EXHIBIT 2.2
AMENDMENT NO. 1 TO
PURCHASE AGREEMENT
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This AMENDMENT NO. 1 TO PURCHASE AGREEMENT is made and entered
into as of December 11, 2000 by and between CONOPCO, INC. ("Conopco"), a New
York corporation, and FRENCH FRAGRANCES, INC. ("Purchaser"), a Florida
corporation.
W I T N E S S E T H:
WHEREAS, Conopco and Purchaser wish to amend certain
provisions of the Purchase Agreement by and between Conopco and Purchaser, dated
as of October 30, 2000 (the "Purchase Agreement") as hereinafter provided; and
WHEREAS, all capitalized terms contained herein shall have the
meanings ascribed to them in the Purchase Agreement, unless otherwise expressly
set forth herein. This Amendment, upon execution as provided for below, shall
constitute Amendment No. 1 to the Purchase Agreement.
NOW, THEREFORE, for good and valuable consideration, the
receipt of which is hereby acknowledged, and subject to the fulfillment of the
conditions set forth below, the parties hereto agree as follows:
1. Clause (s) of the definition of Purchased Assets set forth in
Section 1.1 of the Purchase Agreement is hereby amended and restated to read as
follows:
"(s) Purchaser's pro rata share, as set forth on Schedule
1.1(m), of any supplier rebates earned from Closing through December 31, 2001."
2. Section 2.2(c) of the Purchase Agreement is hereby amended and
restated to read as follows:
"(c) the Liabilities of Sellers, to the extent relating to the
Business in the United States, arising in respect of (i) commissions properly
accrued but not yet paid to customers for demonstrators and "beauty advisors",
to the extent such commissions are actually earned, and (ii) employee "cruise
vacation" bonuses properly accrued but not yet granted, to the extent such
bonuses are actually earned (collectively, the "Section 2.2(c) Liabilities"), in
each case for fiscal 2000 and for fiscal 2001 in respect of the period to and
including the Closing Date; and"
3. Section 2.2(d) of the Purchase Agreement is hereby amended and
restated to read as follows:
"(d) Purchaser's pro rata share, as set forth on Schedule
1.1(m), of customer rebates owed from Closing through December 31, 2001."
4. Part A of Schedule 2.3 is hereby amended and replaced by the
language set forth on Exhibit A hereto.
5. Section 3.3 of the Purchase Agreement is hereby amended and restated
to read as follows:
"3.3 Post-September 2 Economics Adjustment.
(a) Attached hereto as Exhibit H is the "Calculation of Purchase Price
Adjustment" setting forth the estimated after-tax net income (determined using
Conopco's and its Affiliates' management accounting principles, a true and
correct copy of which will be made available to Purchaser upon its request) of
the Business for the period from September 3, 2000 to December 31, 2000 (the
"Estimated Net Income"). On the Closing Date, the Initial Cash Consideration
shall be reduced by the amount of the Estimated Net Income. Within thirty (30)
days after the Closing Date, Conopco shall deliver to Purchaser a determination
of the final after-tax net income of the Business for the period from September
3, 2000 through December 31, 2000 (the "Actual Pre-Closing Net Income"),
calculated in accordance with the consistent application of the accounting
principles, practices, methods and policies used in calculating the Estimated
Net Income on Exhibit H, except that the Actual Pre-Closing Net Income will be
adjusted for the tax rates for each country as set forth on Exhibit H and for
the actual foreign exchange rates between September 3, 2000 and December 31,
2000 (calculated monthly). The principles, practices, methods, policies and
adjustments described in the immediately preceding sentence are referred to in
this Agreement as the "Income Principles." Purchaser shall assist Sellers and
their representatives in the preparation of the Actual Pre-Closing Net Income
and shall provide Sellers and their representatives access at all reasonable
times to the personnel, properties, books and records of the Business for such
purpose.
