|
|
CG.
11.3.5.
|
Le
Preneur souscrira les contrats d’entretien nécessaires au respect de ses
obligations et les maintiendra en cours pendant toute la durée du Bail. Pour l’hypothèse
où le Bailleur souscrirait lui-même un tel contrat d’entretien, il
le notifierait au Preneur. Dans cette hypothèse, le Preneur devra rembourser au
Bailleur l’ensemble des frais résultant des contrats d’entretien souscrits
par lui.
|
Le
Preneur souscrira, auprès d’organismes agréés, des contrats de vérification des équipements,
installations électriques, extincteurs, RIA et chauffage et se conformera aux prescriptions de ces organismes. Le Preneur
devra faire effectuer tous les contrôles de sécurité périodiques concernant toutes les installations
et justifier au Bailleur à première demande, de la souscription de tous les contrats nécessaires ou utiles
à la gestion techniques de l’immeuble auprès d’entreprises qualifiées, du respect des conditions
de garantie des divers constructeurs ou installateurs et de la réalisation de ces contrôles. En cas de carence constatée,
le Bailleur pourra, après mise en demeure adressée au Preneur par lettre recommandée avec accusé de
réception restée infructueuse plus de quinze (15) jours calendaires, désigner un organisme de contrôle
agréé et faire procéder à ces contrôles aux frais du Preneur.
Le
Preneur souscrira en outre un abonnement Prévention et Conseil Incendie AP auprès d’un organisme agréé
par l’Assemblée plénière des Sociétés d’Assurances Dommages (APSAD), et s’engage
à respecter les mesures préconisées par l’organisme pour le maintien de la conformité aux normes
de sécurité incendie des installations livrées par le Bailleur. De même le Preneur s’engage à
respecter (i) les règles APSAD régissant les modalités de stockage et de l’exploitation de locaux munis
de sprinklers, et (ii) les règles de l’APSAD régissant les installations de robinets incendie armés
ou d’extincteurs portatifs.
En
outre, dans l’hypothèse où le Preneur souhaiterait des modalités de stockage ou stocker des marchandises
particulières autres que celles admises par les règles APSAD en matière de sprinklers, et si de ce fait il
est nécessaire de modifier ou étendre l’installation de sprinklers pour en tenir compte, le Preneur s’engage
à rembourser au Bailleur l’intégralité des coûts supportés par le Bailleur pour la modification
ou l’extension du système.
Le
Preneur s'oblige à remettre annuellement au Bailleur la liste des contrats d’entretien souscrits, les comptes-rendus
des interventions périodiques des prestataires chargés de cet entretien ainsi que les rapports de la commission
de sécurité compétente.
Le
Preneur devra en outre faire son affaire, à ses frais, à son départ de la résiliation de l'ensemble
des contrats souscrits dans le cadre du présent Article.
|
|
CG.
11.3.6.
|
La
société GEMFI, alors bailleur, a remis au Preneur, ce que ce dernier reconnaît,
au cours du Bail Initial un exemplaire du D.I.U.O établi à l’achèvement
des Locaux Loués Initiaux. Le Bailleur s'engage à remettre au Preneur un
exemplaire du D.I.U.O. établi à l'achèvement de la Cellule 6.
|
Le
Preneur devra respecter scrupuleusement l’ensemble de ces prescriptions.
|
|
CG.
11.3.7.
|
Le
Preneur s'oblige à entretenir l'ensemble des portes sectionnelles et à
prendre en charge tous dommages causés à ces équipements.
|
|
|
CG.
11.3.8.
|
Le
Preneur accepte qu'à défaut d'avoir effectué lui-même tous
travaux d'entretien, de réparation et de remplacement mis à sa charge,
conformément à ce qui est convenu au présent Article CG. 11.3, le
Bailleur entreprenne, trente (30) jours calendaires après l'envoi d'une lettre
recommandée avec accusé de réception restée infructueuse,
de faire effectuer en ses lieu et place, lesdits travaux, le Preneur s'engageant à
en rembourser le coût effectif, en ce compris tous frais et honoraires s'y rapportant,
dans les quinze (15) jours calendaires de l'état qui lui sera adressé par
le Bailleur, sans préjudice de tous frais de remise en état et de dommages
et intérêts causés par l’inobservation des stipulations du
présent Article et sans préjudice de la mise en Œuvre de la clause
résolutoire stipulée à l’Article CG.13. Il est convenu qu'en
cas d'urgence ou de péril, le Bailleur sera dispensé du délai de
trente (30) jours calendaires susvisé et donnera un préavis raisonnable
compte tenu de l’urgence ou du péril constaté.
|
|
|
CG.
11.3.9.
|
Le
Preneur ne devra en aucun cas rien faire ou laisser faire qui puisse détériorer
les Locaux Loués. Il devra prévenir le Bailleur immédiatement de
toute atteinte qui serait portée à la propriété ainsi que
de toutes dégradations ou détériorations qui viendraient à
se produire dans les Locaux Loués, dont il aurait connaissance.
|
|
|
CG.
11.3.10.
|
Il
devra en outre informer le Bailleur de tous travaux à réaliser dans les
Locaux Loués demeurant à sa charge dont il aurait connaissance et notamment
tous travaux signalés à ce titre dans les rapports établis à
la demande du Preneur dans le cadre de son obligation d’entretien et de respect
de la réglementation. Dans tous les cas où il s'avérerait indispensable
d'entrer dans les Locaux Loués pour cause de sinistre qui semblerait avoir sa
source dans les Locaux Loués, le Bailleur ou le Gestionnaire ou mandataire technique
des Locaux Loués sont formellement autorisés à pénétrer
dans les Locaux Loués, sans formalité autre que d'en aviser le Preneur
dans les plus brefs délais.
|
|
|
CG.
11.3.11.
|
L'ensemble
du coût des travaux ou réparations entrant dans le champ d'application des
garanties ou assurances susvisées et effectivement indemnisé ne pourra
être refacturé au Preneur.
|
|
|
CG.
11.3.12.
|
Le
Preneur prendra toutes précautions utiles pour éviter le gel de tous appareils,
conduits et canalisations.
|
|
|
CG.
11.3.13.
|
Le
Preneur sera responsable de toutes réparations afférentes aux Locaux Loués
que le Bailleur aurait été amené à effectuer en cas de nécessité,
soit par défaut d’exécution des réparations dont le Preneur
a la charge en vertu du présent Article CG. 11.3, soit par les dégradations
résultant de son fait, du fait de son personnel ou de ses visiteurs.
|
|
|
CG.
11.4.
|
Travaux
du Bailleur
|
|
|
CG.
11.4.1.
|
Le
Preneur devra supporter sans pouvoir prétendre à aucune indemnité,
ni diminution de loyer toutes réparations et travaux que le Bailleur serait amené
à faire exécuter dans les Locaux Loués et ce quelle que soit la
nature et la durée de ces travaux, quand bien même celle-ci dépasserait
vingt-et-un jours, et ce par dérogation expresse aux dispositions de l’article
1724 du Code civil. Les travaux concernés appartiennent aux catégories
listées ci-dessous :
|
|
|
(i)
|
les
travaux visant à remédier à une situation qui porterait atteinte
à la sécurité des biens et des personnes au sein des Locaux Loués
|
|
|
(ii)
|
les
travaux destinés à rétablir une exploitation entravée au
sein des Locaux Loués
|
|
|
(iii)
|
tous
travaux de réparation, amélioration, reconstruction, surélévation,
modification, agrandissement et autres ne résultant pas d’une demande du
Preneur,
|
Néanmoins,
dans une telle hypothèse, le Bailleur s'engage à faire ses meilleurs efforts aux fins de limiter la durée
des travaux et leurs inconvénients pour le Preneur et/ou tout occupant de son chef, et à se concerter avec le Preneur
pour déterminer les modalités d’exécution (notamment horaires) des travaux. A cet effet, le Bailleur
devra :
|
|
-
|
informer
préalablement le Preneur du calendrier envisagé au moins un (1) mois avant
le commencement du chantier sauf urgence,
|
|
|
-
|
établir
un calendrier de travaux après concertation préalable avec le Preneur et
les occupants de son chef,
|
|
|
-
|
s’assurer
que ses travaux gênent le moins possible l’activité du Preneur et/ou
de ses occupants (définition de zones spécifiques d’intervention),
|
Le
Preneur devra déposer à ses frais et sans délai tous coffrages, enseignes, agencement et décorations,
ainsi que toutes installations qu'il aura faites et dont l'enlèvement sera utile pour la recherche et la réparation
des fuites de toute nature, de fissures dans les conduits et gaines, notamment après incendie ou infiltrations, pour tout
ravalement, et, en général, pour l'exécution de tous travaux.
Toutefois,
pour tous travaux d’urgence qui porteraient atteinte à la sécurité des biens et des personnes au sein
des Locaux Loués, le Bailleur s’engage :
|
|
-
|
(i)
à mandater un expert dans les 48h à compter de la connaissance qu’il
a du sinistre
|
|
|
-
|
(ii)
à diligenter les réparations dans les meilleurs délais
|
|
|
-
|
A
défaut de réaction du Bailleur dans les 48h et après relance restée
infructueuse 24h suite à l’envoi des devis de réparation, le Preneur
est autorisé à engager directement les réparations et ce sous les
réserves cumulatives suivantes, dans la limite d’un montant de 10 000 €
HT :
|
|
|
-
|
Les
devis devront être impérativement établis par les entreprises ayant
réalisé les travaux initiaux ou les installations existantes et ce afin
de pouvoir assurer la poursuite des éventuelles garanties.
|
|
|
-
|
Avant
toute intervention, un constat d’huissier devra être établi, à
titre conservatoire, afin de constater l’état des ouvrages en cause avant
ladite intervention.
|
|
|
CG.
11.4.2.
|
En
application de l’article L. 145-40-2 du Code de commerce, le Bailleur a communiqué
en Annexe 18, et communiquera au Preneur tous les trois (3) ans, un état
prévisionnel des travaux qu’il envisage de réaliser, assorti du budget
correspondant, tout en rappelant les travaux réalisés depuis les trois
(3) derniers exercices ainsi que leur coût.
|
Il
est précisé que les états prévus au présent article sont communiqués au Preneur aux
seules fins de son information. En conséquence, le Preneur ne pourra pas s’en prévaloir à d’autres
fins et notamment pour exiger du Bailleur la réalisation des travaux mentionnés dans les états.
Le
Bailleur restera libre de réaliser ou non lesdits travaux, de différer leur réalisation ou d’y renoncer.
Il pourra également les modifier ou les réaliser à des conditions financières autres que celles figurant
dans le budget prévisionnel, en en informant le Preneur.
Il
devra réaliser les travaux complémentaires nécessités par l’urgence ou le bon fonctionnement
de l’Immeuble.
|
|
CG.
11.5.
|
Abonnements
divers
|
Le
Preneur est tenu de :
|
|
-
|
Souscrire
à son nom et à ses frais tous les abonnements d’approvisionnement
énergétiques et de télécommunication, et plus généralement
de tous fluides nécessaires à l’exercice de son activité,
|
|
|
-
|
Régler
directement aux services concernés les montants des abonnements, des taxes et
des consommations correspondantes, celui du raccordement éventuel et tous les
frais de résiliation.
|
|
|
-
|
Si,
par impossible, le Bailleur était amené à régler certaines
dépenses pour le compte du Preneur, ce dernier s’engage à les lui
rembourser à première demande.
|
|
|
CG.
11.6.
|
Planchers
- Ascenseurs - Murs
|
A
peine de réparations à ses frais et de dommages-intérêts, le Preneur ne devra pas faire supporter aux
murs et aux planchers une charge supérieure à leur résistance. En cas de doute, le Preneur devra s’assurer
du poids autorisé auprès de l’architecte des Locaux Loués. De même, le Preneur veillera à
ne pas surcharger les ascenseurs (y compris monte-charges) s’il en existe et à ne pas dégrader les cabines.
|
|
CG.
11.7.
|
Plaques
et enseignes
|
Le
Preneur pourra apposer toutes plaques et enseignes lumineuses ou autres y inclus sans que cela ne soit limitatif, tout auvent
et/ou bannière, en saillie ou non, sous réserve de l’obtention de toute autorisation nécessaire, du
respect des servitudes applicables aux Locaux Loués, à ses propres risques et périls, garantissant le Bailleur
contre tous recours nés de l’installation ou de la présence de ces plaques ou enseignes. Le Preneur devra
en outre veiller à ce que les accroches soient compatibles avec les efforts et les contraintes pouvant résulter
des conditions climatiques et faire valider le système préconisé par l’Architecte des locaux Loués.
Le
Preneur s’oblige à procéder à la dépose de toutes plaques et enseignes en fin de jouissance
et à faire procéder aux travaux de remise en état qui s’avéreraient nécessaires, le tout
à ses frais exclusifs.
|
|
CG.
11.8.
|
Usage
d’appareils et autres
|
Le
Preneur ne devra pas faire usage d’appareils à combustion lente ou produisant des gaz nocifs à l’exception
des machines destinées au filmage des palettes et plus généralement de tout appareil dangereux, le Bailleur
n’entendant pas être responsable des accidents matériels et corporels susceptibles d’en découler.
Il
ne devra pas utiliser des appareils susceptibles d’être entendus hors des Locaux Loués ou de perturber le voisinage.
Le
Preneur fera son affaire personnelle, sans recours contre le Bailleur, en cas d’utilisation de radio, télévision
ou autres, de la suppression des bruits ou parasites troublant sa propre réception des ondes.
Le
Preneur fera son affaire personnelle, à ses risques et périls et frais, de toute réclamation émanant
de voisin ou de tiers, notamment pour bruits, éclairs, chaleur, parasites, trépidations.
Le
Preneur s’interdit de stocker ou entreposer dans les Locaux Loués, aucun gaz, matières combustibles ou toxiques
et plus généralement aucun matériaux dangereux autres que les produits faisant l’objet de l’Autorisation
d’Exploiter et dans les conditions prescrites par celle-ci et de la règlementation applicable aux installations classées
pour la protection de l’environnement ainsi qu’indiqué ci-après à l’Article CG. 11.14.
|
|
CG.
11.10.
|
Visite
des lieux - Déménagement
|
|
|
CG.
11.10.1.
|
Sous
réserve d’être prévenu au moins quarante-huit (48) heures à
l’avance par écrit, sauf en cas d’urgence, le Preneur devra laisser
pénétrer en tout temps, dans les Locaux Loués, le Bailleur, ses
mandataires et entrepreneurs, pour visiter et s’assurer de l’état
des Locaux Loués : de même pour les réparer, et les entretenir
aux frais et risques du Preneur si celui-ci ne remplissait pas ses obligations découlant
de l’Article CG. 11.3 ci-dessus et ce, conformément aux dispositions
de l’Article CG. 11.3.8 ci-dessus. Le Bailleur, ses mandataires et entrepreneurs
devront se conformer strictement aux consignes de sécurité édictées
par le Preneur.
|
|
|
CG.
11.10.2.
|
Sous
les réserves visées à l'Article CG. 11.10.1 ci-dessus, dès
que le congé aura été donné, et au moins pendant les six
(6) derniers mois de jouissance du Bail ou de ses renouvellements, et encore en cas de
mise en vente des Locaux Loués (en tout ou partie), le Preneur devra les laisser
visiter par le ou les représentants du Bailleur, chaque jour ouvré de dix
à dix-sept heures et à toute autre heure avec l’autorisation du Preneur.
Le Bailleur aura le droit d’apposer un panneau figurant la mise en location ou
en vente de tout ou partie du bâtiment.
|
|
|
CG.
11.10.3.
|
Le
Preneur devra prévenir de son déménagement au moins un (1) mois
à l’avance, afin de permettre au Bailleur de faire au percepteur les déclarations
légales.
|
|
|
CG
.11.11.
|
Prescriptions
diverses
|
Pour
autant que de tels règlements existent, le Preneur s’engage à se conformer aux prescriptions de tous éventuels
règlements de copropriété et/ou règlement intérieur des Locaux Loués.
|
|
CG.
