<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO.1)
(Frederick's of Hollywood, Inc.)
- -------------------------------------------------------------------------------
(Name of Issuer)
Class A Common Stock, $1.00 par value
- -------------------------------------------------------------------------------
(Title of Class of Securities)
35582420-2
--------------------
(CUSIP Number)
Robert Greenwood, Compliance Director
Bayview Investors, Ltd.
c/o Robertson, Stephens & Company LLC
555 California Street
San Francisco, CA 94104
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
September 9, 1997
- -------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Note. Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") of otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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SCHEDULE 13D
CUSIP NO. 35582420-2
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Bayview Investors, Ltd.
94-2993100 (FEIN)
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /x/
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) / /
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
A California limited partnership
- -------------------------------------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF ---------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 1,478,258
EACH ---------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 0
---------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,478,258
- -------------------------------------------------------------------------------
11 AGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,478,258
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
50.04%
- -------------------------------------------------------------------------------
YPE OF REPORTING PERSON*
PN
- -------------------------------------------------------------------------------
2
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ITEM 1. SECURITY AND ISSUER.
This Statement on Schedule 13D ("Schedule 13D") relates to the shares of
Class A Common stock, $1.00 par value ("shares"), issued by Frederick's of
Hollywood, Inc., a Delaware Corporation ("Issuer"). The principal executive
offices of the Issuer are at 6608 Hollywood Boulevard, Hollywood, CA 90028,
(213) 466-5151.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(c). This Schedule 13D is filed on behalf of Bayview Investors,
Ltd. ("Bayview") one of the six members of the group ("Group") which acquired
beneficial ownership of the shares reported herein through Royalty ("Royalty")
Corporation pursuant to the Stock Purchase Agreement dated August 25, 1997
between Royalty Corporation, as purchaser, and the Frederick N. Mellinger Trust
and the Harriet R. Mellinger Trust, as sellers, which agreement (the "Stock
Purchase Agreement") is attached hereto as Exhibit "A". The five members of
the Group not included in this Schedule 13D filing are Monroe Holdings,
L.L.C., 1995 Investments, L.L.C., ECC Spice, L.L.C., Indosuez FOH Partners, and
Truemarq (Asia) PTE LTD. Bayview is a venture capital partnership whose
partners are employees of Robertson, Stephens & Company LLC, formed in 1985
for the purpose of making investments in various companies and other entities.
This Schedule 13D also includes information with respect to the general
partner of Bayview, Robertson Stephens Private Equity Group, L.L.C., a
Delaware limited liability company ("RSPEG"). RSPEG is a partner of numerous
venture capital partnerships.
Filing Persons
Bayview Investors, Ltd.
c/o Robertson Stephens Private Equity Group, L.L.C.
555 California Street
San Francisco, CA 94104
(d) During the last 5 years, neither Bayview nor RSPEG has been
convicted in a criminal proceeding.
(e) During the last 5 years, neither Bayview nor RSPEG has been a
party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is
subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with
respect to such laws.
(f) Not applicable.
3
<PAGE> 4
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The funds used for the purchase reported herein as well as a
simultaneous purchase of shares of Class B common stock of Frederick's are
derived from Royalty Corporation's working capital in the aggregate
amount of up to approximately $ 20.76 million and an additional $44.24
million which will be funded either by Royalty's existing financing
arrangements described in the Information Statement (described below)
under "Description of Financing of Merger" upon consummation of the
Merger, or from financing arrangements as described in section 6(c) of
this Schedule 13D and as to be further determined in the event the
purchase described herein is effected prior to the consummation of the
Merger. Royalty's working capital is derived from capital contributions
made by members of the Group as follows:
Monroe Holdings $ 9,281,796
1995 Investments 3,664,140
ECC Spice 1,220,688
Bayview Investors, Ltd. 365,376
Indosuez Partners 2,076,000
Trumarq (Asia) PTE Ltd. 4,152,000
------------
Total $20,760,000
Capital contributions from Bayview were made from its working capital
which was obtained from capital contributions made by its partners. Prior to
the purchase reported herein, neither Bayview nor RSPEG was a beneficial owner
of shares of Class A Common Stock.
ITEM 4. PURPOSE OF THE TRANSACTION.
On June 15, 1997, Royalty, Royalty Acquisition Corporation, a Delaware
corporation and a wholly owned subsidiary of Royalty, and the Issuer entered
into an Agreement and Plan of Merger, as amended on July 28, 1997 ("Merger
Agreement") whereby upon the occurrence of certain specified events, the Issuer
would be merged with Royalty Acquisition Corporation. (The Merger Agreement was
filed with the U. S. Securities and Exchange Commission ("SEC") by the Issuer
on Form 8-K on June 20, 1997 and is hereby incorporated by reference as though
fully set forth herein.) Pursuant to the Merger Agreement, (i) each outstanding
share of the Issuer's Class A Common Stock and Class B Common Stock, each par
value $1.00 per share, will be converted into the right to receive $6.14 in
cash, without interest, and (ii) each share held by the Issuer or any of its
subsidiaries or held in the Issuer's treasury is to be canceled, and no payment
is to be made with respect thereto ("Merger Transaction"). The Board of
Directors of the Issuer approved the Merger Transaction on June 15, 1997. The
planned effective date of the Merger was scheduled for August 27, 1997. On
August 6, 1997 proxy material, including an information statement (the
"Information Statement"), was mailed via the U.S. Postal Service to all of the
Issuer's stockholders who held shares as of July 21, 1997. The Information
Statement was filed with the SEC on August 4, 1997 and is hereby incorporated
by reference as though fully set forth herein.
