SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
December 10, 1998
The Cosmetic Center, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 0-14756 52-1266697
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(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation) Number)
8700 Robert Fulton Drive, Columbia, Maryland 21046
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(Address of principal executive office) (Zip Code)
(301) 497-6800
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(Registrant's telephone number including area code)
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(Former Name and Former Address, If Changed Since Last Report)
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Item 1. Changes in Control of Registrant.
On December 10, 1998, Revlon Consumer Products Corporation, a
Delaware corporation ("Revlon") and Prestige Holdings I, L.P., a Delaware
limited partnership (the "Limited Partnership"), executed a Contribution
Agreement (the "Contribution Agreement") pursuant to which Revlon contributed to
the Limited Partnership all of its 8,479,335 shares of the Common Stock of The
Cosmetic Center, Inc. (the "Company") (the "Contributed Shares"), representing
approximately 84.7% of the issued and outstanding capital stock of the Company.
In addition, Revlon contributed to the Limited Partnership certain obligations
owed by the Company to Revlon representing advances of cash and other assets
from Revlon to the Company for working capital and inventory. In exchange for
such contributions, Revlon received a limited partnership interest in the
Limited Partnership. As a result, no cash was used by the Limited Partnership to
acquire the Contributed Shares.
Simultaneously with the closing of the transactions contemplated
by the Contribution Agreement (the "Closing"), eight members of the Company's
Board of Directors (Messrs. Levin, Fox, Fellows, Nichols, Halperin, Drapkin,
Dinkins and Rosenthal) resigned from their positions as Directors of the Company
effective ten days after the date the Company's Schedule 14F was mailed to the
stockholders of record of the Company and transmitted to the Securities and
Exchange Commission. At the Closing, two individuals designated by the Limited
Partnership became Directors of the Company (the "Limited Partnership
Designees").
Pursuant to the Contribution Agreement, the Company's Bylaws were
amended to require the affirmative vote of at least 85% of the Directors present
at a meeting for meetings of the Board of Directors (but not committees thereof)
where a quorum is present in order to take action and to provide that a quorum
for meetings of the Board (but not committees thereof) requires that at least
85% of the entire Board be present. In addition, pursuant to the Contribution
Agreement, all of the members of the Executive Committee of the Board of
Directors were removed and replaced by Ms. Mary Elizabeth Burton and the two
Limited Partnership Designees.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
The following exhibits are annexed hereto:
1. Bylaws of The Cosmetic Center, Inc. (as amended and restated).
2. Contribution Agreement dated as of December 10, 1998 between the
Limited Partnership and Revlon.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this Current Report to be signed on its
behalf by the undersigned hereunto duly authorized.
THE COSMETIC CENTER, INC.
(Registrant)
Dated December 23, 1998
By /s/ Dwight Crawley
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Name: Dwight Crawley
Title: Chief Financial Officer
AMENDED AND RESTATED
BY-LAWS
OF
THE COSMETIC CENTER, INC.
Dated: December 9, 1998
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TABLE OF CONTENTS
ARTICLE I OFFICES
Section 1. Registered Office...............................................1
Section 2. Other Offices...................................................1
ARTICLE II MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings...............................................1
Section 2. Annual Meetings.................................................1
Section 3. Special Meetings................................................1
Section 4. Quorum..........................................................2
Section 5. Proxies.........................................................2
Section 6. Voting..........................................................2
Section 7. Organization and Order of Business..............................2
Section 8. Consent of Stockholders in Lieu of Meeting......................3
Section 9. List of Stockholders Entitled to Vote...........................3
Section 10. Stock Ledger....................................................3
Section 11. Record Date.....................................................3
Section 12. Inspectors of Election..........................................4
ARTICLE III DIRECTORS
Section 1. Number and Election of Directors................................5
Section 2. Vacancies.......................................................5
Section 3. Duties and Powers...............................................5
Section 4. Organization....................................................5
Section 5. Resignations and Removals of Directors..........................6
Section 6. Meetings........................................................6
Section 7. First Yearly Meeting............................................6
Section 8. Quorum and Manner of Acting.....................................6
Section 9. Action by Written Consent.......................................6
Section 10. Meetings by Means of Conference Telephone.......................7
Section 11. Compensation....................................................7
Section 12. Interested Directors............................................7
ARTICLE IV COMMITTEES
Section 1. How Constituted and Powers......................................8
Section 2. Executive Committee.............................................8
Section 3. Organization....................................................8
Section 4. Meetings........................................................8
Section 5. Quorum and Manner of Acting.....................................8
Section 6. General.........................................................8
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ARTICLE V OFFICERS
Section 1. Officers........................................................9
Section 2. Term of Office and Qualifications...............................9
Section 3. Subordinate Officers............................................9
Section 4. Removal.........................................................9
Section 5. Resignations....................................................9
Section 6. Vacancies.......................................................9
Section 7. Compensation....................................................9
Section 8. Chairman of the Board of Directors.............................10
Section 9. Vice Chairman of the Board of Directors........................10
Section 10. President......................................................10
Section 11. Vice Presidents................................................11
Section 12. Treasurer......................................................11
Section 13. Controller.....................................................12
Section 14. Secretary......................................................12
Section 15. Duties of Assistant Treasurers, Assistant
Secretaries and Other Subordinate Officers.....................12
Section 16. Appointed Officers.............................................13
ARTICLE VI CONTRACTS, VOTING OF STOCK HELD,CHECKS, DRAFTS,
BANK ACCOUNTS, ETC.
Section 1. Execution of Contracts.........................................13
Section 2. Loans and Loan Guarantees......................................13
Section 3. Voting of Stock Held...........................................14
Section 4. Checks, Drafts, etc............................................14
Section 5. Deposits.......................................................14
ARTICLE VII STOCK AND DIVIDENDS
Section 1. Form of Certificates...........................................14
Section 2. Signatures.....................................................15
Section 3. Lost, Destroyed, Stolen or Mutilated Certificates..............15
Section 4. Transfers......................................................15
Section 5. Transfer and Registry Agents...................................16
Section 6. Beneficial Owners..............................................16
Section 7. Dividends......................................................16
Section 8. Limitations on Transfer........................................16
ARTICLE VIII NOTICES
Section 1. Notices........................................................17
Section 2. Waivers of Notice..............................................17
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ARTICLE IX BOOKS
Section 1. Books..........................................................17
Section 2. Form of Books..................................................18
ARTICLE X INDEMNIFICATION
Section 1. Power to Indemnify in Actions, Suits or Proceedings
other Than Those by or in the Right of the
Corporation....................................................18
Section 2. Power to Indemnify in Actions, Suits or Proceedings
by or in the Right of the Corporation..........................18
Section 3. Authorization of Indemnification...............................19
Section 4. Good Faith Defined.............................................19
Section 5. Indemnification by a Court.....................................19
Section 6. Expenses Payable in Advance....................................20
Section 7. Nonexclusivity of Indemnification and Advancement of
Expenses.......................................................20
Section 8. Insurance......................................................20
Section 9. Certain Definitions............................................21
Section 10. Survival of Indemnification and Advancement of
Expenses.......................................................21
Section 11. Limitation on Indemnification..................................21
Section 12. Indemnification of Appointed Officers, Employees and
Agents.........................................................21
ARTICLE XI AMENDMENT OF BY-LAWS
Section 1. Amendment of By-Laws...........................................22
Section 2. Entire Board of Directors......................................22
ARTICLE XII GENERAL PROVISIONS
Section 1. Seal...........................................................22
Section 2. Fiscal Year....................................................22
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BY-LAWS
(as restated and amended)
OF
THE COSMETIC CENTER, INC.
(hereinafter called the "Corporation")
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the
Corporation shall be in the City of Wilmington, County of New Castle, State
of Delaware.
Section 2. Other Offices. The Corporation may also have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. Meetings of the stockholders for the
election of directors or for any other purpose shall be held at and place,
either within or without the State of Delaware as shall be designated from time
to time by the Board of Directors and stated in the notice of the meeting or in
a duly executed waiver of notice thereof.
Section 2. Annual Meetings. The Annual Meetings of Stockholders
shall be held on such date and at such time as shall be designated from time to
time by the Board of Directors and stated in the notice of the meeting, at which
meetings the stockholders shall elect a Board of Directors, and transact such
other business as may properly be brought before the meeting. Written notice of
the Annual Meeting of Stockholders stating the place, date and hour of the
meeting shall be given to each stockholder entitled to vote at such meeting not
less than ten nor more than sixty days before the date of the meeting.
Section 3. Special Meetings. Unless otherwise prescribed by law or
by the Certificate of Incorporation, Special Meetings of Stockholders, for any
purpose or purposes, may be called by either (i) the Board of Directors, (ii)
the Chairman of the Board of Directors or (iii) the Chairman of the Executive
Committee of the Board of Directors (if any). Such request shall state the
purpose or purposes of the proposed meeting. Written notice of a Special Meeting
of Stockholders stating the
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place, date and hour of the meeting and the purpose or purposes for which the
meeting is called shall be given not less than ten nor more than sixty days
before the date of the meeting to each stockholder entitled to vote at such
meeting.
Section 4. Quorum. Except as otherwise required by law or by the
Certificate of Incorporation, the holders of a majority in total number of votes
of the capital stock issued and outstanding and entitled to vote thereat,
present in person or represented by proxy, shall constitute a quorum at all
meetings of the stockholders for the transaction of business. A quorum, once
established, shall not be broken by the withdrawal of enough votes to leave less
than a quorum. If, however, such quorum shall not be present or represented at
any meeting of the stockholders, the Chairman of the meeting or the holders of a
majority in number of votes of the capital stock entitled to vote thereat,
present in person or represented by proxy, shall have power to adjourn the
meeting from time to time, without notice other than announcement at the meeting
of the time and place of the adjourned meeting, until a quorum shall be present
or represented. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally noticed. If the adjournment is for more than thirty
days, or if after the adjournment a new record date is fixed for the adjourned
meeting, a written notice of the adjourned meeting shall be given to each
stockholder entitled to vote at the meeting not less than ten nor more than
sixty days before the date of the meeting.
Section 5. Proxies. Any stockholder entitled to vote may do so in
person or by his proxy appointed by an instrument in writing subscribed by such
stockholder or by his attorney thereunto authorized, delivered to the Secretary
of the meeting; provided, however, that no proxy shall be voted or acted upon
after three years from its date, unless said proxy provides for a longer period.
All proxies must be filed with the Secretary of the Corporation at the beginning
of the meeting in order to be counted in any vote at the meeting.
Section 6. Voting. At all meetings of the stockholders at which a
quorum is present, except as otherwise required by law, the Certificate of
Incorporation or these By-Laws, any question brought before any meeting of
stockholders shall be decided by the affirmative vote of the holders of a
majority of the total number of votes of the capital stock present in person or
represented by proxy and entitled to vote thereat voting as a single class. At
the Annual Meeting of Stockholders, or any Special Meeting of Stockholders at
which directors are to be elected, the directors shall be elected by a plurality
vote.
Section 7. Organization and Order of Business. At every meeting of
stockholders, the Chairman of the Board of Directors or, in such person's
absence, such person as shall have been designated by the Board of Directors or,
if none, by the Chairman of the Board of Directors, shall act as Chairman of the
meeting. The Secretary or, in such person's absence, an Assistant Secretary,
shall act as Secretary of the meeting. The Chairman of the meeting shall have
the sole authority to prescribe the agenda and rules of order for the conduct of
any Annual or Special Meeting of Stockholders and to determine all questions
arising thereat relating to the order of business and the conduct of the
meeting,
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except as otherwise required by law. Unless otherwise directed by the Chairman
of the meeting, the vote at any meeting of the stockholders need not be by
written ballot. In case none of the officers above designated to act as
Secretary of the meeting shall be present, the Chairman of the meeting or
Secretary of the meeting shall be appointed by vote of a majority of the total
number of votes of the capital stock present in person or represented by proxy
and entitled to vote thereat.
Section 8. Consent of Stockholders in Lieu of Meeting. Unless
otherwise provided in the Certificate of Incorporation, any action required or
permitted to be taken at any Annual or Special Meeting of Stockholders may be
taken without a meeting, without prior notice and without a vote, if a consent
or consents in writing, setting forth the action so taken, shall be signed by
the holders of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted. Prompt notice
of the taking of the corporate action without a meeting by less than unanimous
written consent shall be given to those stockholders who have not consented in
writing. In the event that the action which is consented to is such as would
have required the filing of a certificate under the General Corporation Law of
the State of Delaware ("DGCL") if such action had been voted on by stockholders
at a meeting thereof, the certificate filed shall state, in lieu of any
statement concerning any vote of stockholders, that written consent and written
notice has been given as provided in this Section 8.
Section 9. List of Stockholders Entitled to Vote. The officer of the
Corporation who has charge of the stock ledger of the Corporation shall prepare
and make, at least ten days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder of the Corporation who is
present.
Section 10. Stock Ledger. The stock ledger of the Corporation shall
be the only evidence as to who are the stockholders entitled to examine the
stock ledger, the list required by Section 9 of this Article II or the books of
the Corporation, or to vote in person or by proxy at any meeting of
stockholders.
