EXHIBIT 10.9
INDIVIDUAL INVESTOR STOCK SUBSCRIPTION AGREEMENT
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INDIVIDUAL INVESTOR STOCK SUBSCRIPTION AGREEMENT, dated as of
, 1998, between CDRJ Investments (Lux) S.A., a Luxembourg societe anonyme
("Holding"), and the Purchaser whose name appears on the signature page hereof
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(the "Purchaser").
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W I T N E S S E T H:
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WHEREAS, pursuant to and subject to the terms of the Acquisition
Agreement, dated as of January 26, 1998, as amended, by and among Holding, Xxx
Xxxxxxxx Xxxxxxx ("Xxxxxxxx") and the other parties thereto, Holding acquired,
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and/or caused certain of its Subsidiaries (as defined herein) to acquire,
substantially all of the assets of the worldwide Jafra cosmetics business of
Xxxxxxxx (the "Acquisition") on April 30, 1998 (the "Acquisition");
WHEREAS, in connection with the Acquisition, Holding issued and sold
an aggregate of 769,600 shares of its Class A voting shares, par value $2.00 per
share (the "Common Stock"), to Xxxxxxx, Dubilier & Rice Fund V Limited
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Partnership, a Cayman Islands exempted limited partnership (together with any
successor investment vehicle managed by Xxxxxxx, Dubilier & Rice, Inc. ("CD&R"),
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the "CD&R Fund"), and an aggregate of 19,903 shares of Common Stock to certain
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executive officers of Holding or its Subsidiaries (the "Initial Management
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Investors");
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WHEREAS, Holding expects to issue and sell an aggregate of up to an
additional 32,238 shares of Common Stock to the Initial Management Investors and
certain other executive officers and other key employees of Holding or its
Subsidiaries (collectively, the "Management Investors") pursuant to the terms of
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substantially identical management stock subscription agreements between Holding
and each such Management Investor and the Amended and Restated Jafra Cosmetics
International Stock Incentive Plan (the "Stock Incentive Plan") and pursuant to
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the exemption from the registration requirements of the Securities Act of 1933,
as amended provided by Rule 701 or Regulation D thereunder;
WHEREAS, Holding expects to issue and sell an aggregate of up to
21,000 shares of Common Stock to (a) certain current or former chief executive
officers
of, or consultants to, other companies in which funds managed by CD&R have or
have had investments, and to other individuals identified by CD&R as "friends of
the firm" (the "Individual Investors") and to members of the Board
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of Directors of Holding (the "Board") who are not employees of Parent or any
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Subsidiary thereof or affiliated with CD&R (the "Director Investors" and,
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together with the Individual Investors, the "Investors"), including the
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Purchaser, in each case, pursuant to stock subscription agreements that are
substantially identical to this Agreement to be entered into with such other
purchasers;
WHEREAS, the terms of the offering of the shares of the Common Stock
to the Purchaser and to the other Investors (the "Offering") are set forth in a
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Confidential Offering Memorandum, dated as of September 10, 1998 (the "Offering
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Memorandum"), a copy of which has been furnished to the Purchaser;
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WHEREAS, the Purchaser desires to subscribe for and purchase from Holding
the aggregate number of shares of Common Stock set forth on the signature page
hereof (each a "Share" and, collectively, the "Shares"), at a purchase price of
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$100 per share;
WHEREAS, Holding desires to sell the Shares to the Purchaser on the
terms and subject to the conditions set forth herein.
NOW, THEREFORE, to implement the foregoing and in consideration of the
mutual promises, covenants and agreements contained herein, the parties hereto
hereby agree as follows:
1. Purchase and Sale of Common Stock.
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(a) Purchase of Common Stock. Subject to all of the terms and
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conditions of this Agreement, the Purchaser hereby subscribes for and shall
purchase, and Holding shall sell to the Purchaser, the Shares, at a purchase
price of $100 per Share, at the Closing provided for in Section 2(a) hereof.
Notwithstanding anything in this Agreement to the contrary, Holding shall have
no obligation to sell any shares of Common Stock (including the Shares) to any
person who is a resident of a jurisdiction in which the sale of Common Stock to
such person would constitute a violation of the securities, "blue sky" or other
laws of such jurisdiction.
(b) Consideration. Subject to all of the terms and conditions of
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this Agreement, the Purchaser shall deliver to Holding at the Closing referred
to in Section 2(a) hereof, immediately available funds in an amount equal to the
aggregate
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purchase price for the Shares to be purchased at such Closing set forth on the
signature page hereof.