11.12.
|
Responsabilité
et recours
|
Le
Preneur renonce expressément à tous recours et actions contre le Bailleur, sauf en cas de faute ou carence de celui-ci :
|
|
i.
|
du
fait de l’endommagement et/ou de la destruction totale ou partielle de son mobilier,
de son matériel et, plus généralement, de tous objets lui appartenant
ou dont il serait détenteur à quelque titre que ce soit, et du fait de
la privation de jouissance et toutes pertes d’exploitation;
|
|
|
ii.
|
en
cas de vol, de tentative de vol, de tout acte délictueux, ou de toute voie de
fait dont le Preneur pourrait être victime dans les Locaux Loués, le Preneur
devant faire son affaire personnelle d’assurer comme il le jugera convenable la
garde et la surveillance des Locaux Loués et de ses biens, les services éventuellement
assurés dans les Locaux Loués ne pouvant y suppléer ;
|
|
|
iii.
|
pour
toute action basée sur l’article 1719-3° du Code Civil, en ce qui
concerne les troubles de jouissance qui pourraient être apportés par des
tiers par voie de fait ou autrement ; étant convenu que le Bailleur s’engage,
à cet égard, à apporter son concours actif au Preneur pour procéder
aux démarches auprès des tiers afin de limiter, autant que possible, la
gêne du Preneur ;
|
|
|
iv.
|
en
cas d’expropriation pour cause d’utilité publique, tous les droits
du Preneur étant réservés contre la partie expropriante.
|
Cette
liste n’est pas limitative.
|
|
CG.
11.13.
|
Hygiène
et Sécurité
|
Le
Preneur s’engage à respecter et faire respecter par ses préposés, prestataires, Exploitant, et fournisseurs
toutes les règles et consignes relatives à la prévention, l’hygiène et la sécurité
concernant les Locaux Loués y compris celles qui pourraient résulter de toute instruction écrite du Gestionnaire
des Locaux Loués et/ou du Bailleur et/ou de toute administration.
Pour
le cas où le Bailleur ferait intervenir une entreprise extérieure dans les Locaux Loués et sauf urgence,
le Bailleur communiquera au Preneur, au moins quarante-huit (48) heures avant toute intervention, les coordonnées de/ des
entreprises intervenantes afin que le Preneur puisse déterminer, en concertation avec ces entreprises et le Bailleur, les
mesures de prévention et, s’il y a lieu, le plan de prévention.
|
|
CG.
11.14.
|
Installations
classées pour la Protection de l'Environnement
|
Il
est rappelé que l’Exploitant est à la date de signature des présentes le titulaire de l’Autorisation
d’Exploiter et que conformément aux stipulations de l’Article CG. 11.17, il occupe les Locaux Loués,
en sa qualité de prestataire logistique unique du Preneur à la demande de ce dernier.
Le
Preneur, ayant parfaite connaissance de l’Autorisation d’Exploiter, déclare que toutes les autorisations rendues
nécessaires par les lois et règlements en vigueur à la date d’effet du Bail et notamment la réglementation
ICPE, pour l'exercice de ses activités et l'utilisation des Locaux Loués ont été obtenues.
Le
Preneur déclare avoir une parfaite connaissance de toutes les dispositions et prescriptions de l’Autorisation d’Exploiter
ainsi que de la réglementation environnementale applicable à ses activités, et dispose de toute la compétence
nécessaire pour en apprécier la portée. A cet égard, le Preneur renonce à tous recours contre
le Bailleur de ce chef.
|
|
CG.
11.14.1.
|
Le
bénéfice de l’Autorisation d’Exploiter ainsi conféré
à l’Exploitant n’implique pas de la part du Bailleur, ni à
la Date d’effet du Bail ni en cours du Bail, aucune garantie pour l’obtention
d’autorisations administratives ultérieures nécessaires à
l’exercice desdites activités.
|
En
conséquence, le Bailleur ne pourra être tenu pour responsable en cas de refus ou de retard dans l’obtention
de ces autorisations.
|
|
CG.
11.14.2.
|
Le
Preneur s’engage à n’exercer et se porte fort de ce que l’Exploitant
n’exerce aucune nouvelle activité soumise à autorisation, déclaration
ou enregistrement sans avoir préalablement obtenu une telle autorisation. Il s’oblige
à fournir au Bailleur une photocopie de toutes les pièces justificatives
relatives aux demandes et aux autorisations administratives obtenues pour l’exercice
de son activité et à demander au Bailleur son accord écrit préalable
sur les autorisations complémentaires demandées. Le Preneur garantit le
Bailleur contre toute condamnation, tout dommage direct ou indirect du fait du non-respect
de tout Article de ce Bail, sans préjudice pour le Bailleur de demander la résiliation
du Bail ainsi que des dommages-intérêts.
|
Il
est en outre expressément convenu que dans l’hypothèse d’une faute ou d’une négligence
du Preneur ou de l’Exploitant, le cas où par suite de contravention à la règlementation spéciale
relative à l’Activité Spécifique du Preneur ou à l’utilisation des locaux Loués,
la fermeture provisoire ou définitive des Locaux Loués ou la suspension de l’Autorisation d’Exploiter
serait ordonnée par l’administration, une telle fermeture ou suspension n’entrainerait ni la résiliation
du Bail, ni la réduction ou suppression des charges financières auxquelles le Preneur est tenu en vertu du Bail
et sans préjudice du droit réservé au Bailleur de mettre fin au contrat de Bail pour non-exploitation des
Locaux Loués. Le Preneur resterait donc tenu, pendant toute la durée de cette éventuelle fermeture, au paiement
du Loyer, des Charges et Accessoires prévus au Bail comme à l’exécution de toutes les conditions du
Bail.
|
|
CG.
11.14.3.
|
Le
Preneur s’oblige à s’acquitter du paiement (ou à procéder
au remboursement) de toutes sommes, redevances, taxes et autres qui seraient réclamées
en contrepartie du maintien de l’Autorisation d’Exploiter, et notamment en
application de la législation fiscale ou environnementale d’utilisation
des locaux à usage d’entrepôts, pour toute redevances exigibles ou
résultant de prescriptions applicables en matière d’hygiène,
de sécurité, de salubrité.
|
|
|
CG.
11.14.4.
|
Le
Preneur s'engage expressément à respecter et à faire respecter à
l’Exploitant l'ensemble des prescriptions préfectorales ou règlementaires
applicables à ces ICPE et en particulier celles de tout arrêté préfectoral
d'autorisation d'exploiter dont il est et deviendrait titulaire ainsi que toutes les
prescriptions de tout futur arrêté complémentaire.
|
Sans
préjudice de l’obligation pour le Preneur de respecter la destination des Locaux Loués telle qu’énoncée
à l’Article CP. 7, le Preneur s’engage à informer, de manière préalable, le Bailleur (i)
de tout projet de changement notable dans l’exploitation des Locaux Loués et (ii) de toute déclaration et/ou
demande d’autorisation que le Preneur souhaiterait effectuer, en cours de Bail, en application de la réglementation
ICPE.
Sauf
autorisation expresse du Bailleur, le Preneur et l’Exploitant seront tenus d’exploiter les Locaux Loués conformément
aux rubriques visées à l’Autorisation d’Exploiter et en particulier aux maximums de volume de stockage
autorisés. Le Preneur sera responsable vis-à-vis du Bailleur de la péremption de l’autorisation concédée
pour une rubrique quelconque (à l’exception des rubriques 2663-1 et 2663-2 concernant les pneumatiques) qui lui serait
imputable du fait de l’absence d’exploitation des Locaux Loués ou d’une partie de ceux-ci pour lesdites
activités. Le Preneur et l’Exploitant s’engagent à ce titre à obtenir de nouveau les autorisations
nécessaires aux rubriques de la nomenclature ICPE qui seraient de son fait devenues caduques de façon à ce
que l’intégralité des activités autorisées aux termes de l’Autorisation d’Exploiter
et de ses éventuels arrêtés complémentaires ou modificatifs soit de nouveau autorisée. Il est
en tant que de besoin précisé que la péremption d’une rubrique ICPE ne devra en aucun cas être
susceptible d’entraîner la perte de l’Autorisation d’Exploiter dans son ensemble ni porter sur la rubrique
1510.
|
|
CG.
11.14.5.
|
Le
Preneur fera son affaire des autorisations administratives à obtenir de façon
à ce que le Bailleur ne soit jamais inquiété à ce titre.
|
Le
Preneur informera le Bailleur des démarches qu’il ou que l’Exploitant a l’intention d’effectuer
en ce sens et lui communiquera à ce titre le Porter-à-connaissance et/ou le récépissé de déclaration
et/ou l’arrêté d’enregistrement et/ou l’arrêté d’autorisation de manière
à ce que le Bailleur puisse vérifier que lesdites démarches ne remettent pas en cause l’Autorisation
d’Exploiter. Si ces démarches s’avéraient conduire à une modification notable des conditions
d’exploitation autorisées au titre de l’Autorisation d’Exploiter, il conviendra de distinguer deux cas
de figure :
-
(i) dans l’hypothèse d’une optimisation de l’Autorisation d’Exploiter, le Preneur sera tenu à
une simple information du Bailleur sur la base des éléments susvisés ;
-
(ii) dans l’hypothèse d’une dégradation de l’Autorisation d’Exploiter, le Bailleur pourra
opposer un refus pour juste motif à la poursuite de ces démarches par le Preneur.
Si
les autorisations administratives n’étaient pas obtenues, le Preneur n’aura aucun recours contre le Bailleur
et ne pourra suspendre ou interrompre le paiement du loyer et de ses accessoires ni aucune de ses obligations contractuelles.
A
défaut de remise du récépissé de dépôt du Porter-à-connaissance et/ou du récépissé
de déclaration et/ou de l’arrêté d’enregistrement et/ou de l’arrêté d’autorisation,
au Bailleur, à l’expiration d’un délai de trente (30) jours calendaires hors mois d’aout, à
compter de la date de réception par le Preneur des documents susvisés, une indemnité de cinq cents euros
(500 €) hors taxes par jour calendaire de retard sera due par le Preneur au Bailleur.
|
|
CG.
11.14.6.
|
Le
Preneur devra mettre en conformité l’ICPE avec toute réglementation
en vigueur et à venir, à ses frais exclusifs, de sorte que le Bailleur
ne soit jamais inquiété à ce sujet (étant rappelé
que le Bailleur conservera toutefois à sa charge la réalisation des travaux
visés à l’Article CG. 8.1.2 et que le Preneur veillera à
ce titre à tenir le Bailleur parfaitement informé des prescriptions et/ou
demandes de l’administration).
|
Le
Preneur s’engage à faire fonctionner et à entretenir l’ICPE de façon à ce que cette installation
ne soit pas de nature à causer une quelconque nuisance aux tiers, il tiendra indemne le Bailleur de tout recours de tiers
dans ce cadre. En ce qui concerne les lois, réglementations, ordonnance, décrets ou directives permettant une exécution
différée de leurs prescriptions, le Preneur s’engage à s’y conformer dans les délais impartis
et en tout état de cause, au plus tard à la date de libération des Locaux Loués.
|
|
CG.
11.14.7.
|
Le
Preneur s’engage à ce que l’Exploitant déclare sans délai
à l’Inspection des ICPE, et à informer le Bailleur dès qu’il
en aura connaissance, de tout accident ou incident survenu du fait du fonctionnement
de toute installation classée, qui soit de nature à porter atteinte aux
intérêts mentionnés à l’article L.511-1 du Code de l’environnement,
et de façon plus générale à transmettre au Bailleur l’ensemble
des correspondances qui lui seraient transmises par l’Exploitant et que ce dernier
aura échangées avec les autorités administratives compétentes
pendant toute la durée du Bail.
|
De
même dans l’hypothèse du transfert de l’Autorisation d’Exploiter au profit de l’une des Parties,
la Partie qui en sera titulaire aura l’obligation de déclarer sans délai à l’Inspection des ICPE,
et à informer l’autre Partie, dès qu’elle en aura connaissance, de tout accident ou incident survenu
du fait du fonctionnement de toute installation classée, qui soit de nature à porter atteinte aux intérêts
mentionnés à l’article L.511-1 du Code de l’environnement, et de façon plus générale
à transmettre à l’autre Partie l’ensemble des correspondances échangées avec les autorités
administratives pendant toute la durée du Bail.
|
|
CG.
11.14.8.
|
Il
est expressément convenu entre les Parties qu’à la libération
des Locaux Loués, les Parties auront l’obligation de collaborer dans le
cadre de la procédure de changement d’exploitant au bénéfice
du Bailleur et/ou d’un futur preneur des Locaux Loués, de façon à
ce qu’en tout état de cause, le bénéfice de l’autorisation
d’exploiter existante ne soit jamais remis en cause.
|
En
conséquence, aucune notification de cessation d’activité ou toute autre décision relative aux ICPE
exploitées dans les Locaux Loués, telle que prévu par le Code de l’environnement, ne pourra intervenir
sans accord écrit express et préalable du Bailleur.
Le
cas échéant et sous réserve de l’obtention de l’accord préalable écrit précité
du Bailleur, le Preneur s’engage à ce que l’Exploitant effectue toute démarche de cessation d’activité
de l’ICPE auprès de l’administration et en justifie auprès du Bailleur. Dans l’hypothèse
où le Bailleur accepterait la cessation d’activité de ladite ICPE, le Preneur devra faire procéder
à l’enlèvement des ICPE ainsi qu’à tous travaux de remise en état et de dépollution
y afférents, le tout en conformité avec le dossier de cessation d’activité approuvé par l’administration.
|
|
CG.
11.15.
|
Pollution
des sols
|
Le
rapport de sols est annexé ci-après en Annexe 12.
Le
Preneur prendra et fera prendre à l’Exploitant toutes les mesures nécessaires et respectera toutes mesures
prescrites par la loi ou les règlements en vigueur afin de préserver les Locaux Loués, à tout moment
de toute forme de pollution.
Si
d’une façon ou d’une autre, à la suite des agissements ou de l’abstention du Preneur, de ses préposés,
représentants ou cocontractants, une pollution se révélait, le Preneur en serai tenu pour responsable. Il
devrait alors exécuter tous les travaux nécessaires afin de supprimer la source de pollution et d’en éliminer
toutes les conséquences, sur ou dans la propriété du Bailleur, ainsi que dans ou sur les propriétés
voisines et laissera le Bailleur indemne.
A
cette fin, il s’engage à informer le Bailleur dès la découverte d’une pollution qui lui serait
imputable et à désigner à ses frais, un expert reconnu et agréé au préalable par
le Bailleur et dont la mission sera d’étudier la nature et l’étendue de la pollution et les moyens à
mettre en Œuvre afin d’en supprimer la source et d’en éliminer toutes les conséquences.
Une
copie du rapport sera communiquée sans délai par le Preneur au Bailleur. En outre, dans l’hypothèse
où le Bailleur aurait encouru des frais d’étude et de contrôle liées soit à l’établissement
des travaux à réaliser pour y remédier, soit encore pour contrôler les travaux réalisés
par le Preneur, ce dernier s’engage à rembourser au Bailleur l’intégralité de ces frais.
En
tout état de cause, à la libération des Locaux Loués, un rapport de pollution sera réalisé
par le Preneur à ses frais pour confirmer l’absence de pollution en comparaison avec le rapport sol figurant en Annexe
12 ainsi qu’indiqué ci-après à l’Article CG. 11.20. Dans l’hypothèse où
des pollutions liées à l’activité du Preneur seraient identifiées par ce rapport, le Preneur
s’engage à remettre en état le site comme indiqué ci-dessus.