Section 11. Record Date. In order that the Corporation may determine
the stockholders entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, or entitled to express consent to corporate action
in writing without a meeting, or entitled to receive payment of any dividend or
other distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of stock, or for the
purpose of any other lawful action, the Board of Directors may fix a record
date, which record date shall not precede the date upon
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which the resolution fixing the record date is adopted by the Board of Directors
and which record date: (1) in the case of determination of stockholders entitled
to vote at any meeting of stockholders or adjournment thereof, shall not be more
than sixty nor less than ten days before the date of such meeting; (2) in the
case of determination of stockholders entitled to express consent to corporate
action in writing without a meeting, shall not be more than ten days after the
date upon which the resolution fixing the record date is adopted by the Board of
Directors; and (3) in the case of any other action, shall not be more than sixty
days prior to such other action. If no record date is fixed: (1) the record date
for determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held; (2) the record date
for determining stockholders entitled to express consent to corporate action in
writing without a meeting when no prior action of the Board of Directors is
required by law, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
Corporation in accordance with applicable law, or if prior action by the Board
of Directors is required by law, shall be at the close of business on the day on
which the Board of Directors adopts the resolution taking such prior action; and
(3) the record date for determining stockholders for any other purpose shall be
at the close of business on the day on which the Board of Directors adopts the
resolution relating thereto. A determination of stockholders of record entitled
to notice of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of Directors may
fix a new record date for the adjourned meeting.
Section 12. Inspectors of Election. The Corporation shall, in
advance of any meeting of stockholders, appoint one or more inspectors of
elections to act at the meeting and make a written report thereof. The
Corporation may designate one or more persons as alternate inspectors to replace
any inspector who fails to act. If no inspector or alternate is able to act at a
meeting of stockholders, the Chairman of the meeting shall appoint one or more
inspectors to act at the meeting. Unless otherwise required by law, inspectors
may be officers, employees or agents of the Corporation. Each inspector, before
entering upon the discharge of his duties, shall take and sign an oath
faithfully to execute the duties of inspector with strict impartiality and
according to the best of his ability. The inspector shall take charge of the
polls and, when the vote is completed, shall make a certificate of the result of
the vote taken and of such other facts as may be required by law.
ARTICLE III
DIRECTORS
Section 1. Number and Election of Directors. The Board of Directors
shall consist of not less than three members, the exact number of which shall
from time to time be determined by resolution of the Board of Directors. Except
as provided in Section 2 of this Article, directors shall be elected by the
stockholders at the Annual Meetings of Stockholders, and each director so
elected shall hold office until his successor is duly elected and qualified, or
until his death, or until his earlier resignation or removal. Directors need not
be stockholders. The directors shall be classified, with
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respect to the time for which they severally hold office, into three classes, as
nearly equal in number as possible, one class to be originally elected for a
term expiring at the annual Stockholders Meeting to be held in 1998, another
class to be originally elected for a term expiring at the annual Stockholders
Meeting to be held in 1999, and another class to be originally elected for a
term expiring at the annual Stockholders Meeting to be held in 2000, with each
director in each class to hold office until his successor is elected and
qualified. At each annual Stockholders Meeting, the successors of the class of
directors whose term expires at the meeting shall be elected to hold office for
a term expiring at the annual Stockholders Meeting held in the third year
following the year of their election, or until each such director's successor is
elected and qualified.
Section 2. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office, though less than a quorum, or by
a sole remaining director, except that any vacancy resulting from the death,
resignation, removal or disqualification of a director elected by the holders of
any class or classes of the stock of the Corporation voting as a class, or from
an increase in the number of directors which such holders are entitled to elect,
may be filled by the affirmative vote of a majority of the directors elected by
such class or classes, or by a sole remaining director so elected, and each
director so chosen shall hold office until his successor is duly elected and
qualified or until his death, or until his earlier resignation or removal, or
disqualification.
Section 3. Duties and Powers. The business of the Corporation shall
be managed by or under the direction of the Board of Directors which may
exercise all such powers of the Corporation and do all such lawful acts and
things as are not by statute or by the Certificate of Incorporation or by these
By-Laws required to be exercised or done by the stockholders.
Section 4. Organization. At each meeting of the Board of Directors,
the Chairman of the Board of Directors, or, in such person's absence, a director
chosen by a majority of the directors present, shall act as Chairman. The
Secretary of the Corporation shall act as Secretary at each meeting of the Board
of Directors. In case the Secretary shall be absent from any meeting of the
Board of Directors, an Assistant Secretary shall perform the duties of Secretary
at such meeting; and in the absence from any such meeting of the Secretary and
all the Assistant Secretaries, the Chairman of the meeting may appoint any
person to act as Secretary of the meeting.
Section 5. Resignations and Removals of Directors. Any director of
the Corporation may resign at any time, by giving written notice to the Chairman
of the Board of Directors, the Chairman of the Executive Committee of the Board
of Directors (if any), the President or the Secretary of the Corporation. Such
resignation shall take effect at the time therein specified or, if no time is
specified, immediately; and, unless otherwise specified in such notice, the
acceptance of such resignation shall not be necessary to make it effective.
Except as otherwise required by law, any director or the entire Board of
Directors may be removed, with or without cause, by the affirmative vote or
written consent of a majority in total voting power of the issued and
outstanding capital stock of the Corporation represented and entitled to vote in
the election of directors.
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Section 6. Meetings. The Board of Directors of the Corporation may
hold meetings, both regular and special, either within or without the State of
Delaware. Regular meetings of the Board of Directors may be held at such time
and at such place as may from time to time be determined by the Board of
Directors and, unless required by resolution of the Board of Directors, without
notice. Special meetings of the Board of Directors may be called by the Chairman
of the Board of Directors, the Chairman of the Executive Committee of the Board
of Directors (if any), or a majority of directors then in office. Notice thereof
stating the place, date and hour of the meeting shall be given to each director
either by mail not less than forty-eight hours before the date of the meeting;
by telephone, telecopy or telegram on twenty-four hours notice; or on such
shorter notice as the person or persons calling such meeting may deem necessary
or appropriate in the circumstances.
Section 7. First Yearly Meeting. The Board of Directors shall meet
for the purpose of organization, the election of officers and the transaction of
other business, as soon as practicable after each Annual Meeting of
Stockholders, and no notice of such meeting to the existing or newly elected
directors shall be necessary in order to legally constitute the meeting,
provided a quorum is present. Such first meeting may be held at any other time
or place specified in a notice given as hereinafter provided for special
meetings of the Board of Directors, or in a waiver of notice thereof.
Section 8. Quorum and Manner of Acting. Except as otherwise required
by law, the Certificate of Incorporation or these By-Laws, at all meetings of
the Board of Directors, eighty percent (85%) of the entire Board of Directors
shall constitute a quorum for the transaction of business and the act of
eighty-five percent (85%) of the directors present at any meeting at which there
is a quorum shall be the act of the Board of Directors. If a quorum shall not be
present at any meeting of the Board of Directors, the directors present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting of the time and place of the adjourned meeting,
until a quorum shall be present.
Section 9. Action by Written Consent. Unless otherwise required by
the Certificate of Incorporation or these By-Laws, any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting, if all the members of the
Board of Directors or committee, as the case may be, consent thereto in writing,
and the writing or writings are filed with the minutes of proceedings of the
Board of Directors or committee.
Section 10. Meetings by Means of Conference Telephone. Unless
otherwise required by the Certificate of Incorporation or these By-Laws, members
of the Board of Directors, or any committee designated by the Board of
Directors, may participate in a meeting of the Board of Directors or such
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other,
and participation in a meeting pursuant to this Section 10 shall constitute
presence in person at such meeting.
Section 11. Compensation. The directors may be paid their expenses,
if any, of attendance at
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each meeting of the Board of Directors and may be paid a fixed sum for
attendance at each meeting of the Board of Directors or a stated salary, or such
other emoluments, as the Board of Directors shall from time to time determine.
No such payment shall preclude any director from serving the Corporation in any
other capacity and receiving compensation therefor. Each director who shall
serve as a member or Chairman of special or standing committee may be allowed
like compensation for attending committee meetings.
Section 12. Interested Directors. No contract or transaction between
the Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers, are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof which
authorizes the contract or transaction, or solely because his or their votes are
counted for such purpose if (i) the material facts as to his or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board of Directors
or committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or (ii) the material facts as to
his or their relationship or interest and as to the contract or transaction are
disclosed or are known to the stockholders entitled to vote thereon, and the
contract or transaction is specifically approved in good faith by vote of the
stockholders; or (iii) the contract or transaction is fair as to the Corporation
as of the time it is authorized, approved or ratified, by the Board of
Directors, a committee thereof or the stockholders. Common or interested
directors may be counted in determining the presence of a quorum at a meeting of
the Board of Directors or of a committee which authorizes the contract or
transaction.
ARTICLE IV
COMMITTEES
Section 1. How Constituted and Powers. The Board of Directors may,
by resolution passed by a majority of the entire Board of Directors, designate
one or more committees, each committee to consist of one or more of the
directors of the Corporation, except as otherwise provided in these By-Laws. The
Board of Directors may designate one or more directors as alternate members of
any committee who may replace any absent or disqualified member at any meeting
of any such committee. In the absence or disqualification of a member of a
committee, and in the absence of a designation by the Board of Directors of an
alternate member to replace the absent or disqualified member, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not they constitute a quorum, may unanimously appoint another member of the
Board of Directors to act in the place of any absent or disqualified. Each
committee, to the extent permitted by law, shall have and may exercise all the
powers and authority of the Board of Directors in the management of the business
and affairs of the Corporation as provided in the resolution establishing such
committee.
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Section 2. Executive Committee. The Board of Directors may designate
an Executive Committee, to consist of not less than three members of the Board
of Directors, which shall have and may exercise, to the extent permitted by law,
all of the powers of the Board of Directors in the management of the business
and affairs of the Corporation, including, unless otherwise specified by a
resolution or resolutions of the Board of Directors, the power and authority to
declare dividends, to authorize the issuance of stock and to adopt a certificate
of ownership and merger pursuant to Section 253 of the DGCL.
Section 3. Organization. The Board of Directors or each such
committee may choose its Chairman and Secretary, and shall keep and record all
its acts and proceedings and report the same from time to time to the Board of
Directors.
Section 4. Meetings. Regular meetings of any such committee, of
which no notice shall be necessary, shall be held at such times and in such
places as shall be fixed by the committee or by the Board of Directors. Special
meetings of any such committee shall be held at the request of any member of the
committee.
Section 5. Quorum and Manner of Acting. A majority of the members of
any such committee shall constitute a quorum for the transaction of business,
and the act of a majority of those present at any meeting at which a quorum is
present shall be the act of the committee.
Section 6. General. The Board of Directors shall have the power at
any time to change the members of, fill vacancies in, and discharge or disband
any such committee, either with or without cause.
ARTICLE V
OFFICERS
Section 1. Officers. The Board of Directors shall elect a Chairman
of the Board of Directors, a President, one or more Vice Presidents, a
Treasurer, a Controller and a Secretary. The Board of Directors may designate
one or more Vice Presidents as Senior Executive Vice Presidents, Executive Vice
Presidents or Senior Vice Presidents, and may use such other descriptive words
as it may determine to designate the seniority or areas of special competence or
responsibility of the officers. Any two or more offices may be held by the same
person.
Section 2. Term of Office and Qualifications. Each such officer
shall hold office until such officer's successor shall have been duly chosen and
shall qualify, or until such officer's death, resignation or removal in the
manner hereinafter provided. The Chairman of the Board of Directors shall be
chosen from among the directors, but no other officer need be a director. Each
officer shall have such functions or duties as are provided in these By-Laws, or
as the Board of Directors may from time to time determine.
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Section 3. Subordinate Officers. The Board of Directors may from
time to time elect such other officers or assistant officers as it may deem
necessary, each of whom shall hold office for such period, have such authority,
and perform such duties as are provided in these By-Laws, or as the Board of
Directors may from time to time determine.
Section 4. Removal. Any officer may be removed, either with or
without cause, by the Board of Directors, and any officer also may be removed in
such other manner as may be specified by the Board of Directors in the
resolution or resolutions electing such officer. Any officer may be suspended by
the Chairman of the Board of Directors either with or without cause.
Section 5. Resignations. Any officer may resign at any time by
giving written notice to the Board of Directors, the Chairman of the Board of
Directors or the Secretary of the Corporation. Any such resignation shall take
effect at the time therein specified or if no time is specified, immediately;
and, unless otherwise specified in such notice, the acceptance of such
resignation shall not be necessary to make it effective.
Section 6. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in these By-Laws for the regular election to that office.
Section 7. Compensation. Salaries or other compensation of the
officers may be fixed from time to time by the Board of Directors or any duly
authorized committee of directors and shall be so fixed by the Board of
Directors or such committee as to any officer serving the Corporation as a
director. No officer shall be prevented from receiving proper compensation for
such officer's services by reason of the fact that such officer is also a
director of the Corporation.