2. Closing.
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(a) Time and Place. Except as otherwise mutually agreed by Holding
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and the Purchaser, the closing of the purchase and sale of the Shares pursuant
to this Agreement shall be held at the offices of Debevoise & Xxxxxxxx, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx at 10:00 a.m. (New York time) on or about
, 1998 (the "Closing").
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(b) Delivery by the Purchaser. At the Closing, the Purchaser shall
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deliver to Holding the consideration referred to in Section 1(b) hereof.
(c) Delivery by Holding. At the Closing, Holding shall deliver to
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the Purchaser (i) a receipt for the consideration received from the Purchaser
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and (ii) a stock certificate or an undertaking by Holding to obtain the issuance
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of a stock certificate registered in the Purchaser's name and representing the
Shares following the completion of the actions to be taken under Section 2(d),
which certificate shall bear the legends set forth in Section 3(b).
(d) Actions Under Luxembourg Law. Holding shall cause its duly
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authorized representatives to record the capital increase represented by the
purchase of the Shares by the Purchaser in accordance with Luxembourg law and
enter the issuance of Purchaser's Shares in the share register of Holding as of
the date of the Closing.
3. Purchaser's Representations, Warranties and Covenants.
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(a) Investment Intention. The Purchaser represents and warrants that
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the Purchaser is acquiring the Shares solely for the Purchaser's own account for
investment and not with a view to or for sale in connection with any
distribution thereof. The Purchaser agrees that the Purchaser will not,
directly or indirectly, offer, transfer, sell, pledge, hypothecate or otherwise
dispose of any of the Shares (or solicit any offers to buy, purchase or
otherwise acquire or take a pledge of any Shares), except in compliance with the
Securities Act of 1933, as amended (the "Securities Act"), and the rules and
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regulations of the Securities and Exchange Commission (the "Commission")
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thereunder, and in compliance with applicable state securities or "blue sky"
laws and foreign securities laws, if any. The Purchaser further understands,
acknowledges and agrees that none of the Shares may be transferred, sold,
pledged, hypothecated or otherwise disposed of (i) unless the provisions of
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Sections 4 through 6 hereof, inclusive, shall have been
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complied with or have expired, (ii) unless (A) such disposition is pursuant to
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an effective registration statement under the Securities Act, (B) the Purchaser
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shall have delivered to Holding an opinion of counsel, which opinion and counsel
shall be reasonably satisfactory to Holding, to the effect that such disposition
is exempt from the provisions of Section 5 of the Securities Act or (C) a
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no-action letter from the Commission, reasonably satisfactory to Holding, shall
have been obtained with respect to such disposition and (iii) unless such
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disposition is pursuant to registration under any applicable state or foreign
securities laws or an exemption therefrom.
(b) Legends. The Purchaser acknowledges that the certificate or
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certificates representing the Shares shall bear the following legends:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
PROVISIONS OF A STOCK SUBSCRIPTION AGREEMENT, DATED AS OF
1998, AND NEITHER THIS CERTIFICATE NOR THE SHARES REPRESENTED BY IT
ARE ASSIGNABLE OR OTHERWISE TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF SUCH STOCK SUBSCRIPTION AGREEMENT, AS THE SAME MAY BE
AMENDED FROM TIME TO TIME, A COPY OF THE CURRENT FORM OF WHICH IS ON
FILE WITH THE SECRETARY OF THE ADVISORY COMMITTEE OF HOLDING. THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE ENTITLED TO THE BENEFITS OF
AND ARE BOUND BY THE OBLIGATIONS SET FORTH IN A REGISTRATION AND
PARTICIPATION AGREEMENT, DATED AS OF APRIL 30, 1998, AMONG HOLDING AND
CERTAIN STOCKHOLDERS OF HOLDING, AS THE SAME MAY BE AMENDED FROM TIME
TO TIME, A COPY OF THE CURRENT FORM OF WHICH IS ON FILE WITH THE
SECRETARY OF THE ADVISORY COMMITTEE OF HOLDING."
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER ANY STATE OR NON-U.S.
SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS (i) (A) SUCH DISPOSITION
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IS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, (B) THE HOLDER HEREOF
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SHALL HAVE DELIVERED TO HOLDING AN OPINION OF COUNSEL, WHICH OPINION
AND COUNSEL SHALL BE REASONABLY SATISFACTORY TO HOLDING, TO THE EFFECT
THAT SUCH DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF
SUCH ACT OR (C) A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE
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COMMISSION, REASONABLY SATISFACTORY TO COUNSEL FOR HOLDING, SHALL HAVE
BEEN OBTAINED WITH RESPECT TO SUCH DISPOSITION AND (ii) SUCH
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DISPOSITION IS PURSUANT TO REGISTRATION UNDER ANY APPLICABLE STATE AND
NON-U.S. SECURITIES LAWS OR AN EXEMPTION THEREFROM. IF THE PURCHASER
IS A CITIZEN OR RESIDENT OF ANY JURISDICTION OTHER THAN THE UNITED
STATES, OR THE PURCHASER DESIRES TO EFFECT ANY TRANSFER IN ANY SUCH
JURISDICTION, THEN, IN ADDITION TO THE FOREGOING, COUNSEL FOR THE
PURCHASER (WHICH COUNSEL SHALL BE REASONABLY SATISFACTORY TO HOLDING)
SHALL HAVE FURNISHED HOLDING WITH AN OPINION OR OTHER ADVICE
REASONABLY SATISFACTORY TO HOLDING TO THE EFFECT THAT SUCH TRANSFER
WILL COMPLY WITH THE SECURITIES LAWS OF SUCH JURISDICTION."
(c) Securities Law Matters. The Purchaser acknowledges receipt of
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advice from Holding that (i) the offer and sale of the Shares hereby have not
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been registered under the Securities Act or any state or foreign securities or
"blue sky" laws, (ii) it is not anticipated that there will be any public market
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for the Shares, (iii) the Shares must be held indefinitely and the Purchaser
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must continue to bear the economic risk of the investment in the Shares unless
there is a public market for the Shares and, to the extent required under the
Securities Act, the Shares are registered for resale under the Securities Act
and such state laws or an exemption from registration is available, (iv) Rule
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144 promulgated under the Securities Act ("Rule 144") is not presently available
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with respect to sales of any securities of Holding, and Holding has made no
covenant to make Rule 144 available, (v) when and if the Shares may be disposed
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of without registration in reliance upon Rule 144, such disposition by an
affiliate of Holding, within the meaning of Rule 405, can be made only in
limited amounts in accordance with the terms and conditions of Rule 144, (vi)
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Holding does not plan to file reports with the Commission or make public
information concerning Holding available unless required to do so by law or the
terms of the financing agreements entered into by Holding and its Subsidiaries
in connection with the Acquisition, as such may be amended from time to time
(the "Financing Agreements"), (vii) if the exemption afforded by
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Rule 144 is not available, sales of the Shares may be difficult to effect
because of the absence of public information concerning Holding, (viii) a
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restrictive legend in the form heretofore set forth shall be placed on the
certificates representing the Shares and (ix) a notation shall be made in the
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appropriate records of Holding indicating that the Shares are subject to
restrictions on transfer set forth in this Agreement and, if Holding should in
the future engage the services of a stock transfer agent, appropriate stop-
transfer restrictions will be issued to such transfer agent with respect to the
Shares.
(d) Compliance with Rule 144. If any of the Shares are to be
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disposed of in accordance with Rule 144, the Purchaser shall transmit to Holding
an executed copy of Form 144 (if required by Rule 144) no later than the time
such form is required to be transmitted to the Commission for filing and such
other documentation as Holding may reasonably require to assure compliance with
Rule 144 in connection with such disposition.
(e) Ability to Bear Risk. The Purchaser represents and warrants that
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(i) the financial situation of the Purchaser is such that the Purchaser can
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afford to bear the economic risk of holding the Shares for an indefinite period
and (ii) the Purchaser can afford to suffer the complete loss of the Purchaser's
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investment in the Shares.
(f) Questionnaire. The Purchaser agrees to furnish such documents
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and to comply with such reasonable requests of Holding as may be necessary to
substantiate the Purchaser's status as a qualifying investor in connection with
this private offering of Shares of Common Stock to the Purchaser and the other
Investors. The Purchaser represents and warrants that all information contained
in such documents and any other written materials concerning the status of the
Purchaser furnished by the Purchaser to Holding in connection with such requests
will be true, complete and correct in all material respects.
(g) Access to Information. The Purchaser represents and warrants
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that (i) the Purchaser has carefully reviewed the Offering Memorandum and the
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other materials furnished to the Purchaser in connection with the transaction
contemplated hereby, (ii) the Purchaser has been granted the opportunity to ask
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questions of, and receive answers from, representatives of Holding concerning
the terms and conditions of the purchase of the Shares and to obtain any
additional information that the Purchaser deems necessary to verify the accuracy
of the information contained in such materials and (iii) the Purchaser's
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knowledge and experience in financial and business matters is such that the
Purchaser is capable of evaluating the risks of an investment in the Shares.
