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): January 28, 1998
PLAYTEX PRODUCTS, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Delaware 33-25485-01 51-0312772
- -------------------------------------------------------------------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
300 Nyala Farms Road, Westport, CT 06880
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 341-4000
----------------------------
N/A
- -------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
2
Item 2. Acquisition or Disposition of Assets.
On January 28, 1998, pursuant to a merger agreement (as amended, the
"Merger Agreement"), dated as of December 22, 1997, among Playtex Products,
Inc., a Delaware corporation (the "Company"), PCG Acquisition Corp., a
wholly-owned subsidiary of the Company and a Delaware corporation (the
"Subsidiary"), J.W. Childs Equity Partners L.P., a Delaware limited partnership
(the "Principal Stockholder") and Personal Care Holdings, Inc., a Delaware
corporation ("PCH"), PCH merged with and into Subsidiary and became a wholly
owned subsidiary of the Company. PCH, the Principal Stockholder and the other
holders of Common Stock, and options to acquire Common Stock, of PCH (the
"Sellers") received an aggregate of $91 million in cash and 9,257,345 shares of
Company stock. The consideration paid to Sellers was determined by negotiations
among the parties and was based on the value of the business of PCH on an
ongoing basis. The cash portion of the merger consolidation was obtained
through the Company's existing credit facilities which were amended in
connection with the acquisition.
John W. Childs, an affiliate at the Principal Stockholder, is also
an officer of the financial advisor to certain funds affiliated with Thomas H.
Lee, a director of the Company.
Personal Care Group, Inc., the principle subsidiary of PCH, owns,
manufactures and distributes a broad range of consumer product brands throughout
the United States and abroad. Personal Care Group, Inc. is headquartered in
<PAGE>
3
Montvale, New Jersey, with its principal manufacturing facilities in Sidney,
Ohio. The Company presently plans to continue operating the acquired
manufacturing facilities and equipment acquired in the merger in substantially
the same manner in which they were used immediately prior to the merger.
A copy of the press release announcing the merger is attached hereto
as Exhibit 99.1.
Item. 7. Financial Statements, Pro Forma Financial Information and Exhibits:
(a) Financial Statements of Businesses Acquired.
It is impracticable to provide the financial statements at this time.
The required financial statements will be filed as an amendment to this Form 8-K
as soon as they become available, but in no event later than 60 days after the
date that this initial report on Form 8-K must be filed.
(b) Pro Form Financial Information.
It is impracticable to provide the required pro forma financial
information at this time. The required pro forma financial information will be
filed as an amendment to this Form 8-K as soon as it becomes available, but in
no event later than 60 days after the date that this initial report on Form 8-K
must be filed.
(c) Exhibits.
2.1 - Merger Agreement, dated as of December 22, 1997, among
Playtex Products, Inc., PCG Acquisition Corp., J.W.
Childs Equity Partners L.P. and Personal Care Holdings,
Inc.
2.2 - Registration Rights Agreement, dated as of January 28,
1998 among Playtex Products, Inc. and J.W. Childs
Equity Partners, L.P.
2.3 - Stockholders Agreement, dated as of January 28, 1998,
between Playtex Products, Inc. and J.W. Childs Equity
Partners, L.P. and the other persons set forth on
Schedule A thereto.
<PAGE>
4
99.1 - Press Release of Playtex Products, Inc., dated January
29, 1998.
*99.2 - Financial Statements of PCH.
*99.3 - Pro Forma financial information with respect to
the Registrant's acquisition of PCH.
- ------------------------
* To be filed by amendment.
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: February 12, 1998
PLAYTEX PRODUCTS, INC.
By: /s/ Michael F. Goss
-------------------------------
Michael F. Goss
Executive Vice President & Chief
Financial Officer
Exhibit 2.1
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
MERGER AGREEMENT
AMONG
PERSONAL CARE HOLDINGS, INC.
J.W. CHILDS EQUITY PARTNERS, L.P.
PLAYTEX PRODUCTS, INC.
AND
PCG ACQUISITION CORP.