Section 8. Chairman of the Board of Directors. The Chairman of the
Board of Directors, if present, shall preside at all meetings of the
stockholders and of the Board of Directors. The Chairman of the Board of
Directors may, with the Treasurer or the Secretary or an Assistant Treasurer or
an Assistant Secretary, sign certificates for stock of the Corporation. The
Chairman of the Board of Directors may enter into and execute in the name of the
Corporation deeds, mortgages, bonds, guarantees, contracts and other
instruments, except in cases where the making and execution thereof shall be
expressly restricted or delegated by the Board of Directors or by a duly
authorized committee of directors or by these By-Laws to some other officer or
agent of the Corporation, or shall be required by law otherwise to be made or
executed. In general, the Chairman of the Board of Directors shall have all
authority incident to the office of Chairman of the Board of Directors and shall
have such other authority and perform such other duties as may from time to time
be assigned by the Board of Directors or by any duly authorized committee of
directors.
Section 9. Vice Chairman of the Board of Directors. The Vice
Chairman shall be an officer of the Corporation and, in general, the Vice
Chairman will render such services to the
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Corporation as are customarily rendered by the Vice Chairman of comparable
publicly held companies. The Vice Chairman also generally shall assist the
Chairman of the Board.
Section 10. President. The President shall be the chief executive
officer of the Corporation and shall have general supervision of the business,
affairs and property of the Corporation and over its several officers, subject,
however, to the control of the Board of Directors. The President also shall be
the chief operating officer of the Corporation and, subject to the direction of
the Board of Directors and any duly authorized committee of directors, shall
have general supervision of the operations of the Corporation. The President
may, with the Treasurer or the Secretary or an Assistant Treasurer or an
Assistant Secretary, sign certificates for stock of the Corporation. The
President may enter into and execute in the name of the Corporation deeds,
mortgages, bonds, guarantees, contracts and other instruments, except in cases
where the making and execution thereof shall be expressly restricted or
delegated by the Board of Directors or by a duly authorized committee of
directors, or by these By-Laws to some other officer or agent of the
Corporation, or shall be required by law otherwise to be made or executed. The
President shall have the power to fix the compensation of elected officers whose
compensation is not fixed by the Board of Directors or a committee thereof in
accordance with Section 7 of this Article V, and also to engage, discharge,
determine the duties and fix the compensation of all employees and agents of the
Corporation necessary or proper for the transaction of the business of the
Corporation. In general, the President shall have all authority incident to the
office of President, chief executive officer and chief operating officer and
shall have such other authority and perform such their duties as may from time
to time be assigned by the Board of Directors or by any duly authorized
committee of directors.
Section 11. Vice Presidents. The Vice Presidents shall have
supervision over the operations of the Corporation within their respective areas
of special competence or responsibility and in accordance with policies,
procedures and practices in effect from time to time, subject, however, to the
control of the Board of Directors, any duly authorized committee of directors,
the Chairman of the Board of Directors, the President and any other officer to
whom they report. They shall, within such areas (in the order of their
designation, or in the absence of such designation, in the order of their
seniority based on title or, in the case of officers of equal title, in order of
their tenure), at the request or in the absence or disability of the President,
perform the duties and exercise the powers of such officer. They may, with the
Treasurer or the Secretary or an Assistant Treasurer or an Assistant Secretary,
sign certificates for stock of the Corporation. They may enter into and execute
in the name of the Corporation deeds, mortgages, guarantees, bonds, contracts
and other instruments, except in cases where the making and execution thereof
shall be expressly restricted or otherwise delegated by these By-Laws or by the
Board of Directors, a duly authorized committee of directors, the Chairman of
the Board of Directors, the President or any other officer to whom they report,
or shall be required by law otherwise to be made or executed. In general, they
shall have all authority incident to their respective offices and shall have
such other authority and perform such other duties as may from time to time be
assigned to them by the Board of Directors, any duly authorized committee of
directors, the Chairman of the Board of Directors, the President or any other
officer to whom they report.
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Section 12. Treasurer. The Treasurer shall, if required by the Board
of Directors, the Chairman of the Board of Directors, the President or any other
officer to whom the Treasurer reports, give a bond for the faithful discharge of
duties, in such sum and with such sureties as may be so required. The Treasurer
shall have custody of, and be responsible for, all funds and securities of the
Corporation; receive and give receipts for money due and payable to the
Corporation from any source whatsoever; deposit all such money in the name of
the Corporation in such banks, trust companies, or other depositories as shall
be selected in accordance with the provisions of Section 5 of Article VI of
these By-Laws; against proper vouchers, cause such funds to be disbursed by
check or draft on the authorized depositories of the Corporation signed in such
manner as shall be determined in accordance with the provisions of Section 4 of
Article VI of these By-Laws and be responsible for the accuracy of the amounts
of all funds so disbursed; regularly enter or cause to be entered in books to be
kept by the Treasurer or under the Treasurer's direction, full and adequate
accounts of all money received and paid by the Treasurer for the account of the
Corporation; have the right to require, from time to time, reports or statements
giving such information as the Treasurer may determine to be necessary or
desirable with respect to any and all financial transactions of the Corporation
from the officers and agents transacting the same; render to the Board of
Directors, any duly authorized committee of directors, the Chairman of the Board
of Directors, the President or any officer to whom the Treasurer reports,
whenever they or any of them, respectively, shall require the Treasurer so to
do, an account of the financial condition of the Corporation and of all
transactions of the Treasurer; exhibit at all reasonable times the books of
accounts and other records provided for herein to any of the directors of the
Corporation; and, in general, have all authority incident to the office of
Treasurer and such other authority and perform such other duties as from time to
time may be assigned by the Board of Directors, any duly authorized committee of
directors, the Chairman of the Board of Directors, the President or any other
officer to whom the Treasurer reports, and may sign with the Chairman of the
Board of Directors, the President or any Vice President, certificates for stock
of the Corporation.
Section 13. Controller. The Controller shall be responsible for
preparing and maintaining reasonable and adequate books of account and other
accounting records of the assets, liabilities and transactions of the
Corporation in accordance with generally accepted accounting principles and
procedures, shall see that reasonable and adequate audits thereof are regularly
made and that reasonable and adequate systems of financial control are
maintained, shall examine and certify the financial accounts of the Corporation,
shall prepare and render such budgets and other financial reports as the Board
of Directors, the Chairman of the Board of Directors, the President or any other
officer to whom the Controller reports may require, and shall, in general, have
all authority incident to the office of Controller and such other authority and
perform such other duties as from time to time may be assigned by the Board of
Directors, any duly authorized committee of directors, the Chairman of the Board
of Directors, the President or any other officer to whom the Controller reports.
Section 14. Secretary. The Secretary shall act as Secretary of all
meetings of the stockholders and of the Board of Directors of the Corporation;
shall keep the minutes thereof in the proper book or books to be provided for
that purpose; shall see that all notices required to be given by the Corporation
in connection with meetings of stockholders and of the Board of Directors are
duly
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given; may, with the Chairman of the Board of Directors, the President or any
Vice President, sign certificates for stock of the Corporation; shall be the
custodian of the seal of the Corporation and shall affix the seal or cause it or
a facsimile thereof to be affixed to all certificates for stock of the
Corporation and to all documents or instruments requiring the same, the
execution of which on behalf of the Corporation is duly authorized in accordance
with the provisions of these By-Laws; shall have charge of the stock records and
also of the other books, records and papers of the Corporation relating to its
organization and acts as a corporation, and shall see that the reports,
statements and other documents related thereto required by law are properly kept
and filed; and shall, in general, have all authority incident to the office of
Secretary and such other authority and perform such other duties as from time to
time may be assigned by the Board of Directors, any duly authorized committee of
directors, the Chairman of the Board of Directors, the President or any other
officer to whom the Secretary reports.
Section 15. Duties of Assistant Treasurers, Assistant Secretaries
and Other Subordinate Officers. The Assistant Treasurers shall, respectively, if
required by the Board of Directors, the Chairman of the Board of Directors, the
President or any other officer to whom they report, give bonds for the faithful
discharge of their duties in such sums and with such sureties as may be so
required. Assistant Treasurers and Assistant Secretaries may, with the Chairman
of the Board of Directors, the President or any Vice President, sign
certificates for stock of the Corporation. Subordinate officers shall have all
authority incident to their respective offices and such other authority and
perform such other duties as shall be assigned to them by the Board of
Directors, any duly authorized committee of directors, the Chairman of the Board
of Directors, the President or the officers to whom they report.
Section 16. Appointed Officers. The Chairman of the Board of
Directors and the President may appoint or cause to be appointed, in accordance
with the policies and procedures established by them, such Presidents, Vice
Presidents and other officers of the Divisions, Groups and Staffs of the
Corporation (each an "Appointed Officer") as each of them shall determine to be
necessary or desirable in furtherance of the business and affairs of such
Divisions, Groups and Staffs, may designate such Vice Presidents as Senior
Executive Vice Presidents, Executive Vice Presidents or Senior Vice Presidents,
and may use such other descriptive words as each of them may determine to
designate the seniority or areas of special competence or responsibility of the
Appointed Officers appointed in accordance with this Section 15. Appointed
Officers appointed in accordance with this Section 15 shall not be deemed to be
officers as elsewhere referred to in this Article V or in Article X hereof but
as between themselves and the Corporation shall have such authority and perform
such duties in the management and operations of the Divisions, Groups and Staffs
of the Corporation of which they are appointed officers as the officer
appointing them and the persons to whom they report may from time to time
determine. Such Appointed Officers shall have the authority as between
themselves and third parties to bind the Corporation solely to the extent of
their apparent authority based upon their titles and solely in relation to the
business affairs of the Divisions, Groups and Staffs of which they are appointed
officers.
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ARTICLE VI
CONTRACTS, VOTING OF STOCK HELD,
CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
Section 1. Execution of Contracts. The Board of Directors or any
duly authorized committee of directors, except as by these By-Laws otherwise
require, may authorize any officer other than or in addition to the officers
authorized by Article V of these By-Laws, including Appointed Officers, and any
employee or agent or agents, in the name and on behalf of the Corporation, to
enter into and execute any deed, mortgage, bond, guarantee, contract or other
instrument, and any such authority may be general or may be confined to specific
instances or otherwise limited.
Section 2. Loans and Loan Guarantees. Any officer, employee or agent
of the Corporation thereunder authorized by the Board of Directors or by any
duly authorized committee of directors may effect in the name and on behalf of
the Corporation, loans or advances from, or guarantees of loans or advances to,
any bank, trust company or other institution or any firm, corporation or
individual, and for such loans and advances or guarantees may make, execute and
deliver promissory notes bonds or other certificates or evidences of
indebtedness or guaranty of the Corporation, and may pledge or hypothecate or
transfer any securities or other property of the Corporation as security for any
such loans, advances or guarantees. Such authority conferred by the Board of
Directors or any duly authorized committee of directors may be general or may be
confined to specific instances or otherwise limited.
Section 3. Voting of Stock Held. The Chairman of the Board of
Directors and the President and, unless otherwise provided by resolution of the
Board of Directors or directed by the Chairman of the Board of Directors or the
President, the Secretary may from time to time personally or by an attorney or
attorneys or agent or agents of the Corporation, in the name and on behalf of
the Corporation, cast the votes which the Corporation may be entitled to cast as
a stockholder or otherwise in any other corporation, any of the stock or
securities of which may be held by the Corporation, at meetings of the holders
of the stock or other securities of such other corporations, or consent in
writing to any action by any such other corporation, and may instruct any person
or persons so appointed as to the manner of casting such votes or giving such
consent, and may execute or cause to be executed on behalf of the Corporation
and under its corporate seal, or otherwise, such written proxies, consents,
waivers or other instruments as the Secretary may deem necessary or proper in
the premises; or may attend any meeting of the holders of stock or other
securities of any such other corporation and thereat vote or exercise any or all
other powers of the Corporation as the holder of such stock or other securities
of such other corporation.
Section 4. Checks, Drafts, etc. All checks, drafts and other orders
for payment of money out of the funds of the Corporation and all notes and other
evidences of indebtedness of the Corporation shall be signed on behalf of the
Corporation by the Treasurer or an Assistant Treasurer or by any other officer,
employee or agent of the Corporation to whom such power may from time to
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time be delegated by the Board of Directors or any duly authorized committee of
directors or by any officer, employee or agent of the Corporation to whom the
power of delegation may from time to time be granted by the Board of Directors
or any duly authorized committee of directors.
Section 5. Deposits. The funds of the Corporation not otherwise
employed shall be deposited from time to time to the order of the Corporation in
such banks, trust companies or other depositories as the Board of Directors or
any duly authorized committee of directors may from time to time select, or as
may be selected by any officer, employee or agent of the Corporation to whom
such power may from time to time be delegated by these By-Laws, the Board of
Directors or any duly authorized committee of directors.
ARTICLE VII
STOCK AND DIVIDENDS
Section 1. Form of Certificates. (a) Every holder of stock in the
Corporation shall be entitled to have a certificate signed, in the name of the
Corporation (i) by the Chairman of the Board of Directors, the President or one
of the Vice Presidents and (ii) by the Treasurer or an Assistant Treasurer, or
the Secretary or an Assistant Secretary of the Corporation, certifying the
number of shares owned by him in the Corporation.