Si
à la suite de la découverte d’une pollution, des négociations devaient être engagées avec
les autorités compétentes ou des tiers, le Preneur sera en charge de mener ses négociations. Il devra toutefois
tenir le Bailleur parfaitement et intégralement informé du déroulement des négociations et à
la demande du Bailleur, l’associer à ces négociations.
Les
travaux de suppression des sources de pollution qui lui serait imputable et d’élimination de ses conséquences
seront réalisés par le Preneur, à ses frais exclusifs et sous le contrôle de l’expert désigné
ci-dessus. Le Preneur et l’expert devront régulièrement tenir le Bailleur informé de l’évolution
des travaux.
A
la fin des travaux du Preneur, l’expert aura pour mission de constater la suppression des sources de pollution et l’élimination
de toutes ses conséquences, de prescrire des travaux complémentaires et le cas échéant d’en
surveiller la réalisation.
|
|
CG.
11.16.
|
Destruction
des Locaux Loués
|
En
cas de destruction totale des Locaux Loués par cas fortuit, le Bail sera, sauf meilleur accord des Parties, résilié
de plein droit, sans formalité et sans qu’aucune indemnité, à quelque titre que ce soit, ne soit due
par le Bailleur au Preneur.
Si
les surfaces ainsi détruites représentent plus de quarante pour cent (40%) de la surface totale des Locaux Loués
ou si cette destruction rend inutilisable plus de quarante pour cent (40%) de la surface totale des Locaux, chaque Partie pourra
mettre fin au Bail lequel sera alors résilié de plein droit sans indemnité de part et d’autre.
Si
les surfaces ainsi détruites représentent moins de quarante pour cent (40%) de la surface totale des Locaux Loués
ou si cette destruction rend inutilisable moins de quarante pour cent (40%) de la surface totale des Locaux Loués ou si
la reconstruction des surfaces détruites est possible dans un délai maximum de vingt-quatre (24) mois à compter
du sinistre, au moyen des seules indemnités d’assurances, les Parties conviennent qu’il ne sera pas mis fin
au bail lequel continuera à produire tous ses effets, par dérogation expresse à l’article 1722 du Code
civil.
Le
Bailleur fera ses meilleurs efforts pour parvenir à une reconstruction des surfaces détruites dans un délai
de vingt-quatre (24) mois à compter du sinistre, étant entendu qu’en tout état de cause le délai
de reconstruction ne pourra excéder trente (30) mois à compter du sinistre.
Le
Preneur bénéficiera d’un abattement de loyer pendant la perte de jouissance partielle.
Le
calcul de l’abattement de loyer sera effectué, en fonction de la surface détruite ou rendue inutilisable des
Locaux Loués d’un commun accord entre les Parties ou, à défaut, par un expert choisi par les Parties.
Faute
par ces dernières de nommer un tel expert dans les meilleurs délais et ne pouvant excéder vingt (20) jours
suivants la date du sinistre, il sera procédé à cette désignation à la requête de la
Partie la plus diligente par Monsieur le Président du Tribunal de Grande Instance du lieu de situation des Locaux Loués,
les frais et honoraires de l’ordonnance étant supportés à parts égales entre les Parties, de
même en ce qui concerne les honoraires de l’expert ainsi choisi ou désigné.
Pour
le cas où en raison de causes étrangères au Bailleur, la reconstruction des parties détruites des
Locaux Loués s’avérerait impossible dans le délai susvisé de vingt-quatre (24) mois, le Preneur
pourrait demander la résiliation du Bail sans indemnité, le Bailleur étant assuré pour sa perte de
loyer.
|
|
CG.
11.17.
|
Garanties
légales des constructeurs
|
La
Cellule 6 sera couverte par les garanties légales des constructeurs prévues aux articles 1792 et suivants du Code
civil du fait des travaux qui seront exécutés. Par conséquent, le Preneur s’oblige à aviser,
dès qu’il en a connaissance, le Bailleur des désordres qu’il constaterait dans les lieux dans les conditions
qui suivent)
Afin
de permettre au Bailleur d’exercer ses droits au titre des articles 1792 et suivants du Code Civil, le Preneur s’oblige
à lui notifier dans les plus brefs délais, par courriel doublé d’une lettre recommandée avec
accusé de réception ou remise contre récépissé :
|
|
-
|
pendant
un délai d’un (1) an moins 15 jours à compter de la réception,
des travaux tous les désordres qui viendraient à se révéler
et dont il aurait connaissance (article 1792-6 du Code civil) ;
|
|
|
-
|
pendant
un délai de deux (2) ans de la réception des travaux, tous les désordres
et dont il aurait connaissance affectant les équipements autres que ceux-ci dessus
mentionnés (article 1792-3 du Code civil) ;
|
|
|
-
|
pendant
un délai de dix (10) ans moins 30 jours à compter de la réception
des travaux, tous les désordres et dont il aurait connaissance qui compromettraient
la solidité de l’ouvrage ou qui l’affectant dans l’un de ses
éléments constitutifs ou l’un de ses éléments d’équipements,
le rendraient impropre à sa destination (article 1792 du Code civil) ;
|
|
|
-
|
pendant
un délai de dix (10) ans moins 30 jours à compter de la réception
des travaux, tous les désordres et dont il aurait connaissance qui affecteraient
la solidité des équipements d’un ouvrage, faisant indissociablement
corps avec les ouvrages de viabilité, de fondation, d’ossature, de clos
ou de couvert (article 1792-2 du Code civil).
|
A
défaut, le Preneur sera personnellement tenu de rembourser au Bailleur le montant du préjudice direct ou indirect
résultant pour le Bailleur des vices ou désordres susvisés et sera notamment responsable vis-à-vis
de lui du défaut de déclaration en temps utile desdits vices ou désordres aux constructeurs et cocontractants
susvisés.
En
outre, le Bailleur rappelle que les Locaux Loués Initiaux sont garantis au titre de la responsabilité décennale
des constructeurs.
Par
conséquent et plus généralement, en cas de défaut, vice, dommage ou sinistre apparaissant dans les
Locaux Loués Initiaux ou dans la Cellule 6, le Preneur en informera immédiatement le Bailleur dès qu'il en
a connaissance. Dans la mesure où, au regard de leur nature, lesdits défauts, vices, dommages ou sinistres seraient
susceptibles d’être pris en charge au titre des garanties et/ou assurances susvisées, le Bailleur s'engage
à faire diligence pour mettre en jeu la responsabilité des constructeurs et/ou les assurances visées ci-dessus,
dans les délais requis, afin que le défaut, vice, dommage ou sinistre soit pris en charge et réparé,
à hauteur du montant maximum de sa prise en charge par l'assurance, dans les meilleurs délais.
Enfin,
le Preneur s’engage d’ores et déjà à laisser libre accès aux Locaux Loués au Bailleur,
au Promoteur, à l’architecte et aux entrepreneurs, toutes les fois que cela sera nécessaire pour effectuer
les travaux de parachèvement, de levée des réserves, procéder à tout réglage ou contrôle,
effectuer les travaux de réparations aux garanties applicables à la Cellule 6 (en ce compris la garantie des vices
apparents et défauts de conformité, garantie décennale, etc.) ou nécessaires à l’obtention
de l’attestation de non contestation de conformité, à condition qu’il en ait été prévenu
au moins quarante-huit (48) heures à l’avance et sous réserve que le Bailleur, le Promoteur, l’architecte,
les entrepreneurs experts, vérificateurs et ouvriers prennent toutes les dispositions nécessaires, pour perturber
le moins possible l’activité du Preneur.
|
|
CG.
11.18.1.
|
Police
d'assurance du Bailleur
|
Le
Bailleur garantira les conséquences pécuniaires de la responsabilité civile qu'il peut encourir en qualité
de propriétaire des Locaux Loués.
Le
Bailleur assurera par ailleurs la totalité des Locaux Loués en valeur de reconstruction à neuf, contre notamment,
les risques d'incendie, d'explosion, tempête et dégâts des eaux.
L’assurance
s’étend aux garanties annexes dont notamment la perte de loyers d’une durée minimale de deux (2) ans
et les honoraires d’experts.
Le
Bailleur se réserve le droit de couvrir tous autres risques raisonnables. Toutes les assurances seront assujetties aux
termes et conditions, limites et exclusions des polices établies par le Bailleur.
Les
primes d'assurance attachées à la garantie multirisques et responsabilité civile ci-dessus visées
et toutes surprimes exigibles du fait du Preneur ou de l’activité exercée par ce dernier, ainsi acquittées
par le Bailleur seront intégralement remboursées par le Preneur.
|
|
CG.
11.18.2.
|
Police
d'assurance du Preneur
|
|
|
a)
|
Souscription
des polices d'assurance
|
Le
Preneur souscrira les polices suivantes :
En
conséquence des obligations résultant du Bail, le Preneur est tenu de souscrire toutes les assurances nécessaires
et d'en fournir les justifications qui pourront lui être demandées, à n'importe quel moment, par le Bailleur.
Le
Preneur doit notamment souscrire auprès de compagnies d'assurance notoirement solvables les assurances garantissant toutes
les responsabilités lui incombant en raison de l'occupation ou de l'exploitation des Locaux Loués et qu'il peut
encourir de son propre fait et de celui de ses préposés ainsi que de celui de toute autre personne intervenant pour
son compte.
Le
Preneur souscrira également une police d'assurance contre les risques d'atteinte à l'environnement accidentelle
y compris les frais de prévention.
Cette
garantie comportera a minima la liste des événements garantis suivante :
|
|
-
|
l'atteinte
à l'environnement (soit, sans que cette liste soit exhaustive : l'émission,
la dispersion, le rejet ou le dépôt de toute substance solide, liquide ou
gazeuse diffusés par l'atmosphère, le sol ou les eaux ; la production
d'odeurs, bruits, vibrations, variations de température, ondes, radiations, rayonnements
excédant la mesure des obligations ordinaires de voisinage),
|
|
|
-
|
les
frais de dépollution des sols (sol s'entendant par le sol, le sous-sol et, par
extension, les eaux de surface et les eaux souterraines) résultant d'une atteinte
à l'environnement,
|
|
|
-
|
et
de remise en état des installations à la suite d’une atteinte à
l'environnement.
|
En
outre, dans l’hypothèse où le Preneur serait personnellement reconnu responsable d’une atteinte à
l’environnement par une décision judiciaire ou administrative ayant autorité de chose jugée, le Preneur
accepte la charge financière des conséquences de tout défaut ou insuffisance d'assurance des risques d'atteinte
à l'environnement.
Les
franchises prévues dans ces contrats ne sont pas opposables au Bailleur.
|
|
●
|
Assurance
de dommages aux biens
|
Le
Preneur s'engage à souscrire une police d'assurance des biens lui appartenant (le matériel, les marchandises, etc…)
ainsi que tous aménagements, équipements et installations à caractère immobilier dont il est propriétaire
ou locataire contre les risques suivants, notamment :
|
|
-
|
chocs
de véhicules terrestres,
|
|
|
-
|
chutes
et/ou chocs d'aéronefs, parties d'appareil ou objets tombant de ceux-ci,
|
|
|
-
|
tempêtes,
ouragan, grêle,
|
|
|
-
|
catastrophes
naturelles,
|
|
|
-
|
grèves,
émeutes, mouvements populaires, actes de vandalisme, actes de terrorisme et de
sabotage …
|
Les
garanties souscrites devront permettre notamment :
|
|
-
|
l'indemnisation
en valeur à neuf des Locaux Loués,
|
|
|
-
|
le
remboursement des honoraires d'experts,
|
|
|
-
|
la
prise en charge des frais d'entreposage, de stockage, de conservation ou de sauvetage
des biens meubles situés dans les Locaux Loués,
|
|
|
-
|
l'indemnisation
de tous recours des voisins et des tiers et garantir la responsabilité du Preneur
laquelle, en cas de sinistre prenant naissance dans les Locaux Loués et les installations,
demeure entière envers le Bailleur considéré comme tiers, et
|
|
|
-
|
l'indemnisation
de toutes pertes d'exploitation et frais supplémentaires d’exploitation
couvrant toute la période d'interruption de l'exploitation des Locaux Loués
résultant de l’un quelconque des événements garantis.
|
Ces
assurances seront contractées auprès de compagnie d’assurances notoirement solvables et de manière
à permettre, à l'identique, le remplacement des biens lui appartenant (le matériel, les marchandises, etc…)
ainsi que tous aménagements, équipements et installations à caractère immobilier dont il est propriétaire
ou locataire, ou leur remise en état ou la reconstitution des parties détruites.
Il
est rappelé que le Bailleur n'assume aucune obligation de surveillance et de garde des biens mobiliers ou immobiliers pouvant
se trouver sur son domaine et qu'en conséquence, le Preneur fera son affaire personnelle des assurances qu'il estime nécessaire
de souscrire.
|
|
b)
|
Dispositions
communes aux assurances
|
|
|
·
|
Maintien
des polices et paiement des primes
|
Le
Preneur prendra seul à sa charge la totalité des primes d'assurances correspondantes et supportera seul le coût
des franchises prévues par les polices d'assurance qu'il aura souscrites.
Il
devra justifier de ces assurances et de l'acquit exact des primes à toute demande du Bailleur.
En
cas de préavis de résiliation ou de suspension pour quelque cause que ce soit des polices d'assurance ou de décision
brutale de résiliation des assureurs, le Preneur devra en aviser immédiatement le Bailleur. A défaut, le
Preneur reste tenu de toutes les conséquences préjudiciables qui pourraient en résulter pour le Bailleur
ainsi que pour tout tiers en général.
En
tout état de cause, le Bailleur prendra toutes dispositions utiles et pourra notamment payer les primes et/ou, en cas d'interruption
des garanties, souscrire les polices d'assurance en l'acquit du Preneur qu'il pourra poursuivre en recouvrement selon toutes les
voies de droit appropriées.
En
conséquence, les événements non assurés, les franchises prévues au contrat et les déchéances
pour non-respect par le Preneur de ses obligations en cas de sinistre resteront à la charge de ce dernier.
|
|
·
|
Déclaration
de sinistre et reconstruction
|
Le
Preneur devra immédiatement déclarer aux assureurs concernés tout sinistre qui compromet la solidité,
le clos et le couvert de l'ouvrage ou, l'affectant dans l'un de ses éléments constitutifs ou l'un de ses éléments
d'équipement, le rend impropre à sa destination et en informer le Bailleur.
|
|
CG.
11.18.3.
|
Renonciation
à recours réciproques
|
Le
Bailleur renonce et fera renoncer ses assureurs à tout recours contre le Preneur et ses assureurs en cas de sinistre couvert
par les garanties prévues ci-dessus sauf en cas de malveillance ou de faute lourde de ce dernier.
A
titre de réciprocité, le Preneur renonce et fera renoncer ses assureurs à tout recours contre le Bailleur
et ses assureurs en cas de sinistre couvert par les garanties prévues ci-dessus sauf en cas de malveillance ou faute lourde
de ce dernier.
|
|
CG.
11.18.4.
|
Contrôle
par les Parties
|
En
vue d'assurer l'exécution des stipulations qui précèdent, le Preneur devra adresser au Bailleur, au plus
tard à la Date d'Effet, une ou plusieurs attestations d'assurance émanant de(s) assureur(s), précisant la
nature et le montant des garanties souscrites au titre des dispositions ci-dessus.
Pendant
toute la durée du Bail, le Preneur devra justifier à tout moment sur simple demande du Bailleur du paiement des
primes, des garanties couvertes et des sommes assurées.
De
même, le Bailleur communiquera au Preneur à la demande de ce dernier le justificatif du respect de ses obligations
au titre de la présente clause d’assurance.
|
|
CG.
11.19.
|
Cession
et sous-location
|
Il
est interdit au Preneur de concéder la jouissance des Locaux Loués à qui que ce soit et sous quelque forme
que ce soit, même temporairement ou à titre gratuit et précaire.
|
|
CG.
