EXHIBIT 99.3
October __, 1998
EXCHANGE AGENT AGREEMENT
------------------------
State Street Bank and Trust Company
Corporate Trust Administration
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Ladies and Gentlemen:
Jafra Cosmetics International, Inc. and Jafra Cosmetics International,
S.A. de C.V. (collectively, the "Company") propose to make an offer (the
"Exchange Offer") to exchange the Issuers' 11 3/4% Senior Subordinated Notes Due
2008 (the "Existing Notes") for the Issuers' Senior Subordinated Notes Due 2008
(the "New Notes"), which have been registered under the Securities Act of 1933,
as amended. The terms and conditions of the Exchange Offer as currently
contemplated are set forth in a prospectus (and any amendments thereto) filed
with the Securities and Exchange Commission on September 4, 1998 as part of a
Registration Statement on Form S-4 (as so amended, the "Prospectus"), proposed
to be distributed to all record holders of the Existing Notes. The Existing
Notes and the New Notes are collectively referred to herein as the "Notes." Any
capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to such terms in the Prospectus.
The Company hereby appoints State Street Bank and Trust Company to act as
exchange agent (the "Exchange Agent") in connection with the Exchange Offer as
of September 4, 1998. References hereinafter to "you" shall refer to State
Street Bank and Trust Company.
The Exchange Offer is expected to be commenced by the Company on or about
October __, 1998. The Letter of Transmittal accompanying the Prospectus (or in
the case of book entry securities, the ATOP system) is to be used by the Holders
of the Existing Notes to accept the Exchange Offer, and contains instructions
with respect to the delivery of certificates for Existing Notes tendered.
The Exchange Offer shall expire at 5:00 P.M., New York City time, on
November __, 1998, or on such later date or time to which the Company may extend
the Exchange Offer (the "Expiration Date"). Subject to the terms and conditions
set forth in the Prospectus, the Company expressly reserves the right to extend
the Exchange Offer from time to time and may extend the Exchange Offer by giving
oral (confirmed in writing) or written notice to you
before 9:00 A.M., New York City time, on the business day following the
previously scheduled Expiration Date.
The Company expressly reserves the right to amend or terminate the
Exchange Offer, and not to accept for exchange any Existing Notes not
theretofore accepted for exchange, upon the occurrence of any of the conditions
of the Exchange Offer specified in the Prospectus under the caption "The
Exchange Offer--Conditions." The Company will give oral (confirmed in writing)
or written notice of any amendment, termination or nonacceptance to you as
promptly as practicable.
In carrying out your duties as Exchange Agent, you are to act in
accordance with the following instructions:
1. You will perform such duties and only such duties as are specifically
set forth in the section of the Prospectus captioned "The Exchange Offer" or as
specifically set forth herein; provided, however, that in no way will your
-------- -------
general duty to act in good faith be discharged by the foregoing.
2. You will establish an account with respect to the Existing Notes at The
Depository Trust Company (the "Book-Entry Transfer Facility") for purposes of
the Exchange Offer within two business days after the date of the Prospectus,
and any financial institution that is a participant in the Book-Entry Transfer
Facility's systems may make book-entry delivery of the Existing Notes by causing
the Book-Entry Transfer Facility to transfer such Existing Notes into your
account in accordance with the Book-Entry Transfer Facility's procedure for such
transfer.
3. You are to examine each of the Letters of Transmittal and certificates
for Existing Notes (or confirmation of book-entry transfer into your account at
the Book-Entry Transfer Facility) and any other documents delivered or mailed to
you by or for holders of the Existing Notes to ascertain whether: (i) the
Letters of Transmittal and any such other documents are duly executed and
properly completed in accordance with instructions set forth therein and (ii)
the Existing Notes have otherwise been properly tendered. In each case where
the Letter of Transmittal or any other document has been improperly completed or
executed or any of the certificates for Existing Notes are not in proper form
for transfer or some other irregularity in connection with the acceptance of the
Exchange Offer exists, you will endeavor to inform the presenters of the need
for fulfillment of all requirements and to take any other action as may be
necessary or advisable to cause such irregularity to be corrected.
4. With the approval of the President, Chief Financial Officer or any Vice
President of the Company (such approval, if given orally, to be confirmed in
writing) or any other party
2
designated by such an officer in writing, you are authorized to waive any
irregularities in connection with any tender of Existing Notes pursuant to the
Exchange Offer.