(b) If the Corporation shall be authorized to issue more than one
class of stock or more than one series of any class, the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate which the Corporation shall
issue to represent such class or series of stock, provided that, except as
otherwise required by Section 202 of the DGCL, in lieu of the foregoing
requirements, there may be set forth on the face or back of the certificate
which the Corporation shall issue to represent such class or series of stock, a
statement that the Corporation will furnish without charge to each stockholder
who so requests the powers, designations, preferences and relative,
participating, optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of such preferences
and/or rights.
Section 2. Signatures. Any or all signatures on the certificate may
be a facsimile. In case an officer, transfer agent or registrar who has signed
or whose facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent or registrar before such certificate
is issued, unless otherwise ordered by the Board of Directors, it may be issued
by the Corporation with the same effect as if he were such officer, transfer
agent or registrar at the date of issue.
Section 3. Lost, Destroyed, Stolen or Mutilated Certificates. The
Board of Directors may direct a new certificate to be issued in place of any
certificate theretofore issued by the Corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit or such other proof
satisfactory to the Board of Directors of that fact by the person claiming the
certificate of
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stock to be lost, stolen or destroyed. When authorizing such issue of a new
certificate, the Board of Directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed certificate, or his legal representative, to advertise the same in
such manner as the Board of Directors shall require and/or to give the
Corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the Corporation and its transfer agents and registrars
with respect to the certificate alleged to have been lost, stolen or destroyed
or the issuance of such new certificate.
Section 4. Transfers. Except as otherwise prescribed by law or the
Certificate of Incorporation, stock of the Corporation shall be transferable in
the manner prescribed in these By-Laws. Transfers of stock shall be made on the
books of the Corporation only by the person named in the certificate or by such
person's duly authorized attorney appointed by a power of attorney duly executed
and filed with the Secretary of the Corporation or a transfer agent of the
Corporation, and upon surrender of the certificate or certificates for such
stock properly endorsed for transfer and payment of all necessary transfer
taxes; provided, however, that such surrender and endorsement or payment of
taxes shall not be required in any case in which the officers of the Corporation
shall determine to waive such requirement. Every certificate exchanged, returned
or surrendered to the Corporation shall be marked "Cancelled," with the date of
cancellation, by the Secretary or an Assistant Secretary of the Corporation or
the transfer agent thereof. No transfer of stock shall be valid as against the
Corporation, its stockholders or creditors for any purpose until it shall have
been entered in the stock records of the Corporation by an entry showing from
and to whom transferred.
Section 5. Transfer and Registry Agents. The Corporation may from
time to time maintain one or more transfer offices or agencies and registry
offices or agencies at such place or places as may be determined from time to
time by the Board of Directors.
Section 6. Beneficial Owners. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise required by
law.
Section 7. Dividends. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of Incorporation, if
any, may be declared by the Board of Directors at any regular or special
meeting, and may be paid in cash, in property, or in shares of the Corporation's
capital stock. Before payment of any dividend, there may be set aside out of any
funds of the Corporation available for dividends such sum or sums as the Board
of Directors from time to time, in its absolute discretion, deems proper as a
reserve or reserves to meet contingencies, or for purchasing any of the shares
of capital stock, warrants, rights, options, bonds, debentures, notes, scrip or
other securities or evidences of indebtedness of the Corporation, or for
equalizing dividends, or for repairing
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or maintaining any property of the Corporation, or for any proper purpose, and
the Board of Directors may modify or abolish any such reserve.
Section 8. Limitations on Transfer. A written restriction on the
transfer or registration of transfer of a security of the Corporation, if
permitted by Section 202 of the DGCL and noted conspicuously on the certificate
representing the security or, in the case of uncertificated shares, contained in
the notice sent pursuant to Section 151(f) of the DGCL, may be enforced against
the holder of the restricted security or any successor or transferee of the
holder including an executor, administrator, trustee, guardian or other
fiduciary entrusted with like responsibility for the person or estate of the
holder. Unless noted conspicuously on the certificate representing the security
or, in the case of uncertificated shares, contained in the notice sent pursuant
to Section 151(f) of the DGCL, a restriction, even though permitted by Section
202 of the DGCL, is ineffective except against a person with actual knowledge of
the restriction. A restriction on the transfer or registration of transfer of
securities of the Corporation may be imposed either by the Certificate of
Incorporation or by these By-laws or by an agreement among any number of
security holders or among such holders and the Corporation. No restriction so
imposed shall be binding with respect to securities issued prior to the adoption
of the restriction unless the holders of the securities are parties to an
agreement or voted in favor of the restriction.
ARTICLE VIII
NOTICES
Section 1. Notices. Whenever written notice is required by law, the
Certificate of Incorporation or these By-Laws to be given to any director,
member of a committee or stockholder, such notice may be given by mail,
addressed to such director, member of a committee or stockholder, at such
person's address as it appears on the records of the Corporation, with postage
thereon prepaid, and such notice shall be deemed to be given at the time when
the same shall be deposited in the United States mail. Written notice may also
be given personally or by courier service, facsimile transmission, telegram,
telex or cable.
Section 2. Waivers of Notice. (a) Whenever any notice is required by
law, the Certificate of Incorporation or these By-Laws, to be given to any
director, member of a committee or stockholder, a waiver thereof in writing,
signed, by the person or persons entitled to said notice, whether before or
after the time stated therein, shall be deemed equivalent to notice. Attendance
of a person at a meeting, present by person or represented by proxy, shall
constitute a waiver of notice of such meeting, except where the person attends
the meeting for the express purpose of objecting at the beginning of the meeting
to the transaction of any business because the meeting is not lawfully called or
convened.
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(b) Neither the business to be transacted at, nor the purpose of,
any regular or special meeting of the stockholders, directors or members of a
committee of directors need be specified in any written waiver of notice unless
so required by law, the Certificate of Incorporation or these By-Laws.
ARTICLE IX
BOOKS
Section 1. Books. The Corporation shall keep in accordance with
applicable law correct and adequate books and records of account and minutes of
proceedings of the stockholders, the Board of Directors and any committees of
the Board of Directors. The Corporation shall keep in accordance with applicable
law at the office designated in the Certificate of Incorporation or at the
office of the transfer agent or registrar of the Corporation, a record
containing the names and addresses of all stockholders, the number and class of
shares held by each and the dates when they respectively became the owners of
record thereof.
Section 2. Form of Books. Any books maintained by the Corporation,
including its stock ledger, books of account and minute books, may be kept on,
or be in the form of, electronic data storage, computer discs, punch cards,
magnetic tape, photographs, microphotographs or any other information storage
device, provided that the records so kept can be converted into clearly legible
written form within a reasonable time. The Corporation shall so convert any
records so kept upon the request of any person entitled to inspect the same.
ARTICLE X
INDEMNIFICATION
Section 1 . Power to Indemnify in Actions, Suits or Proceedings
other Than Those by or in the Right of the Corporation. Subject to Section 3 of
this Article X, the Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that such person is or was a director or officer of the
Corporation, or is or was a director or officer of the Corporation serving at
the request of the Corporation as a director or officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other entity or enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding if such person
acted in good faith and in a manner such person reasonably believed to be in or
not opposed to the best interests of the Corporation, and,with respect to any
criminal action or proceeding, had no reasonable cause to believe such person's
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that such person did
not act in good faith and in a manner which such person reasonably believed to
be in or not opposed to the best interests of the Corporation, and,
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with respect to any criminal action or proceeding, had reasonable cause to
believe that such person's conduct was unlawful.
Section 2 . Power to Indemnify in Actions, Suits or Proceedings by
or in the Right of the Corporation. Subject to Section 3 of this Article X, the
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Corporation to procure a judgment in its favor by reason of the
fact that such person is or was a director or officer of the Corporation, or is
or was a director or officer of the Corporation serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other entity or
enterprise, against expenses (including attorneys' fees) actually and reasonably
incurred by such person in connection with the defense or settlement of such
action or suit if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
Corporation; except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
Section 3. Authorization of Indemnification. Any indemnification
under this Article X (unless ordered by a court) shall be made by the
Corporation only as authorized in the specific case upon a determination that
indemnification of the director or officer is proper in the circumstances
because such person has met the applicable standard of conduct set forth in
Section 1 or Section 2, and in each case Section 11, of this Article X, as the
case may be. Such determination shall be made (i) by a majority vote of the
directors who were not parties to such action, suit or proceeding, even though
less than a quorum, or (ii) if there are no such directors, or if such directors
so direct, by independent legal counsel in a written opinion, or (iii) by the
stockholders. To the extent, however, that a director or officer of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding described above, or in defense of any claim, issue or
matter therein, such person shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
therewith, without the necessity of authorization in the specific case.
Section 4. Good Faith Defined. For purposes of any determination
under Section 3 of this Article X, a person shall be deemed to have acted in
good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the Corporation, or, with respect to any
criminal action or proceeding, to have had no reasonable cause to believe such
person's conduct was unlawful, if such person's action is based on the records
or books of account of the Corporation or another enterprise, or on information
supplied to such person by the officers of the Corporation or another enterprise
in the course of their duties, or on the advice of legal counsel for the
Corporation or another enterprise or on information or records given or reports
made to the Corporation or another enterprise by an independent certified public
accountant or by an appraiser or other expert selected
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with reasonable care by the Corporation or another enterprise. The term "another
enterprise" as used in this Section 4 shall mean any other corporation or any
partnership, joint venture, trust, employee benefit plan or other entity or
enterprise of which such person is or was serving at the request of the
Corporation as a director, officer, employee or agent. The provisions of this
Section 4 shall not be deemed to be exclusive or to limit in any way the
circumstances in which a person may be deemed to have met the applicable
standard of conduct set forth in Sections 1 or 2, and in each case Section 11,
of this Article X, as the case may be.
Section 5. Indemnification by a Court. Notwithstanding any contrary
determination in the specific case under Section 3 of this Article X, and
notwithstanding the absence of any determination thereunder, any director or
officer may apply to any court of competent jurisdiction in the State of
Delaware for indemnification to the extent otherwise permissible under Sections
1 and 2, and in each case Section 11, of this Article X. The basis of such
indemnification by a court shall be a determination by such court that
indemnification of the director or officer is proper in the circumstances
because such person has met the applicable standards of conduct set forth in
Sections 1 or 2, and in each case Section 11, of this Article X, as the case may
be. Neither a contrary determination in the specific case under Section 3 of
this Article X nor the absence of any determination thereunder shall be a
defense to such application or create a presumption that the director or officer
seeking indemnification has not met any applicable standard of conduct. Notice
of any application for indemnification pursuant to this Section 5 shall be given
to the Corporation promptly upon the filing of such application. If successful,
in whole or in part, the director or officer seeking indemnification shall also
be entitled to be paid the expense of prosecuting such application.
Section 6. Expenses Payable in Advance. Expenses (including
attorneys' fees) incurred by a director or officer in defending any civil,
criminal, administrative or investigative action, suit or proceeding shall be
paid by the Corporation in advance of the final disposition of such action, suit
or proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that such
person is not entitled to be indemnified by the Corporation as authorized in
this Article X.
Section 7. Nonexclusivity of Indemnification and Advancement of
Expenses. The indemnification and advancement of expenses provided by or granted
pursuant to this Article X shall not be deemed exclusive of any other rights to
which those seeking indemnification or advancement of expenses may be entitled
under any by-law, agreement, contract, vote of stockholders or disinterested
directors or pursuant to the direction (howsoever embodied) of any court of
competent jurisdiction or otherwise, both as to action in such person's official
capacity and as to action in another capacity while holding such office, it
being the policy of the Corporation that indemnification of the persons
specified in Sections 1 and 2 of this Article X shall be made to the fullest
extent permitted by law. The provisions of this Article X shall not be deemed to
preclude the indemnification of any person who is not specified in Sections 1 or
2 of this Article X but whom the Corporation has the power or obligation to
indemnify under the provisions of the DGCL, or otherwise.
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Section 8. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director or officer of the
Corporation, or is or was a director or officer of the Corporation serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other entity or enterprise against any liability asserted against such person
and incurred by such person in any such capacity, or arising out of such
person's status as such, whether or not the Corporation would have the power or
the obligation to indemnify such person against such liability under the
provisions of this Article X.
Section 9. Certain Definitions. For purposes of this Article X,
references to "the Corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors or officers, so that any person who is or was a director or officer of
such constituent corporation, or is or was a director or officer of such
constituent corporation serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other entity or enterprise, shall
stand in the same position under the provisions of this Article X with respect
to the resulting or surviving corporation as such person would have with respect
to such constituent corporation if its separate existence had continued. For
purposes of this Article X, references to "fines" shall include any excise taxes
assessed on a person with respect to an employee benefit plan; and references to
"serving at the request of the Corporation" shall include any service as a
director, officer, employee or agent of the Corporation which imposes duties on,
or involves services by, such director or officer with respect to an employee
benefit plan, its participants or beneficiaries; and a person who acted in good
faith and in a manner such person reasonably believed to be in the interest of
the participants and beneficiaries of an employee benefit plan shall be deemed
to have acted in a manner "not opposed to the best interests of the Corporation"
as referred to in this Article X. For purposes of this Article X, the term
"officers" shall not include "Appointed Officers" as defined in Section 15 of
Article V.
