Exhibit 10.7
[EXECUTION COPY]
SECOND AMENDMENT, ACKNOWLEDGMENT AND SUPPLEMENT
TO UNIT PURCHASE AGREEMENT
This Second Amendment, Acknowledgment and Supplement to Unit Purchase
Agreement (this "AMENDMENT AND SUPPLEMENT"), dated as of April 6, 2004, is made
to the Unit Purchase Agreement, dated as of February 6, 2004, by and among
Medtech/Denorex, LLC, a Delaware limited liability company (n/k/a Prestige
International Holdings, LLC, the "COMPANY"), GTCR Fund VIII, L.P., a Delaware
limited partnership, GTCR Fund VIII/B, L.P., a Delaware limited partnership,
GTCR Co-Invest II, L.P., a Delaware limited partnership, and the TCW/Crescent
Purchasers (as defined therein), as amended by the First Amendment,
Acknowledgment and Supplement to Unit Purchase Agreement (the "FIRST
AMENDMENT"), dated as of the date hereof, by and among the Company, GTCR Fund
VIII, GTCR Fund VIII/B, GTCR Co-Invest, GTCR Capital Partners and the
TCW/Crescent Purchasers (the "AGREEMENT"). Each capitalized term used herein but
not otherwise defined shall have the meaning ascribed to such term in the
Agreement.
WHEREAS, the Company has indirectly acquired all of the outstanding shares
of capital stock of Xxxxxx Bay Holdings, Inc., a Virginia corporation and
ultimate parent of Prestige Brands International, Inc. (the "ACQUISITION"); and
WHEREAS, the undersigned desire to amend certain terms of the Agreement,
add the TCW/Crescent Lenders (as defined below) as a party to the Agreement,
make certain acknowledgments with respect to the Agreement and reaffirm the
other terms and provisions of the Agreement in order to better reflect the
intent of the undersigned after giving effect to the Acquisition; and
WHEREAS, the TCW/Crescent Purchasers desire to purchase, and the GTCR
Purchasers and GTCR Capital Partners desire to sell to the TCW/Crescent
Purchasers, an aggregate of 1,367,232 Common Units and 4,188.976 Class B
Preferred Units for an aggregate purchase price of $4,380,787.
NOW, THEREFORE, effective immediately following the consummation of the
Acquisition, the undersigned, intending to be legally bound, hereby agree as
follows:
AMENDMENT PROVISIONS
1. The following defined terms (and related definitions) shall be added to the
Agreement:
(a) "TCW/CRESCENT LENDERS" means collectively, TCW/Crescent Mezzanine
Partners III, L.P., a Delaware limited partnership, TCW/Crescent
Mezzanine Trust III, a Delaware business trust, and TCW/Crescent
Mezzanine Partners III Netherlands, L.P., a Delaware limited
partnership, any of their Affiliates or any investment fund for whom
Trust Company of the West or any Affiliate of Trust Company of the
West acts as an account manager.
2. The definitions for each of the following defined terms in the Agreement
shall be deleted in their entirety and amended and restated as follows:
(a) "PURCHASERS" means the GTCR Purchasers, the TCW/Crescent Purchasers,
GTCR Capital Partners and the TCW/Crescent Lenders (and each
individually a "PURCHASER").
3. The last sentence of Section 1.B(b) of the Agreement shall be deleted in
its entirety and amended and restated as follows:
Notwithstanding anything to the contrary herein, the aggregate amount of
Securities which the TCW/Crescent Purchasers or TCW/Crescent Lenders, as
the case may be, are collectively purchasing hereunder (or which the
TCW/Crescent Purchasers (or their transferees) or the TCW/Crescent Lenders
(or their transferees), as the case may be, are collectively selling
pursuant to the repurchase provisions hereunder) shall be allocated among
the TCW/Crescent Purchasers or TCW/Crescent Lenders, as the case may be, in
accordance with the allocation percentage opposite each TCW/Crescent
Purchaser's name under the heading "TCW/Crescent Purchaser Allocations" on
the "Schedule of TCW/Crescent Allocations" attached hereto or in accordance
with the allocation percentage opposite each TCW/Crescent Lender's name
under the heading "TCW/Crescent Lender Allocations" on the "Schedule of
TCW/Crescent Allocations" attached hereto, as the case may be.
4. The heading of Section 1.B(e) shall be deleted in its entirety and amended
and restated as follows:
(e) TCW/CRESCENT PURCHASERS SUBSEQUENT CLOSINGS.
5. In Section 1.B(e)(i) of the Agreement, the number "0.0278" shall be deleted
in its entirety and amended and replaced with the number "0.0537".
6. In Section 1.B(e)(ii) of the Agreement, the dollar amount of "$6,945,918"
shall be deleted in its entirety and amended and replaced with the dollar
amount of "$13,435,226".