11.19.1.
|
Sous-location
|
Le
Preneur devra occuper par lui-même les Locaux Loués et ne pourra mettre tout ou partie des Locaux Loués à
disposition de quiconque, sous quelque forme que ce soit, notamment, sous-location, location-gérance, domiciliation (même
temporairement à titre gratuit ou précaire), sans avoir obtenu l’autorisation préalable et écrite
du Bailleur, sous peine de résiliation du Bail dans les conditions ci-après convenues.
En
cas de sous-location autorisée par dérogation au présent Article dans le cadre des conditions particulières
du Bail), le Bailleur sera appelé à concourir à l’acte, et le Preneur demeurera seul redevable
du paiement de l’intégralité des loyers, redevances, charges et accessoires à l’égard
du Bailleur et seul responsable de l’exécution des charges et conditions du Bail, de sorte que le Bailleur n’ait
à connaître qu’un seul et unique locataire, titulaire du Bail pour la totalité des Locaux Loués,
le Bailleur n’entendant, en aucun cas, avoir un quelconque lien de droit avec les sous-locataires éventuels.
Les
Locaux Loués forment un tout indivisible. En conséquence, le ou les sous-locataires n’auront aucun droit direct
à l’égard du Bailleur et en particulier aucun droit au renouvellement ou à un quelconque maintien dans
les lieux. Il s’ensuit que la sous-location sera consentie aux risques et périls du Preneur qui s’engage à
faire son affaire personnelle de l’éviction de tout sous-locataire.
Le
Preneur fera son affaire personnelle de l’exécution des travaux d’aménagement (et notamment de tous
travaux liés à la sécurité) et de remise en état des Locaux Loués consécutifs
à toute sous-location et en supportera intégralement la charge.
Le
Preneur ne pourra céder son droit au présent Bail, sauf autorisation préalable et écrite du Bailleur.
Toutefois,
il pourra librement céder ledit droit au bail à l’acquéreur de son fonds de commerce sauf pour ce dernier
à ne pas justifier de capacités financières et d’une activité lui permettent de faire face aux
obligations résultant du présent Bail.
Par
dérogation à ce qui précède, sont autorisées les cessions du bail à une société
directement ou indirectement contrôlées par le Preneur au sens de l’article L.233-3 du Code de commerce («
Société du Groupe du Preneur »), lesquelles demeureront libres, sous réserve que le cessionnaire
soit une société de droit français ayant son siège en France et que le Preneur remette concomitamment
au Bailleur un cautionnement solidaire émanant de la société holding de son groupe, elle-même société
de droit français, garantissant le paiement de douze (12) mois de loyer (TVA comprise) pendant toute la durée du
Bail augmentée de six (6) mois et remette également au Bailleur les justificatifs de l’expérience et
de la compétence du cessionnaire à l’exploitation du site constituant un ICPE.
En
outre, tous ceux qui seront devenus successivement cessionnaires du Bail à compter de cette cession demeureront tenus envers
le Bailleur, solidairement entre eux et avec le Preneur au paiement des loyers et du respect de l’ensemble des clauses et
conditions du Bail, pendant une durée de trois (3) ans à compter de la cession, dans les termes de l’article
L. 145-16-2 du Code de commerce.
Dans
le cas ci-dessus, si un cautionnement a été mis en place, ce cautionnement sera maintenu (et le cas échéant
étendu) pour couvrir l’obligation de garantie solidaire susvisée.
Dans
tous les cas, le Preneur devra notifier par lettre recommandée avec accusé de réception au Bailleur au moins
deux (2) mois avant la date prévue pour la signature de l’acte de cession du fonds de commerce auquel le Bailleur
sera appelé à concourir. La notification devra contenir tous les renseignements permettant d’identifier le
cessionnaire, un projet d’acte, des bilans et comptes d’exploitation des trois (3) derniers exercices et des pièces
justificatives de l’expérience et de la compétence du cessionnaire à l’exploitation d’un
site constituant un ICPE.
Aucun
apport ou cession ne pourra être fait s'il est dû des loyers et charges, impôts ou taxes quelconques par le
Preneur, qui devra, préalablement à tout apport ou cession, justifier de l'entier paiement de tous impôts
et taxes dus par lui au titre de son exploitation.
|
|
CG.
11.19.3.
|
Transfert
de propriété des Locaux Loués
|
En
cas de transfert de la propriété des Locaux Loués, le présent Bail se poursuivra entre le Preneur
et l’ayant droit du Bailleur.
|
|
CG.
11.20.
|
Restitution
des Locaux Loués
|
|
|
CG.
11.20.1.
|
Avant
de déménager, le Preneur devra, préalablement à tout enlèvement,
même partiel des mobiliers et matériels, avoir acquitté la totalité
des termes de loyer et accessoires et justifier, par présentation des acquits,
du paiement des contributions à sa charge, tant pour les années écoulées
que pour l'année en cours.
|
|
|
CG.
11.20.2.
|
Le
Preneur devra, au plus tard en fin de jouissance du Bail (le cas échéant
renouvelé ou en cas de résiliation anticipée du Bail), rendre les
Locaux Loués en bon état d’entretien, de réparations et de
propreté en tenant compte de l’usage normal des Locaux Loués et conformément
à ses obligations ainsi qu’indiqué à l’Article CG.
11.3 et libre de tous mobilier et installations.
|
L’obligation
de remise en état susvisée, inclura notamment, s’il était besoin de le préciser, l’enlèvement
des racks, chaines mécaniques et installations du même type et des équipements de sécurité spécifiques
à l’activité du Preneur qui y seraient éventuellement installés et les remises en état
consécutives nécessaires au bon fonctionnement des Locaux Loués.
|
|
CG.
11.20.3.
|
Tous
les travaux, agencements, embellissements, améliorations, installations et constructions
quelconques, y compris les cloisons fixes, mobiles ou amovibles et, le cas échéant,
ceux qui pourraient être imposés par des dispositions législatives
ou règlementaires, faits pendant l’occupation des Locaux Loués par
le Preneur (y compris préalablement à la Date d’Effet du Bail ainsi
qu’indiqué en Partie 1 du Bail), deviendront, au départ du Preneur,
la propriété du Bailleur, si bon semble à celui-ci, par voie d’accession,
sans indemnité d’aucune sorte.
|
Il
est toutefois précisé que si le Bailleur souhaitait conserver, au départ du Preneur, les racks et chaines
mécaniques installées par le Preneur dans les lieux, il devra verser au Preneur en contrepartie, par dérogation
à ce qui précède, la valeur résiduelle comptable de ces éléments à la date de
libération des Locaux Loués.
|
|
CG.
11.20.4.
|
Le
Bailleur aura la faculté contraire d’exiger du Preneur la suppression partielle
ou totale des travaux et installations visés au paragraphe ci-dessus, même
s’ils ont été autorisés par le Bailleur, ainsi que la remise
en état des Locaux Loués, en tout ou partie, dans leur état d’origine,
le tout aux frais exclusifs et aux risques du Preneur, précision étant
ici faite que là où cette remise en état provoquera des dégradations
qui ne peuvent être évitées, le Preneur sera tenu d’en supporter
les conséquences et de réaliser, à ses frais, les travaux de réfections
nécessaires afin que les Locaux Loués soient restitués en bon état
d’entretien et de réparation en tenant compte de l’usage normal des
Locaux Loués, conformément aux stipulations de l’Article CG. 11.20.2.
|
|
|
CG.
11.20.5.
|
Dans
les six (6) mois précédant le départ du Preneur des Locaux Loués
pour quelque cause que ce soit, les Parties se réuniront afin de dresser la liste
des éventuels travaux de remise en état des Locaux Loués à
la charge du Preneur ainsi qu'un estimatif des coûts y associés. En cas
d'accord des Parties sur la liste et le coût des travaux de remise en état
des Locaux Loués, le Preneur aura la faculté de faire réaliser ces
travaux à ses frais ou d'en régler le montant au Bailleur par avance afin
que ce dernier les fasse réaliser.
|
|
|
CG.
11.20.6.
|
Dans
l'hypothèse où le Preneur n'aurait pris aucune disposition pour restituer
les Locaux Loués au Bailleur au sens du paragraphe précédent, et
en cas de défaut de restitution des Locaux Loués par le Preneur conformément
aux stipulations des Articles CG. 11.20.2 et CG. 11.20.4, le Preneur devra payer au Bailleur
une indemnité journalière d'immobilisation de son bien égale au
double du dernier loyer en cours, charges comprises, pendant la durée nécessaire
aux travaux et réparations ci-dessus évoqués et courant à
compter de la date d’expiration du Bail, le Bailleur s’engageant à
faire réaliser lesdits travaux dans les meilleurs délais dès la
libération des Locaux Loués.
|
|
|
CG.
11.20.7.
|
En
tout état de cause, il sera procédé, en la présence du Preneur,
dûment convoqué, à un état des lieux de sortie contradictoire,
au plus tard dix (10) jours calendaires à compter du déménagement
des Locaux Loués par le Preneur.
|
|
|
CG.
11.20.8.
|
Cet
état des lieux comportera, s'il y a lieu, le relevé des réparations
à effectuer. Nonobstant la remise des clés, le Bail se poursuivra jusqu'à
la date d'expiration, le loyer restant dû jusqu'à ce terme.
|
|
|
CG.
11.20.9.
|
Au
cas où le Preneur ne serait pas présent aux jours et heure prévus
pour l'état des lieux, celui-ci pourra être établi, si bon semble
au Bailleur, en présence d'un huissier qui pourra se faire assister d'un serrurier
pour pénétrer dans les Locaux Loués, les frais correspondants étant
à la charge exclusive du Preneur.
|
|
|
CG.
11.20.10.
|
Sauf
demande contraire du Bailleur, le Preneur devra procéder, immédiatement
et à ses frais, à la dépose des enseignes installées.
|
|
|
CG.
11.20.11.
|
Le
Preneur s'oblige également à transférer ou faire transférer
au Bailleur, et au plus tard en fin d’occupation des Locaux Loués, le bénéfice
de toutes les autorisations administratives, dont les Locaux Loués auront fait
l'objet ou lui bénéficieraient.
|
|
|
CG.
11.20.12.
|
Dans
l'hypothèse où le Preneur, déchu de tout droit d'occupation, ne
libère pas totalement les Locaux Loués de tous occupants de son chef et/ou
de tous meubles et objets mobiliers, résiste à une ordonnance d'expulsion,
obtient judiciairement des délais pour son départ, il sera redevable au
Bailleur, de plein droit et sans aucun préavis, par jour de retard, outre les
charges et sans préjudice de tous droits à dommages et intérêts
au profit du Bailleur, d'une indemnité conventionnelle d'occupation irréductible
égale à deux fois le loyer quotidien, ceci jusqu'à complet déménagement
et restitution des clés, ladite indemnité étant destinée
à dédommager le Bailleur du préjudice causé par l'occupation
des lieux.
|
|
|
CG.
11.20.13.
|
En
fin de bail, préalablement à son départ,
|
Le
Preneur fera réaliser un rapport de pollution par un bureau d’étude spécialisé à ses
frais pour confirmer l’absence de pollution en comparaison avec le rapport sol figurant en Annexe 12.
Le
Bailleur s’il le juge utile, pourra faire vérifier les déclarations du Preneur par un expert qui sera désigné
d’un commun accord entre les Parties où, à défaut, par le président du Tribunal de Grande Instance
du lieu de situation de l’Immeuble. L’expert interviendra comme mandataire commun des Parties et sa décision
s’imposera à elles, sans recours possible.
Dans
l’hypothèse où le Preneur serait déclaré responsable par l’expert d’une pollution
dans les Locaux Loués ou sur le Terrain en raison de son propre fait ou du fait de ses préposés, Exploitant,
prestataires, représentants ou cocontractants, les stipulations de l’Article CG. 11.15 s’appliqueront mutatis
mutandis. L’ensemble des coûts des travaux et d’expertise et des frais seront à la charge du Preneur.
A
l’inverse, si l’Expert confirme les déclarations du Preneur, les frais d’expertises seront à la
charge du Bailleur.
|
|
CG.12.
|
MODIFICATION
- TOLERANCE
|
|
|
CG.
12.1.
|
Toute
modification des présentes ne pourra résulter que d'un document écrit
et exprès sous forme d'un acte bilatéral ou d'un échange de courrier.
|
|
|
CG.
12.2.
|
Il
est formellement convenu qu'une tolérance relative à l'application des
clauses et conditions du présent Bail ne pourra jamais, quelle qu'ait pu être
la durée ou la fréquence de cette tolérance, être considérée
comme constituant novation ou apportant une modification ou une suppression de certaines
clauses et conditions des présentes, ni comme génératrices d'un
droit quelconque ; le Bailleur pouvant y mettre fin sans préavis.
|
|
|
CG.13.
|
CLAUSE
DE RESILIATION DE PLEIN DROIT
|
|
|
CG.
13.1.
|
A
défaut de paiement à son échéance exacte de tout ou partie
(i) d'un seul terme de loyer, (ii) des charges et remboursements divers qui sont payables
en même temps que celui-ci, (iii) de toutes sommes qui en constituent l'accessoire,
(iv) de toutes indemnités d'occupation qui viendraient à être dues
à quelque titre que ce soit (y compris celle visée aux articles L.145-28
à L.145-30 du Code de commerce) ou (v) des frais de commandement, de sommation,
de saisie et de poursuite, ou à défaut de l'exécution de l'une quelconque
des clauses, charges et conditions du Bail, ou en cas de violation par le Preneur des
obligations qui lui sont imposées par les textes légaux et/ou règlementaires,
et un (1) mois après un commandement de payer ou après une sommation
d'exécuter restée sans effet, et contenant déclaration par le Bailleur
de son intention d'user du bénéfice de la présente clause, le Bail
sera, si bon semble au Bailleur, résilié automatiquement par lettre recommandée
avec demande d'avis de réception ou acte extrajudiciaire sans qu'il soit nécessaire
de faire une demande en justice, sans préjudice de tous dépenses, dommages
et intérêts que le Bailleur pourrait réclamer au Preneur et nonobstant
toute consignation ou offre réelle ultérieure.
|
|
|
CG.
13.2.
|
Le
Preneur sera débiteur de plein droit et dès la résiliation jusqu'à
la reprise de possession des Locaux Loués par le Bailleur d'une indemnité
d'occupation égale au double du dernier loyer augmenté des charges et de
tous accessoires dudit loyer.
|
|
|
CG.
13.3.
|
Sans
préjudice du droit pour le Bailleur d'exiger des dommages-intérêts
si à la suite d'une demande du Bailleur, le Preneur n'accomplissait pas la remise
en bon état d’entretien et de réparation des Locaux Loués,
le Preneur n'aura droit à aucune indemnité pour les travaux et améliorations
qu'il aurait fait réaliser ou pour toutes les dépenses qu'il aurait engagées
ou effectuées en vue de son installation dans les Locaux Loués. En tant
que de besoin par la signature des présentes, il renonce expressément à
toutes indemnisations de ces différents chefs.
|
|
|
CG.
13.4.
|
Le
Preneur supportera l'intégralité des frais, émoluments et dépens
de justice, frais de commandement, de sommation, de saisie et de poursuite ou mesures
conservatoires, ainsi que tous frais de levée d'états et de notification,
qui seront considérés comme suppléments et accessoires du loyer,
le tout sans préjudice de dommages-intérêts.
|
|
|
CG.
13.5.
|
En
outre, le Preneur remboursera au Bailleur l'intégralité des frais d'huissier
que le Bailleur aura dû engager du fait d'une défaillance du Preneur au
titre de l'une de ses obligations prévues au Bail.
|
|
|
CG.