Section 10. Survival of Indemnification and Advancement of Expenses.
The indemnification and advancement of expenses provided by, or granted pursuant
to, this Article X shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director or officer and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
Section 11. Limitation on Indemnification. Notwithstanding anything
contained in this Article X to the contrary, except for proceedings to enforce
rights to indemnification (which shall be governed by Section 5 hereof), the
Corporation shall not be obligated to indemnify any director or officer in
connection with a proceeding (or part thereof) initiated by such person unless
such proceeding (or part thereof) was authorized or consented to by the Board of
Directors of the Corporation.
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Section 12. Indemnification of Appointed Officers, Employees and
Agents. The Corporation may, to the extent authorized from time to time by the
Board of Directors, provide rights to indemnification and to the advancement of
expenses to Appointed Officers, employees and agents of the Corporation similar
to those conferred in this Article X to directors and officers of the
Corporation.
ARTICLE XI
AMENDMENT OF BY-LAWS
Section 1. Amendment of By-Laws. These By-Laws may be altered,
amended or repealed, in whole or in part, or new By-Laws may be adopted by the
stockholders or by the Board of Directors; provided, however, that notice of
such alteration, amendment, repeal or adoption of new By-Laws be contained in
the notice of such meeting of stockholders or Board of Directors as the case may
be. All such amendments must be approved by either the affirmative vote of the
holders of a majority in total number of votes of the outstanding capital stock
entitled to vote thereon or by a majority of the directors then in office.
Section 2. Entire Board of Directors. As used in this Article XI and
in these By-Laws generally, the term "entire Board of Directors" means the total
number of directors which the Corporation would have if there were no vacancies.
ARTICLE XII
GENERAL PROVISIONS
Section 1. Seal. The Board of Directors shall approve a corporate
seal which shall be in the form of a circle and shall bear the name of the
Corporation, the year of its incorporation and the word "Delaware." The Seal may
be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise.
Section 2. Fiscal Year. The fiscal year of the Corporation
shall be determined and may be changed by resolution of the Board of
Directors, and unless and until otherwise so determined, shall be the
calendar year.
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CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this "Agreement") dated as of December 10,
1998 is made by and between Prestige Holdings I, L.P., a limited partnership
organized under the laws of Delaware ("Transferee") and Revlon Consumer Products
Corporation, a Delaware corporation ("Transferor").
W I T N E S S E T H:
WHEREAS, Transferor is the owner of 8,479,335 shares (the "Shares") of
Class C common stock, par value $.01 per share (the "Common Stock"), of The
Cosmetics Center, Inc. (the "Company"), representing approximately 84.6% of the
issued and outstanding capital stock of the Company; and
WHEREAS, Transferor is the owner of (i) a promissory note of the
Company dated as of April 25, 1997 in the principal amount of $13.255 million
and bearing interest at the rate of 11% per annum, and (ii) an amended and
restated promissory note of the Company dated as of September 26, 1998 in the
principal amount of $7 million and bearing interest at the rate of 9.25% per
annum, in each case, as amended as of the date hereof to, among other things,
have a term of less than one (1) year (the "Intercompany Debt "); and
WHEREAS, Transferor is the owner of certain trade payables owed by the
Company to Transferor for goods sold and delivered and services provided in the
ordinary course of business by Transferor (the "Trade Payables"); and
WHEREAS, Transferor desires to contribute to Transferee, and Transferee
desires to receive such from Transferor as a contribution, the Shares, the
Intercompany Debt and $6 million of the oldest Trade Payables outstanding (the
"Assigned Trade Payables"); Transferor will retain $3.7 million of Trade
Payables (the "Retained Trade Payables"), a portion of which will be paid or
offset on or prior to the Closing (as herein defined) in accordance with Section
4(e) and the remainder of which will be evidenced by the Promissory Notes (as
herein defined) in accordance with Section 4(b), and the Transferor shall
forgive the remainder of the Trade Payables; and
WHEREAS, in consideration of the foregoing, each of the parties to this
Agreement desires to perform its respective obligations upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements hereinafter contained, the parties hereto do hereby agree as follows:
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1. Contribution and Receipt of the Shares, the Intercompany Debt and
the Assigned Trade Payables; Closing.
(a) Subject to all of the terms and conditions of this
Agreement, Transferor shall contribute the Shares, the Intercompany Debt and the
Assigned Trade Payables to Transferee, and Transferee shall receive the Shares,
the Intercompany Debt and the Assigned Trade Payables as a contribution from
Transferor, at the Closing (as hereinafter defined). In consideration for the
contribution, Transferor shall be admitted as a limited partner of Transferee in
accordance with the provisions of the Partnership Agreement (as hereinafter
defined).
(b) The closing of the contribution and receipt of the Shares,
the Intercompany Debt and the Assigned Trade Payables (herein called the
"Closing ") shall take place upon execution and delivery of this Agreement at
the offices of Transferor at 625 Madison Avenue, New York, New York 10022, and
shall be effective at the close of business on December 10, 1998, or at such
other location, time or date as may be agreed to in writing by Transferor (such
time and date of the Closing being herein called the "Closing Date").
(c) At the Closing, Transferor shall deliver to Transferee
stock certificates representing the Shares duly endorsed (or accompanied by duly
executed stock powers), the promissory notes representing the Intercompany Debt,
and an assignment of the Assigned Trade Payables, each for transfer to
Transferee. Additionally, at the Closing, Transferor and Transferee shall each
deliver to the other the agreements and documents required of them pursuant to
Schedule I hereto.
2. Representations and Warranties of Transferor. Transferor hereby
represents and warrants to Transferee, except as set forth in the Disclosure
Schedule (as defined below), as follows:
(a) Due Incorporation. Each of Transferor and the Company is a
corporation validly existing and in good standing under the laws of the State of
Delaware. The Company is duly qualified and in good standing as a foreign
corporation in each jurisdiction in which the character of the properties owned
or held under lease or license or the nature of the Company's business requires
such qualification, except where the failure to be so qualified and in good
standing shall not have a material adverse effect on the financial condition or
results of operations of the Company taken as a whole (a "Material Adverse
Effect").
(b) Due Authorization. Transferor has corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder, and the execution, delivery and performance of this Agreement by
Transferor have been duly authorized by all necessary corporate action on its
part. The Company has full corporate power and authority to own, conduct and
operate its business, assets and properties. Prior to Closing, the board of
directors of the Company has approved the transaction contemplated
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hereby pursuant to which Transferee and any "affiliate" or "associate" of
Transferee becomes an "interested" stockholder of the Company for purposes of
Section 203 of the Delaware General Corporation Law, as each such term is
defined therein.
(c) Binding Obligation. This Agreement has been duly executed
and delivered by Transferor and is the valid and binding obligation of
Transferor, enforceable against Transferor in accordance with its terms (except
as such enforcement may be limited by applicable principles of equity, and by
bankruptcy, insolvency, moratorium, receivership, conservancy, fraudulent
conveyance, liquidation and other laws affecting creditors' rights and remedies
generally).
(d) No Conflict. Except as set forth on Schedule 2(d) of the
disclosure schedule delivered by Transferor to Transferee upon the execution and
delivery of this Agreement (the "Disclosure Schedule"), the execution, delivery
and performance of this Agreement by Transferor and the consummation by
Transferor of the transactions contemplated hereby do not (i) contravene the
certificate of incorporation, bylaws or other organizational documents of
Transferor or the Company, (ii) violate, conflict with or result in a breach of
or default under any agreement, license, instrument, indenture, mortgage, lease,
judgment, decree, order or ruling to which Transferor or the Company is a party
or by which Transferor or the Company or any of their respective assets or
properties is bound, or to which the Shares are subject, or (iii) result in or
permit the creation of any lien, charge or encumbrance upon the Shares, except,
in the case of clause (ii), where such conflict, violation, breach or default,
lien, charge or encumbrance would not result in a Material Adverse Effect on the
Company. Except as set forth in Disclosure Schedule 2(d), no consents are
required in order for Transferor to enter into this Agreement or consummate the
transactions contemplated hereby, except any consent the failure of which to
secure would not result in a Material Adverse Effect on the Company. The
execution, delivery and performance of a financing agreement which refinances
all amounts owed under the Company's existing Credit Agreement with Bank of
America Business Credit, as amended to the date hereof, providing for revolving
credit secured by the Company's inventory, receivables, tangible and intangible
assets would not violate, conflict with or result in a breach or default under
any agreement, license, indenture, mortgage, lease, judgment, order or ruling to
which the Company is a party or by which the Company or any of its assets is
bound, except where such conflict, violation, breach or defaults would not
result in a Material Adverse Effect on the Company.
(e) No Violation of Law; Regulatory Approvals. The execution,
delivery and performance of this Agreement by Transferor and the consummation by
Transferor of the transactions contemplated hereby do not violate any law, rule,
regulation or governmental order or decree applicable to Transferor or the
Company, except any violations which would not have a Material Adverse Effect on
the Company. Neither Transferor nor the Company is required to file, seek or
obtain any governmental notice, filing, authorization, approval, order or
consent ("Governmental Consent") in connection with execution, delivery and
performance
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of this Agreement by Transferor, except for such Governmental Consents the
failure of which to obtain would not result in a Material Adverse Effect on
the Company.
(f) Litigation. Except as set forth on Schedule 2(f) of the
Disclosure Schedule, neither Transferor nor the Company is engaged in or a party
to, or threatened in writing with, any suit, legal action, arbitration or other
proceeding (a "Proceeding") before any court, administrative agency, arbitration
panel or other similar authority that (i) relates to or may affect the business,
assets or properties of the Company, except for Proceedings that would not
result in a Material Adverse Effect on the Company, or (ii) challenges or seeks
to prevent, delay or make illegal the transactions contemplated by this
Agreement.
(g) Shares. At the Closing, Transferor will deliver to
Transferee the Shares, free and clear of any and all liens, rights, interests,
hypothecations, violations, pledges, encumbrances, charges, agreements or
claims, and, upon delivery of the certificates for the Shares at the Closing,
Transferee will acquire valid title to the Shares, free and clear of any
security interests, hypothecations, violations, judgments or encumbrances or
"adverse claims" within the meaning of Section 8-302 of the New York Uniform
Commercial Code. The Shares are fully paid and nonassessable. The Shares are not
registered and may not be transferred except pursuant to registration or an
exemption therefrom.
(h) Capitalization of the Company. The Company's authorized
capital stock consists solely of: (i) 40,000,000 authorized shares of Class C
common stock, par value $.01 per share, of which 10,025,601 shares are issued,
outstanding, fully paid and nonassessable, 80,361 shares are reserved for
issuance under the Company's Amended and Restated 1991 Stock Option Plan (the
"1991 Plan") and 1,000,000 shares are reserved for issuance and 616,250 options
are outstanding under the Company's 1997 Stock Option Plan (the "1997 Plan");
(ii) 5,000,000 shares of Class A common stock, par value $.01 per share, none of
which is issued and outstanding; and (iii) 5,000,000 shares of Class B common
stock, par value $.01 per share, none of which is issued and outstanding. Except
as set forth on Disclosure Schedule 2(h) and except for this Agreement, the 1991
Plan and the 1997 Plan, there are no outstanding options, warrants or other
rights to acquire, or any outstanding securities or obligations convertible into
or exchangeable for, or any voting agreements with respect to, any shares of
capital stock of the Company. The Company has no subsidiaries.
(i) Ownership and Condition of Property. Except as set forth
on Disclosure Schedule 2(i), the Company owns or leases all material assets used
in the conduct its business as presently conducted. To Transferor's knowledge,
all of the Company's assets are in all material respects in good operating
condition and repair, ordinary wear and tear excepted.
(j) Trade Payables. At the Closing before the contribution by
Transferor to Transferee of the Assigned Trade Payables, the total amount of the
Trade Payables owed by the Company to Transferor or any of its Affiliates shall
not be less than $11.1 million.
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(k) Employee Benefit Plans and Agreements.
(i) Schedule 2(k) of the Disclosure Schedule contains a true
and complete list of, and the Transferor has delivered a complete and accurate
copy to Transferee of, each material "employee benefit plan" within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") of the Company, and each material stock purchase, stock
option, severance, employment, change in control, fringe benefit, bonus,
incentive, deferred compensation and all other material employee benefit plans,
agreements, programs, policies or other arrangements of the Company, whether or
not subject to ERISA, under which any employee or former employee, or the
spouse, beneficiary or dependent of any employee or former employee, of the
Company has any present or future right to benefits or under which the Company
has any present or future liability. All such plans, agreements, programs,
policies and arrangements are hereinafter referred to as "Employee Benefit
Plans."