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(h) Registration and Participation Agreement. The Purchaser
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acknowledges and agrees that the Purchaser shall be entitled to the rights and
subject to the obligations created under the Registration and Participation
Agreement, dated as of April 30, 1998, among Holding and certain other
shareholders of Holding (as the same may be amended from time to time, the
"Registration and Participation Agreement"), and the Shares shall be deemed to
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be "registrable securities," as defined in the Registration and Participation
Agreement, in each case, to the extent provided therein.
(i) Restrictions on Sale upon Public Offering. The Purchaser
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acknowledges and agrees that, in the event that Holding files a registration
statement under the Securities Act with respect to an underwritten public
offering of any shares of its capital stock, the Purchaser will not effect any
public sale or distribution of any shares of Common Stock (other than as part of
such underwritten public offering), including but not limited to, pursuant to
Rule 144 or Rule 144A under the Securities Act, during the 20 days prior to and
the 180 days after the effective date of such registration statement. The
Purchaser further understands and acknowledges that any sale, transfer or other
disposition of the Shares by him following any underwritten public offering of
the Common Stock will be subject to compliance with, and may be limited under,
the federal securities laws and/or state "blue sky" or non-U.S. securities laws.
4. Restrictions on Disposition of Shares. Except as provided in
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Sections 5 and 6 hereof, inclusive, neither the Purchaser nor any of the
Purchaser's heirs or representatives shall sell, assign, transfer, pledge or
otherwise directly or indirectly dispose of or encumber any of the Shares to or
with any other person, firm, trust, association, corporation or entity
(including, without limitation, transfers to any other holder of Holding's
capital stock, dispositions by gift, by will, by a corporation as a distribution
in liquidation or by operation of law) other than (i) a transfer of Shares upon
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the death of the Purchaser by operation of law to the estate of the Purchaser or
by will to the beneficiary named therein, provided that such estate or
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beneficiary, whichever is applicable, shall be bound by all of the provisions of
this Agreement or (ii) with the consent of the Board, to (A) a trust or trusts
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for the exclusive benefit of Purchaser's spouse, children, and/or grandchildren
("Family Members") or (B) a partnership or limited liability company for the
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exclusive benefit of such Family Members of which such Family Members and/or
trusts are the only partners or members, as the case may be, provided that such
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partnership or limited liability company, whichever is applicable, shall be
bound by all of the provisions of this Agreement. The restrictions contained in
this Section 4 (x) shall terminate on the first date sales of Common Stock are
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made to the public pursuant to an underwritten public offering of the Common
Stock led by one or more underwriters at least one of which is an underwriter of
nationally recognized standing (a "Public Offering") and (y) shall not apply to
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a sale as part of the Public Offer-
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ing or to a sale as part of a "qualifying sale" within the meaning of Section 4
of the Registration and Participation Agreement.
5. Options of Holding and the CD&R Fund Upon Proposed Disposition.
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(a) Rights of First Refusal. If the Purchaser desires to accept an
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offer (which must be in writing and for cash, be irrevocable by its terms for at
least 60 days and be a bona fide offer as determined in good faith by the
Holding Board) from any prospective purchaser to purchase all or any part of the
Shares at any time owned by the Purchaser, the Purchaser shall give notice in
writing to Holding and the CD&R Fund (i) designating the number of Shares
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proposed to be sold (the "Offer Shares"), (ii) naming the prospective purchaser
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of such Shares and (iii) specifying the price (the "Offer Price") at and terms
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(the "Offer Terms") upon which the Purchaser desires to sell the same. During
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the 30-day period following receipt of such notice by Holding and the CD&R Fund
(the "First Refusal Period"), Holding shall have the right to purchase from the
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Purchaser the Offer Shares, at the Offer Price and on the Offer Terms. Holding
hereby undertakes to use reasonable efforts to act as promptly as practicable
following such notice to determine whether it shall elect to exercise such
right. If Holding fails to exercise its right to purchase the Offer Shares
within the First Refusal Period, the CD&R Fund shall have the right to purchase
the Offer Shares, at the Offer Price and on the Offer Terms, at any time during
the period beginning on the earlier of (x) the end of the First Refusal Period
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and (y) the date of receipt by the CD&R Fund of written notice that Holding has
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elected not to exercise its right to purchase the Offer Shares and ending 30
days thereafter (the "Second Refusal Period"). The rights provided hereunder
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shall be exercised by irrevocable written notice to the Purchaser given at any
time during the applicable period. If such right to purchase the Offer Shares
is exercised, Holding or the CD&R Fund, as the case may be, shall deliver to the
Purchaser a certified or bank check for the Offer Price, payable to the order of
the Purchaser, against delivery of certificates or other instruments
representing the Offer Shares so purchased, appropriately endorsed by the
Purchaser. If such right shall not have been exercised prior to the expiration
of the Second Refusal Period, then at any time during the 30 days following the
expiration of the Second Refusal Period, the Purchaser may sell the Offer Shares
to (but only to) the intended purchaser named in the Purchaser's notice to
Holding and the CD&R Fund at the Offer Price and on the Offer Terms specified in
such notice, free of all restrictions or obligations imposed by, and free of any
rights or benefits set forth in this Agreement, provided that such intended
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purchaser shall have agreed in writing, pursuant to an instrument of assumption
satisfactory in substance and form to Holding, to make and be bound by the
representations, warranties and covenants set forth in Section 3 hereof, other
than those set forth in Sections 3(g)(i), 3(g)(ii) and 3(h).