DATED AS OF DECEMBER 22, 1997
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE 1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . .2
ARTICLE 2 THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . .9
2.1 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
2.2 Effective Time . . . . . . . . . . . . . . . . . . . . . . . . 10
2.3 Certificate of Incorporation . . . . . . . . . . . . . . . . . 10
2.4 By-laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.5 Officers and Directors . . . . . . . . . . . . . . . . . . . . 11
2.6 Effect of Merger . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 3 CONVERSION . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.1 Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.2 Exchange of Certificates . . . . . . . . . . . . . . . . . . . 16
3.3 Exchange Procedures. . . . . . . . . . . . . . . . . . . . . . 16
3.4 Letter of Transmittal. . . . . . . . . . . . . . . . . . . . . 17
3.5 No Further Ownership Rights in Target Common Stock . . . . . . 17
ARTICLE 4 DISSENTING STOCKHOLDERS. . . . . . . . . . . . . . . . . . . . 18
4.1 Election . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.2 Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF TARGET . . . . . . . . . . . 19
5.1 Organization and Qualification . . . . . . . . . . . . . . . . 19
5.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . 19
5.3 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.4 Binding Obligation . . . . . . . . . . . . . . . . . . . . . . 20
5.5 No Defaults or Conflicts . . . . . . . . . . . . . . . . . . . 21
5.6 No Governmental Authorization or Consent Required. . . . . . . 22
5.7 Title to Properties; Liens . . . . . . . . . . . . . . . . . . 22
5.8 Real Estate. . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.9 Know-How, Trademarks, Patents, Copyrights, Etc.. . . . . . . . 25
5.10 Financial Statements . . . . . . . . . . . . . . . . . . . . . 26
5.11 Absence of Certain Changes or Events . . . . . . . . . . . . . 27
5.12 Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.13 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.14 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.15 Permits. . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
i
<PAGE>
5.16 Employment Matters . . . . . . . . . . . . . . . . . . . . . . 34
5.17 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . 35
5.18 Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.19 Environmental Compliances. . . . . . . . . . . . . . . . . . . 38
5.20 Employee Relations . . . . . . . . . . . . . . . . . . . . . . 38
5.21 Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.22 Suppliers and Customers. . . . . . . . . . . . . . . . . . . . 39
5.23 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.24 Transactions with Affiliates . . . . . . . . . . . . . . . . . 41
5.25 Full Disclosure. . . . . . . . . . . . . . . . . . . . . . . . 41
5.26 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE 6 REPRESENTATIONS AND WARRANTIES
OF THE PRINCIPAL STOCKHOLDER . . . . . . . . . . . . . . . . . 42
6.1 Full Disclosure. . . . . . . . . . . . . . . . . . . . . . . . 42
6.2 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.3 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE 7 REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND SUBSIDIARY TO TARGET. . . . . . . . . . . . 43
7.1 Organization; Standing and Power . . . . . . . . . . . . . . . 43
7.2 Articles of Incorporation and By-Laws. . . . . . . . . . . . . 43
7.3 Capital Structure. . . . . . . . . . . . . . . . . . . . . . . 43
7.4 Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.5 SEC Documents; Financial Statements. . . . . . . . . . . . . . 46
7.6 Compliance with Applicable Laws. . . . . . . . . . . . . . . . 48
7.7 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 48
7.8 Absence of Certain Changes or Events . . . . . . . . . . . . . 49
7.9 Full Disclosure. . . . . . . . . . . . . . . . . . . . . . . . 49
7.10 Financing Commitments. . . . . . . . . . . . . . . . . . . . . 50
7.11 Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
7.12 Certain Actions. . . . . . . . . . . . . . . . . . . . . . . . 50
7.13 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE 8 REPRESENTATIONS AND WARRANTIES OF THE
COMPANY AND SUBSIDIARY TO TARGET STOCKHOLDERS
8.1 Full Disclosure. . . . . . . . . . . . . . . . . . . . . . . . 51
8.2 Validity of Stock Consideration. . . . . . . . . . . . . . . . 52
ARTICLE 9 COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.1 Conduct of Business of the Acquired Companies. . . . . . . . . 52
9.2 Access to Information; Confidentiality . . . . . . . . . . . . 52
9.3 Publicity. . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.4 Filings and Authorizations . . . . . . . . . . . . . . . . . . 53
ii
<PAGE>
9.5 Notice of Events . . . . . . . . . . . . . . . . . . . . . . . 54
9.6 Further Assurances . . . . . . . . . . . . . . . . . . . . . . 55
9.7 Notice to Stockholders . . . . . . . . . . . . . . . . . . . . 55
9.8 No Section 338 Election. . . . . . . . . . . . . . . . . . . . 55
9.9 Affiliate Transactions . . . . . . . . . . . . . . . . . . . . 55
9.10 Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.11 Indemnification of Directors and Officers. . . . . . . . . . . 56
9.12 Solvency Opinion . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE 10 CONDITIONS PRECEDENT TO
OBLIGATIONS OF THE COMPANY AND SUBSIDIARY . . . . . . . . . . 57
10.1 Representations and Warranties Accurate. . . . . . . . . . . . 57
10.2 Performance. . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.3 Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.4 Other Agreements . . . . . . . . . . . . . . . . . . . . . . . 58
10.5 Corporate Matters. . . . . . . . . . . . . . . . . . . . . . . 58
10.6 HSR Act: Authorizations; Legal Prohibition. . . . . . . . . . 58
10.7 No Injunction. . . . . . . . . . . . . . . . . . . . . . . . . 59
10.8 Legal Opinion. . . . . . . . . . . . . . . . . . . . . . . . . 59
ARTICLE 11 CONDITIONS PRECEDENT TO OBLIGATIONS OF TARGET . . . . . . . . 59