Royalty Corporation entered into the Stock Purchase Agreement with The
Frederick N. Mellinger Trust and The Harriet R. Mellinger Trust disclosed
herein to acquire the shares of Class A Common Stock for $6.90 per share on
August 25, 1997, as supplemented September 3, 1997. In addition, pursuant to
the Stock Purchase Agreement, Royalty agreed that per consummation of the
Merger, it will purchase all other shares of the Issuer, both Class A Common
Stock and Class B Common Stock, for $6.90 per share. In addition, pursuant to
the Stock Purchase Agreement, Royalty has been granted an irrevocable proxy to
vote all of the shares subject to the Agreement in favor of the Merger. In
addition, Royalty purchased as aggregate of 195,000 shares of Class A Common
Stock of the issuer in open market transactions, at an average price of $8.21
per share. Consequently, the primary purpose of effecting the Stock Purchase
Agreement was to enhance the Filers' ability to gain control of the Issuer
through the Merger and to discourage other competing bidders. Royalty may make
additional purchases of Class A Common Stock, or agreements or options with
respect to such stock, to further enhance its ownership position. At present,
Royalty has not entered into any specific agreements with respect to any such
additional Purchases.
Royalty intends to acquire all the shares of both the Class B Common
Stock and Class A Common Stock of the Issuer pursuant to the Merger Agreement.
Royalty intends to consummate the Merger Transaction to pay all stockholders
in cash for their shares and reconstitute the Board of Directors, all as
described in the Information Statement. As a result of the Merger, the Issuer
will become privately held, and consequently will be delisted from the New York
Stock Exchange and will terminate its registration pursuant to Section 12(g)4
of the Act.
4
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ITEM 5. INTEREST IN THE SECURITIES OF THE ISSUER.
(a)-(b) Royalty Corporation has direct beneficial ownership and the
members of the Group, Monroe Holdings, 1995 Investments, ECC Spice,
Bayview Investors, Ltd., Indosuez FOH Partners, and Truemarq (Asia) PTE
LTD., share indirect beneficial ownership of 1,478,258 shares (50.04%) of
the Company's Class A Common Stock. Each of the members of the Group has
deposited all of its respective shares of Royalty and rights thereto into
a voting trust which vests all voting and dispositive power of the
securities of Royalty to the Trustees ("Voting Trust"). The Trustees of
this Voting Trust are David E. Lipson, Nadine E. Lipson, Laurence E.
Lipson, and Suzanne L. Saxman whose majority vote determines all voting
and investment decisions of the shareholders of Royalty. The members of
the Board of Directors of Royalty Corporation, David E. Lipson and John
H. Friedman have the power to direct corporate action of Royalty at the
board level.
(c) Except for those shares acquired and disclosed herein, neither
Bayview nor RSPEG has purchased shares of the Company's Class A Common
Stock within the past 60 days.
Royalty Corporation entered into the Stock Purchase Agreement with
the Harriet R. Mellinger Trust and the Frederick N. Mellinger Trust on
August 25, 1997, as supplemented on September 3, 1997, to acquire from
each Trust 463,066 and 820,192 of the shares, respectively, of the
Class A Common Stock of the issuer for $6.90 per share.
<TABLE>
<CAPTION>
DATE OF PURCHASE NUMBER OF SHARES PRICE PER SHARE HOW EFFECTED
- ---------------- ---------------- --------------- ------------
<S> <C> <C> <C>
08/25/97 1,283,258 $6.90 PRIVATE SALE
09/07/97 195,000 $8.21 OPEN MARKET PURCHASES
</TABLE>
(d) Not applicable
(e) Not applicable
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
A. Royalty entered into the Stock Purchase Agreement to purchase 1,283,258
shares (43.4%) of the Company's Class A Common Stock from the Frederick N.
Mellinger Trust and Harriet N. Mellinger Trust for $6.90 per share on August
25, 1997, as supplemented on September 3, 1997.
B. Royalty Corporation, its wholly owned subsidiary, Royalty
Acquisition Corporation, and the Issuer entered into the Merger Agreement on
June 15, 1997, as amended by First Amendment to Agreement and Plan of Merger
dated as of July 28, 1997, and further amended September 8, 1997, to acquire
100% of the outstanding stock of the Issuer. The Merger Agreement was filed
with the U. S. Securities and Exchange Commission ("SEC") by the Issuer on Form
8-K on June 20, 1997 and is hereby incorporated by reference as though fully
set forth herein.
C. The balance of the funds required to consummate the purchase will be
provided from the sources identified in the information statement.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Item 7(c) is amended and restated to read in its entirety as follows:
(c)(i) Merger Agreement, incorporated by reference from Issuers Form 8-k
filed on June 20, 1997.
(c)(ii) Second amendement to Merger Agreement, dated September 8, 1997.
5
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: September 16, 1997
BAYVIEW INVESTORS, LTD.
By: /s/ Dana K. Welch
------------------------
Authorized Signatory
6
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EXHIBIT A
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made as of August 25,
1997, by and between Royalty Corporation, a Delaware corporation ("Buyer"), and
the Frederick N. Mellinger Trust and the Harriet R. Mellinger Trust
(collectively, "Seller").
WHEREAS, Frederick's of Hollywood, Inc. ("Frederick's") has entered into
an Agreement and Plan of Merger dated as of June 15, 1997, as amended by First
Amendment to Agreement and Plan of Merger dated as of July 28, 1997 (the
"Merger Agreement") with Buyer, pursuant to which Buyer's wholly owned
subsidiary Royalty Acquisition Corp. will be merged with and into Frederick's
(the "Merger"), with Frederick's surviving the Merger; and
WHEREAS, under the Merger Agreement, each issued and outstanding share of
Class A capital stock, $1.00 par value, and Class B capital stock, $1.00 par
value, of Frederick's will be canceled and converted into the right to receive
$6.14 per share (the "Merger Price "); and
WHEREAS, as of the date hereof, Seller owns, and is willing to sell on the
terms contained herein, 1,283,258 shares of Class A capital stock and 3,159,103
shares of Class B capital stock (collectively, the "Shares") of Frederick's;
and
WHEREAS, Buyer is willing to and shall purchase 1,283,258 shares of the
Class A capital stock and 2,563,258.9 shares of the Class B capital stock as a
single unit representing 43.42212% of the total issued and outstanding shares
of each of the Class A capital stock and the Class B capital stock, plus an
additional 595,844.1 shares of Class B capital stock representing 10.0937% of
the total issued and outstanding shares of the Class B capital stock, at $6.90
per share and otherwise in accordance with the terms and subject to the
conditions of this Agreement.