(ii) With respect to the Employee Benefit Plan intended to
qualify under Code (section)401(a), (1) an application for a determination
letter filed in August 1998 is pending with the Internal Revenue Service, (2)
the Company has not engaged in a transaction prohibited by Code(section)4975 or
Section 406 of ERISA, and (3) Transferor has delivered to Transferee the most
recent valuation that was delivered by the third party administrator for such
Employee Benefit Plan.
(iii) Except for any failure to so maintain or to take or
fail to take action as would not result in a Material Adverse Effect on the
Company, the Employee Benefit Plans have been maintained in all material
respects in accordance with their terms, the requirements of ERISA, the Code
(where applicable), and all other applicable laws and no Employee Benefit Plan
has taken, or has failed to take, any action that could result in the imposition
of any excise tax, penalty, judgment or assessment.
(iv) The Company does not sponsor a plan subject to Title IV
of ERISA or Code (section)412, nor does the Company have a current or contingent
obligation to contribute to any multiemployer plan (as defined in Section 3(37)
of ERISA). The Company has not incurred (and no event, transaction or condition
has occurred or exists which will result in the Company incurring) any
withdrawal liability under Section 201 or 4202 of ERISA in respect of any
multiemployer plan.
(v) Except as set forth on Disclosure Schedule 2(k), the
Company has no commitment, whether formal or informal and whether legally
binding or not, to create any additional material Employee Benefit Plan or
modify any existing Employee Benefit Plan in any material respect.
(vi) There are no pending or threatened claims by or on
behalf of any Employee Benefit Plan, or by or on behalf of any individual
participants or beneficiaries of
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any such Employee Benefit Plan, alleging any breach of fiduciary duty on the
part of the Company or any of its officers, directors or employees under ERISA
or any other applicable laws, or claiming benefit payments (other than those
made in the ordinary operation of such plans), nor, to Transferor's knowledge,
is there any basis for such claim, except in the case of this Section 2(k)(vi)
any such claims as would not have a Material Adverse Effect on the Company.
(l) Environment.
(i) For purposes of this Agreement, "Hazardous Substance"
shall mean any material or substance defined or identified as a hazardous
material, hazardous waste, hazardous substance, toxic substance, pollutant or
contaminant, or which is otherwise regulated, under any Environmental Law, or
which is or contains petroleum, gasoline, diesel fuel or another petroleum
hydrocarbon product; "Environmental Laws" shall collectively mean all Federal,
state and local laws, statutes, ordinances, rules, regulations, common law
rules, orders, codes, licenses, permits, decrees, judgments, directives,
guidelines, standards or the equivalent of or by any Governmental Authority and
relating to or addressing the protection of the environment or human health
(including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601 et
seq.), the Hazardous Materials Transportation Act, as amended (49 U.S.C. Section
1801 et seq.), the Resource Conservation and Recovery Act, as amended (42 U.S.C.
Section 6901 et seq.), and the regulations adopted pursuant thereto);
"Governmental Authority" shall mean the Federal government, any state or other
political subdivision thereof, exercising executive, legislative, judicial,
regulatory or administrative functions.
(ii) Except as set forth in Disclosure Schedule 2(l), to the
knowledge of Transferor (i) there has been no material treatment storage,
disposal, release or threatened release of any Hazardous Substance on or from
any of the premises of the Company in a manner which (a) has caused damage to
persons, property or resources or would result in any material liability to the
Company under any Environmental Law, or (b) is required by Environmental Law to
be investigated, cleaned up or remediated; (ii) except in accordance with
applicable Environmental Laws, during the period of time that Transferor has
owned the Shares the Company has not disposed of any Hazardous Substance and no
third party with which the Company has contracted to dispose of any Hazardous
Substance has so disposed of any such substance at any location; (iii) except as
set forth in Disclosure Schedule 2(l), there are no claims pending or threatened
by any regulatory authority or third party that the Company is in violation of
or non-compliance with any Environmental Law or that the Company is liable to
any party for property damage, personal injury or otherwise as a result of the
presence of Hazardous Substances at or from the Company's premises or as a
result of the Company's operations; and (iv) the Company is in compliance in all
material respects with all Environmental Laws and possesses all permits required
by Environmental Laws and all such permits are currently in effect, except for
any exceptions to (i), (ii), (iii) or (iv) as would not result in a Material
Adverse Effect on the Company.
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(m) Labor Matters. The Company is not a party to any
collective bargaining agreement or other contract or commitment to any labor
union or association representing any employee of the Company. During the period
of time that Transferor has owned the Shares, no such agreement has been
requested of management of the Company by, or is under discussion by management
of the Company with, any group of employees or others not covered by any such
agreement.
(n) Lease Payments. Except as set forth in Disclosure
Schedule 2(n), (i) Company has paid any and all amounts due pursuant to all real
property leases under which it is lessee or sublessee, and is not otherwise in
default thereunder, and (ii) the Transferor has no knowledge of any event
(including but not limited to the execution and delivery of this Agreement)
that, with the giving of notice or lapse of time or both, would be a default
under any such lease, except in the case of (i) for any amounts in dispute and
except in the case of (ii) for any defaults that would not have a Material
Adverse Effect on the Company.
(o) Affiliate Agreements. Except as disclosed in Disclosure
Schedule 2(o), Company is not party to any agreement with, or requiring the
performance from and after the Closing Date of any obligations by or for the
benefit of, Transferor or any other Affiliate of the Transferor. For purposes of
this Agreement, "Affiliate" shall mean any person that, directly or indirectly,
controls, is controlled by or is under common control with, the first mentioned
person.
(p) Services Agreement. There are no services provided by
Transferor or any Affiliate of Transferor that are not contemplated by the
Services Agreement dated April 25, 1997 (the "Service Agreement") by and between
the Company and Transferor.
(q) Supply Agreement. The Transferor presently sells
inventory to the Company pursuant to the Supply Agreement dated April 25, 1997
(the "Supply Agreement") by and between the Company and Transferor, as amended
as provided herein.
(r) Letters of Credit. Other than as set forth on Disclosure
Schedule 2(r), there are no letters of credit or bank guarantees presently used
by the Company in connection with its business.
(s) SEC Documents. To Transferor's knowledge, except as set
forth on Disclosure Schedule 2(s), since April 25, 1997 the Company has filed
all required forms, statements, schedules, exhibits, reports and other documents
with the Securities and Exchange Commission ("SEC") required to be filed by it
pursuant to the Federal securities laws and the SEC rules and regulations
thereunder, other than any such failure to file as would not have a Material
Adverse Effect on the Company (as such documents have since the time of their
filing been amended, the "Company SEC Documents"). To Transferor's knowledge, as
of their respective dates, the Company SEC Documents complied in all material
respects with the
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requirements of the Securities Act of 1933, as amended (the "Securities Act"),
or the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as the
case may be, and the rules and regulations of the SEC thereunder applicable to
such Company SEC Documents or such other forms, reports or other documents, as
of their respective dates and none of the Company SEC Documents contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, other than any
non-compliance, untrue statements or omissions that would not result in a
Material Adverse Effect on the Company.
(t) Employment Agreements, Consulting Agreements and
Severance Agreements. Except as set forth in Disclosure Schedule 2(t), the
Company is not a party to (i) any written employment or consulting agreements
with any employees or consultants pursuant to which the Company is obligated to
pay in excess of $100,000 after the Closing Date, or (ii) any written severance
or separation agreement with any former employee pursuant to which the Company
is obligated to pay in excess of $100,000 after the Closing Date.
(u) Intercompany Debt and Assigned Trade Payables. The
Intercompany Debt and Assigned Trade Payables have not been sold, pledged,
assigned or transferred by Transferor and as of the date hereof are free and
clear of all liens and encumbrances.
3. Representations and Warranties of Transferee. Transferee
hereby represents and warrants to Transferor as follows:
(a) Due Formation; Non-Contravention. Transferee is a limited
partnership validly existing and in good standing under the laws of the State of
Delaware.
(b) Due Authorization. Transferee has the power and authority
as a limited partnership to execute and deliver this Agreement and to perform
its obligations hereunder. The execution, delivery and performance of this
Agreement by Transferee have been duly authorized by all necessary partnership
action on the part of Transferee.
(c) Binding Obligation. This Agreement has been duly executed
and delivered by Transferee and is the valid and binding obligation of
Transferee, enforceable against it in accordance with its terms (except as such
enforcement may be limited by applicable principles of equity, and by
bankruptcy, insolvency, moratorium, receivership, conservancy, fraudulent
conveyance, liquidation and other laws affecting creditors' rights and remedies
generally).
(d) No Conflict. Neither the execution, delivery and
performance of this Agreement by Transferee, nor the consummation by it of the
transactions contemplated hereby (i) contravene the certificate of limited
partnership or other organizational documents of Transferee or (ii) violate,
conflict with or result in a breach of or default under any agreement,
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license, instrument, indenture, mortgage, lease, judgment, decree, order or
ruling to which Transferee is a party or by which Transferee or any of its
assets or properties is bound, except in the case of clause (ii) where such
conflict, violation, breach or default, lien, charge or encumbrance would not
adversely affect the business, assets or properties of Transferee.
(e) No Violation of Law; Regulatory Approvals. Neither the
execution, delivery and performance of this Agreement by Transferee, nor the
consummation of the transactions contemplated hereby, will violate any law, rule
or regulation applicable to Transferee which violation would adversely affect
the business, assets or properties of Transferee. Transferee is not required to
seek any Governmental Consent in connection with the execution, delivery and
performance of this Agreement, except for such Governmental Consents the failure
of which to obtain would not adversely affect the business, assets or properties
of Transferee.
(f) Litigation. Transferee is not engaged in or a party to,
or threatened with, any Proceeding before any court, administrative agency,
arbitration panel or other similar authority that relates to or may adversely
affect the business, assets or properties of Transferee, and Transferee is not a
party to, or threatened with any such Proceeding that may have the effect of
preventing, delaying, making illegal or otherwise interfering with the
transactions contemplated by this Agreement.
(g) Investment Intent. Transferee is and will be acquiring
the Shares for its own account, for investment and not with a view to the
distribution thereof within the meaning of the Securities Act. Transferee has no
present intention of selling, distributing or otherwise disposing of the Shares.
Transferee is an "accredited investor" as such term is defined in Rule 501
promulgated under the Securities Act. Transferee understands that (i) the Shares
have not been registered under the Securities Act and (ii) the Shares must be
held by Transferee indefinitely unless a subsequent disposition thereof is
registered under the Securities Act or is exempt from such registration and
agrees not to dispose of the Shares other than pursuant to such registration or
exemption. Transferee understands that there is a legend on the certificates
delivered hereunder stating that the Shares have not registered under the
Securities Act and, therefore, cannot be offered, sold or transferred unless
they are registered under the Securities Act or an exemption from such
registration is available.
(h) Access to Information. Transferee acknowledges that it
and its representatives have been permitted full and complete access to the
filings of the Company under the Securities Act and the Exchange Act, and that
it and its representatives have had a full opportunity to meet with the officers
and employees of Transferor and the Company to discuss the Company and have had
access to all relevant books, records and documents. Transferee acknowledges
that none of
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Transferor or any of its Affiliates or any other person has made any
representation or warranty, expressed or implied, as to the accuracy or
completeness of any information regarding the businesses of the Company or the
Shares, except as expressly set forth in this Agreement and the schedules
hereto, and none of Transferor or any of its Affiliates shall have or be subject
to any liability to Transferee, its representatives or any other person
resulting from the distribution to Transferee or its representatives, or their
use of, any such information, documents or materials made available to
Transferee or its representatives in any form in expectation of the transactions
contemplated hereby except as and to the extent expressly provided in this
Agreement.
4. Covenants of the Parties.
(a) Partnership Agreement. Transferor shall execute and
deliver at the Closing a partnership agreement (the "Partnership Agreement")
setting forth the organization of Transferee and the rights and obligations of
its partners in the form attached hereto as Exhibit A.
(b) Promissory Notes. Transferor shall cause the Company to
execute and deliver to Transferor at the Closing two promissory notes (the
"Promissory Notes"). One Promissory Note shall be payable to Transferor in the
amount of $850,000, representing the obligation of the Company to repay to
Transferor $850,000 of the most current outstanding Retained Trade Payables due
from the Company to Transferor, which are amounts due in the ordinary course
under the Supply Agreement, in the form attached hereto as Part I to Exhibit B.
The Second Promissory Note shall be payable to Transferor in the amount of
$850,000, representing the obligation of the Company to repay to Transferor
$850,000 of the next most current outstanding Retained Trade Payables due from
the Company to Transferor, which are amounts due in the ordinary course under
the Supply Agreement, in the form attached hereto as Part II to Exhibit B.
Transferor will forgive the remainder of the Trade Payables owed by the Company
to Transferor, after giving effect to the payments and offset to be made in
accordance with Section 4(e), on or prior to the Closing. At the Closing,
Transferor will assign the Assigned Trade Payables to the Transferee.
(c) Leases.
(i) At the Closing, Transferor shall cause the Company to
transfer and assign to Transferor the real property lease with respect to the
Company store located on Fifth Avenue, New York City, and, simultaneously
therewith, Transferor, as sublessor, and the Company, as sublessee, shall enter
into a sublease for such store terminating on December 31, 1999, which sublease
shall provide that between the Closing Date and the termination date of the
sublease the Company will operate such store in the ordinary course of business
and the Company will transfer and assign to Transferor all fixtures and
inventories owned by the Company or Transferor located at such store on such
termination date.