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(b) Public Offering. In the event that a Public Offering has been
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consummated, the Purchaser may sell his Shares without complying with Section
5(a) and this Section 5 shall not apply to a sale to the underwriters as part of
the Public Offering or at any time thereafter.
6. Drag-Along Rights.
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(a) Drag-Along Notice. If the CD&R Fund intends to effect a sale of
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51% or more of its shares of common stock of Holding to a third party (a "Third
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Party Buyer") and the CD&R Fund elects to exercise its rights under this Section
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6, the CD&R Fund shall deliver written notice (a "Drag-Along Notice") to the
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Purchaser, which notice shall (a) state (i) that the CD&R Fund wishes to
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exercise its rights under this Section 6 with respect to such sale, (ii) the
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name and address of the Third Party Buyer, (iii) the per share amount and form
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of consideration the CD&R Fund proposes to receive for its shares of common
stock of Holding and (iv) the terms and conditions of payment of such
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consideration and all other material terms and conditions of such sale, (b)
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contain an offer (the "Drag-Along Offer") by the Third Party Buyer to purchase
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from the Purchaser a percentage of his Shares equal to the percentage of the
shares of common stock of Holding owned by the CD&R Fund that are to be sold to
the Third Party Buyer (such percentage, the "Applicable Percentage") on and
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subject to the same terms and conditions offered to the CD&R Fund and (c) state
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the anticipated time and place of the closing of the purchase and sale of the
Applicable Percentage of the Shares (a "Section 6 Closing"), which (subject to
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such terms and conditions) shall occur not fewer than five (5) days nor more
than ninety (90) days after the date such Drag-Along Notice is delivered,
provided that if such Section 6 Closing shall not occur prior to the expiration
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of such 90-day period, the CD&R Fund shall be entitled to deliver additional
Drag-Along Notices with respect to such Drag-Along Offer.