5. Tenders of Existing Notes may be made only as set forth in the Letter
of Transmittal and in the section of the Prospectus captioned "The Exchange
Offer--Procedures for Tendering," and Existing Notes shall be considered
properly tendered to you only when tendered in accordance with the procedures
set forth therein.
Notwithstanding the provisions of this paragraph 5, Existing Notes which
the President, Chief Financial Officer or any Vice President of the Company
shall approve as having been properly tendered pursuant to paragraph 4 above
shall be considered to be properly tendered (such approval, if given orally,
shall be confirmed in writing).
6. You shall advise the Company with respect to any Existing Notes
received subsequent to the Expiration Date and accept its instructions with
respect to disposition of such Existing Notes (such advice, if given orally,
shall be confirmed in writing).
7. You shall accept tenders:
(a) in cases where the Existing Notes are registered in two or more
names, only if signed by all named holders;
(b) in cases where the signing person (as indicated on the Letter of
Transmittal) is acting in a fiduciary or a representative capacity, only when
proper evidence of his or her authority so to act is submitted; and
(c) from persons other than the registered holder of Existing Notes
provided that customary transfer requirements, including the payment by such
persons of any applicable transfer taxes, are fulfilled.
8. Upon satisfaction or waiver of all of the conditions to the Exchange
Offer, the Company will notify you (such notice if given orally, to be confirmed
in writing) of its acceptance, promptly after the Expiration Date, of all
Existing Notes properly tendered and you, on behalf of the Company, will
exchange such Existing Notes for New Notes and cause such Existing Notes to be
cancelled. Delivery of New Notes will be made on behalf of the Company by you
at the rate of $1,000 principal amount of New Notes for each $1,000 principal
amount of the corresponding series of Existing Notes tendered promptly after
notice (such notice if given orally, to be confirmed in writing) of acceptance
of said Existing Notes by the Company; provided, however, that in all cases,
-------- -------
Existing Notes tendered pursuant to the Exchange Offer will be exchanged only
after timely receipt by you of certificates for such Existing Notes (or
confirmation of book-entry transfer into your account at the Book-Entry
3
Transfer Facility), a properly completed and duly executed Letter of Transmittal
(or facsimile thereof) with any required signature guarantees and any other
required documents. You shall issue New Notes only in denominations of $1,000 or
any integral multiple thereof.
9. Tenders pursuant to the Exchange Offer are irrevocable, except that,
subject to the terms and upon the conditions set forth in the Prospectus and the
Letter of Transmittal, Existing Notes tendered pursuant to the Exchange Offer
may be withdrawn at any time prior to the Expiration Date.
10. The Company shall not be required to exchange any Existing Notes
tendered if any of the conditions set forth in the Exchange Offer are not met.
Notice of any decision by the Company not to exchange any Existing Notes
tendered shall be given (and confirmed in writing) by the Company to you.
11. If, pursuant to the Exchange Offer, the Company does not accept for
exchange all or part of the Existing Notes tendered because of an invalid
tender, the occurrence of certain other events set forth in the Prospectus under
the caption "The Exchange Offer-- Conditions" or otherwise, you shall as soon as
practicable after the expiration or termination of the Exchange Offer return
those certificates for unaccepted Existing Notes (or effect appropriate book-
entry transfer), together with any related required documents and the Letters of
Transmittal relating thereto that are in your possession, to the persons who
deposited them.
12. All certificates for reissued Existing Notes, unaccepted Existing
Notes or for New Notes shall be forwarded by (a) first-class certified mail,
return receipt requested under a blanket surety bond protecting you and the
Company from loss or liability arising out of the non-receipt or non-delivery of
such certificates or (b) registered mail insured separately for the replacement
value of each of such certificates.
13. You are not authorized to pay or offer to pay any concessions,
commissions or solicitation fees to any broker, dealer, bank or other persons or
to engage or utilize any person to solicit tenders.