WHEREAS, Buyer is willing, upon consummation of the Merger, to make an
additional payment to the remaining stockholders ("Remaining Stockholders") so
that their aggregate consideration is $6.90 per share.
Accordingly, for and in consideration of the foregoing, the parties hereto
agree as follows:
1. Purchase and Sale. On the terms and subject to the conditions of this
agreement, Seller hereby agrees to sell, convey, transfer and assign to the
Buyer, and the Buyer hereby agrees to purchase, accept and acquire from Seller,
the Shares.
2. Purchase Price and Closings.
(a) Buyer agrees to pay as the purchase price for the Shares an
amount equal to $6.90 per Share. Payment for the Shares shall be made
upon the earlier of the consummation of the Merger or the Merger Deadline
(as defined in Section 10.1 of the Merger Agreement, hereinafter the
"Closing"). At the Closing, Seller shall deliver or cause to be
delivered to Buyer a stock certificate or certificates duly endorsed for
transfer by delivery or accompanied by stock powers duly endorsed in
blank for the Shares sold by Seller, together with such other documents
as may be necessary to effect the transfer thereof to Buyer. At the
Closing, Buyer shall pay in cash to Seller the per Share purchase price
multiplied by the Shares being sold by Seller at the Closing.
(b) In the event the Merger is consummated pursuant to the Merger
Agreement, Buyer hereby agrees that an additional payment of $0.76 per
share shall be paid to the Remaining Stockholders entitled to payment of
the Merger Price, at such time as the Merger Price is paid to such
holders.
7
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3. Representations and Warranties of the Seller. Seller represents and
warrants to the Buyer as follows:
(a) Seller has good and marketable title to the Shares, free and
clear of any claims, security interests, liens and encumbrances except
for a pledge of the Shares to Bank of America. Upon sale hereunder, good
and marketable title to the Shares will be transferred to Buyer, free and
clear of any claims, security interests, liens and encumbrances
whatsoever, including without limitation the pledge to Bank of America.
(b) The execution and delivery of this Agreement on behalf of Seller
and the consummation by Seller of the transactions contemplated hereby
have been duly authorized by all necessary action on the part of Seller,
and this Agreement constitutes the legal, valid and binding agreement of
Seller enforceable in accordance with its terms.
4. Representations and Warranties of Buyer. Buyer hereby represents and
warrants to the Seller as follows:
(a) Buyer is a corporation duly organized, validly existing and in
good standing under the laws of Delaware.
(b) The execution and delivery of this Agreement and the
consummation by Buyer of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of Buyer,
and this Agreement constitutes the legal, valid and binding agreement of
Buyer enforceable in accordance with its terms.
(c) Buyer has a net worth of at least $17 million.
5. Irrevocable Proxy. Seller hereby irrevocably appoints the Buyer or
any designee of the Buyer the lawful agent, attorney and proxy of Seller, during
the term of this Agreement, to vote all of the Shares in favor of the Merger
Agreement, and the transactions contemplated by the Merger Agreement against any
other proposal for any merger, sale of assets or other business combination
between the Company and any other person or entity or which would result in any
of the conditions to the Buyer's obligations not being fulfilled. Seller
acknowledges that the irrevocable proxy created hereby is coupled with an
interest.
6. Conditions Precedent to the Seller's Obligations. Each of the
obligations of Seller to be performed hereunder shall be subject to the
satisfaction (or waiver by Seller), prior to the time Seller is obligated to
perform such obligation, of each of the following conditions:
(a) Buyer's representations and warranties contained in this
Agreement shall be true on and as of such time with the same force and
effect as though made on and as of such time.
(b) Buyer shall have complied in all material respects with the
covenants set forth herein to be performed by it.
7. Conditions Precedent to Buyer's Obligations. Each of the
obligations of Buyer to be performed hereunder shall be subject to the
satisfaction (or waiver by Buyer), prior to the time Buyer is obligated to
perform such obligation, of each of the following conditions:
(a) Seller's representations and warranties contained in this
Agreement shall be true on and as of such time with the same force and
effect as though made on and as of such time.
8
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(b) Seller shall have complied in all material respects with the
covenants set forth herein to be performed by Seller.
8. Termination. This Agreement may be terminated and the purchase and
sale contemplated herein may be abandoned:
(a) By mutual consent of the parties hereto.
(b) By either party hereto, if such party is precluded by an order
or injunction of a court of competent jurisdiction from consummating the
purchase and sale contemplated hereunder.
(c) By either party hereto, if after the date hereof any action has
been taken or any statute, rule or regulation has been enacted,
promulgated or deemed applicable to the transactions contemplated hereby
by any government or governmental agency that makes the consummation of
the transactions contemplated hereby illegal.
(d) By either party hereto upon termination of the Merger Agreement
in accordance with its terms, as fully set forth in Article X thereof.
In the event of such termination or abandonment, neither party hereto (or
any of its directors, officers or trustees) shall have any liability, or
further obligation to the other party to this Agreement, except that nothing
herein will relieve either party from liability under Section 10 or for any
material breach of any warranty set forth in Sections 3 or 4, or for any
willful breach of this Agreement.
9. Further Assurances. Each party agrees to cooperate with the other,
and to execute and deliver, or cause to be executed and delivered, all such
other instruments, and to take all such other actions as it may be reasonably
requested to take, from time to time, in order to effectuate the provisions and
purposes of this Agreement.
10. Specific Performance. Each party acknowledges that (i) the Shares
ansferred to Buyer pursuant to this Agreement and the rights of Seller hereunder
are unique, (ii)Eneither party will have any adequate remedy at law if the other
party shall fail to perform any of its obligations hereunder and (iii) each
party shall have the right, in addition to any other rights it may have, to
specific enforcement of this Agreement if the other party shall fail to perform
any of its obligations hereunder.
11. Binding Effect. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, personal
representatives, successors and assigns. Buyer may, without the consent of the
Seller, assign any or all of its rights hereunder, provided that any such
assignment shall not effect the obligations of Buyer hereunder.