(b) Conditions to Drag-Along. Upon delivery of a Drag-Along Notice,
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the Purchaser shall have the obligation to transfer the Applicable Percentage of
the Purchaser's Shares pursuant to the Drag-Along Offer, as the same may be
modified from time to time, provided that the CD&R Fund transfers the Applicable
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Percentage of its shares of common stock of Holding to the Third Party Buyer at
the Section 6 Closing. Within 10 days of receipt of the Drag-Along Notice, the
Purchaser shall (i) execute and deliver to the CD&R Fund a power of attorney and
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a letter of transmittal and custody agreement appointing, and in form and
substance reasonably satisfactory to, the CD&R Fund or one or more of its
affiliates designated by the CD&R Fund (the "Custodian"), the true and lawful
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attorney-in-fact and custodian for the Purchaser, with full power of
substitution, and authorizing the Custodian to take such actions as the
Custodian may deem necessary or appropriate to effect the sale and transfer of
the Applicable Percentage of the
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Shares to the Third Party Buyer, upon receipt of the purchase price therefor at
the Section 6 Closing, free and clear of all security interests, liens, claims,
encumbrances, charges, options, restrictions on transfer, proxies and voting and
other agreements of whatever nature, and to take such other action as may be
necessary or appropriate in connection with such sale, including consenting to
any amendments, waivers, modifications or supplements to the terms of the sale
(provided that the CD&R Fund also so consents, and, to the extent applicable,
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sells and transfers the Applicable Percentage of its shares of common stock of
Holding on the same terms as so amended, waived, modified or supplemented) and
(ii) deliver to the Custodian certificates representing the Applicable
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Percentage of the Shares, together with all necessary duly executed stock
powers. The Custodian shall hold the Applicable Percentage of the Shares and
other documents in trust for the Purchaser pending completion or abandonment of
such sale. If, within 90 days after the CD&R Fund delivers the Drag-Along
Notice, the CD&R Fund has not completed the sale of the Applicable Percentage of
the Shares and of its shares of common stock of Holding to the Third Party Buyer
and another Drag-Along Notice with respect to such Drag-Along Offer has not been
sent to the Purchaser, the Custodian shall return to the Purchaser all
certificates representing the Applicable Percentage of the Shares and all other
documents that the Purchaser delivered in connection with such sale. Promptly
after the Section 6 Closing, the Custodian shall give notice thereof to the
Purchaser, shall remit to the Purchaser the total consideration for the
Applicable Percentage of the Shares sold pursuant thereto (reduced by any
required withholding or other similar taxes and by any amount required to be
held in escrow pursuant to the terms of the purchase and sale agreement and a
pro rata portion of any expenses incurred in connection with such sale), and
shall furnish such other evidence of the completion and time of completion of
such sale and the terms thereof as may reasonably be requested by the Purchaser.
(c) Reincorporation, Merger, Etc.. If the CD&R Fund shall determine
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that Holding should reincorporate in another jurisdiction, merge with or into
another entity, transfer substantially all of its assets to another entity or
participate in any other corporate reorganization or readjustment (any such
transaction a "Reorganization"), Purchaser shall take such actions as may be
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requested by Holding to effect such a Reorganization; provided that Purchaser
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shall not be required to take such actions unless Purchaser's proportionate
interest in the assets and earnings of any entity that results from such
Reorganization is the same (except for de minimis differences) as such
Purchaser's interest in the assets and earnings of Holding immediately prior to
such Reorganization.
(d) Remedies. The Purchaser acknowledges that the CD&R Fund would
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be irreparably damaged in the event of a breach or a threatened breach by the
Purchaser of any of its obligations under this Section 6 and the Purchaser
agrees that, in
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the event of a breach or a threatened breach by the Purchaser of any such
obligation, the CD&R Fund shall, in addition to any other rights and remedies
available to it in respect of such breach, be entitled to an injunction from a
court of competent jurisdiction (without any requirement to post bond) granting
it specific performance by the Purchaser of its obligations under this Section
6. In the event that the CD&R Fund shall file suit to enforce the covenants
contained in this Section 6 (or obtain any other remedy in respect of any breach
thereof), the prevailing party in the suit shall be entitled to recover, in
addition to all other damages to which it may be entitled, the costs incurred by
such party in conducting the suit, including reasonable attorney's fees and
expenses. In the event that, following a breach or a threatened breach by the
Purchaser of the provisions of this Section 6, the CD&R Fund does not obtain an
injunction granting it specific performance of the Purchaser's obligations under
this Section 6 in connection with such proposed sale prior to the time the CD&R
Fund completes the sale of the Applicable Percentage of its shares of common
stock of Holding or, in its sole discretion, abandons such sale, then Holding
shall have the option to purchase all of the Shares from the Purchaser at a
purchase price per Share equal to the price at which the Purchaser purchased
such shares of Common Stock from Holding or, if less, the per share
consideration payable pursuant to the Drag-Along Offer. Upon notification by
Holding to the Purchaser of Holding's decision to purchase such Shares,
including the price to be paid therefor, the sale and transfer to Holding shall
be considered complete and ownership of such Shares shall pass to Holding.
(e) Public Offering. In the event that a Public Offering has been
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consummated, the provisions of this Section 6 shall terminate and cease to have
further effect.
7. Representations and Warranties of Holding. Holding represents and
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warrants to the Purchaser that (a) Holding has been duly incorporated and
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validly exists under the laws of Luxembourg, (b) this Agreement has been duly
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authorized, executed and delivered by Holding and constitutes a valid and
legally binding obligation of Holding enforceable against Holding in accordance
with its terms and (c) the Shares, when issued, delivered and paid for in
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accordance with the terms hereof, will be duly and validly issued, fully paid
and nonassessable, and free and clear of any liens or encumbrances other than
those created pursuant to this Agreement, or otherwise in connection with the
transactions contemplated hereby.