(ii) At the Closing, Transferee shall cause the Company to
(x) amend the leases for the Company stores located in Irvington, New Jersey,
Phoenix, Arizona, and Oxford, North Carolina (the "Leases") to provide that each
of the Leases shall terminate on December 31, 1999, time being of the essence
(the "1999 Termination Date"), (y) operate
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such stores in the ordinary course of business until the 1999 Termination Date
and (z) transfer and assign to Transferor all fixtures and inventories owned by
the Company or Transferor located at such store on such 1999 Termination Date.
(iii) It is expressly understood and agreed that the Company
will retain the rights under the lease for the Company store located in Apex,
North Carolina for the balance of the lease term, together with any renewal
options or extensions thereof.
(d) Supply Agreement. The Supply Agreement shall be amended
(i) to provide that it may be terminated by Transferor (x) immediately for
non-payment by the Company of amounts due and payable with respect to goods and
services provided after the Closing Date; and (y) immediately for failure to
comply with covenants relating to wholesaling products; and (ii) to waive,
solely in connection with the consummation of the transactions contemplated by
this Agreement, the change in control provisions in Section 2.02 of the Supply
Agreement to the extent required for such provisions not to be triggered by and
on the occasion of the consummation of the such transactions.
(e) Payment of Balance of Retained Trade Payables. On or
prior to the Closing, Transferee shall cause the Company to pay to Transferor an
amount equal to $1.5 million, by certified check or wire transfer of immediately
available funds, in partial payment of the Retained Trade Payables. On or prior
to the Closing, the Transferor will offset $100,000 owed by it to the Company
against the Trade Payables. From and after the Closing, Transferee shall cause
the Company to pay to Transferor the balance of the Retained Trade Payables
(other than the Retained Trade Payables represented by the Promissory Notes) in
accordance with the payment terms thereof.
(f) Board of Directors. Transferor shall arrange at the
Closing for (i) two (2) designees of Transferee (the "Transferee Designees") to
be elected to the board of directors of the Company (the "Board"), (ii) the
Transferee Designees to be elected to fill two of the seats on the Executive
Committee of the Board, and (iii) the amendment of the by-laws of the Company to
provide that no action of the Board, other than the filling of vacancies on the
Board or its Executive Committee, may be taken without the affirmative vote of
85% of the full Board.
(g) Non-Competition. Transferor hereby agrees that for three
(3) years after the Closing Date, Transferor will not own or operate a retail
outlet store in the United States that sells cosmetics, fragrances or health and
beauty products. Notwithstanding the foregoing, Transferor may operate (i) full
priced "flagship" stores operating under the "Revlon" name or any other
trademarks or tradenames used by Transferor in its business, (ii) employee
stores located on or near Transferor's premises, (iii) retail stores acquired
through the acquisition of an entity, provided that the purpose of such
acquisition is not to acquire retail stores and that no more than 25% of such
acquired entity's gross sales are derived from retail sales of cosmetics,
fragrances, and/or health and beauty products, (iv) "tent" and warehouse sales
having a duration of ten (10) days or less, and
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(v) stores located in or adjacent to hair, nail and/or beauty salons owned or
operated by Transferor which are incidental to the business of the salon.
5. Further Agreements and Assurances.
(a) Further Assurances. Transferor and Transferee shall
execute and deliver any and all documents or instruments reasonably necessary or
desirable to effectuate the transactions contemplated by this Agreement or any
of the agreements executed and delivered in connection herewith. Without
limitation of the foregoing, (i) Transferor shall use commercially reasonable
efforts to assist Transferee in discussions with any landlords that are party to
lease agreements with the Company that may be necessary or advisable as a result
of the transactions contemplated by this Agreement; provided, however, that
Transferor does not hereby make any covenant or undertaking that any consents
that may be required will be secured and provided further that Transferor shall
not be required to take any actions that would obligate Transferor to (x) incur
any third party costs or expenses or (y) commence or join any litigation or
similar proceeding; and (ii) after the Closing, Transferee shall and shall cause
the Company to provide Transferor and its agents with access during normal
business hours to the Company's Columbia, Maryland facility, and to any other
property of the Company as is reasonably necessary, in order for Transferor to
remove Transferor's routing equipment located on the Company's property.
Transferor will be responsible for any actual damage to the Company's property
that occurs as a direct result of such removal of Transferor's equipment by
Transferor and its agents.
(b) Post-Closing Access by Transferor and Transferee.
Transferee shall and shall cause the Company to cooperate with Transferor to
make available to Transferor financial, tax and other information (including
reasonable access to books and records of the Company) for periods up to and
including the Closing Date, reasonably required by Transferor in connection with
any audit or other investigation by any taxing authority or for tax compliance
or any required reports or submissions to governmental bodies or judicial
authorities with respect to the Company, or its business and operations or for
the purpose of defending third party claims under Section 7(c) hereof.
Transferor shall cooperate with Transferee and the Company to make available to
Transferee and the Company financial, tax and other information for periods up
to and including the Closing Date, not delivered to the Company or Transferee on
the Closing Date, reasonably required by Transferee and the Company in
connection with any audit or other investigation by any taxing authority or for
tax compliance or any required reports or submissions to governmental bodies or
judicial authorities with respect to the Company, or for the purpose of
defending third party claims under Section 7(c) hereof.
(c) Post-Closing Cooperation. Transferor shall use
commercially reasonable efforts to assist Transferee in the transition to its
own service providers of services provided by Transferor to the Company pursuant
to the Services Agreement prior to the Closing, provided that in no event shall
Transferor be required to perform any such services
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for the Company post-Closing. The Services Agreement shall be terminated as of
the Closing Date.
(d) Directors and Officers. Transferor will indemnify the
Company for any actual losses arising out of matters that occurred up to and
including the Closing Date if the Company is required after the Closing Date
pursuant to and subject to the terms and conditions of Article X of its By-Laws
and any applicable Delaware laws to indemnify any of Harvey Rosenthal, David
Dinkins, Jerry W. Levin, William J. Fox, Donald Drapkin, George Fellows, Richard
Halperin, Wade H. Nichols or Steven Isko by reason of the fact that any such
person was a director or officer of the Company up to and including the Closing
Date. Transferor may secure at its own cost and expense a "runoff" insurance
policy for the Company providing directors and officers liability coverage for
the matters, individuals and periods set forth in the preceding sentence (the
"Runoff Policy"). Transferee acknowledges that prior to Transferor's ownership
of the Company certain insurance policies which included coverage for directors
and officers were purchased by the Company (the "Predecessor Policies").
Transferee agrees that it shall cause the Company to grant Transferor the
authority to file claims with the insurers under the Predecessor Policies and
the Runoff Policy and pursue the benefits of such coverage to the extent that
such Predecessor Policies and the Runoff Policy provide coverage for directors
and officers liability claims for which Transferor has agreed to indemnify the
Company pursuant to this Section 5(d). Transferee agrees that it shall cause the
Company to assign to Transferor all benefits of the insurance under the
Predecessor Policies and the Runoff Policy to the extent such benefits are
actually received for the directors and officers liability claims for which
Transferor has agreed to indemnify the Company pursuant to this Section 5(d).
Transferee agrees to aid and to cause the Company to aid and support Transferor
in pursuit of the insurance under the Predecessor Policies and the Runoff Policy
which shall include, but not be limited to, supplying records, personnel, and,
if necessary, filing lawsuits or claims against insurers to collect the
insurance under the Predecessor Policies and the Runoff Policy and Transferor
shall reimburse Company and Transferee for its third party costs incurred in
connection with such assistance to Transferor. Transferor shall be entitled to
control the proceedings for any such lawsuits or claims. The indemnification
provided under this Section 5(d) shall survive indefinitely.
(e) Publicity. No press releases or filings with respect to
this Agreement and the transactions contemplated hereby shall be made by either
party without the prior approval of the other party (which approval shall not be
unreasonably withheld) except as required by law or the rules of any stock
exchange.
(f) Confidentiality. The Confidentiality Agreement dated
September 25, 1998, between the Company and York Management Services, Inc. shall
remain in full force and effect.
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(g) Use of Revlon Name. From and after the Closing date,
Transferee shall cause the Company to cease to use the "Revlon" name as a
tradename in any of its stores, and shall have no right, title or interest in
the "Revlon" name following the Closing.
6. Survival of Representations and Warranties. With the
exception of the representations and warranties set forth in Sections 2(c), 2(g)
and 2(u) hereof and Section 8, which shall survive the Closing forever and the
representations set forth in Section 3 hereof, which shall survive for a period
of six (6) months from the Closing Date, the other representations and
warranties set forth in this Agreement (the "Non-Surviving Reps and Warranties")
shall not survive the Closing Date and after the Closing Date no party shall
have any right to make a claim for indemnification or otherwise with respect to
the breach or inaccuracy of any Non-Surviving Reps and Warranties.
7. Indemnification.
(a) Indemnification by Transferor. Transferor hereby agrees
to indemnify, defend, save and hold Transferee and its Affiliates and their
respective directors, officers, employees, representatives and agents and each
of the successors and assigns of any of the foregoing (the "Transferee Group")
harmless from and against any and all damage, liability, loss, expense,
assessment, judgment or deficiency of any nature whatsoever (including, without
limitation, attorneys' fees and other costs and expenses incident to any
Proceeding) (together, "losses") incurred or sustained by any member of the
Transferee Group which shall arise out of or result from (1) any breach or
inaccuracy of any representation or warranty set forth in Sections 2(c), 2(g)
and 2(u), and (2) the nonfulfillment or breach of any agreement, obligation or
covenant of Transferor contained herein, in each case after offset by any
related insurance proceeds directly related to the matter for which
indemnification is claimed (net of increased insurance premiums and charges
related directly to such losses) to which any member of the Transferee Group is
entitled under its insurance policies (it being understood that no member of the
Transferee Group has any obligation hereunder to carry insurance coverage for
any particular or general group of risks), or other third party recovery
received by any member of the Transferee Group related to the matter for which
indemnification is claimed (it being understood that no member of the Transferee
Group has any obligation hereunder to institute a Proceeding or take any other
action detrimental to any member of Transferee Group to seek such recovery).
(b) Indemnification by Transferee. Transferee hereby agrees
to indemnify, defend, save and hold harmless Transferor and its Affiliates and
their respective directors, officers, employees, representatives and agents and
each of the successors and assigns of any of the foregoing (the "Transferor
Group") from and against any and all losses incurred or sustained by any member
of the Transferor Group which shall arise out of or result from (1) any breach
or inaccuracy of any representation or warranty set forth in Section 3 hereof
and (2) the nonfulfillment or breach of any agreement, obligation or covenant of
Transferee under this Agreement, in each case after offset by any related
insurance proceeds directly related to
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the matter for which indemnification is claimed (net of increased insurance
premiums and charges related directly to such losses) to which any member of the
Transferor Group is entitled under its insurance policies (it being understood
that no member of the Transferor Group has any obligation hereunder to carry
insurance coverage for any particular or general group of risks), or other third
party recovery received by any member of the Transferor Group related to the
matter for which indemnification is claimed (it being understood that no member
of the Transferor Group has any obligation hereunder to institute a Proceeding
or to take any other action detrimental to any member of the Transferor Group to
seek such recovery).
(c) Tax Indemnification.
(i) Transferor hereby agrees to indemnify, defend, save and
hold harmless the Transferee Group from and against any and all Federal and
state and local (but only to the extent the Company filed state and local
consolidated or combined income or franchise Tax returns with a group in which
Transferor was a member or would have been included in a state and local
consolidated or combined income or franchise Tax return in which Transferor was
a member if the Shares had been owned by Transferor for all periods prior to the
Closing Date) income Tax liabilities relating to periods ending on or prior to
the Closing Date, including, without limitation, Taxes owed by any other member
of a consolidated group in which the Company and Transferor joined pursuant to
Treasury Regulation (section)1.1502-6 or as a transferee or successor, by
contract or otherwise. For purposes of this Agreement "Tax" or "Taxes" mean all
Federal, state, local or foreign income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental, customer duties, franchise, profits, withholding, social
security, unemployment, disability, real property, personal property, intangible
property, sales, use or transfer, registration, value added, alternative or
add-on minimum, estimated or other taxes of any kind whatsoever, including any
interest, penalty or additions thereto, whether disputed or not. A claim for
indemnification may be made under this Section 7(c) at any time during the
applicable Tax statutory period of limitations with respect to such Tax claim.
(ii) Tax Matters. The following provisions shall govern the
allocation of responsibility as between Transferee and Transferor for certain
tax matters following the Closing Date:
(A) Filing of Tax Returns. Transferor shall prepare
or cause to be prepared and file or cause to be filed all Tax returns
for the Company for all Tax periods ending on or prior to the Closing
Date which are required to be filed before or after the Closing Date.