12. Amendment and Modification. This Agreement may not be amended,
modified, supplemented or changed in any respect except by a writing duly
executed by Seller and Buyer.
13. Other Provisions.
(a) Notice. All notices, requests, consents and other
communications hereunder shall be in writing and shall be mailed first
class, certified return receipt requested, with postage prepaid as
follows:
9
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If to Buyer, addressed to:
Royalty Corporation
c/o D'Ancona & Pflaum
30 North LaSalle, Suite 2900
Chicago, IL 60602
Attn: Suzanne L. Saxman
If to Seller, addressed to:
The Frederick N. Mellinger Trust
The Harriet R. Mellinger Trust
c/o Hugh V. Hunter
16633 Ventura Boulevard, Suite 1211
Encino, California 91436
(b) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
taken together shall constitute one instrument.
(c) Headings. The headings of the paragraphs and subparagraphs of
this Agreement are inserted for convenience only and shall not constitute
a part hereof.
(d) Law Governing. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
(e) Benefit of Parties. Except as expressly provided herein,
nothing in this Agreement shall be construed to give any person or entity
other than Seller, Buyer and the Remaining Stockholders any legal or
equitable right, remedy or claims under this Agreement, and this
Agreement shall be for the sole and exclusive benefit of Seller, Buyer
and the Remaining Stockholders.
(f) Expenses. The parties shall bear their own respective expenses
incurred in connection with this Agreement and consummation of the
transactions contemplated hereby.
(g) Severability. Whenever possible, each provision shall be
construed so as to be interpreted in such manner as to be effective and
valid under applicable law. If any provision of this Agreement or the
application thereof to any party or circumstance shall be prohibited by
or invalid under applicable law, such provision shall be ineffective to
the extent of such prohibition without invalidating the remainder of such
provision or any other provision of this Agreement or the application of
such provision to other parties or circumstances.
(h) Waivers. No delay on the part of either party in the exercise
of any right or remedy shall operate as a waiver thereof, and no single
or partial exercise of any right or remedy by either party shall preclude
any other or further exercise thereof, or exercise of any other right or
remedy.
10
<PAGE> 11
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
<TABLE>
<CAPTION>
SELLER: BUYER:
<S> <C>
THE FREDERICK N. MELLINGER TRUST ROYALTY CORPORATION
a Delaware corporation
By: /s/ Hugh V. Hunter By: /S/ David E. Lipson
-------------------------------- ----------------------
Hugh V. Hunter, Co-Trustee David E. Lipson,
Chariman of the Board & President
BY: WELLS FARGO BANK, CO-TRUSTEE
By: /s/ Gary Newman
-----------------------------
By: /s/ Karen M. Vielhaber
-----------------------------
THE HARRIET R. MELLINGER TRUST
By: /s/ Hugh V. Hunter
--------------------------------
Hugh V. Hunter, Co-Trustee
BY: WELLS FARGO BANK, CO-TRUSTEE
By: /s/ Gary Newman
-----------------------------
By: /s/ Karen M. Vielhaber
-----------------------------
</TABLE>
11
<PAGE> 12
SUPPLEMENT TO STOCK PURCHASE AGREEMENT
This Supplement to Stock Purchase Agreement (the "Agreement") is made as
of September 3, 1997, by and between Royalty Corporation, a Delaware
corporation ("Buyer"), and the Frederick N. Mellinger Trust and the Harriet R.
Mellinger Trust (collectively, "Seller").
WHEREAS, Buyer and Seller have entered into a Stock Purchase Agreement
dated as of August 25, 1997 (the "Stock Purchase Agreement"), providing for the
purchase by Buyer of shares of Class A capital stock and Class B capital stock
of Frederick's of Hollywood, Inc. owned by Seller (the "Shares"); and
WHEREAS, pursuant to Section 12 of the Stock Purchase Agreement Buyer and
Seller desire to supplement the Stock Purchase Agreement;
Accordingly, for good and valuable consideration, the receipt and
sufficiency of which is acknowledged, the parties hereto agree as follows:
1. Status of Stock Purchase Agreement. Except as specifically
supplemented herein, the Stock Purchase Agreement shall remain in full force
and effect. This Supplement is not to be construed as a release, waiver or
modification of any of the terms, conditions, representations, warranties,
covenants, rights or remedies set forth in the Stock Purchase Agreement, except
as specifically set forth herein. All capitalized terms not otherwise defined
herein shall have the meaning ascribed to them in the Stock Purchase Agreement.
2. Termination. Section 8(d) of the Stock Purchase Agreement is hereby
revised to read in its entirety as follows: "By Seller if Buyer has not paid
the purchase price for the Shares on or prior to the Merger Deadline."
3. Closing. The parties recognize and agree that Buyer may, at its
option, exercise its right to purchase the Shares at any time upon written
notice to Seller, and that such exercise shall be effective upon delivery of
such written notice to Seller, subject only to Buyer paying the purchase price
therefor within two business days of delivery of such written notice. Buyer
and Seller acknowledge and agree that Seller's obligation to sell the Shares to
Buyer upon Buyer's exercise of its right to purchase the Shares is
unconditional and not subject to completion of the Merger or any other
contingency.
4. Indemnification. Buyer shall indemnify Seller, immediately upon
demand by Seller, for (a) any fee payable to Janney Montgomery Scott, Inc.
("Janney") pursuant to the agreement between Seller and Janney dated May 9,
1996 as a result of the consummation of the transactions contemplated by the
Stock Purchase Agreement; and (b) the out-of-pocket costs and expenses
(including attorneys' fees) incurred by Seller in connection with or related
to this Supplement, up to a maximum of $25,000. Upon and after Seller's
delivery of the Shares to Buyer, Buyer shall also indemnify Seller (including,
without limitation, the trustees of Seller, and their respective officers,
employees and agents), for any expense (including, without limitation,
reasonable attorneys fees and other costs of defense), loss, damage, liability
or claims ("Claims") asserted by any shareholder of Frederick's of Hollywood,
Inc. or by any other third party other than beneficiaries of the Seller,
arising from or relating to the transactions contemplated by the Stock Purchase
Agreement, as supplemented hereby. Buyer retains the right to provide and
participate in the defense of such Claims.