13.6.
|
Indépendamment
de cette résiliation de plein droit, le Bailleur sera fondé à réclamer
au Preneur la réparation du préjudice qu'aura pu lui causer cette résiliation
anticipée notamment par la perte de loyers.
|
|
|
CG.14.
|
MODIFICATION
DE FORME JURIDIQUE
|
Le
Preneur s'engage à notifier au Bailleur, dans les trente (30) jours de la survenance de l'événement considéré,
les modifications statutaires suivantes qui pourront le concerner : transformation, changement de dénomination ou
de raison sociale, changement de siège social.
|
|
CG.15.
|
FRAIS
ET ELECTION DE DOMICILE
|
|
|
CG.
15.1.
|
Chacune
des Parties conservera à sa charge les frais, droits et honoraires du Bail qu’elle
aura exposés, ainsi que ceux qui en seraient la suite ou la conséquence.
|
|
|
CG.
15.2.
|
Les
frais d’enregistrement seront à la charge de celle des Parties qui souhaiterait
faire procéder à cette formalité.
|
|
|
CG.
15.3.
|
Pour
l’exécution des présentes, et notamment la réception de tous
actes extrajudiciaires, ou de poursuites, les Parties font élection de domicile
aux adresses respectives indiquées à l’Article CP. 17.
|
|
|
CG.16.
|
ETENDUE
DES PRESENTES – NULLITE D’UNE CLAUSE DU BAIL
|
|
|
CG.
16.1.
|
Il
est expressément convenu que les présentes seules entérinent l’intégralité
des accords intervenus entre les Parties à ce jour.
|
|
|
CG.
16.2.
|
Les
Parties conviennent que la nullité de l’une quelconque des stipulations
du Bail n’emportera pas nullité de l’intégralité du
Bail et les Parties s’engagent si une telle nullité venait à être
soulevée à négocier de bonne foi pour substituer à la stipulation
concernée une stipulation ayant un effet équivalent.
|
Si
des dispositions de l’un ou plusieurs des articles du Code de commerce ou du Code civil auxquelles les Parties ont dérogé
dans le Bail, devaient être jugées comme étant d’ordre public, contrairement à ce que pensent
les Parties, les dispositions légales s’appliqueront alors.
|
|
CG.17.
|
DROIT
APPLICABLE - COMPETENCE
|
|
|
CG.
17.1.
|
Le
présent Bail est soumis au droit français.
|
|
|
CG.
17.2.
|
Pour
tous litiges relatifs aux présentes et qui ne pourraient être réglés
à l'amiable, les Parties font irrévocablement et inconditionnellement attribution
de compétence au Tribunal de Grande Instance du lieu de situation des Locaux Loués,
nonobstant les cas de pluralité de défendeurs ou d'appel en garantie.
|
Chaque
Partie accepte de garder ces informations confidentielles et de ne pas les communiquer à un tiers (à l’exception
des prestataires des Locaux Loués qui auraient besoin de ces informations en vue d’exécuter leurs obligations
et hors entités membres du même groupe, banques et conseils habituels du Bailleur) sauf (i) si la levée de
confidentialité est imposée par la loi ou si la production du Bail s’avère nécessaire pour la
solution d’un litige entre elles, (ii) si elle résulte du consentement écrit de chacune des Parties ou encore
(iii) en cas de cession par le Bailleur des Locaux Loués ou de cession par le Preneur du Bail.
* *
*
TITRE
2 - CONDITIONS PARTICULIERES
|
|
CP.
1.
|
IDENTITE
DES PARTIES
|
ENTRE
LES SOUSSIGNEES :
|
|
CP.
1.1.
|
La
société NOTAPIERRE, société civile de placement immobilier
à capital variable, dont le siège social est situé à 7-7bis
rue Galvani Paris (75017), immatriculée au Registre du Commerce et des Sociétés
de Paris sous le numéro 347 726 812,
|
Représentée
par :
La
société dénommée UNOFI-GESTION D’ACTIFS (anciennement dénommée SECURINOT),
société anonyme au capital de 1 000 572 euros, dont le siège social est à PARIS (17ème), 7
et 7 bis, rue Galvani, identifié au SIREN sous le numéro 347 710 824, et inscrite au registre du commerce et des
sociétés de PARIS
UNOFI-GESTION
D’ACTIFS agissant en qualité de société de gestion statutaire de NOTAPIERRE, fonction à
laquelle elle a été nommée aux termes de l'article 17 des statuts et ayant tous pouvoirs à l'effet
des présentes en vertu des articles 2 et 18 desdits statuts.
UNOFI-GESTION
D’ACTIFS, elle-même représentée par :
Madame
Florence DOURDET-FRANZONI, dûment habilitée aux fins de signature des présentes en sa qualité
de Directeur général délégué, ainsi qu’il ressort de l’extrait k bis, des statuts,
et de la délibération du conseil d’administration du 18 décembre 2014, dont une copie figure en Annexe
1,
(Ci-après
dénommée le "Bailleur"),
D’UNE
PART,
ET
|
|
CP.
1.2.
|
La
société dénommée INTERPARFUMS, société
anonyme au capital de 141.786.570 €, dont le siège social est à PARIS
(75008) – 4, rond-point des Champs Elysées et immatriculée au Registre
du Commerce et des Sociétés de PARIS sous le numéro 350 219 382,
|
Représentée
par Monsieur Philippe SANTI en qualité de Directeur Général Délégué , dûment habilitée
à l’effet des présentes
(Ci-après
dénommée le "Preneur"),
D’AUTRE
PART
Le
Bailleur, par les présentes, donne à bail les Locaux Loués Initiaux et la Cellule 6 en son état futur
d’achèvement au Preneur, qui l’accepte pour une durée qui commence à courir à compter
de la Date d’Effet du Bail, conformément à la législation applicable aux baux commerciaux à
laquelle les Parties entendent se soumettre, ainsi qu’aux clauses et conditions des présentes que les Parties s’engagent
à exécuter et accomplir, tant pour la durée du Bail que pour celle de ses renouvellements successifs.
|
|
CP.
3.
|
DESIGNATION
DES LOCAUX LOUES
|
Les
Locaux Loués seront composés
des Locaux Loués Initiaux et à compter de son achèvement qui sera constaté par un Procès-Verbal
d’Achèvement, s’y ajoutera la Cellule 6, sur un terrain situé sur la commune de Criquebeuf-Sur-Seine
(27340), Parc d’Activités « Le Bosc Hétrel ».
L’achèvement
conformément aux dispositions du TITRE 3 « DISPOSITIONS SPECIFIQUES A LA PERIODE DE CONSTRUCTION DE LA CELLULE
6 », emportera automatiquement prise de possession de la Cellule 6 par le Preneur et en conséquence l’ensemble
des dispositions du présent Bail deviendra applicable au nouveau périmètre des Locaux Loués.
Il
est d’ores et déjà convenu qu’à la date d’Achèvement de la Cellule 6, les Parties
s’engagent à constater par la signature d’un avenant au Bail la date de l’adjonction des nouvelles surfaces
de la Cellule 6 et leur prise de possession, et le procès-verbal d’achèvement sera annexé audit avenant.
|
|
CP.
3.1.
|
Description
des Locaux Loués Initiaux
|
Les
Locaux Loués Initiaux comprennent :
|
|
-
|
des
cellules d’entrepôts et accessoirement locaux techniques, locaux à
usage de bureaux, locaux sociaux et local gardiennage d’une surface SHON prévue
au permis de construire d’environ 31.220 m² ; et
|
|
|
-
|
116
emplacements de stationnement pour véhicules légers.
|
Il
est précisé à titre purement informatif que les Locaux Loués Initiaux développent une surface
hors Œuvre nette (SHON) réelle totale de 31.029 m² (soit 30.858 m² de surface de plancher (SDP) , répartie
comme suit :
|
Désignation
|
Nature
des Locaux
|
SHON
mesurées (m²)
|
|
Cellule
1
|
Entrepôt
|
5.688
|
|
Local
en charge
|
347
|
|
Cellule
2
|
Entrepôt
|
5.988
|
|
Local
de charge
|
0
|
|
Cellule
3
|
Entrepôt
|
5.988
|
|
Local
de charge
|
0
|
|
Cellule
4
|
Entrepôt
|
5.793
|
|
Local
de charge
|
193
|
|
Cellule
5
|
Entrepôt
|
5.729
|
|
Local
de charge
|
263
|
|
Locaux
Techniques
|
Local
sprinkler, chaufferie, transformateur, locaux poste eau
|
193
|
|
Sous-total
des Cellules 1 à 5 et des locaux techniques
|
|
30.182
|
|
Sous-total
bureaux et locaux sociaux
|
|
847
|
|
Total
|
|
31.029
|
|
116
emplacements de stationnement extérieurs
|
Les
Locaux Loués Initiaux sont certifiés HQE AFILOG 1.
Il
est rappelé que les surfaces susvisées sont données à titre indicatif ; toute erreur dans la
désignation des Locaux Loués Initiaux ou dans leur surface ne pouvant justifier aucune diminution ou augmentation
de Loyer ni aucune pénalité d’aucune sorte, le loyer ayant été notamment fixé en fonction
de l'appréciation globale des Locaux Loués Initiaux par le Preneur, qui sont réputés parfaitement
connus du Preneur pour les occuper déjà à la date de conclusion des présentes.
|
|
CP.
3.2.
|
Description
de la Cellule 6 en son état futur d’achèvement
|
La
Cellule 6 comprend des locaux à
usage d’entrepôt et accessoirement de bureaux et locaux sociaux, qui développeront, à leur achèvement
une surface de plancher (SDP) totale de 6.066 m² comprenant :
|
|
-
|
5.738
m² à usage d’entrepôt, et
|
|
|
-
|
328
m² de bureaux et locaux sociaux,
|
|
|
-
|
ainsi
que six (6) emplacements de stationnement pour véhicules légers.
|
Il
est précisé que le Bailleur s’engage à obtenir une certification suivant le référentiel
« Haute Qualité Environnementale » niveau Très Bon pour
la Cellule 6.
Le
Bailleur déclare que le Terrain n’est grevé à ce jour d’aucune servitude conventionnelle autre
que celles figurant en Annexe 5 du Bail.
Le
Preneur reconnaît avoir une parfaite connaissance des servitudes ainsi applicables.
Il
s’engage à souffrir, sans recours contre le Bailleur, les servitudes mentionnées ci-dessus et des servitudes
administratives qui peuvent grever les Locaux Loués, et qui résulteraient du plan local d’urbanisme, de ses
modificatifs en cours ou ultérieurs, des prescriptions d’ordre règlementaire s’appliquant à la
commune de CRIQUEBEUF-SUR-SEINE, de leurs modificatifs en cours ou ultérieurs et plus généralement des servitudes
de toute nature pouvant grever le terrain d’assiette.
|
|
CP.
5.
|
DUREE
ET DATE D’EFFET
DU BAIL
|
Le
Bail est consenti et accepté pour une durée de neuf (9) années entières et consécutives,
qui commencer à courir au 1er juin 2020 et ci-après définie comme La Date d’Effet
du Bail.
Le
Preneur renonce expressément à sa faculté de résilier le Bail à l'expiration des première
et deuxième périodes triennales, en application de l'article L.145-4 du Code de commerce. Il disposera toutefois
de la faculté de résilier le Bail à l’échéance de la 7ème année
et de la 9ème année, de sorte que la durée de location sera de sept (7) ans fermes minimum.
|
|
CP.
6.
|
MISE
A DISPOSITION ANTICIPEE DE LA CELLULE 6 AU PRENEUR
|
Dans
le cadre de la construction de la Cellule 6, et en accord avec le promoteur, le Bailleur mettra à disposition du Preneur
la partie entrepôt de la Cellule 6 de manière anticipée, par anticipation à son achèvement dans
les conditions précisées à l’Article DP.8. ci-après.
|
|
CP.
7.
|
DESTINATION
DES LOCAUX LOUES
|
Les
Locaux Loués sont à usage exclusif d’activités de logistique, stockage et entreposage de produits répondants
aux rubriques pour lesquelles l’Autorisation d’Exploiter est délivrée et de bureaux annexes.
|
|
CP.
8.
|
ETAT
DES LIEUX
D’ENTREE et AUDIT TECHNIQUE
|
A
la Date d’Effet du Bail pour les besoins de l’Article CG. 11.20, les Parties conviennent de se référer
s’agissant des Locaux Loués Initiaux, non à l’état des lieux qui sera ainsi dressé à
la Date d’Effet du Bail mais aux procès-verbaux de livraison du 26 avril 2011 (pour la livraison de la Phase 1 du
bâtiment) ; du 30 septembre 2011 (pour la livraison de la Phase 2 du bâtiment) contenant réserves, au
procès-verbal de levée des réserves du 22 novembre 2011 et au procès-verbal
de livraison sans réserve du 26 décembre 2011 (pour l’auvent) ; les quatre (4) procès-verbaux
figurant en Annexe 9.
A
la date de livraison de la Cellule 6, les procès-verbaux établis entre les Parties conformément aux stipulations
de l’Article DP.6. vaudront état des lieux d’entrée concernant la Cellule 6.
Dans
le cadre de l’application de l’article CG 8.1.2, il sera effectué, aux frais du Bailleur, et dans le mois qui
suivra la prise d’effet du Bail, un audit technique des Locaux Loués Initiaux afin de constater l’état
des différents ouvrages et équipements du bien dont le Preneur a eu la charge et l’entretien au titre du précédent
bail. A cet effet, le Preneur s’engage à laisser libre accès au Bailleur et à tous ses mandataires
aux Locaux Initiaux Loués.
|
|
CP.
9.
|
INTERVENTION
D’UN PRESTATAIRE
LOGISTIQUE
|
Il
est précisé que le Preneur aura la faculté de sous-traiter tout ou partie des prestations logistiques réalisées
dans les Locaux Loués à tout logisticien de son choix et en cas de choix d’un prestataire logistique unique
de lui transférer l’Autorisation d’Exploiter, ce que le Bailleur accepte.
Il
est précisé que la faculté de sous-traitance ainsi concédée au Preneur ne pourra en aucun cas
être assimilée à une faculté de sous-location, le Bailleur n’autorisant le Preneur à confier
le soin des prestations logistiques exploitées dans les lieux pour son compte à l’Exploitant et à lui
transférer le bénéfice de l’Autorisation d’Exploiter que pour autant et dans la mesure où
cette faculté ne confère aucun droit direct à l’Exploitant au titre du Bail.
Il
est rappelé qu’à la date de conclusion des présentes le Preneur a ainsi confié, dans le cadre
du Bail Initial, les prestations logistiques réalisées dans les Locaux Loués à la société
dénommée « BOLLORE LOGISTICS », qui est actuellement titulaire
de l’Autorisation d’Exploiter.
Par
dérogation à l’Article CG. 11.19.1, Le Preneur pourra sous-louer partiellement les Locaux Loués :
|
|
-
|
(i)
à hauteur de 90% de la surface des Locaux Loués à une ou plusieurs
sociétés filiales du Groupe Interparfums, au sens de l’article L.
233-1 du Code de commerce et/ou à des sociétés sous son contrôle
au sens de l’article L. 233-3 du Code de commerce
|
|
|
-
|
(ii)
dans la limite de 3 cellules (avec le cas échéant une quote-part de bureaux
et locaux sociaux) à un tiers,
|
étant
précisé que le cumul des deux modes de sous-location ne pourra jamais avoir pour conséquence la sous-location
de plus de 90% des Locaux Loués, et que toute sous-location n’est ainsi autorisée,
dans tous les cas, par le Bailleur que pour autant et dans le mesure où elle ne confère au sous-locataire aucun
droit direct au renouvellement, les Locaux Loués formant un tout indivisible de l’accord des Parties.
Il
est ici précisé que dans l’hypothèse (i), si le sous-locataire cesse d'être une société
filiale ou contrôlée par le Preneur, la sous-location prendra fin de plein
droit et sans autre formalité dans le mois suivant cet événement.