8. Covenants of Holding.
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(a) Rule 144. Holding agrees that at all times after it has filed a
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registration statement after the date hereof pursuant to the requirements of the
Securities
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Act or Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), relating to any class of equity securities of Holding (other
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than (i) the registration of equity securities of Holding and/or options or
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interests in respect thereof to be offered primarily to directors and/or members
of management or employees, sales agents or similar representatives of Holding
or its Subsidiaries, or directors or senior executives of corporations in which
entities managed or sponsored by Xxxxxxx, Dubilier & Rice, Inc. ("CD&R") have
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made equity investments and/or other persons with whom CD&R has consulting or
other advisory relationships, or (ii) the registration of equity securities
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and/or options or other interests in respect thereof solely on Form S-4 or S-8
or any successor form), it will file the reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations
adopted by the Commission thereunder (or, if Holding is not required to file
such reports, it will, upon the request of the Purchaser, make publicly
available such information as necessary to permit sales pursuant to Rule 144
under the Securities Act), to the extent required from time to time to enable
the Purchaser to sell the Shares without registration under the Securities Act
within the limitation of the exemptions provided by (i) Rule 144, as such Rule
-
may be amended from time to time, or (ii) any successor rule or regulation
--
hereafter adopted by the Commission.
(b) State and Non-U.S. Securities Laws. Holding agrees to use its
----------------------------------
best efforts to comply with all state securities or "blue sky" laws and foreign
securities laws, if any, applicable to the sale of the Shares to the Purchaser,
provided that Holding shall not be obligated to qualify or register the Shares
--------
under any such law or to qualify as a foreign corporation or file any consent to
service of process under the laws of any jurisdiction or subject itself to
taxation as doing business in any such jurisdiction.
9. Miscellaneous.
-------------
(a) Notices. All notices and other communications required or
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permitted to be given under this Agreement shall be in writing and shall be
deemed to have been given if delivered personally or sent by certified or
express mail, return receipt requested, postage prepaid, or by any recognized
international equivalent of such mail delivery, to Holding, the CD&R Fund or the
Purchaser, as the case may be, at the following addresses or to such other
address as Holding, the CD&R Fund or the Purchaser, as the case may be, shall
specify by notice to the others:
(i) if to Holding, to Holding at:
CDRJ Investments (Lux) S.A.
00 xxx Xxxxxxx Xxxx
00
X-0000 Xxxxxxxxxx
Xxxxxxxxxx
Attention: Secretary
---------
with a copy to:
Jafra Cosmetics International, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
---------
(ii) if to the Purchaser, to the Purchaser at the address set forth on
the signature page hereof, with a copy to:
Xxxxxxx X. Xxxxxxxxx & Associates, P.A.
00 Xxxx Xxxxxx
Xxxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
---------
(iii) if to the CD&R Fund, to:
Xxxxxxx, Dubilier & Rice Fund V
Limited Partnership
Xxxxxxxxxx Xxxxx, Xxxxx 000
0000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx, III
---------
All such notices and communications shall be deemed to have been received on the
date of delivery if delivered personally or on the third business day after the
mailing thereof. Copies of any notice or other communication given under this
Agreement shall also be given to:
Xxxxxxx, Dubilier & Rice, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
---------
and
00
Xxxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxx, Esq.
---------
The CD&R Fund also shall be given a copy of any notice or other communication
between the Purchaser and Holding under this Agreement at its address as set
forth above.
(b) Binding Effect; Benefits. This Agreement shall be binding upon
------------------------
the parties to this Agreement and their respective successors and assigns and
shall inure to the benefit of the parties to this Agreement, the CD&R Fund and
their respective successors and assigns. Except as provided in Sections 4
through 6, inclusive, nothing in this Agreement, express or implied, is intended
or shall be construed to give any person other than the parties to this
Agreement, the CD&R Fund or their respective successors or assigns any legal or
equitable right, remedy or claim under or in respect of any agreement or any
provision contained herein.
(c) Waiver; Amendment.