7. In Section 1.B(f)(i) of the Agreement, the number "0.0255" shall be deleted
in its entirety and amended and replaced with the number "0.0248".
8. In Section 1.B(f)(ii) of the Agreement, the dollar amount of "$6,381,314"
shall be deleted in its entirety and amended and replaced with the dollar
amount of "$6,189,061".
9. A new Section 1.B(g) shall be added to the Agreement as follows:
(g) TCW/CRESCENT LENDERS SUBSEQUENT CLOSINGS.
(i) In connection with each Subsequent Closing occurring after the date
of the Second Amendment, Acknowledgment and Supplement to Unit Purchase
Agreement, dated as of April 6, 2004 (the "SECOND AMENDMENT"), the
TCW/Crescent Lenders may, but shall not be obligated to, purchase a number
of Class B Preferred Units equal to the total number of Class B Preferred
Units being
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purchased at such Subsequent Closing multiplied by 0.0033 and on the same
terms and conditions as the GTCR Purchasers; PROVIDED THAT, if the
TCW/Crescent Lenders choose not to purchase all of the Class B Preferred
Units it is entitled to purchase at any Subsequent Closing, they may not
purchase Class B Preferred Units at such Subsequent Closing or at any
Subsequent Closing thereafter.
(ii) In connection with any Subsequent Closing in which the TCW/Crescent
Lenders do not purchase Class B Preferred Units, the Participating
Purchasers with respect to such Subsequent Closing shall have the right to
purchase from the TCW/Crescent Lenders and transferees a number of Common
Units. The number of Common Units to be purchased hereunder will be
determined by calculating the amount that the TCW/Crescent Lenders would
have been entitled to invest had the TCW/Crescent Lenders participated in
such Subsequent Closing and dividing that amount by $833,286 (i.e., the
TCW/Crescent Lenders' total committed equity) (the "TCW/CRESCENT LENDERS'
RATIO"). The TCW/Crescent Lenders' Ratio will then be multiplied by the
number of Common Units held by the TCW/Crescent Lenders and its transferees
immediately prior to such Subsequent Closing. Such product will then be
adjusted to give effect to any change in the Fair Market Value of the
Company and its Subsidiaries between the date hereof and the date
immediately preceding such Subsequent Closing before giving effect to such
Subsequent Closing by dividing such product by the multiple of such
increase in Fair Market Value of the Company and its Subsidiaries or by 1
minus the percentage decrease in such Fair Market Value of the Company and
its Subsidiaries, as the case may be. Such right to purchase in favor of
the Participating Purchasers (i) must be exercised on the date of the
Subsequent Closing if the TCW/Crescent Lenders (or their transferees, as
the case may be) have notified the Purchasers at least three (3) business
days prior to such Subsequent Closing that they do not intend to
participate in such Subsequent Closing or otherwise within five (5)
business days after such Subsequent Closing, (ii) shall not, under any
circumstances, permit the Participating Purchasers to purchase any Common
Units held by the TCW/Crescent Lenders or their transferees which were
initially purchased hereunder by the TCW/Crescent Purchasers pursuant to
SECTIONS 1.B(b) or 1.B(e) or the TCW Incremental Co-Invest Transactions (as
defined in the Second Amendment) and (iii) shall, if the Participating
Purchasers elect to purchase an aggregate number of Common Units under this
SECTION 1.B(g) greater than the number determined to be available for
purchase in accordance with the terms of this SECTION 1.B(g), then the
available Common Units shall be allocated among the Participating
Purchasers on a pro rata basis consistent with each such Participating
Purchaser's portion of the investment made pursuant to such Subsequent
Closing. "Fair Market Value" for purposes of this SECTION 1.B(g) shall be
the fair market value of all equity of the Company using the methodology
procedures set forth in the definition of Fair Market Value in SECTION 6
hereof.
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(iii) The purchase price for each Common Unit repurchased pursuant to this
SECTION 1.B(g) will be $0.10 per unit (each as proportionately adjusted for
all subsequent unit splits, unit dividends and other recapitalizations).
(iv) The closing of the purchase of the Common Units pursuant to this
SECTION 1.B(g) shall take place on the date designated in a notice given to
the TCW/Crescent Lenders in accordance herewith, which date shall not be
more than 30 days nor less than five days after the delivery of such
notice. Each Participating Purchaser will pay for the Common Units to be
purchased by it by a check or wire transfer of immediately available funds.
The Participating Purchasers will be entitled to receive customary
representations and warranties from the sellers regarding such sale and to
require that all sellers' signatures be guaranteed.
10. The PURCHASER NOTICE SCHEDULE attached to the Agreement shall be replaced
and superseded in its entirety by the PURCHASER NOTICE SCHEDULE attached
hereto.