En
tout état de cause, la sous-location sera consentie sous réserve du respect des conditions du Bail (destination
des Locaux, indivisibilité des Locaux, communication d’une copie du contrat de sous-location, Preneur demeurant seul
redevable des paiements et du respect de l’ensemble des clauses et conditions du Bail, fin de la sous-location avec le Bail,
etc.) et de la prise en charge de l’intégralité des frais et intervention qui y seront liés par le
Preneur. Par dérogation à l’Article CG. 11.19.1, le Preneur sera dispensé d’appeler le Bailleur
à concourir à l’acte de sous-location.
Le
loyer annuel hors taxes et hors charges est fixé à un montant de [_____] sous réserve
d’un éventuel ajustement prévu dans les conditions de l’Article DP. 2.
Et
décomposé comme suit :
|
|
-
|
[_____]
correspondant aux surfaces existantes à la prise d’Effet du Bail à
savoir les Locaux Loués Initiaux.
|
|
|
-
|
[_____]
Hors Taxes et Hors Charges à compter de la livraison de la Cellule 6 correspondant
à 6 066 m² de SDP prévisionnelle à [_____]
|
|
|
-
|
Il
est précisé que la partie de loyer correspondant à la Livraison
de la Cellule 6 fera l’objet d’un calcul au prorata du trimestre en cours
pour l’échéance trimestrielle concernée.
|
L’indice
de base pour la première indexation du loyer sera le dernier Indice des Loyers des
Activités Tertiaires (ILAT) publié par l’INSEE publié à la Date d'Effet du Bail.
|
|
CP.
13.
|
DEPOT
DE GARANTIE
|
Conformément
aux termes de l’Article CG.7, le dépôt de garantie du Bail s’élèvera à la Date d’Effet
du Bail à la somme de [_____].
Il
est rappelé que le Preneur a versé au titre du Bail Initial un dépôt de garantie d’un montant
s’élevant à ce jour, à [_____]
De
convention expresse entre les Parties, il est convenu que le dépôt de garantie du Bail Initial sera
conservé par le Bailleur au titre du dépôt de garantie prévu en application du présent Bail.
Par ailleurs, le Preneur ne sera tenu de lui verser, à la date de signature de l’avenant constatant la livraison
de la Cellule 6, que la somme de [_____] en complément du dépôt de garantie
versé au titre du Bail Initial.
[_____]
|
|
CP.
14.
|
CHARGES
– GESTION TECHNIQUE DE L’ENSEMBLE IMMOBILIER PAR LE PRENEUR
|
Il
est rappelé que le Preneur a pris à bail l’intégralité de l’ensemble immobilier, propriété
du Preneur, et qu’il assure ainsi directement, au titre de son obligation d’entretien et de respect de la réglementation,
la gestion et le contrôle technique de l’ensemble des Locaux Loués et de leurs équipements, à
ses frais et sous sa responsabilité, sous la seule réserve des travaux et réparations demeurant à
la charge du Bailleur en application de l’Article CG. 8.1.2 dont le Bailleur continuera à assurer la réalisation,
à ses frais.
Ainsi,
sans préjudice des stipulations de l’Article CG.8, il est ici précisé que le Preneur rembourse à
ce jour annuellement au Bailleur uniquement les Accessoires suivants :
|
|
-
|
Honoraires
du gestionnaire technique du Bailleur ;
|
|
|
-
|
Taxes
Foncières et TEOM ;
|
Etant
précisé que les Parties conviennent de fixer le montant des honoraires de gestion refacturables au Preneur à
un montant annuel forfaitaire de [_____] (le « Forfait de Gestion »). De convention expresse entre
les Parties, il est entendu que les honoraires de gestion, de la date d’effet du Bail jusqu’à la Mise à
Disposition de la Cellule 6 s’élèveront [_____].
Ce
forfait de gestion sera indexable selon les mêmes modalités que le Loyer.
Le
Bailleur ou son représentant s’engage à transmettre au Preneur un rapport de visite des Locaux Loués
après chaque visite de contrôle ou d’intervention.
Dans
l'hypothèse d'un manquement avéré du Preneur (ou de son Exploitant ou de ses prestataires) dans l'exercice
de ses missions conformément aux stipulations qui précèdent, le Bailleur pourra reprendre tout ou partie
desdites missions relatives aux défaillances visées, trois (3) mois après mise en demeure restée infructueuse,
sans que cela affecte de quelque façon les autres obligations du Preneur au titre du Bail. Dans une telle hypothèse,
le Preneur supportera les charges correspondantes, en ce compris les honoraires du prestataire du Bailleur qui assurera alors
la gestion et l’entretien technique des Locaux Loués conformément à l’Article CG.8, pour
leur coût réel, le Forfait de Gestion, que les Parties ont fixé en considération de la prise en charge
de l’essentiel de la gestion technique par le Preneur étant alors considéré comme caduque.
|
|
CP.
15.
|
TRAVAUX
D’AMENAGEMENT INITIAUX
DU PRENEUR DANS LA CELLULE 6
|
Le
Preneur a informé le Bailleur de son souhait de réaliser divers travaux d’aménagement dans la Cellule
dont un descriptif technique sommaire figure ci-après en Annexe 10 (les « Travaux d’Aménagement
Initiaux »).
|
|
CP.
15.1.
|
Travaux
Intégrés
|
Le
Bailleur a accepté de prendre à sa charge et d’intégrer une partie des Travaux d’Aménagement
Initiaux aux travaux de réalisation de la Cellule 6 (les « Travaux Intégrés »).
Le descriptif technique des Travaux Intégrés est détaillé en Annexe 10.
Il
est précisé que le Bailleur n’a accepté la prise en charge des Travaux Intégrés que pour
autant et dans le mesure où :
|
|
-
|
les
Travaux Intégrés constituent des travaux de nature immobilière (et
notamment en cas d’installation d’équipements, que lesdits équipements
sont incorporés dans l’immeuble ou que leur retrait ne puisse se faire sans
de graves détériorations soit dudit équipement, soit de l’immeuble) ;
|
|
|
-
|
le
prix des Travaux Intégrés, qui seront réalisés dans le cadre
du CPI, ne puisse excéder un budget enveloppe de [_____].
|
Les
Travaux Intégrés demeureront la propriété du Bailleur qui s’interdit pendant toute la durée
du Bail de les déposer.
Les
Travaux Intégrés seront néanmoins, une fois achevés, considérés comme des travaux d’aménagement
du Preneur pour l’application de l’Article CG. 8.1.2 et demeureront sous la seule responsabilité et garde
du Preneur qui devra les assurer pour la partie qui ne serait pas couverte, le cas échéant, par les polices d’assurance
souscrites par le Bailleur.
En
cas de destruction des Travaux Intégrés en cours de bail, le Bailleur n’aura pas l’obligation de procéder
à leur reconstruction.
|
|
CP.
15.2.
|
Autres
Travaux d’Aménagement Initiaux
|
Le
Bailleur autorise d’ores et déjà, par principe, le Preneur à réaliser ou à faire réaliser
les Travaux d’Aménagement Initiaux qui ne sont pas compris dans les Travaux Intégrés dans la Cellule
6, étant précisé que les travaux relevant de l’Article CG. 11.2.2 demeureront soumis à l'accord
préalable et exprès du Bailleur dans les conditions dudit article et que le Preneur devra se conformer, dans tous
les cas, pour tous ses travaux d’aménagement, à l’ensemble des stipulations de l’Article CG.
11.2.
Ces
travaux pourront être réalisés pendant la mise à disposition anticipée de la Cellule 6 visée
ci-après à l’Article DP.
8.
|
|
CP.
15.3.
|
Sort
des Travaux d’Aménagement Initiaux
|
Les
Parties conviennent que par dérogation à l’Article CG. 11.20.4 le Bailleur ne pourra exiger du Preneur
la suppression partielle ou totale des Travaux d’Aménagement Initiaux à son départ des Locaux Loués.
|
|
CP.
16.
|
ETAT
DES RISQUES ET POLLUTION (ERP)
|
En
application de l’article L.125-5 du Code de l’environnement, les locataires de biens immobiliers situés dans
des zones couvertes par un plan de prévention des risques technologiques ou par un plan de prévention des risques
naturels prévisibles, prescrit ou approuvé, ou dans des zones de sismicité définies par décret
en Conseil d’Etat, sont informés par le bailleur de l’existence des risques visés par ce plan ou de
décret.
L’Etat
des Risques et Pollution (ERP), établi moins de six mois avant la date de conclusion des présentes, et la copie
de l’arrêté préfectoral sont demeurés joints et annexés aux présentes (Annexe
13).
En
outre, le Bailleur étant tenu d’informer, en application de l’article L.125-5-IV du Code de l’environnement,
par écrit le Preneur de tout sinistre, ayant donné lieu au versement d’une indemnité en application
de l’article L. 125-2 ou L. 128-2 du Code des assurances survenu, pendant la période où il a été
propriétaire des Locaux Loués ou dont il a été lui-même informé en application des précédentes
dispositions, il est ici indiqué que les Locaux Loués n’ont fait l’objet d’aucun sinistre ayant
donné lieu à indemnisation au titre des effets d’une catastrophe naturelle ou technologique.
|
|
CP.
17.
|
ELECTION
DE DOMICILE
|
Toutes
communications devant être effectuées en vertu du Bail seront faites par écrit, par porteur, par lettre recommandée
ou avec accusé de réception ou par télécopie ou courrier électronique (avec envoi d'une copie
au plus tard le jour suivant par lettre recommandée avec demande d’avis de réception), aux coordonnées
indiquées ci-dessous :
|
|
-
|
pour
le Preneur, en son siège social.
|
|
|
-
|
pour
le Bailleur, en son siège social.
|
Sous
réserve des stipulations contraires expressément prévues aux présentes, toute communication sera considérée
comme ayant été reçue (i) à la date figurant sur le récépissé délivré
par le destinataire en cas de remise par porteur ou (ii) le jour suivant l'envoi de la télécopie ou de la lettre
recommandée avec accusé de réception, la date d'envoi étant celle figurant sur l'accusé de
transmission ou la preuve de dépôt de la lettre recommandée.
|
|
CP.
18.
|
ADRESSE
DE
FACTURATION
|
Les
factures de loyers et charges seront libellées au nom de INTERPARFUMS et adressées pour facturation à INTERPARFUMS,
4 Rond-Point Des Champs Elysées – 75008 PARIS
* * *
TITRE
3 – DISPOSITIONS SPECIFIQUES A LA PERIODE DE CONSTRUCTION DE LA CELLULE 6
Le
présent Titre 3, applicable à la période de construction de la Cellule 6 est régi par le droit commun
des contrats et des obligations et exclut toute application du statut des baux commerciaux prévu par les dispositions des
articles L. 145-1 et suivants du Code de commerce.
Le
Bailleur a confié à la société GEMFI, ci-après « Le Promoteur » la mission
de faire réaliser pour son compte et dans les délais impartis les travaux visant à la construction de la
Cellule 6 (ci-après « Le Programme Immobilier ») par le biais d’un Contrat de Promotion Immobilière
« CPI ».
A
cet effet, la partie de Terrain devant recevoir la Cellule 6 sera mise à disposition du Promoteur qui en deviendra gardien.
Le Preneur et le Promoteur s’engagent mutuellement à ne pas gêner ou faire obstacle à l’activité
exploitée sur les Locaux Loués Initiaux ou aux travaux de construction.
Il
est ici précisé que l’accès au chantier se fera par le terrain contigu (parcelles ZD 329 et ZD 338)
acquis par le Bailleur, et que le terrain d’assiette des travaux sera clôturé par des palissades de chantier
de manière à empêcher la communication avec le site en exploitation, sauf si nécessité et accord
reçu préalablement tel que précisé ci-après. Le plan d’accès au chantier est joint
en Annexe 16.
Exceptionnellement,
pour le cas où le Promoteur devrait accéder au chantier par les chemins et voies d’accès actuellement
exploités par le Preneur dans le cadre de son activité, il devra obligatoirement se coordonner avec le représentant
du Preneur, afin de limiter la gêne occasionnée.
Le
Preneur devra alors laisser libre accès aux entreprises et faire respecter la réglementation de sécurité
due à l’existence du chantier.
Le
Preneur et ses assureurs renoncent à tout recours ou réclamation à l’encontre du Bailleur, pour les
seuls sinistres, dégâts ou dommages consécutifs aux travaux de construction de la Cellule 6 et affectant les
biens du Preneur.
|
|
DP.
1.
|
DESCRIPTION
DU PROGRAMME
|
Le
Programme Immobilier consiste en l’édification sur le Terrain d’une sixième cellule jouxtant le Bâtiment
Initial à usage d’entrepôt et de bureaux d’une SDP totale de 6.066m² se répartissant comme
suit et de 6 emplacements de stationnement VL dont 4 PMR :
|
|
SdP
|
SHON
|
|
Entrepôt
|
5,738
m²
|
5,751
m²
|
|
Bureaux
|
328
m²
|
352
m²
|
|
TOTAL
|
6,066
m²
|
6,103
m²
|
Ainsi
que tous les ouvrages techniques (poteaux incendie, réseaux, voiries), tels que ces cellules et ouvrages sont figurés
sur les Documents Techniques.
Un
descriptif détaillé de la construction de la Cellule 6, établi par le Promoteur figure dans la Notice Descriptive
Technique de la Cellule 6 ci-jointe en Annexe 8.
Les
caractéristiques techniques du programme de construction de la Cellule 6 (ci-après les « Documents Techniques »),
établies par le Promoteur et par des professionnels spécialisés mandatés par lui, sont définies
par les documents listés ci-après que les Parties conviennent de hiérarchiser dans l’ordre décroissant
d’importance qui suit :
|
|
(a)
|
La
Notice Descriptive Technique de la Cellule 6 annexée au CPI dans sa version V4a
en date du 22 octobre 2019 établie sous sa seule responsabilité par le
Promoteur joint en Annexe 8;
|
|
|
(b)
|
Le
dossier de demande du Permis de Construire joint en Annexe 7 (y compris les plans
annexés à la demande de Permis de Construire) ;
|
|
|
(c)
|
L’arrêté
préfectoral n° DELE/BERPE/18/681 du 9 mai 2018 faisant partie de l’Annexe
6.
|
Le
Bailleur s’oblige à faire réaliser la Cellule 6 conformément à sa définition résultant
des Documents Techniques, à son usage et à sa destination, ainsi que dans le respect des autorisations administratives,
des dispositions légales et réglementaires, des prescriptions techniques émanant d'organismes officiels sur
l'édification de bâtiments soit notamment les DTU et des règles de l'art, tous dans l'état applicable
à la date de signature des présentes.
Les
Parties conviennent de se référer à ces documents pour tout ce qui concerne les caractéristiques de
l’opération projetée et précisent qu’en cas de contradiction entre lesdits documents, il sera
fait application de l’ordre de préséance, le premier document énuméré prévalant
sur le deuxième et ainsi de suite.
En
cas de contradiction entre les Documents Techniques, ils prévalent les uns contre les autres de la façon de la façon
suivante :
|
|
-
|
en
cas d’absence de concordance entre les plans et la Notice Descriptive Technique
et dès qu’est en cause l’appréciation qualitative d’une
prestation technique, la Notice Descriptive Technique l’emporte sur les plans
|
|
|
-
|
par
contre, en cas d’absence de concordance, dès lors qu’il s’agira
d’apprécier un élément quantitatif, les plans prévaudront.
|
Les
prestations prévues à la Notice Descriptive Technique (et les plans) pourront être, pour des raisons techniques
ou de fabrication modifiées par le Promoteur à la condition (i) qu’elles soient remplacées par des
prestations similaires de qualité au moins équivalente et (ii) qu’elles aient été préalablement
et expressément acceptées par le Bailleur.