(b) The Actual Pre-Closing Net Income shall become final and binding
upon the parties on the thirtieth day following delivery thereof, unless
Purchaser gives written notice of its disagreement with the Actual Pre-Closing
Net Income (an "Income Notice of Disagreement") to Conopco on or prior to such
date. Any Income Notice of Disagreement shall specify (i) in reasonable detail
the nature of any such disagreement so asserted and (ii) only include
disagreements based on mathematical errors or on Actual Pre-Closing Net Income
not being calculated in accordance with the Income Principles. If an Income
Notice of Disagreement is received by Conopco in a timely manner, then the
Actual Pre-Closing Net Income shall become final and binding upon Conopco and
Purchaser on the earlier of (i) the date Conopco and Purchaser resolve in
writing any differences they have with respect to the matters specified in the
applicable Income Notice of Disagreement and (ii) the date any disputed matters
are finally resolved in writing by the Independent Accountants. The date on
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which such final determination is made (either by mutual agreement of Purchaser
and Conopco, or as determined by the Independent Accountants) is hereinafter
referred to as the "Income Determination Date."
(c) During the 15-day period following delivery of an Income
Notice of Disagreement, Conopco and Purchaser shall seek in good faith to
resolve in writing any differences they have with respect to the matters
specified in the Income Notice of Disagreement. At the end of such 15-day
period, the Independent Accountants shall be retained to resolve the issues in
dispute. Purchaser and Conopco shall furnish, or cause to be furnished, to the
Independent Accountants all information the Independent Accountants shall
reasonably request for purposes of making this determination. Conopco and
Purchaser shall cause the Independent Accountants to act promptly to resolve the
issues in dispute. The Independent Accountants' determination shall be reasoned
and in writing and shall be accompanied by a certificate of the Independent
Accountants that they reached their decision in accordance with the provisions
of this Section 3.3.
(d) If the Actual Pre-Closing Net Income shall be less than
the Estimated Net Income, then, promptly following the Income Determination
Date, and in any event within five (5) Business Days of the Income Determination
Date, Purchaser shall pay to Conopco (on behalf of Sellers), as an adjustment to
the Purchase Price, the amount by which the Actual Pre-Closing Net Income is
less than the Estimated Net Income, by wire transfer of immediately available
funds to an account designated by Conopco prior thereto; provided, however,
that, if during the period from November 5, 2000 to December 31, 2000 (the
"Interim Period"), Purchaser has purchased not less than $11,000,000 of products
bearing the Trade Names from Sellers and their Affiliates at customary markups
and margins, such adjustment shall not exceed an amount equal to ten percent
(10%) of the Estimated Net Income. If the Actual Pre-Closing Net Income shall be
greater than the Estimated Net Income, then, promptly following the Income
Determination Date and in any event within five (5) Business Days of the Income
Determination Date, Conopco shall pay to Purchaser, as an adjustment to the
Purchase Price, the amount by which the Actual Pre-Closing Net Income is greater
than the Estimated Net Income, by wire transfer of immediately available funds
to an account designated by Purchaser prior thereto; provided, however, that if
during the Interim Period, Purchaser has purchased not less than $11,000,000 of
products bearing the Trade Names from Sellers and their Affiliates at customary
markups and margins, such adjustment shall not exceed an amount equal to ten
percent (10%) of the Estimated Net Income.
(e) It is understood and agreed that (i) the adjustment
contemplated by this Section 3.3 is intended to determine the difference between
the Estimated Net Income and the Actual Pre-Closing Net Income and (ii) such
difference can only be measured if the calculation is done in accordance with
the Income Principles for both Estimated Net Income and Actual Pre-Closing Net
Income. The scope of the disputes to be resolved by the Independent Accountants
shall be limited to whether such calculation was done in accordance with the
Income Principles, and whether there were mathematical errors in such
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calculation, and the Independent Accountants are not to make any other
determination.
(f) Following the Closing (up to the Income Determination
Date), Purchaser shall not take any actions with respect to the accounting books
and records of the Business on which the Actual Pre-Closing Net Income is to be
based that are not consistent with the Business's past practices. During the
period of time from and after the Closing Date through the Income Determination
Date, Purchaser shall afford to Sellers and any of their representatives
retained by Sellers, in connection with any adjustment to the Purchase Price
contemplated by this Section 3.3, reasonable access during normal business hours
to all the properties, books, contracts, personnel and records of the Business
relevant to the adjustment contemplated by this Section 3.3.