14. As Exchange Agent hereunder you:
(a) shall have no duties or obligations other than those specifically
set forth in the Prospectus or set forth herein or as may be subsequently agreed
to in writing by you and the Company;
(b) will be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value or genuineness of any of
the certificates or the Existing Notes represented thereby deposited with you
pursuant to the Exchange Offer, and will not be
4
required to and will make no representation as to the validity, value or
genuineness of the Exchange Offer;
(c) shall not be obligated to take any legal action hereunder which
might in your reasonable judgment involve any expense or liability, unless you
shall have been furnished with reasonable indemnity;
(d) may reasonably rely on and shall be protected in acting in
reliance upon any certificate, instrument, opinion, notice, letter, telegram or
other document or security delivered to you and reasonably believed by you to be
genuine and to have been signed by the proper party or parties;
(e) may reasonably act upon any tender, statement, request, comment,
agreement or other instrument whatsoever not only as to its due execution and
validity and effectiveness of its provisions, but also as to the truth and
accuracy of any information contained therein, which you shall in good faith
believe to be genuine or to have been signed or represented by a proper person
or persons;
(f) may rely on and shall be protected in acting upon written or oral
instructions from any officer of the Company;
(g) may consult with your counsel with respect to any questions
relating to your duties and responsibilities and the advice or opinion of such
counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted to be taken by you hereunder in good faith
and in accordance with the advice or opinion of such counsel; and
(h) shall not advise any person tendering Existing Notes pursuant to
the Exchange Offer as to the wisdom of making such tender or as to the market
value or decline or appreciation in market value of any Existing Notes.
15. You shall take such action as may from time to time be requested by
the Company or its counsel (and such other action as you may reasonably deem
appropriate) to furnish copies of the Prospectus, Letter of Transmittal and the
Notice of Guaranteed Delivery (as defined in the Prospectus) or such other forms
as may be approved from time to time by the Company, to all persons requesting
such documents and to accept and comply with telephone requests for information
relating to the Exchange Offer, provided that such information shall relate only
to the procedures for accepting (or withdrawing from) the Exchange Offer. The
Company will furnish you with copies of such documents at your request. All
other requests for information relating to the Exchange Offer shall be directed
to the Company, Attention: Xxxxx X. Xxxxx, III, Esq., General Counsel of Jafra
Cosmetics International, Inc.
5
16. You shall advise by facsimile transmission or telephone, and
promptly thereafter confirm in writing to Xxxxx X. Xxxxx, III, Esq., General
Counsel of Jafra Cosmetics International, Inc. and such other person or persons
as it may request, daily (and more frequently during the week immediately
preceding the Expiration Date and if otherwise requested) up to and including
the Expiration Date, as to the number of Existing Notes which have been tendered
pursuant to the Exchange Offer and the items received by you pursuant to this
Agreement, separately reporting and giving cumulative totals as to items
properly received and items improperly received. In addition, you will also
inform, and cooperate in making available to, the Company or any such other
authorized person or persons upon oral request made from time to time prior to
the Expiration Date of such other information as it or he or she reasonably
requests. Such cooperation shall include, without limitation, the granting by
you to the Company and such person as the Company may request of access to those
persons on your staff who are responsible for receiving tenders, in order to
ensure that immediately prior to the Expiration Date, the Company shall have
received information in sufficient detail to enable it to decide whether to
extend the Exchange Offer. You shall prepare a final list of all persons whose
tenders were accepted, the aggregate principal amount of Existing Notes
tendered, the aggregate principal amount of Existing Notes accepted and deliver
said list to the Company.
17. Letters of Transmittal and Notices of Guaranteed Delivery shall be
stamped by you as to the date and the time of receipt thereof and shall be
preserved by you for a period of time at least equal to the period of time you
preserve other records pertaining to the transfer of securities. You shall
dispose of unused Letters of Transmittal and other surplus materials by
returning them to the Company.
18. You hereby expressly waive any lien, encumbrance or right of setoff
whatsoever that you may have with respect to funds deposited with you for the
payment of transfer taxes by reasons of amounts, if any, borrowed by the
Company, or any of its subsidiaries or affiliates pursuant to any loan or credit
agreement with you or for compensation owed to you hereunder.
19. For services rendered as Exchange Agent hereunder, you shall be
entitled to such compensation as set forth on Schedule I attached hereto.
20. You hereby acknowledge receipt of the Prospectus and the Letter of
Transmittal and further acknowledge that you have examined each of them. Any
inconsistency between this Agreement, on the one hand, and the Prospectus and
the Letter of Transmittal (as they may be amended from time to time), on the
other hand, shall be resolved in favor of the latter two documents, except with
respect to the duties, liabilities and indemnification of you as Exchange Agent,
which shall be controlled by this Agreement.