5. Buyer's Account. Buyer represents that the Shares are being
acquired for its own account and not with a view to resale. If the Merger is
not consummated, and prior to March 1, 1998 Buyer resells the Shares to an
unaffiliated third party for a price per share greater than $6.90, then Buyer
shall pay Seller as additional purchase price the amount of any such
difference.
6. Best Efforts. Buyer shall use its best efforts to cause the
consummation of the Merger pursuant to the Agreement and Plan of Merger among
Buyer, Royalty Acquisition Corp. and Frederick's of Hollywood, Inc. Buyer and
Seller each shall take such actions requested by the other to effectuate the
terms of the Stock Purchase Agreement, as supplemented hereby.
7. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same instrument.
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8. Governing Law. This Amendment shall be governed by the laws of the
state of California (regardless of the laws that might otherwise govern under
applicable California principles of conflicts of law) as to all matters,
including but not limited to matters of validity, construction, effect,
performance and remedies.
*****
SELLER: BUYER:
THE FREDERICK N. MELLINGER TRUST ROYALTY CORPORATION
a Delaware Corporation
By: /s/ Hugh V. Hunter By: /s/ David E. Lipson
----------------------------- ---------------------------------
Hugh V. Hunter, Co-Trustee Davis E. Lipson
Chairman of the Board & President
BY: WELLS FARGO BANK, CO-TRUSTEE
By: /s/ Gary Newman, Vice President Trust
---------------------------------------
By: /s/ Patricia A. Cassin
--------------------------
THE HARRIET R. MELLINGER TRUST
By: /s/ Hugh V. Hunter
-------------------------------
Hugh V. Hunter, Co-Trustee
BY: WELLS FARGO BANK, CO-TRUSTEE
By: /s/ Gary Newman, Vice President Trust
---------------------------------------
By: /s/ Patricia A. Cassin
----------------------------
13
<PAGE> 1
EXHIBIT 7(c)(ii)
SECOND AMENDMENT
TO
AGREEMENT AND PLAN OF MERGER
THIS SECOND AMENDMENT TO AGREEMENT AND PLAN OF MERGER (the "Second
Amendment"), dated this 8th day of September, 1997, to the AGREEMENT AND PLAN
OF MERGER (the "Original Merger Agreement"), dated as of June 15, 1997, as
amended by that certain FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER
(the "First Amendment"), dated as of July 28, 1997 (the Original Merger
Agreement as so amended by such First Amendment, the "Merger Agreement"), by
and among FREDERICK'S OF HOLLYWOOD, INC., a Delaware corporation (the
"Company"), ROYALTY ACQUISITION CORP., a Delaware corporation ("Buyer"), and
ROYALTY CORPORATION, a Delaware corporation ("Parent"), is entered
into by and among the Company, Buyer and Parent. All capitalized terms used
herein and not otherwise defined herein shall have the meanings ascribed to
them in the Merger Agreement.
RECITALS
WHEREAS, the Company, Buyer and Parent have entered into the Merger
Agreement providing for the merger of Buyer with and into the Company (the
"Merger"), with the Company surviving the Merger.
WHEREAS, the Company, Buyer and Parent amended the Original Merger
Agreement pursuant to the First Amendment;
WHEREAS, pursuant to the Original Merger Agreement, each issued and
outstanding share of Class A Capital Stock and Class B Capital Stock of the
Company would have been converted into the right to receive $6.14 per share;
WHEREAS, Parent and the Frederick N. Mellinger Trust and the Harriet R.
Mellinger Trust (the "Trusts") are parties to that certain Stock Purchase
Agreement made as of August 25, 1997, as amended by that certain Supplement to
Stock Purchase Agreement made as of September 3, 1997 (such Stock Purchase
Agreement, as so amended by such Supplement to Stock Purchase Agreement, the
"Stock Purchase Agreement");
WHEREAS, pursuant to the Stock Purchase Agreement, the Trusts have agreed
to sell to Parent, and Parent has agreed to purchase from the Trusts, 1,283,259
shares of the Class A Capital Stock of the Company, representing approximately
43.4% of the issued and outstanding shares of the Class A Capital Stock of the
Company, and 3,159,104 shares of the Class B Capital Stock of the Company,
representing approximately 53.5% of the issued and outstanding shares of the
Class B Capital Stock of the Company.
WHEREAS, the purchase price for such shares under the Stock Purchase
Agreement is $6.90;
WHEREAS, subsequent to the Original Merger Agreement and in connection
with the Stock Purchase Agreement, Buyer agreed to increase the Merger Price
to $6.90 per share of Class A Capital Stock and Class B capital Stock;
WHEREAS, the Company has received one or more unsolicited bids from third
parties offering to pay over $6.90 per share of Class A Capital Stock and Class
B Capital Stock;
WHEREAS, in light of such circumstances, the Company inquired whether
Parent would be willing to increase the $6.90 Merger Price for the Class A
Capital Stock and Class B Capital Stock;
WHEREAS, in order to consummate the Merger Agreement with the Company,
Parent has indicated its willingness to increase the Merger Price to $7.75 per
share of Class A Capital Stock and Class B Capital Stock if, and only if, the
Company rejects all other bids and agrees to amending the Merger Agreement in
the manner set forth herein:
WHEREAS, the Board of Directors of the Company has determined that it
is in the best interests of the Company's stockholders to agree to such
amendment in light of the following circumstances, among others: (1) the
existence of the Stock Purchase Agreement and Parent's right to aquire a near
majority of the outstanding Class A Capital Stock and a majority of the Class B
Capital Stock pursuant thereto: (2) Parent's expressed intention to acquire
such shares regardless of any action the Board of Directors may take with
respect to any third parties: (3) Parent's expressed intention to vote the
shares to be acquired by it pursuant to the Stock Purchase Agreement against
any transaction the Board of Directors of the Company may approve with any such
third party: (4) the high level of
<PAGE> 2
comfort the Board of Directors of the Company has with respect to Parent's
ability to consummate the transactions contemplated by the Merger Agreement,
including but not limited to Parent's ability to pay the Merger Price (as
increased hereby); and (5) concerns by the Board of Directors of the Company
regarding the likelihood of the consummation of any transaction with any such
third party and the resulting consequences to the stockholders of the Company;
and
WHEREAS, in light of the foregoing and other developments and
circumstances, the Company, Buyer and Parent desire to further amend the Merger
Agreement in the manner set forth herein:
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, agreements and conditions contained
herein, the parties hereto agree as follows:
1. Status of Merger Agreement. Except as specifically set forth herein,
the Merger Agreement shall remain in full force and effect and shall not be
waived, modified, superseded or otherwise affected by this Second Amendment.