-----------------
(i) Waiver. Any party hereto or beneficiary hereof may by written
------
notice to the other parties (A) extend the time for the performance of any
-
of the obligations or other actions of the other parties under this
Agreement, (B) waive compliance with any of the conditions or covenants of
-
the other parties contained in this Agreement and (C) waive or modify
-
performance of any of the obligations of the other parties under this
Agreement, provided that any waiver of the provisions of Sections 4 through
--------
6, inclusive, must be consented to in writing by the CD&R Fund. Except as
provided in the preceding sentence, no action taken pursuant to this
Agreement, including, without limitation, any investigation by or on behalf
of any party or beneficiary shall be deemed to constitute a waiver by the
party or beneficiary taking such action of compliance with any
representations, warranties, covenants or agreements contained herein. The
waiver by any party hereto or beneficiary hereof of a breach of any
provision of this Agreement shall not operate or be construed as a waiver
of any preceding or succeeding breach and no failure by a party to exercise
any right or privilege hereunder shall be deemed a waiver of such party's
or beneficiary's rights or privileges hereunder or shall be deemed a waiver
of such party's or beneficiary's rights to exercise the same at any
subsequent time or times hereunder.
14
(ii) Amendment. This Agreement may not be amended, modified or
---------
supplemented orally, but only by a written instrument executed by the
Purchaser and Holding, and, in the case of any amendment, modification or
supplement to or affecting any of Sections 4 through 6, inclusive, or that
adversely affects the rights of the CD&R Fund hereunder, consented to by
the CD&R Fund in writing. The parties hereto acknowledge that Holding's
consent to an amendment or modification of this Agreement may be subject to
the terms and provisions of the Financing Agreements.
(d) Assignability. Except as provided herein, neither this Agreement
-------------
nor any right, remedy, obligation or liability arising hereunder or by reason
hereof shall be assignable by Holding or the Purchaser without the prior written
consent of the other party hereto and the CD&R Fund; provided that this
--------
Agreement and the rights, remedies, obligations and liabilities of Holding shall
be assignable by holding to any Successor of Holding. Holding and the CD&R Fund
may assign from time to time all or any portion of its rights under Sections 4
through 6 hereof to one or more Affiliates designated by it.
(e) Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
--------------
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO PRINCIPLES OF CONFLICT OF LAWS WHICH WOULD REQUIRE APPLICATION OF
THE LAW OF ANOTHER JURISDICTION.
(f) Jurisdiction. The Purchaser hereby irrevocably and
------------
unconditionally submits, for him or her and his or her property, to the
nonexclusive jurisdiction of any New York State court or Federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out or of relating to this
Agreement or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State court or, to the extent permitted by law, in such Federal court. Each
of the parties hereby agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that Holding may otherwise have to bring any
action or proceeding relating to this Agreement against the Purchaser or his or
her properties in the courts of any jurisdiction. The Purchaser hereby
irrevocably and unconditionally waives, to the fullest extent he or she may
legally and effectively do so, any objection that he or she may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement in any New York or Federal court. Each of the parties
hereto hereby
15
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(g) Section and Other Headings, etc. The section and other headings
-------------------------------
contained in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.
(h) Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.
(i) Certain Definitions.
-------------------
"Affiliate": with respect to any Person, means any other Person that,
---------
directly or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with the first Person, including but
not limited to a Subsidiary of the first Person, a Person of which the first
Person is a Subsidiary, or another Subsidiary of a Person of which the first
Person is also a Subsidiary.
"Control": with respect to any Person, means the possession, directly
-------
or indirectly, severally or jointly, of the power to direct or cause the
direction of the management policies of such Person, whether through the
ownership of voting securities, by contract or credit arrangement, as trustee or
executor, or otherwise.
"Person": any natural person, firm, partnership, limited liability
------
company, association, corporation, company, trust, business trust, governmental
authority or other entity.
"Subsidiary": with respect to any Person, each corporation or other
----------
Person in which the first Person owns or Controls, directly or indirectly,
capital stock or other ownership interests representing 50% or more of the
combined voting power of the outstanding voting stock or other ownership
interests of such corporation or other Person.
"Successor": of a Person means a Person that succeeds to the first
---------
Person's assets and liabilities by merger, liquidation, dissolution or otherwise
by operation of law, or a Person to which all or substantially all the assets
and/or business of the first Person are transferred.
16
IN WITNESS WHEREOF, Holding and the Purchaser have executed this
Agreement as of the date first above written.
CDRJ INVESTMENTS (LUX) S.A.
By:_______________________________________
Name:
Title:
THE PURCHASER:
Name
By:______________________________________
as Attorney-in-Fact
Name:
Address of the Purchaser:
Address
Total Number of Shares
of Common Stock of
CDRJ Investments (Lux) S.A.
(RC Luxembourg B 63 119)
to be Purchased: Shares
Total Cash Purchase
Price: $Share Amount
17