Transferee shall prepare and file or cause to be prepared and filed any
Tax returns of the Company for tax periods which begin before the
Closing Date and end after the Closing Date. Transferor shall pay all
Federal and state and local (but only to the extent the Company filed
state and local consolidated or combined income or franchise Tax
returns with a group in which Transferor was a member) Taxes shown to
be due on such income Tax returns.
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(B) Cooperation on Tax Matters. Transferee and
Transferor shall cooperate fully, as and to the extent reasonably
requested by the other party, in connection with the filing of Tax
Returns pursuant to this Section and any audit, litigation or other
proceeding with respect to Taxes. Such cooperation shall include the
retention and (upon the other party's reasonable request) the provision
of records and information which are reasonably relevant to any such
audit, litigation or other proceeding and making employees available on
a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. Transferee and
Transferor agree (x) to retain, and cause the Company to retain, all
books and records with respect to Tax matters pertinent to the Company
relating to any taxable period beginning before the Closing Date until
the expiration of the statute of limitations (and, to the extent
notified by Transferee or Transferor, any extensions thereof) of the
respective taxable periods, and to abide, and to cause the Company to
abide, by all record retention agreements entered into with any taxing
authority, and (y) to give the other party reasonable written notice
prior to transferring, destroying or discarding any such books and
records and, if the other party so reasonably requests, Transferee and
Transferor, as the case may be, shall allow, and Transferee shall cause
the Company to allow, the other party to take possession of such books
and records. Transferee and Transferor further agree, upon request, to
use their commercially reasonable efforts to obtain any certificate or
other document from any governmental authority or any person as may be
necessary to mitigate, reduce or eliminate any Tax that could be
imposed (including, but not limited to, with respect to the
transactions contemplated hereby). Transferee and Transferor further
agree, upon request, to provide the other party with all information
that either party may be required to report pursuant to Code
(section)6043 and all Treasury Department Regulations promulgated
thereunder.
(C) Certain Taxes. All transfer, documentary, sales,
use, stamp, registration and other such Taxes and fees (including any
penalties and interest) incurred in connection with this Agreement
(including any New York State Real Estate Transfer Tax, New York City
Transfer Tax and any similar tax imposed in other states or
subdivisions), shall be paid by Transferor when due, and Transferor
will, at its own expense, file all necessary Tax returns and other
documentation with respect to all such transfer, documentary, sales,
use, stamp registration and other Taxes and fees, and, if required by
applicable law, Transferee will, and will cause its Affiliates to, join
in the execution of any such Tax returns and other documentation.
(D) Tax Sharing Agreements. Notwithstanding the
provisions of any tax sharing agreements, tax powers of attorney or
similar agreements in effect on the date hereof with respect to or
involving the Company and Transferor and its Affiliates relating to
Taxes (the "Tax Agreements"), Transferor shall be responsible for, and
shall indemnify the Company for, any Taxes, as and to the extent
provided in Section
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7(c) hereof, and Company shall have no liability with respect to such
Taxes under the Tax Agreements.
(E) Audits. Transferor will conduct any Federal,
state or local (but only to the extent the Company filed state and
local consolidated or combined income or franchise Tax returns with a
group in which Transferor was a member or would have been included in a
state and local consolidated or combined income or franchise Tax return
in which Transferor was a member if the Shares had been owned by
Transferor for all periods prior to the Closing Date) income Tax
audits. Transferor agrees not to settle any Federal income or state or
local (but only to the extent the Company filed state and local
consolidated or combined income or franchise Tax returns with a group
in which Transferor was a member or would have been included in a state
and local consolidated or combined income or franchise Tax return in
which Transferor was a member if the Shares had been owned by
Transferor for all periods prior to the Closing Date) income Tax audit
in a manner that would adversely affect the Company after the Closing
Date unless such settlement would be reasonable in the case of a person
that owned the Company both before and after the Closing Date, and
Transferor will advise and consult with Transferee prior to such
settlement. Transferee shall have the sole right to represent the
Company in any Tax audit or administrative or court proceeding for all
other taxable periods and to employ counsel of its choice at its own
expense.
(d) ERISA Indemnification. (i) Transferor hereby agrees to
indemnify, defend, save and hold harmless the Transferee Group from and against
any and all losses, including, without limitation, withdrawal or underfunding
liabilities, arising out of any employee benefit plan (other than the Employee
Benefit Plans) maintained or sponsored by any entity affiliated with the Company
prior to the Closing under Section 414(b), (c), (m) or (o) of the Code, to the
extent such losses arise solely as a legal result of such affiliation. A claim
for indemnification may be made under this Section 7(d) at any time during the
applicable ERISA statutory period of limitations with respect to such claim.
(ii) With respect to the Employee Benefit Plan intended to
qualify under Section 401(a) of the Code, immediately following the Closing,
Transferee agrees to file a Power of Attorney Form 2848 with the Internal
Revenue Service designated Steven H. Sholk as power of attorney in place of
Kenneth J. Raphael, E. Maureen Olson and Therese Michaels-Boyle. Transferee
agrees to indemnify the Company, Transferor, Kenneth J. Raphael, E. Maureen
Olson and Therese Michaels-Boyle for any liability arising out of its failure to
comply with this Section 7(d)(ii).
(e) Third-Party Claims.
(i) Promptly after receipt by an indemnified party under
Section 7(a), (b), (c) or (d) hereof of notice of any claim or
Proceeding for which it may seek indemnification hereunder, such
indemnified party shall, if a claim is to be made
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against an indemnifying party under such Section, give notice to the
indemnifying party of the commencement of such claim or Proceeding,
but the failure to notify the indemnifying party will not relieve the
indemnifying party of any liability that it may have to any
indemnified party, except to the extent that the indemnifying party
demonstrates that the defense of such claim or Proceeding is
prejudiced by the indemnifying party's failure to receive such notice.
(ii) If an indemnified party gives notice to the
indemnifying party of the commencement of such claim or Proceeding
pursuant to Section 7(e)(i), the indemnifying party shall be entitled
to participate in such claim or Proceeding, and, to the extent that it
wishes (unless the indemnifying party is also a party to such claim or
Proceeding and the indemnified party determines in good faith that
joint representation would result in a conflict of interest), to assume
the control of the investigation and defense of such claim or
Proceeding with counsel reasonably satisfactory to the indemnified
party and, after notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or
Proceeding, the indemnifying party shall not, as long as it diligently
conducts such defense, be liable to the indemnified party under this
Section 7 for any fees of other counsel or any other expenses with
respect to the defense of such claim or Proceeding. If the indemnifying
party assumes the defense of a claim or Proceeding, (1) no compromise
or settlement of such claim or Proceeding may be effected by the
indemnifying party without the indemnified party's consent unless the
sole relief provided is monetary damages that are paid in full by the
indemnifying party; and (2) the indemnifying party shall have no
liability with respect to any compromise or settlement of such claim or
Proceeding effected without its consent.
(iii) Notwithstanding the foregoing, if an
indemnified party determines in good faith that there is a reasonable
probability that a claim or Proceeding may adversely affect it or its
Affiliates other than as a result of monetary damages for which it
would be entitled to indemnification under this Agreement, the
indemnified party may, by notice to the indemnifying party, assume the
exclusive right to defend, compromise, or settle such claim or
Proceeding, but the indemnifying party shall not pay defense costs and
shall not be bound by or liable for any determination of a claim or
Proceeding so defended or any compromise or settlement thereof.
(f) Certain Limitations. The indemnification provided for in
this Section 7 shall be the sole and exclusive remedy for damages available to
any party hereto for any breach or alleged breach of any representation,
warranty, covenant or agreement in this Agreement or given pursuant hereto.
Notwithstanding anything to the contrary contained herein, no indemnification
shall be provided under this Section 7 for lost profits or other special,
indirect, incidental, punitive or consequential damages of any kind or nature
whatsoever.
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8. Finder's Fees; Brokers. Each of Transferor and Transferee
represents and warrants to the other that, with the exception of Financo, Inc.
(whose fees shall be paid by Transferor), there are no claims (or any basis for
any claims) for brokerage commissions, finder's fees or like payments in
connection with this Agreement or the transactions contemplated hereby resulting
from any action taken by it or on its behalf. Transferor shall indemnify and
hold Transferee harmless and Transferee shall indemnify and hold Transferor
harmless with respect to the representations and warranties set forth in this
Section 8.
9. Waiver; Requirements of Writing. This Agreement cannot be
changed or any performance, term or condition waived in whole or in part except
by a writing signed by the party against which enforcement of the change or
waiver is sought. Any term or condition of this Agreement may be waived at any
time by the party hereto entitled to the benefit thereof and any such term or
condition may be modified at any time by an agreement in writing executed by the
party or parties hereto affected by such term or condition.
10. Expenses. Each of the parties hereto shall pay all the
costs incurred by it incident to the preparation, execution and delivery of this
Agreement and, except to the extent otherwise provided in this Agreement, the
performance of its obligations hereunder.
11. No Assignment. This Agreement shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
permitted assigns, but may not be assigned by either party without the prior
written consent of the other party.
12. Miscellaneous.
(a) Notices. Any notice, request, consent, waiver or other
communication required or permitted hereunder shall be effective only if it is
in writing and personally delivered or sent by certified or registered mail,
postage prepaid, reputable overnight courier (such as Federal Express) or
facsimile transmissions (with electronic confirmation) addressed or transmitted
as follows:
If to Transferor:
Revlon Consumer Products Corporation
625 Madison Avenue
New York, New York 10022
Attn: Senior Vice President and Deputy General Counsel
Fax No.: (212) 527-5693
with a copy to:
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
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New York, New York 10022
Attn: Thomas E. Constance, Esq.
Fax No.: (212) 715-8000
If to Transferee:
Prestige Holdings I, L.P.
c/o York Management Services, Inc.
764 Easton Avenue
Suite #8
Somerset, New Jersey 08873
Attn: Chairman
Fax No.: (732) 296-6606
with a copy to:
Gibbons, Del Deo, Dolan, Griffinger & Vecchione
One Riverfront Plaza
Newark, New Jersey 07102-5497
Attn: Frank B. Reilly, Esq.
Fax No.: (973) 639-6248
or such other person or address (or Fax No.) as the addressee may have specified
in a notice duly given to the sender as provided herein. Such notice or
communication shall be deemed to have been given as of the date so personally
delivered or mailed.
(b) Integration. This Agreement (including the Schedules and
Exhibits attached hereto) constitutes the entire agreement and understanding of
the parties relating to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings, whether oral or written, relating
to the subject matter hereof.
(c) Waiver. No delay or failure on the part of any party in
exercising any rights hereunder, and no partial or single exercise thereof, will
constitute a waiver of such rights or of any other rights hereunder.
(d) No Third-Party Beneficiaries. Nothing in this Agreement
will be construed as giving any person, firm, corporation or other entity, other
than the parties hereto and their successors and permitted assigns, any right,
remedy or claim under or in respect of this Agreement or any provision hereof.
(e) Applicable Law. This Agreement will be construed and
interpreted in accordance with and governed by the laws of the State of New
York, without giving effect to the conflict of laws principles thereof.
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(f) Headings; Knowledge. The headings in this Agreement are
included for convenience of reference only and shall not in any way affect the
meaning or interpretation of this Agreement. Any reference in this Agreement to
the "knowledge" of Transferor means the actual knowledge on the date hereof of
Robert K. Kretzman, Esq., Eli Shahmoon, Esq., Beverly O'Toole, Esq., Michael
Goodman and Steven Isko, Esq.
(g) Severability. If any term, provision, covenant or
condition of this Agreement or part thereof, or the application thereof to any
person, place or circumstance, shall be held to be invalid, unenforceable or
void by a court of competent jurisdiction, the remainder of this Agreement and
such term, provision, covenant or condition shall remain in full force and
effect, and any such invalid, unenforceable or void term, provision, covenant or
condition shall be deemed, without further action on the part of the parties
hereto, modified, amended and limited, and the court shall have the power to
modify, amend and limit such term, provision, covenant or condition to the
extent necessary to render the same and the remainder of this Agreement valid,
enforceable and lawful.
(h) Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
(i) Publicity. Neither Transferor nor Transferee shall make or
issue, or cause to be made or issued, any announcement or written statement
concerning this Agreement, or the transactions contemplated hereby or thereby
for dissemination to the press or general public without the prior written
consent of the other except for any announcement or written statement which is
required to be made by law or the regulations of any governmental entity or any
stock exchange or national market (except that the party required to make such
announcement shall consult with the other party concerning the timing and
content of such announcement before such announcement is made).
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IN WITNESS WHEREOF, the parties hereto have executed, or
caused to be executed by their duly authorized officers, this Agreement as of
the date first above written.
PRESTIGE HOLDINGS I, L.P.
By: Prestige I, L.L.C., its General Partner
By:
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Name:
Title:
REVLON CONSUMER PRODUCTS
CORPORATION
By:
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Name:
Title:
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EXECUTION COPY
EXHIBIT A
FORM OF PARTNERSHIP AGREEMENT
FORM OF AGREEMENT DISTRIBUTED SEPARATELY
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EXECUTION COPY
EXHIBIT B
FORM OF PROMISSORY NOTES
FORM OF NOTES DISTRIBUTED SEPARATELY