This Second Amendment shall not be construed as a release, waiver or
modification of any of the terms, conditions, representations, warranties,
convenants, rights or remedies set forth in the Merger Agreement, except as
specifically set forth herein.
2. Amendments to Merger Agreement. The Merger Agreement is hereby amended
in the following respects:
(a) Amendment to Section 2.1. The dollar amount "$6.14" is
hereby deleted and replaced with the dollar amount "$7.75".
(b) Amendment to Section 6.2. Section 6.2 is hereby deleted in
its entirely and replaced as follows:
"(a) The Company shall cause its directors (even if any of them
should resign), officers, home office management employees, representatives, and
agents (including, without limitation, its attorneys (including, without
limitation, attorneys at Leob & Leob and attorneys at Morris, Nichols, Arsht &
Tunney), accountants and investment bankers (including, without limitation, its
representatives at Janney Montgomery Scott)) (collectively, the "Company
Representatives") not to engage in any discussions or negotiations, or
otherwise have any form of contract (whether in person, by phone, written
communication, electronically or otherwise), with any person or entity
(including, without limitation, any person or entity that has contacted the
Company prior to the date hereof) and their respective affiliated and related
entities) other than Parent and Buyer (and their agents and representatives)
with respect to any proposal (whether solicited or unsolicited, whether
previously made, currently in existence or arising in the future) with respect
to any acquisition of all or any material portion of the Company by means of a
merger, consolidation or other busines combination involving the Company or its
subsidiaries or acquisition of all or a material portion of the assets or
capital stock of the Company or any of its subsidiaries (an "Acquisition
Transaction"). In the event that the Company or any of the Company
Representatives shall receive any form of communication (whether written, oral,
electronic or otherwise) from any person (other than Parent or Buyer and their
agents and representatives) acting on behalf of any person or entity interested
in any Acquisition Transaction, the Company shall and the Company shall cause
the Company Representatives to, immediately terminate such contact upon
ascertaining that such contact involves an Acquisition Transaction. In the
event any Company Representative shall be contacted in person, whether by phone
or face-to-face or otherwise, by any person (other than Parent or Buyer and
their agents and representatives) acting on behalf of any person or entity
interested in any Acquisition Transaction, such Company Representative shall
state "I am prohibited from discussing anything with you", or words to such
effect, and shall cease all discussions and contact with such person. Any
telephone call from any such person shall not be returned, and all other
inquiries (whether in written, oral, electronic or other form) shall not be
answered, without the prior written consent of Parent. Neither Parent, nor
Buyer shall be entitled to terminate this Agreement as a result of any
inadvertent breach of the foregoing provisions by any Company Representative,
unless a reasonable possibility exists that the direct or indirect consequence
of such breach (together with any other such inadvertent breaches) may be the
inability of one or more of the parties hereto to consummate the Merger in
accordance with the terms of this Agreement. The Company shall arrange a
meeting on Monday, September 8, 1997, among all of the officers of the Company
(those officers who are not at the Company's headquarters shall attend by
telephone, if available) and at which representatives of Parent may attend in
person or by phone. At such meeting, George W. Townson shall inform such
officers of the requirements set forth above in this Section 6.2(a) and shall
instruct such officers to comply with such requirements to the letter, and
shall further instruct such officers to inform the other home office management
employees of the Company of such requirements and to instruct such employees to
comply with such requirements to the letter. Notwithstanding the foregoing,
the Company Representatives may, on the date hereof and only on the date
hereof, contact any person or
<PAGE> 3
entity that has previously made a proposal for an Acquisition Transaction
solely to inform such person or entity that an agreement between the Company,
Parent and Buyer has been executed, which agreement provides for the payment of
$7.75 per share for all of the Class A and Class B Capital Stock of the Company
owned by its stockholders. The Company Representatives may not go into any
further detail.
(b) The Company shall use its best efforts immediately to advise
Parent and Buyer orally (to be confiremed in writing if requested by Parent or
Buyer) of the receipt of any inquiries or proposals (whether written, oral,
electronic or otherwise) relating to an Acquisition Transaction, including the
terms of any such inquiries or proposals, and the actions the Company or its
representatives propose to take with respect thereto, shall immediately provide
copies of any such inquiries or proposals to Parent and Buyer, and shall not
take any action with respect thereto without Parent's prior written consent."