Le
Preneur ne pourra s’opposer et accepte d’ores et déjà tous travaux supplémentaires ou modificatifs
qui seraient imposés au Bailleur du fait de changements de lois et règlements en cours d’exécution
des travaux de construction de la Cellule 6 comme au titre des prescriptions relatives au permis de construire ou à ses
éventuels modificatifs. Lesdits travaux supplémentaires ou modificatifs seront effectués aux frais et risques
exclusifs du Bailleur.
|
|
DP.
2.
|
AJUSTEMENT
DE LOYER - TOLERANCE QUANT AUX SDP
|
Aux
fins de la présente clause, un mesurage de la Surface de Plancher construite sera effectué par un géomètre
expert mandaté par le Bailleur ou le Promoteur et délivré au Preneur cinq (5) jours avant la Mise à
Disposition, tel que prévu à l’Article DP.3.
Les
Parties conviennent qu’en cas de variation négative de la SDP au-delà de 1,5% de la SDP indiquée
au Bail au titre de la Cellule 6, il sera procédé à un ajustement du loyer initial de 43 € par mètre
carré de Surface de Plancher manquante au-delà de ce seuil de 1.5 %.
Dans
l’hypothèse où les surfaces réalisées de la Cellule n°6 seraient supérieures aux
surfaces convenues, cette variation positive de surface fera le profit du Preneur sans augmentation du Loyer sans que cette augmentation
de surface ne puisse venir remettre en question la conformité de la cellule d’entreposage au regard de la règlementation
et des autorisations administratives obtenues
Il
est précisé qu’afin d’anticiper et corriger éventuellement en cours de chantier des écarts
qui seraient trop importants entre la SDP prévue au Bail et la SDP mesurée, le Bailleur a demandé au Promoteur
de procéder, en cours de chantier et au moment de l’élévation de la structure du bâtiment et
avant édification des murs et coulage de la dalle, à un mesurage par un géomètre expert permettant
de vérifier que les SDP projetées et réalisées s’inscriront dans la tolérance maximum
agréée et en tout état de cause resteront inférieures à un seuil de 5%, et qu’à
défaut le Promoteur a accepté de s’engager à procéder à ses frais aux actions constructives
correctrices afin de ne pas dépasser ce seuil et ce sans modification du délai contractuel.
|
|
DP.
3.
|
PRISE
DE POSSESSION DE LA CELLULE 6 – LEVÉE DES RÉSERVES
|
|
|
DP.
3.1
|
DATE
PREVISIONNELLE DE PRISE DE POSSESSION :
|
Il
est précisé qu’en vertu du présent bail, les Locaux Initiaux sont déjà mis à disposition
au Preneur à la Date d’Effet du Bail.
La
date de prise de possession prévisionnelle de la Cellule 6 est fixée au 16 novembre 2020 sous réserves des
stipulations de l’article DP. 4. ci-après (Causes Légitimes de Prorogation de Délais) et ci-après
nommée « La Date de Prise de Possession Prévisionnelle ».
|
|
DP.
3.2
|
DEFINITION
DE L’ACHEVEMENT DE LA CELLULE 6 L’Achèvement de la Cellule 6 s’entend
au sens des dispositions de l’article R261-1 du Code de Construction et de l’Habitation
mais également de l’exécution par le Bailleur des travaux réalisés
conformément :
|
|
|
-
|
aux
Documents Techniques (ensemble la Notice Descriptive Technique, les plans du Permis de
Construire, le Permis de Construire et son dossier de demande et le cas échéant
les permis de construire modificatifs),
|
|
|
-
|
aux
Travaux Modificatifs validés par les Parties ultérieurement à la
signature des présentes,
|
|
|
-
|
aux
règles de l'art et du DTU,
|
|
|
-
|
aux
autorisations administratives obtenues, y compris pour les activités spécifiques
du preneur.
|
|
|
-
|
et
à toutes les obligations que la loi ou la réglementation rendraient obligatoires
et applicable avant la livraison pour les immeubles en cours de construction et ne nécessitant
pas l’obtention d’une autorisation administrative complémentaire.
|
L'achèvement
s'entend complet et devra comprendre :
|
|
-
|
les
éléments d’équipements en état de fonctionnement prévus
auxdits documents qui sont indispensables à son utilisation, conformément
à sa destination,
|
|
|
-
|
l’exécution
complète des travaux de la Cellule 6, des VRD, et aménagements paysagers
prévus au permis de construire en fonction de la saison de plantation,
|
|
|
-
|
l’évacuation
des gravats et la réparation des dégradations des VRD liées au chantier,
|
Pour
l’appréciation de l’Achèvement de la Cellule 6, (i) les malfaçons, imperfections mineures de
toute nature et (ii) les désordres consécutifs aux travaux d'aménagement du Preneur antérieurs à
la date d’Achèvement n'empêcheront pas la constatation de l’Achèvement de la Cellule 6 dès
lors qu’ils ne feront pas obstacle à la destination de la Cellule 6 telle que mentionnée au Bail ou qu'ils
n'affecteront ni la solidité de la Cellule 6, ni la sécurité des personnes amenées à l’occuper,
ni n’empêcheront l’exploitation des Locaux Loués conformément aux autorisations.
Les
seules malfaçons, imperfections ou non conformités visées au paragraphe précédent pourront
faire l'objet de réserves à l’Achèvement de la Cellule 6 de la part du Preneur lors de la prise de
possession de ladite cellule.
Par
ailleurs, dans l'hypothèse où, en fonction de la date à laquelle interviendra l’Achèvement de
la Cellule 6, certains éléments ou équipements techniques de la Cellule 6 ne pourraient être utilement
testés, l'Achèvement se fera sous la réserve du bon fonctionnement de ces éléments ou équipements
techniques qui seront testés ultérieurement. Une réserve spéciale devra être indiquée
à cet effet dans le procès-verbal d’Achèvement ou le rapport de l'expert.
|
|
DP.
4.
|
CAUSES
LEGITIMES DE PROROGATION DE DELAIS DE PRISE DE POSSESSION
|
En
cas de survenance d’un cas fortuit ou d’un événement de force majeure ou d’une cause légitime
de prorogation de délai de prise de possession (ci-après ensembles les « Causes Légitimes de Prorogation
de Délais »), le délai d’Achèvement sera automatiquement prorogé d’un nombre
de jours équivalent à l’impossibilité de réaliser les travaux.
Pour
l’application de ces dispositions sera considéré comme Causes Légitimes de Prorogation de Délais,
au sens de ce Bail :
tout
cas de force majeure ou de cas fortuit au sens de l’article 1218 et 1231 du code civil du Code Civil et de ses applications
jurisprudentielles ainsi que les cas suivants :
|
|
a)
|
Un
évènement de force majeure. La force majeure s’entend au sens que
lui donne la jurisprudence comme tout évènement extérieur, imprévisible,
irrésistible, et insurmontable. Les grèves spécifiques au chantier
sont exclues de la force majeure.
|
|
|
b)
|
Les
troubles résultant de cataclysmes naturels
|
|
|
c)
|
Les
journées d’intempéries au sens de l’article L.731-2 du Code
du Travail répondant aux critères suivants :
|
|
causes
|
|
lots
|
|
critères
|
|
Gel
(température
mesurée à 7h00)
|
|
Traitement
chaux/ciment de la plateforme bâtiment
Terrassements
/ Charpente
Gros-Œuvre
Etanchéité
/ Bardage
Dallage
Voiries
|
|
DTU
ou arrêt centrale
-
5° C ou DTU
-
1° C ou DTU
4°
C ou présence de verglas
DTU
ou arrêt centrale
5°
C
|
|
|
|
|
|
|
|
Barrière
de dégel
|
|
Tous
corps d'état
|
|
|
|
|
|
|
|
|
|
Précipitations
|
|
Terrassements
/ Renforcement de sol
Rabattag
e nappes
Gros-Œuvre
Couverture
Etanchéité
Bardage
Charpente
Voirie
|
|
>
3 mm
0
mn
>
10 mm
>
4 mm
>
4 mm
>
10 mm
>
10 mm
0
mm
|
|
|
|
|
|
|
|
Neige
|
|
Terrassements
Gros-Œuvre
Couverture
/ Bardage
Charpente
|
|
Présence
de tapis de neige ou chute
>
1 cm
|
|
|
|
|
|
|
Rafales
de vent ou vents forts
(vitesse maximale)
|
|
Gros-Œuvre
Couverture
Bardage
/ Menuiseries extérieures
Charpente
|
|
>
50 km/h
>
40 km/h
>
40 km/h ou présence de rafales
>
50 km/h ou présence de rafales
|
Le
Bailleur justifiera des intempéries au Preneur en lui communiquant une attestation du Maître d’Œuvre d’Exécution
du chantier qui confirmera que le chantier a été perturbé du fait des intempéries et arrêtera
le nombre de jours de report de la date de livraison en résultant. A ce certificat sera joint un relevé de la station
météo nationale la plus proche du Programme Immobilier confirmant l’existence desdites intempéries
et un écrit du Bureau de Contrôle Technique ou du Coordonnateur SPS constatant de manière motivée une
impossibilité de travailler, en raison de la conséquence d’intempéries ou de conditions climatiques
dangereuses pour les personnes.
|
|
d)
|
Une
des causes de suspension de délai suivantes : la grève générale
affectant les professions du bâtiment ou des transports (les grèves ne touchant
que les entreprises travaillant sur le chantier n’étant pas prises en considération),
les injonctions judiciaires ou administratives de suspendre ou d’arrêter
les travaux (à moins que lesdites injonctions ne soient fondées sur des
fautes ou négligences commises par le Promoteur dans l’exécution
de sa mission), les troubles résultant d’émeutes, d’hostilités,
révolutions, les manifestations empêchant l’approvisionnement du chantier.
|
|
|
e)
|
De
convention expresse, il est précisé que toute défaillance d’entreprises
y compris la liquidation judiciaire ne sera pas prise en compte pour modifier le calendrier
de livraison.
|
|
|
f)
|
Les
retards imputables aux travaux d’aménagement du Preneur préalablement
à la Date d’effet du Bail.
|
Pour
l’appréciation des évènements évoqués ci-dessus, les Parties déclarent dès
à présent accepter de s’en rapporter à un certificat établi par le maître d’Œuvre
d’exécution et/ou par le coordonnateur de sécurité et de protection de la santé (CSPS), sous
leur propre responsabilité, accompagné des documents justificatifs de l’évènement considéré,
lesquels seront communiqués au Preneur sous un délai de dix (10) jours ouvrés à compter de la réception
par le Bailleur du courrier recommandé notifié par le Promoteur dénonçant les cas reconnus comme Causes
Légitimes de report, étant convenu qu’en toute hypothèse toute Cause Légitime de report sera
précisée par le Bailleur au Preneur lors du comité de suivi.
Il
est toutefois précisé que les justificatifs météo pouvant entrainer des causes légitimes de
suspension de délai ne sont disponibles qu’en début du mois suivant la survenance de ladite intempérie
et ne pourront être transmis au Preneur que le mois d’après.
|
|
DP.
5.
|
VISITES
DE PREALABLES A LA PRISE DE POSSESSION
|
Dans
les quinze (15) jours précédant la date d’Achèvement de la Cellule 6, le Bailleur invitera le Preneur
à assister au cours de ce délai aux opérations préalables à la livraison de la Cellule 6, aux
fins de permettre au Promoteur de prendre note de malfaçons qui pourraient être relevées par le Preneur ou
tout mandataire de son choix et d'engager tous travaux de reprise avant la date d'Achèvement de la Cellule 6 (sauf réserves).
Les
Parties établiront à cet effet une liste des malfaçons relevées au cours de ces opérations
préalables à la livraison.
Cette
visite préliminaire ne vaudra en aucune façon Prise de Possession de la Cellule 6 qui ne pourra avoir lieu que par
la signature du procès-verbal de prise de possession de la Cellule 6.
Le
Preneur aura la faculté de se faire accompagner de toute personne de son choix.
|
|
DP.
6.
|
PRISE
DE POSSESSION ET INDEMNITES DE RETARD
|
La
Prise de Possession sera effectuée de la façon suivante :
|
|
(i)
|
Le
Bailleur avisera le Preneur de la date à laquelle il pourra constater l’Achèvement
de la Cellule 6 et procéder à la prise de possession. Cet avis sera effectué
par lettre recommandée avec demande d’avis de réception au moins
8 (8) jours avant la date fixée.
|
|
|
(ii)
|
Au
dit jour, l’Achèvement de la Cellule 6, avec ou sans réserves, sera
constaté dans un procès-verbal de prise de possession établi contradictoirement
entre les Parties (le « Procès-Verbal de Prise de Possession »).
Chaque Partie pourra se faire accompagner par un ou plusieurs experts de son choix. Le
Preneur établira la liste des réserves qu’il remettra au Bailleur
pour être annexée au Procès-Verbal de Prise de Possession.
|
|
|
(iii)
|
Dès
la constatation de l’Achèvement et la Prise de Possession, que des réserves
aient été ou non formulées, acceptées ou contredites, il
sera procédé à la remise des clefs au Preneur pour valoir prise
de possession.
|
En
cas de désaccord entre les Parties sur la nature des inexécutions et malfaçons ou non-conformité fondant
un refus de prise de possession, les Parties feront appel à un expert désigné d’un commun accord entre
les Parties et qui appréciera l’Achèvement de la Cellule 6 conformément aux dispositions de l’article
DP. 3.2. et si les réserves formulées par le Preneur étaient fondées ou levées.
Dans
l’hypothèse où les Parties ne se mettraient pas d’accord sur le choix de cet expert, il sera procédé
à sa désignation par Monsieur le Président du Tribunal de Grande Instance du lieu de l’Immeuble, statuant
par voie de référé, et ce, à la requête de la Partie la plus diligente.
Les
honoraires de cet expert et les conséquences financières induites par son intervention seront à la charge
de celle des deux Parties dont la position aura été contredite par l’expert ou partagés par moitié
dans l'hypothèse où les deux Parties auraient été contredites partiellement par ledit expert.
Les
Parties s’engagent irrévocablement à communiquer à l’expert tout document que ce dernier jugerait
utile à l’accomplissement de sa mission et à se soumettre à l’avis qu’il aura émis.
L’expert aura tous les pouvoirs de mandataire commun des Parties et sa décision sera définitive et sans recours.
En
cas d’absence du Preneur à la constatation de l’Achèvement, le Bailleur adressera au Preneur, par lettre
recommandée avec demande d’avis de réception, une nouvelle convocation pour procéder à la constatation
de l’Achèvement de la Cellule 6 avec un délai de préavis de cinq (5) jours.
En
cas de nouvelle absence du Preneur, le Preneur sera réputé avoir accepté sans réserve la Cellule 6
à la date prévue aux termes de la première convocation. Le procès-verbal de constatation de l’huissier
vaudra Achèvement de la Cellule 6 sans réserve.
Dans
le cas où la cellule 6 ne serait pas mise à disposition du Preneur par le Bailleur, selon les modalités prévues
ci-dessus à la date d’Achèvement de la Cellule 6 (hors Clauses Légitimes de Prorogation de Délais
ou force majeure), c’est-à-dire en cas de retard excédant quinze (15) jours calendaires et pour tout fait
non imputable à une Cause Légitime de Suspension de Délai, le Bailleur sera redevable de plein droit d’une
indemnité forfaitaire et définitive de six cents euros (600 €) par jour de retard pour réparation de
l’intégralité du préjudice du Preneur.
|
|
DP.
7.
|
PROCESSUS
DE LEVEE DE RESERVES ET INDEMNITES FORFAITAIRES
|
Les
réserves formulées dans le Procès-Verbal de Prise de Possession devront être levées dans le
délai de 90 jours calendaires suivant la date de signature de celui-ci à moins que (i) le délai susvisé
ne doive être prolongé pour une Cause Légitime de Prorogation de Délai liée notamment à
des difficultés d’approvisionnement ou que (ii) la levée de ladite réserve ne soit techniquement impossible
ou ne le soit qu’au moyen de mesures dont l’impact ou le coût seraient manifestement disproportionnés
au regard de l’impact de la réserve considérée sur le fonctionnement des Locaux Loués et hors
réserves spéciales pour des équipements qui ne pourraient pas être testés correctement dans
le délai susvisés.