6
21. The Company covenants and agrees to indemnify and hold you harmless
in your capacity as Exchange Agent hereunder against any loss, liability, cost
or expense, including reasonable attorneys' fees and expenses, arising out of or
in connection with any act, omission, delay or refusal made by you in reliance
upon any signature, endorsement, assignment, certificate, order, request,
notice, instruction or other instrument or document reasonably believed by you
to be valid, genuine and sufficient and in accepting any tender or effecting any
transfer of Existing Notes reasonably believed by you in good faith to be
authorized, and in delaying or refusing in good faith to accept any tenders or
effect any transfer of Existing Notes; provided, however, that the Company shall
-------- -------
not be liable for indemnification or otherwise for any loss, liability, cost or
expense to the extent arising out of your gross negligence or willful
misconduct. In no case shall the Company be liable under this indemnity with
respect to any claim against you unless the Company shall be notified by you, by
letter or cable or by facsimile confirmed by letter, of the written assertion of
a claim against you or of any other action commenced against you, promptly, but
in any event within enough time to file an answer to such claim, after you shall
have received any such written assertion or notice of commencement of action.
Failure to so notify the Company shall not relieve the Company of any liability
which it may have otherwise than on account of this Agreement except such
liability which is a result of your failure to notify promptly. The Company
shall be entitled to participate at its own expense in the defense of any such
claim or other action, and, if the Company so elects, the Company shall assume
the defense of any suit brought to enforce any such claim. In the event that
the Company shall assume the defense of any such suit, the Company shall not be
liable for the fees and expenses of any additional counsel retained by you,
which fees and expenses are incurred thereafter, so long as the Company shall
retain counsel reasonably satisfactory to you to defend such suit except for any
reasonable fees and expenses of your counsel incurred in representing you that
are necessary and appropriate as a result of the need to have separate
representation because the Company's counsel has reasonably determined a
conflict of interest exists between the Company and you.
22. You shall arrange to comply with all requirements under the tax laws
of the United States, including those relating to missing Tax Identification
Numbers, and shall file any appropriate reports with the Internal Revenue
Service. The Company understands that you are required to deduct 31% on
payments to holders who have not supplied their correct Taxpayer Identification
Number or required certification. Such funds will be turned over to the
Internal Revenue Service in accordance with applicable regulations.
23. You shall deliver or cause to be delivered, in a timely manner to
each governmental authority to which any transfer taxes are payable in respect
of the exchange of Existing Notes, your check in the amount of all transfer
taxes so payable, and the Company shall reimburse you for the amount of any and
all transfer taxes payable in respect of the exchange of Existing Notes;
provided, however, that you shall reimburse the Company for
-------- -------
7
amounts refunded to you in respect of your payment of any such transfer taxes,
at such time as such refund is received by you.
24. This Agreement and your appointment as Exchange Agent hereunder shall
be construed and enforced in accordance with the laws of the State of New York
applicable to agreements made and to be performed entirely within such state,
and without regard to conflicts of law principles, and shall inure to the
benefit of, and the obligations created hereby shall be binding upon, the
successors and assigns of each of the parties hereto.
25. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
26. In case any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
27. This Agreement shall not be deemed or construed to be modified,
amended, rescinded, cancelled or waived, in whole or in part, except by a
written instrument signed by a duly authorized representative of the party to be
charged. This Agreement may not be modified orally.
28. Unless otherwise provided herein, all notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
or similar writing) and shall be given to such party, addressed to it, at its
address or telecopy number set forth below:
If to the Company:
CDRJ Investments (Lux) S.A.
Jafra Cosmetics International, S.A. de C.V.
c/o Jafra Cosmetics International, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxx, III, Esq., General Counsel
8
With a copy to:
Xxxx X. Xxxx, Esq.
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Exchange Agent:
State Street Bank and Trust Company
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Corporate Trust Administration
29. Unless terminated earlier by the parties hereto, this Agreement
shall terminate 90 days following the Expiration Date. Notwithstanding the
foregoing, Paragraphs 19, 21, and 23 shall survive the termination of this
Agreement. Upon any termination of this Agreement, you shall promptly deliver
to the Company any certificates for Notes, funds or property then held by you as
Exchange Agent under this Agreement.
9
30. This Agreement shall be binding and effective as of the date hereof.
Please acknowledge receipt of this Agreement and confirm the arrangements herein
provided by signing and returning the enclosed copy.
JAFRA COSMETICS INTERNATIONAL, INC.
By: ____________________________________
Name:
Title:
JAFRA COSMETICS INTERNATIONAL, S.A. de C.V.
By: ____________________________________
Name:
Title:
10
Accepted as of the date first above written:
STATE STREET BANK AND TRUST COMPANY, as Exchange Agent
By:_____________________________________________
Name:
Title:
11
SCHEDULE I
FEES
Exchange Agent Fee.....................................................$5,000.00
All out-of-pockets expenses will be billed as incurred.
12