(c) Amendment to Section 10.1. Clause (b) of Section 10.1 is hereby
deleted in its entirety and replaced as follows:
"by any party if, without any material breach by such terminating party
of its obligations under this Agreement, the Merger shall not have occurred on
or before 5:00 p.m. (Los Angeles time) on November 15, 1997 (the "Merger
Deadline"); provided, however, that Parent may, at its option, extend the
Merger Deadline up to two times, in each case for an additional six-month
period (such that, upon the exercise of the first option, the Merger Deadline
would be extended to May 15, 1998, and upon exercise of the second option, the
Merger Deadline would be extended to November 15, 1998). Any such extension
shall be exercised by delivery by Parent to the Company, at least ten (10) days
prior to the then operative Merger Deadline, of written notice exercising
Parent's option to extend the Merger Deadline; provided, however, that Parent
shall not be entitled to extend any Merger Deadline unless (i) any court of
competent jurisdiction in the United States or other governmental body in the
United States shall have issued an order, decree or ruling or taken any other
action restraining, enjoining or otherwise prohibiting the Merger, or (ii) any
administrative action, inquiry, investigation or proceeding shall have been
commenced by any court or governmental body that has requested the Merger be
delayed, and the Company, Parent or Buyer has agreed to comply with such
request; or (iii) such extension is for purposes of the Company's, Parent's or
Buyer's complying with applicable law relating to consummation of the Merger,
provided, however, that as soon as the event causing the extension under
subclause (i), (ii) or (iii) has been eliminated or complied with, the Company,
Parent and Buyer shall then consummate the Merger as soon as legally
permissible. In the written notice delivered by Parent to the Company, Parent
shall specify the basis for the extension under subclause (i), (ii) or (iii) of
the immediately preceding sentence and shall also confirm that it reasonably
believes it continues to have the necessary financing to consummate the
Merger."
(d) Amendment to Section 10.2.
(1) Clause (b) of Section 10.2 is hereby amended by adding the
following at the end thereof and before the commencement of Clause (c) thereof:
"provided, however, that the foregoing shall not apply to any breach of Section
6.2 hereof, and in the event of any breach of said Section 6.2, Parent or Buyer
may immediately terminate this Merger Agreement;"
(2) Section 10.2 is amended by adding the following sentence to the
end thereof;
"Nothing set forth in the immediately preceding sentence shall be
construed to indicate that the Board shall be entitled to take the actions
described by Clauses (e) or (f) thereof."
(e) Amendment to Section 10.3. Clause (d) of Section 10.3 is hereby
deleted in its entirety, and the word "or" shall be inserted before Clause (c)
thereof.
(f) Amendment to Section 10.6. Clause (a) of Section 10.6 is hereby
amended by replacing the words "the actual out-of-pocket fees and expenses
reasonably incurred and paid by such terminating party in connection with the
Merger and the transactions contemplated by this Agreement such amount not to
exceed $750,000" with "Four Million, Five Hundred Thousand Dollars
($4,500,000) as compensation and liquidated damages for lost opportunities and
reimbursement for out-of-pocket expenses (which out-of-pocket expenses alone
Parent and Buyer estimate exceed One Million, Two Hundred Thousand Dollars
($1,200,000))."
(g) Amendments to Section 10.7.
<PAGE> 4
(1) Clause (a) of Section 10.7 is hereby deleted in its entirety
and replaced as follows:
"In the event this Agreement is terminated by Parent or Buyer
pursuant to Section 10.2(e) or 10.2(f) hereof, or Section 10.2(b) hereof as a
result of a breach by the Company of Section 6.2 hereof, the Company shall pay
to Buyer the sum of Four Million, Five Hundred Thousand Dollars ($4,500,000)
immediately upon demand by Buyer, as compensation and liquidated damages for
lost opportunities and reimbursement of out-of-pocket expenses (which
out-of-pocket expenses alone Parent and Buyer estimate exceed One Million, Two
Hundred Thousand Dollars ($1,200,000))."
(2) Clause(b) of Section 10.7 is hereby amended by adding the
following sentences to the end of Section 10.7(b): "The Company shall not take
any position to cause the Class A or Class B Capital Stock of the Company not
to be voted in favor of the Merger. If the Company takes any such position and
the Merger is not approved, Buyer shall be entitled to a fee of Four Million,
Five Hundred Thousand Dollars ($4,500,000). Notwithstanding the foregoing, in
the event the termination of this Agreement pursuant to Section 10.2(c) is as a
result of the failure of the condition set forth in Section 7.1 to be
satisfied, Buyer shall not be entitled to any payment under this Section
10.7(b) unless Parent shall have used its best efforts to cause the shares of
Class A and Class B Capital Stock that Parent is entitled to purchase pursuant
to the Stock Purchase Agreement to be voted in favor of the Merger."
(h) Amendment to Article X. A new Section 10.9 is hereby added to the
Merger Agreement as follows:
"Section 10.9 Payment of Fees. No termination of this
Agreement by the Company shall be effective unless and until Parent and Buyer
have received payment in full of the amounts, if any, required under this
Article X. Nothing in this Agreement shall require the Company to pay Parent
and Buyer together more than Four Million, Five Hundred Thousand Dollars
($4,500,000) upon termination of this Agreement."
3. Representations and Warranties of the Company, Buyer and
Parent. Each of the Company, Buyer and Parent represents and warrants that
its execution, delivery and performance of this Second Amendment has been duly
authorized by all necessary corporate action and this Second Amendment is the
legal, valid and binding obligation of such entity, enforceable against such
entity in accordance with its terms. The Company further represents and
warrants to Buyer and Parent that (a) the Company will deliver to Parent within
three (3) business days following the date hereof true and complete copies of
resolutions adopted and approved by the Board of Directors reconfirming
approval of the Merger Agreement, including without limitation, the Merger
Agreement as amended by this Second Amendment, and the transactions
contemplated thereby; and (b) no action has been taken by the Board of
Directors of the Company subsequent to the date and time thereof that modifies
or affects such resolutions or the matters approved thereby.
4. Board Observation Right. From and after the date hereof
and until termination of the Merger Agreement in accordance with its terms, the
Company hereby grants to Parent the right to appoint, in its sole discretion,
one person to act as an observer (the "Observer") at all meetings of the Board
of Directors held on or after the date hereof (whether such meetings are held
in person, by telephone, electronically or otherwise). In connection
therewith, the Company shall (a) provide to Parent all information (including,
without limitation, notices of meetings of the Board of Directors of the
Company) that the Company shall provide to any member of the Board of
Directors, in such person's capacity as such, concurrently with the delivery of
such information to any such director and (b) permit, and make arrangements for,
a person designated by Parent in writing as the Observer to attend any such
meeting of the Board of Directors in an easily accessible manner. Until the
termination of the Merger Agreement in accordance with its terms, at least
twenty-four (24) hours prior to executing any action by written consent, the
Board of Directors shall provide a true and complete copy of such proposed
consent to the Observer. Nothing set forth in the immediately preceding
sentence shall limit the obligations of the Company under this Section 4 to
provide copies of any proposed written consent to the Observer concurrently
with the delivery thereof to members of the Board of Directors.