A
l’issue du délai de 90 jours calendaires susvisé, le Bailleur sera redevable à l’égard
du Preneur d’une indemnité forfaitaire et définitive de CENT EUROS (100 €) par jour ouvré de retard
pour l’ensemble des réserves non levées, quel que soit le nombre de réserves restantes.
Le
versement des indemnités forfaitaires cessera automatiquement à l’issue d’un délai de 90 jours
calendaires supplémentaires au-delà du délai de levée de réserves initiale.
En
tant que de besoin, il est précisé que si un expert nommé dans les conditions visées à l’Article
DP. 5. venait à conclure que le refus par le Preneur de constater l’Achèvement de la Cellule 6 était
injustifié, aucune indemnité de retard ne sera due par le Bailleur au Preneur et le Preneur restera devoir le Loyer.
A
l’issue de ce délai de 90 jours calendaires, la levée des réserves sera constatée par un procès-verbal
de levée des réserves établi contradictoirement entre les Parties ou à défaut, par un expert
désigné dans les conditions ci-dessous.
Au
terme de ce délai de 90 jours calendaires et à défaut d’avoir levé toutes les réserves,
et après une mise en demeure par lettre recommandée avec accusé de réception restée infructueuse
pendant Vingt et un jours calendaires (21), le Preneur pourra s'il le désire faire réaliser, par toute entreprise
de son choix, mais aux frais du Bailleur qui s'y engage, les travaux nécessaires à la levée des réserves
non-levées. Cette possibilité est offerte au Preneur pour les seuls travaux de levée de réserves qui
n’auront aucun impact sur la couverture de l’assurance Dommage Ouvrage.
Pour
les levées de réserves pouvant avoir un impact sur la couverture de l’assurance Dommage Ouvrage, les parties
s’engagent à se revoir à l’issue de ces délais afin de trouver une solution satisfaisante.
Un
procès-verbal de levée des réserves sera établi contradictoirement entre les Parties ou, à
défaut, en cas de désaccord, le différend sera réglé par voie d'expertise ainsi que convenu
à l’Article DP. 5.
En
contrepartie des obligations contractées par le Bailleur et le Promoteur de lever les réserves, et afin de leur
donner les moyens de tenir ces engagements, il est convenu que le Preneur confère d’ores et déjà au
Bailleur et au Promoteur le pouvoir d'accéder aux locaux aux heures d'ouverture afin de procéder aux travaux de
levée des réserves avec les entreprises.
|
|
DP.
8.
|
MISE
A DISPOSITION ANTICIPEE
|
Aux
fins que le Preneur réalise par anticipation sur l’Achèvement de la Cellule 6 ses travaux d’aménagement
et d’équipement de ladite cellule le Bailleur mettra la partie entrepôt de la Cellule 6 à sa disposition
de manière anticipée, quinze (15) jours calendaires avant la date de Prise de Possession, et en tout état
de cause après que la dalle ait été coulée et soit devenue sèche. Les modalités (calendrier,
termes et conditions…) de mise à disposition anticipée des surfaces susvisées sont définies
dans la convention ci-jointe (Annexe 17).
A
cet effet, un Etat des lieux contradictoire sera dressé entre les Parties, présentes ou représentées.
Le Preneur s’engage à respecter l’ensemble des mesures de sécurité liées au chantier,
ne pas gêner la poursuite des travaux de la Cellule 6 dans les délais fixés, ne pas créer d’aménagement
ou réaliser de travaux qui viendraient faire obstacle à l’obtention de la conformité de la Cellule
6 ou encore l’obtention de la certification visée.
En
aucun cas le Preneur ne sera autorisé à exercer son activité dans les locaux mis à sa disposition.
Enfin
le Preneur s’engage à souscrire des lors toutes les assurances nécessaires tant aux biens qu’à
l’exécution de ses travaux à prévoir.
Il
est rappelé que la mise à disposition anticipée au Preneur de la partie entrepôt de la Cellule 6 prendra
fin automatiquement à la date de Prise de Possession par le Preneur. Il est en outre rappelé que la mise à
disposition de la Cellule 6 au Preneur ne saurait être retardée si les travaux d’aménagement du Preneur
n’étaient pas terminés à cette date et que l’absence de finalisation par le Preneur de ses travaux
d’aménagements ou l’existence de défauts ou réserves de réalisation ne saurait remettre
en cause l’Achèvement de la Cellule 6.
Les
Travaux d’aménagement du Preneur devront correspondre aux travaux visés en annexe de la convention de mise
à disposition anticipée susvisée et être préalablement agréés par le Bailleur,
tous autres travaux souhaités devront être présentés au Bailleur pour validation préalable.
|
|
DP.
9.
|
DEMANDE
DE TRAVAUX MODIFICATIFS PRENEUR
|
Dans
le cas où le Preneur désirerait que des modifications soient apportées à la consistance de la Cellule
6 par le biais de travaux modificatifs (ci-après « les Travaux Modificatifs », il devra s’adresser
exclusivement au Bailleur, lequel appréciera sous sa responsabilité si les modifications demandées sont réalisables
au regard des dispositions législatives et règlementaires de toute nature applicable à la construction de
la Cellule 6.
Le
Preneur fournira un descriptif détaillé des Travaux Modificatifs qu’il entend voir réaliser. Si les
Travaux Modificatifs nécessitent des études de faisabilités préalables, le Bailleur précisera
par écrit au Preneur, la nature et le prix prévisionnel de ces études et le Preneur disposera d’un
délai de cinq (5) jours ouvrés à compter de la réception de ces informations pour accepter ou refuser
ces études.
Si
au terme de ces études de faisabilité, le Preneur ne donnait pas suite à la demande de Travaux Modificatifs,
celui-ci versera au Bailleur le coût de ces études dans un délai de cinq (5) jours ouvrés à
compter de la réception de la facture correspondante.
Le
Bailleur aura la faculté de refuser la réalisation des Travaux Modificatifs demandés par le Preneur si lesdits
travaux :
|
|
-
|
ont
pour effet de retarder la Date de Prise de Possession prévisionnelle ;
|
|
|
-
|
nécessitent
un permis de construire modificatif ou une déclaration préalable de travaux
ou un nouveau permis de construire ou une autre autorisation administrative (ICPE notamment)
;
|
|
|
-
|
ne
sont pas compatibles avec les exigences relatives à l'obtention de certifications ;
|
|
|
-
|
font
obstacle à l'obtention de la conformité administrative du permis de construire
et le cas échéant des éventuels permis modificatifs obtenus pour
la construction de la Cellule n°6 conformément articles L. 461-1, L. 462-1
et L. 462-2 du Code de l'Urbanisme ;
|
|
|
-
|
sont
techniquement irréalisables notamment en raison de l’état d’avancement
des travaux de construction de la Cellule 6.
|
Dans
les vingt-cinq (25) jours calendaires de (i) la réception par le Bailleur de la demande de Travaux Modificatifs du Preneur
ou (ii) la réception des études de faisabilité, le Bailleur soumettra au Preneur un devis relatif aux Travaux
Modificatifs comprenant le coût des travaux majoré forfaitairement de 10% HT en rémunération des honoraires
techniques et architecturaux, du bureau de contrôle, du coordinateur de sécurité, de gestion et des assurances
et de façon générale de tous frais liées à ceux-ci.
En
cas d’absence de réponse du Preneur dans un délai de dix (10) jours calendaires, le devis sera réputé
rejeté par le Bailleur.
Les
modifications de la Cellules 6 ne pourront être entreprises qu’après approbation exprès de ce ou de
ces propositions par les Parties, cet accord étant dès lors formalisé par un avenant au Bail, indiquant la
nature des modifications ou travaux supplémentaires, leur incidence sur le Loyer et , le cas échéant sur
la date de Prise de Possession.
Les
travaux modificatifs bénéficieront des mêmes garanties et assurances que les travaux prévus au présent
Bail.
Les
coûts des Travaux Modificatifs, tels qu’indiqués ci-dessus, seront refacturés par le Bailleur au Preneur.
La
mise en Œuvre de ces Travaux Modificatifs ne pourra débuter avant l’acceptation du devis par le preneur et
la signature d’un avenant au présent Bail.
FAIT
A
Le
10 12 2019
EN
DEUX EXEMPLAIRES ORIGINAUX, remis à chacune des Parties qui le reconnaissent
|
Le
Bailleur
|
|
Le
Preneur
|
|
|
|
|
|
/s/
signature unintelligible
|
|
/s/
Philippe Santi
|
LISTE
DES ANNEXES
|
Annexe
1
|
Extrait k-bis et
statuts du représentant du Bailleur
|
|
|
|
|
Annexe 2
|
Extrait k BIS du
Preneur
|
|
|
|
|
Annexe 3
|
Tableau récapitulatif
des SHON réalisé par Jean-Claude BERSON, le 12 avril 2011
|
|
|
|
|
Annexe 4
|
Arrêté
d’Exploiter, convention quadripartite du 26 avril 2011 et récépissé de déclaration de changement
d’exploitant du 15 juin 2011
|
|
|
|
|
Annexe 5
|
Acte authentique
du 6 juin 2016 constitutif de servitudes réciproques non aedificandi, sur les terrains appartenant à la société
INS CRIQUEBEUF à la société NOTAPIERRE
|
|
|
|
|
Annexe 6
|
Porter à
Connaissance, avis favorable délivré par la DREAL du 30 juin 2017 et Arrêté d’Exploiter Complémentaire
|
|
|
|
|
Annexe 7
|
Permis de Construire
et son dossier de demande, Plans de la Cellule 6
|
|
|
|
|
Annexe 8
|
Notice Descriptive
Technique de la Cellule 6
|
|
|
|
|
Annexe 9
|
Procès-verbaux
de livraison du 26 avril 2011 (pour la livraison de la Phase 1 du bâtiment) ; du 30 septembre 2011 (pour la livraison
de la Phase 2 du bâtiment contenant réserves, procès-verbal de levée des réserves du 22
novembre 2011 et procès-verbal de livraison sans réserve du 26 décembre 2011 (pour l’auvent)
|
|
|
|
|
Annexe 10
|
Descriptif des Travaux
d’Aménagement Initiaux du Preneur
|
|
|
|
|
Annexe 11
|
Compte bancaire
du Bailleur
|
|
|
|
|
Annexe 12
|
Diagnostic environnemental
= rapports de sol réalisés lors de la construction
|
|
|
|
|
Annexe 13
|
Etat des Risques
et Pollutions (ERP)
|
|
|
|
|
Annexe 14
|
Plan du Terrain
|
|
|
|
|
Annexe 15
|
DPE
|
|
|
|
|
Annexe 16
|
Plan d’implantation
du chantier
|
|
|
|
|
Annexe 17
|
Convention de mise
à disposition tripartite
|
|
|
|
|
Annexe 18
|
Etat récapitulatif
des travaux selon la loi Pinel (-3 ans / +3 ans)
|
|
|
|
|
Annexe 19
|
Inventaire des catégories
de charges, taxes, redevances et impôts liées au Bail
|
|
|
|
|
Annexe 20
|
Plans de repérage
des cellules
|
-
72 -
Exhibit 21
LIST OF SUBSIDIARIES
|
Name
|
|
Jurisdiction
|
|
|
|
|
|
Inter Parfums Holdings, S.A.
|
|
France
|
|
Interparfums SA
|
|
France
|
|
Jean Philippe Fragrances, LLC
|
|
New York
|
|
Inter Parfums USA, LLC
|
|
New York
|
|
IP Beauty, Inc.
|
|
Delaware
|
|
Inter Parfums srl
|
|
Italy
|
|
Inter España Parfums et Cosmetiques, SL
|
|
Spain
|
|
Parfums Rochas Spain, SL
|
|
Spain
|
|
Inter Parfums (Suisse) Sarl
|
|
Switzerland
|
|
Interparfums Luxury Brands, Inc.
|
|
Delaware
|
|
Interparfums Singapore Pte.
|
|
Republic of Singapore
|
|
Inter Parfums USA Hong Kong Limited
|
|
Hong Kong
|
|
Interstellar Brands LLC
|
|
New York
|
Exhibit 23
CONSENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
We consent to the incorporation by reference
in the Registration Statements on Form S-8 (No. 333-136988 and No. 333-216705) under the Securities Act of 1933 of Inter Parfums,
Inc. and subsidiaries of our report dated March 2, 2020 on the consolidated balance sheets of Inter Parfums, Inc. and subsidiaries
as of December 31, 2019 and 2018, and the related consolidated statements of income, comprehensive income (loss), changes in shareholders’
equity and cash flows and the schedule listed in the Index in Item 15(a)(2) for each of the years in the three-year period ended
December 31, 2019 and on the effectiveness of the Inter Parfums, Inc. maintenance of internal controls over financial reporting
as of December 31, 2019. This report appears in the December 31, 2019 Annual Report on Form 10-K of Inter Parfums, Inc.
/s/ Mazars USA LLP
New York, New York
March 2, 2019
Exhibit 31.1
CERTIFICATIONS
I, Jean Madar, certify that:
1. I have reviewed this annual report on Form 10-K of Inter
Parfums, Inc.;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible
for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
a) Designed such disclosure controls and procedures,
or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during
the period in which this report is being prepared;
b) Designed such internal control over financial reporting,
or caused such control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s
disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures as of the end of the period covered by this report based upon such evaluation; and
d) Disclosed in this report any change in the registrant’s
internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s
fourth quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee
of registrant’s board of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses
in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s
ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves
management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 2, 2020
|
|
|
|
|
|
/s/ Jean Madar
|
|
|
Jean Madar, Chief Executive Officer
|
|
Exhibit 31.2
CERTIFICATIONS
I, Russell Greenberg, certify that:
1. I have reviewed this annual report on Form 10-K of Inter
Parfums, Inc.;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible
for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
a) Designed such disclosure controls and procedures,
or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during
the period in which this report is being prepared;
b) Designed such internal control over financial reporting,
or caused such control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s
disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures as of the end of the period covered by this report based upon such evaluation; and
d) Disclosed in this report any change in the registrant’s
internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s
fourth quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee
of registrant’s board of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses
in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s
ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves
management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: March 2, 2020
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/s/ Russell Greenberg
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Russell Greenberg
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Chief Financial Officer and
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Principal Accounting Officer
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Exhibit
32.1
CERTIFICATION
The
undersigned hereby certifies, in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002, in his capacity as an officer of Inter Parfums, Inc., that the Annual Report of Inter Parfums, Inc. on Form 10-K for
the year ended December 31, 2019, fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934
and that the information contained in such report fairly presents, in all material respects, the financial condition and results
of operation of Inter Parfums, Inc.
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Date:
March 2, 2020
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By:
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/s/
Jean Madar
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Jean
Madar,
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Chief
Executive Officer
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A
signed original of this written statement required by Section 906 has been provided to Inter Parfums, Inc. and will be retained
by Inter Parfums, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
CERTIFICATION
The undersigned hereby certifies, in accordance
with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in his capacity as an officer of Inter
Parfums, Inc., that the Annual Report of Inter Parfums, Inc. on Form 10-K for the year ended December 31, 2019, fully complies
with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in such report
fairly presents, in all material respects, the financial condition and results of operation of Inter Parfums, Inc.
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Date: March 2, 2020
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By:
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/s/ Russell Greenberg
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Russell Greenberg,
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Executive Vice President,
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Chief Financial Officer and
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Principal Accounting Officer
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A signed original of this written statement
required by Section 906 has been provided to Inter Parfums, Inc. and will be retained by Inter Parfums, Inc. and furnished to the
Securities and Exchange Commission or its staff upon request.