PURCHASE PROVISIONS
11. Immediately following the consummation of the Acquisition, subject to the
terms and conditions set forth herein, for an aggregate purchase price of
$4,380,787, the TCW/Crescent Purchasers shall purchase from the GTCR
Purchasers and GTCR Capital Partners, and the GTCR Purchasers and GTCR
Capital Partners shall sell to the TCW/Crescent Purchasers, the following
Securities: (i) the TCW/Crescent Purchasers shall purchase from GTCR Fund
VIII, and GTCR Fund VIII shall sell to the TCW/Crescent Purchasers,
3,454.338 Class B Preferred Units at a price of $1,000 per unit PLUS the
Class B Unpaid Yield thereon (as defined in the LLC Agreement) and
1,127,455 Common Units at a price of $0.10 per unit; (ii) the TCW/Crescent
Purchasers shall purchase from GTCR Fund VIII/B, and GTCR Fund VIII/B shall
sell to the TCW/Crescent Purchasers, 606.220 Class B Preferred Units at a
price of $1,000 per unit PLUS the Class B Unpaid Yield thereon and 197,863
Common Units at a price of $0.10 per unit; (iii) the TCW/Crescent
Purchasers shall purchase from GTCR Co-Invest, and GTCR Co-Invest shall
sell to the TCW/Crescent Purchasers, 18.437 Class B Preferred Units at a
price of $1,000 per unit PLUS the Class B Unpaid Yield thereon and 6,018
Common Units at a price of $0.10 per unit; and (iv) the TCW/Crescent
Purchasers shall purchase from GTCR Capital Partners, and GTCR Capital
Partners shall sell to the TCW/Crescent Purchasers, 109.980 Class B
Preferred Units at a price of $1,000 per unit PLUS the Class B Unpaid Yield
thereon and 35,896 Common Units at a price of $0.10 per unit. The aggregate
amount of Securities which the TCW/Crescent Purchasers are collectively
purchasing pursuant to the foregoing shall be allocated among the
TCW/Crescent Purchasers in accordance with the allocation percentage
opposite each TCW/Crescent Purchaser's name under the heading "TCW/Crescent
Purchaser Allocations" on the "Schedule of TCW/Crescent Allocations"
attached hereto. The transactions described in this Section 11 are referred
to herein as the "TCW INCREMENTAL CO-INVEST TRANSACTIONS".
12. The closing of the TCW Incremental Co-Invest Transactions (the
"SUPPLEMENTAL CLOSING") shall occur immediately following the consummation
of the Acquisition and
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simultaneous with the effectiveness of the amendments described in this
Amendment and Supplement. At the Supplemental Closing, the GTCR Purchasers
and GTCR Capital Partners shall deliver to the TCW/Crescent Purchasers the
unit certificates evidencing the Class B Preferred Units and Common Units
to be purchased by the TCW/Crescent Purchasers upon payment of the purchase
price thereof by wire transfer of immediately available funds to such
account as designated by the GTCR Purchasers and GTCR Capital Partners, as
applicable.
13. As of the date of this Amendment and Supplement, each of the GTCR
Purchasers and GTCR Capital Partners is the holder of record and owns
beneficially the number of Class B Preferred Units and Common Units being
sold by such Person to the TCW/Crescent Purchasers at the Supplemental
Closing (such Person's "APPLICABLE SECURITIES"). Other than the transfer
restrictions set forth in the Transaction Documents, each of the GTCR
Purchasers and GTCR Capital Partners owns its Applicable Securities free
and clear of all liens, pledges, voting agreements, voting trusts, proxy
agreements, security interests, or encumbrances of any kind (collectively,
"LIENS"). Upon the consummation of the TCW Incremental Co-Invest
Transactions, the TCW/Crescent Purchasers will receive good and valid title
to such Person's Applicable Securities, free and clear of all Liens other
than as provided pursuant to the Transaction Documents and applicable
securities laws.
14. Each of the TCW/Crescent Purchasers hereby represents that it is acquiring
the Class B Preferred Units and Common Units pursuant to the TCW
Incremental Co-Invest Transactions for its own account with the present
intention of holding such securities for purposes of investment, and that
it has no intention of selling such securities in a public distribution in
violation of the federal securities laws or any applicable state securities
laws. Each of the TCW/Crescent Purchasers agrees and acknowledges that the
Class B Preferred Units and Common Units purchased at the Supplemental
Closing shall be deemed "Securities" under the Agreement.
GENERAL PROVISIONS
15. Except for the changes noted in Sections 1 through 10 above, the Agreement
shall remain in full force and effect and any dispute under this Amendment
and Supplement shall be resolved in accordance with the terms of the
Agreement, including, but not limited to, Section 7.L thereof (Governing
Law).
16. All representations and warranties contained herein or made in writing by
any party in connection herewith shall survive the execution and delivery
of this Amendment and Supplement and the consummation of the transactions
contemplated hereby, regardless of any investigation made by a Purchaser or
on its behalf.