5. Grant of Option Upon the Occurrence of Certain Evants. In
the event that the Company shall issue or grant to any person or entity any
option, warrant or other right to purchase or acquire any other rights in any
shares of Class A Capital Stock, Class B Capital Stock, any other capital stock
or any other securities of the Company, concurrently therewith, solely by
operation of this Section 5, and with no further action on the part of the
Company or its Board of Directors, Parent shall receive an identical option,
warrant or right, as the case may be, to purchase the same securities or rights
described therein in the identical amounts, at the identical purchase price and
on the identical provisions issued or granted to such other person or entity.
Nothing set forth herein shall limit or otherwise affect any rights Parent and
Buyer may have under the Merger Agreement
<PAGE> 5
or otherwise as a result of the Company's having issued or granted any such
option, warrant or right to any such person or entity.
6. Press Release. As promptly as possible following the
execution of this Second Amendment, the Company shall issue a press release in
a form acceptable to Parent that shall include a statement announcing that the
Board has reapproved the Merger Agreement at a price of $7.75 per share, a
statement reconfirming the existence of the Stock Purchase Agreement, a
statement that the Board of Directors has rejected the most recent unsolicited
bid, and such other statements as may be requested by Parent and accepted by
the Company (which acceptance will not be unreasonably withheld).
7. Best Efforts. The parties reconfirm their intentions
and agree to use their reasonable best efforts to consummate the Merger as soon
as possible. In connection therewith, the Company agrees to contact the
Securities and Exchange Commission (the "Commission") as promptly as possible
following the execution of this Second Amendment, to apprise the Commission of
the execution of this Second Amendment, the issuance of the press release
required by Section 6 hereof, and all material developments that have happened
since the Commission was last contacted by the Company or it last contacted the
Company. One or more representatives of Parent, at Parent's election, shall be
entitled, and the Company shall cause its representatives to allow such
representative(s) of Parent to participate in such telephone conversation with
the Commission (and any future telephone or in person meetings with the
Commission of a substantive nature with respect to the Merger, other than
unexpected telephone calls from the Commission that are answered by a Company
representative at the time the Commission places such call). The Company shall
provide copies of any materials to be filed or otherwise supplied to the
Commission to Parent sufficiently in advance of such filing or submission for
Parent to comment on such materials before such filing, and shall make such
changes as Parent shall reasonably request prior to such filing or submission.
Other than the obligations and rights described in the second sentence hereof,
the Company shall have the same obligations set forth above with respect
to the Commission, and Parent shall have the same rights set forth above with
respect thereto, with respect to all other governmental authorities, the New
York Stock Exchange, the National Association of Securities Dealers and any
other similar organization that may assert jurisdiction or an interest in the
transactions contemplated by the Merger Agreement.
8. Defense of Proceedings. In the event any claim,
action, suit, hearing, arbitration, governmental investigation or other
proceeding (whether public or private) is brought or threatened by any
governmental authority or any other person or entity against the Company,
and/or director, officer, employee, representative or agent of the Company (a
"Proceeding"), in connection with the Merger Agreement (including, without
limitation, this Second Amendment) or any of the transactions contemplated by
the Merger Agreement (including, without limitation, this Second Amendment),
the Company shall immediately advise Parent of the commencement, or threat of
any such Proceeding and shall provide to Parent a summary of any orally
communicated threats, and a copy of all written materials received in
connection with any such proceeding or threat, including, without limitation,
any complaints, briefs, orders, correspondence and similar materials. Parent
shall be entitled to participate in (but not control) the defense of any such
action, with its own counsel, at its own expense. The Company shall not settle
any such Proceeding, or threatened Proceeding, without the prior written
consent of Parent, not to be unreasonably withheld.
9. Executed Merger Documents. Promptly after the date
hereof, the parties shall use their best efforts to prepare such additional
documents as may be necessary to consummate the Merger and the Company shall
execute such documents, and shall cause its directors officers and employees to
execute such socuments, as shall be reasonably requested by Parent , and shall
deposit such documents with counsel for Parent until such time as any
additional waiting period that may be imposed by the Commission expires;
provided, however, that all documents and monies relating to termination
agreements, employment, non-competition and consulting agreements, and
resignations shall be exchanged and delivered in accordance with the Merger
Agreement. The parties intend that all such documents (other than the
documents referred to in the proviso in the immediately preceding sentence) be
prepared, executed and delivered to such counsel such that no further action by
the Company's Board of Directors, officers or other representatives shall be
necessary upon the expiration of any such additional waiting period for the
Merger to be consummated, except for such actions as may be required in
connection with the documents referred to in the proviso in the immediately
preceding sentence. Nothing set forth herein shall limit or affect the
Company's obligations under Section 7 hereof or Section 6.4 of the Merger
Agreement even after delivery of such executed documents.
10. Counterparts. This Second Amendment may be executed in
any number of counterparts, each of which shall be deemed an original and all
of which taken together shall constitute one and the same instrument.
<PAGE> 6
11. Governing Law. This Second Amendment shall be governed by
the laws of the State of Delaware (regardless of the laws that might otherwise
govern under applicable Delaware principles of conflicts of law) as to all
matters, including but not limited to matters of validity, construction, effect,
performance and remedies.
[SIGNATURE PAGE FOLLOWS THIS PAGE]
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IN WITNESS, WHEREOF, the Company, Buyer and Parent have caused this Second
Amendment to be signed by their respective duly authorized officers as of the
date first written above.
COMPANY: BUYER:
FREDERICK'S OF HOLLYWOOD, INC. ROYALTY ACQUISITION CORP.
By: _________________________ By: _________________________
_____________________________ _____________________________
Title: President Title: Chairman and President
PARENT:
ROYALTY CORPORATION
By: _________________________
Title: Chairman and President