3.4 Post-December 31 Economic Adjustment
(a) Within thirty (30) days after the Closing Date, Conopco
shall deliver to Purchaser a determination of the final after-tax net income of
the Business for the period from January 1, 2001 through the Closing Date (the
"Actual January Pre-Closing Net Income"), calculated in accordance with the
Income Principles, except that the Actual January Pre-Closing Net Income will be
adjusted for the tax rates for each country as set forth on Exhibit H and for
the actual foreign exchange rates between January 1, 2001 and the Closing Date.
Purchaser shall assist Sellers and their representatives in the preparation of
the Actual January Pre-Closing Net Income and shall provide Sellers and their
representatives access at all reasonable times to the personnel, properties,
books and records of the Business for such purpose.
(b) The Actual January Pre-Closing Net Income shall become
final and binding upon the parties on the thirtieth day following delivery
thereof, unless Purchaser gives written notice of its disagreement with the
Actual January Pre-Closing Net Income (a "January Income Notice of
Disagreement") to Conopco on or prior to such date. Any January Income Notice of
Disagreement shall specify (i) in reasonable detail the nature of any such
disagreement so asserted and (ii) only include disagreements based on
mathematical errors or on Actual January Pre-Closing Net Income not being
calculated in accordance with the Income Principles (as adjusted above in
Section 3.4(a)). If a January Income Notice of Disagreement is received by
Conopco in a timely manner, then the Actual January Pre-Closing Net Income shall
become final and binding upon Conopco and Purchaser on the earlier of (i) the
date Conopco and Purchaser resolve in writing any differences they have with
respect to the matters specified in the applicable January Income Notice of
Disagreement and (ii) the date any disputed matters are finally resolved in
writing by the Independent Accountants. The date on which such final
determination is made (either by mutual agreement of Purchaser and Conopco, or
as determined by the Independent Accountants) is hereinafter referred to as the
"January Income Determination Date".
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(c) During the 15-day period following delivery of a January
Income Notice of Disagreement, Conopco and Purchaser shall seek in good faith to
resolve in writing any differences they have with respect to the matters
specified in the January Income Notice of Disagreement. At the end of such
15-day period, the Independent Accountants shall be retained to resolve the
issues in dispute. Purchaser and Conopco shall furnish, or cause to be
furnished, to the Independent Accountants all information the Independent
Accountants shall reasonably request for purposes of making this determination.
Conopco and Purchaser shall cause the Independent Accountants to act promptly to
resolve the issues in dispute. The Independent Accountants' determination shall
be reasoned and in writing and shall be accompanied by a certificate of the
Independent Accountants that they reached their decision in accordance with the
provisions of this Section 3.4.
(d) In addition to the payments required to be made pursuant
to the provisions of Section 3.3(d), if the Actual January Pre-Closing Net
Income is greater than zero (0) dollars, Conopco (on behalf of Sellers) shall
pay to Purchaser, within five (5) Business Days of the January Income
Determination Date, an amount equal to the Actual January Pre-Closing Net
Income. If the Actual January Pre-Closing Net Income is less than zero (0)
dollars, Purchaser shall pay to Conopco, within five (5) Business Days of the
January Income Determination Date, an amount equal to the absolute value of the
Actual January Pre-Closing Net Income.
(e) It is understood and agreed that the scope of the disputes
to be resolved by the Independent Accountants pursuant to this Section 3.4 shall
be limited to whether the calculation of Actual January Pre-Closing Income was
done in accordance with the Income Principles (as adjusted above in Section
3.4(a)), and whether there were any mathematical errors in such calculation, and
the Independent Accountants are not to make any other determination.
(f) Following the Closing (up to the January Income
Determination Date), Purchaser shall not take any actions with respect to the
accounting books and records of the Business on which the Actual January
Pre-Closing Net Income is to be based that are not consistent with the Business'
past practices. During the period of time from and after the Closing Date
through the January Income Determination Date, Purchaser shall afford to Sellers
and any of their representatives retained by Sellers, in connection with any
adjustment to the Purchase Price contemplated by this Section 3.4, reasonable
access during normal business hours to all the properties, books, contracts,
personnel and records of the Business relevant to the adjustment contemplated by
this Section 3.4."