17. This Amendment and Supplement may be executed in any number of counterparts
(including by means of facsimiled signature pages), which shall together
constitute one and the same instrument.
* * * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment,
Acknowledgment and Supplement to Unit Purchase Agreement on the date first
written above.
PRESTIGE INTERNATIONAL HOLDINGS, LLC
By: /S/ XXXXX X. XXXXXXXX
------------------------------
Name: Xxxxx X. Xxxxxxxx
------------------------------
Title: Chief Financial Officer
------------------------------
GTCR FUND VIII, L.P.
By: GTCR Partners VIII, L.P.
Its: General Partner
By: GTCR Xxxxxx Xxxxxx XX, L.L.C.
Its: General Partner
By: /S/ XXXXX X. XXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxx
Its: Principal
GTCR FUND VIII/B, L.P.
By: GTCR Partners VIII, L.P.
Its: General Partner
By: GTCR Xxxxxx Xxxxxx XX, L.L.C.
Its: General Partner
By: /S/ XXXXX X. XXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxx
Its: Principal
GTCR CO-INVEST II, L.P.
By: GTCR Xxxxxx Xxxxxx XX, L.L.C.
Its: General Partner
By: /S/ XXXXX X. XXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxx
Its: Principal
[SIGNATURE PAGE TO SECOND AMENDMENT, ACKNOWLEDGMENT AND SUPPLEMENT TO UNIT
PURCHASE AGREEMENT]
GTCR CAPITAL PARTNERS, L.P.
By: GTCR Mezzanine Partners, L.P.
Its: General Partner
By: GTCR Partners VI, L.P.
Its: General Partner
By: GTCR Xxxxxx Xxxxxx, L.L.C.
Its: General Partner
By: /S/ XXXXX X. XXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxx
Its: Principal
TCW/CRESCENT MEZZANINE
PARTNERS III, L.P.
TCW/CRESCENT MEZZANINE TRUST III
TCW/CRESCENT MEZZANINE
PARTNERS III NETHERLANDS, L.P.,
each in its capacity as both a
TCW/Crescent Purchaser and
TCW/Crescent Lender hereunder
By: TCW/Crescent Mezzanine
Management III, L.L.C.,
its Investment Manager
By: TCW Asset Management Company,
its Sub-Advisor
By: /S/ XXXXXXX X. XXXXXXXX
---------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
[SIGNATURE PAGE TO SECOND AMENDMENT, ACKNOWLEDGMENT AND SUPPLEMENT TO UNIT
PURCHASE AGREEMENT]
PURCHASE NOTICE SCHEDULE
IF TO THE GTCR PURCHASERS:
GTCR Fund VIII, L.P.
GTCR Fund VIII/B, L.P.
GTCR Co-Invest II, L.P.
c/o GTCR Xxxxxx Xxxxxx XX, L.L.C.
0000 Xxxxx Xxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxx
WITH A COPY TO:
Xxxxxxxx & Xxxxx LLP
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, P.C.
IF TO GTCR CAPITAL PARTNERS:
c/o GTCR Xxxxxx Xxxxxx XX, L.L.C.
0000 Xxxxx Xxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxx
WITH A COPY TO:
Xxxxxxxx & Xxxxx LLP
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, P.C. and Xxxxxxxxxxx X. Xxxxxx
IF TO THE TCW/CRESCENT PURCHASERS:
TCW/Crescent Mezzanine Partners III, L.P.
TCW/Crescent Mezzanine Trust III
TCW/Crescent Mezzanine Partners III Netherlands, L.P.
x/x XXX/Xxxxxxxx Xxxxxxxxx, X.X.X.
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telecopier No.: (000) 000-0000
WITH A COPY TO:
Gardere Xxxxx Xxxxxx LLP
3000 Thanksgiving Tower
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxx
Telecopier No.: (000) 000-0000
SCHEDULE OF TCW/CRESCENT ALLOCATIONS
TCW/CRESCENT PURCHASER TCW/CRESCENT PURCHASER ALLOCATIONS
------------------------------------------- ----------------------------------
TCW/CRESCENT MEZZANINE PARTNERS III, L.P. 83.5667%
TCW/CRESCENT MEZZANINE TRUST III 13.0190%
TCW/CRESCENT MEZZANINE PARTNERS III
NETHERLANDS, L.P. 3.4143%
TCW/CRESCENT LENDER TCW/CRESCENT LENDER ALLOCATIONS
------------------------------------------- ----------------------------------
TCW/CRESCENT MEZZANINE PARTNERS III, L.P. 83.5667%
TCW/CRESCENT MEZZANINE TRUST III 13.0190%
TCW/CRESCENT MEZZANINE PARTNERS III
NETHERLANDS, L.P. 3.4143%