6. The section designation for the section currently designated "3.4."
is hereby amended and restated as "3.5".
7. Schedule 4.17(b) is hereby amended and replaced by Exhibit B hereto.
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8. The first sentence of Section 5.12 of the Purchase Agreement is
hereby amended and restated to read as follows:
"Purchaser has obtained from certain financial institutions
commitments pursuant to commitment letters dated October 28, 2000, as amended,
and November 21, 2000 (the "Commitments") to provide debt financing that is
sufficient for Purchaser to consummate the transactions contemplated hereby."
9. Section 6.2(b)(iv) of the Purchase Agreement is hereby amended and
restated to read as follows:
"(iv) enter into, renew, terminate or substantially amend or
supplement any (A) Contract (except for any Real Property Lease) unless the same
is done in the Ordinary Course of Business, (B) Real Property Lease, (C) joint
venture, long-term alliance or partnership or (D) consent for the assignment of
any Contract, including the Xxxxxx Agreement; provided that, notwithstanding the
provisions of this Section 6.2(b)(iv), in the case of clauses (A) and (B)
hereof, Conopco may, and may allow or cause the other Sellers to, renew the
Manufacturing Agreement between Unilever N.V. and Xxxxxx X.X. dated September
23, 1991 (as amended) and the Consultant Agreement between Xxxxxxxxx Xxxxx Co.
and Xxxxxxxxx Communications and Xxxxx Xxxxxxxx Associates, Ltd dated March 1,
2000 (as amended) so long as the term of such renewal is for a period of less
than or equal to six months from the date of such renewal and the renewal is on
substantially the same terms and conditions as the agreement being renewed."
10. Section 8.1 of the Purchase Agreement is hereby amended and
restated to read as follows:
"8.1 The Closing. Unless the parties agree otherwise in
writing, the Closing shall be held within two Business Days after each of the
conditions precedent set forth in Sections 7.1, 7.2 and 7.3 (other than those
conditions that by their terms are to be satisfied simultaneously with the
Closing) have been satisfied or waived; provided that if such second Business
Day occurs before January 31, 2001, Purchaser may extend the date of the Closing
to up to January 31, 2001 if it has not yet obtained the Financing. The Closing
shall be held at the offices of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000. Except as provided in Section 6.16(c), at the Closing,
all of the transactions provided for in Article II hereof shall be consummated
on a substantially concurrent basis."
11. The Purchase Agreement, as amended by this Amendment, constitutes
the entire agreement with respect to the subject matter hereof and thereof and
supersedes all prior agreements and understandings, both written and oral,
between Conopco and Purchaser with respect to the subject matter hereof and
thereof.
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12. This Amendment may be executed in several counterparts, each of
which shall be deemed an original and all of which shall together constitute one
and the same instrument.
13. This Amendment and the Purchase Agreement and any disputes arising
under or related hereto or thereto (whether for breach of contract, tortious
conduct or otherwise) shall be governed and construed in accordance with the
laws of the State of New York, without reference to its conflicts of law
principles. Each of the parties hereto waives to the fullest extent permitted by
law any right to trial by jury in any action, suit or proceeding brought to
enforce, defend or interpret any rights or remedies under, or arising in
connection with or relating to, this Agreement.
14. This Amendment shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, successors and permitted assigns.
15. This Amendment shall not constitute a waiver, amendment or
modification of any other provision of the Purchase Agreement not expressly
referred to herein and shall not be construed as a waiver or consent to any
further or future action on the part of any of the parties hereto that would
require a waiver or consent of the other parties hereto. Except as expressly
amended or modified herein, the provisions of the Purchase Agreement are and
shall remain in full force and effect.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment No. 1 to Purchase Agreement to be executed on its behalf by its
officers or representatives thereunto duly authorized, all as of the date first
written above.
CONOPCO, INC.
By: /s/ Mart Laius
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Name: Mart Laius
Title: Vice President
FRENCH FRAGRANCES, INC.
By: /s/ Xxxxx X. Marina
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Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
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