11.1 Representations and Warranties Accurate. . . . . . . . . . . . 59
11.2 Performance by Others. . . . . . . . . . . . . . . . . . . . . 59
11.3 Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . 60
11.4 Other Agreements.. . . . . . . . . . . . . . . . . . . . . . . 60
11.5 HSR Act: Authorization; Legal Prohibition. . . . . . . . . . . 60
11.6 No Injunction. . . . . . . . . . . . . . . . . . . . . . . . . 60
11.7 Legal Opinion. . . . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE 12 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . 61
12.1 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . 61
12.2 Notice and Opportunity to Defend.. . . . . . . . . . . . . . . 61
12.3 Limitations on Indemnifications. . . . . . . . . . . . . . . . 63
ARTICLE 13 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . 64
13.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . 64
13.2 Survival After Termination . . . . . . . . . . . . . . . . . . 65
ARTICLE 14 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 66
14.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
14.2 Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . 66
14.3 Survival of Representations and Warranties . . . . . . . . . . 66
14.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 66
14.5 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
iii
<PAGE>
14.6 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
14.7 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 69
14.8 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
14.9 Binding Effect; Assignment . . . . . . . . . . . . . . . . . . 69
14.10 No Third Party Beneficiary. . . . . . . . . . . . . . . . . . 69
14.11 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 70
14.12 Governing Law and Jurisdiction. . . . . . . . . . . . . . . . 70
iv
<PAGE>
MERGER AGREEMENT
MERGER AGREEMENT (the "Agreement"), dated as of December 22, 1997,
among Playtex Products, Inc., a Delaware corporation (the "Company"), PCG
Acquisition Corp., a wholly-owned subsidiary of the Company and a Delaware
corporation ("Subsidiary"), J.W. Childs Equity Partners L.P., a Delaware limited
partnership (the "Principal Stockholder") and Personal Care Holdings Inc., a
Delaware corporation ("Target").
RECITALS
WHEREAS, subject to the terms and conditions of this Agreement, each
of the boards of directors of the Company, Subsidiary and Target have approved
the merger (the "Merger") of Target into Subsidiary, on the terms set forth in
this Agreement; and
WHEREAS, in furtherance of the consummation of the Merger and
transactions contemplated herein, the parties hereto desire to enter into this
Agreement;
NOW, THEREFORE, in consideration of and premised upon the various
representations, warranties, covenants and other agreements of the Company,
Subsidiary, the Principal Stockholder and Target contained in this Agreement,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby
<PAGE>
acknowledged, the Company, Subsidiary, the Principal Stockholder and Target
agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. (a) The following terms, whenever used herein,
shall have the following meanings for all purposes of this Agreement.
"Acquired Companies" means each of Target and each Target Subsidiary.
"Antitrust Law" means any law of the United States governing
competition, monopolies or restrictive trade practices, including without
limitation, the Sherman Act, the Clayton Act, the Federal Trade Commission Act
and the HSR Act, in each case including any rules and regulations thereunder.
"Balance Sheet" means the audited consolidated balance sheet of Target
as at March 29, 1997.
"Balance Sheet Date" means March 29, 1997.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which banking institutions in New York are authorized or required by law
or executive order to close.
"Cash Consideration" means $91,000,000 minus the aggregate amount of
Indebtedness of the Acquired Companies as of the Effective Time.
"Cash Consideration Per Share" means the amount determined by dividing
(a) the Cash Consideration by (b) the number of shares of Target Common
2
<PAGE>
Stock outstanding as of the Effective Time except as otherwise set forth in
Section 3.1(b).
"Closing Company Stock Price" means the average daily closing price
for shares of Company Common Stock quoted on The New York Stock Exchange for the
period of ten Business Days ending on the Business Day that is three Business
Days prior to the Effective Date.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company Common Stock" means the common stock, par value $0.01, of the
Company.
"Consideration Per Share" means (i) the Cash Consideration Per Share
plus (ii) the Stock Consideration Per Share.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations or proceedings arising under any
Environmental Law.
"Environmental Laws" means any United States (or other applicable
jurisdiction's) federal, state, local or municipal statute, law, rule,
regulation, ordinance, code, policy or rule of common law and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to the environment, (including
without limitation air, surface water, ground water, surface or subsurface land
and plant and animal life) health or safety, or to any chemical, material or
substance, the generation, release, transportation,
3
<PAGE>
disposal, storage, processing, handling or exposure to which is prohibited,
limited or regulated by any Governmental Authority.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Financial Statements" means (i) the consolidated balance sheet of
Target as at March 29, 1997 and the related consolidated statements of
operations and cash flows, stockholders' investment and changes in financial
position of Target for the year ended March 29, 1997, certified by KPMG Peat
Marwick LLP, independent certified public accountants, whose opinion thereon is
included therewith, together with the notes and schedules thereto and (ii) the
consolidated balance sheet of Target as of November 22, 1997 and the related
consolidated statement of operations and cash flows, stockholders' investment
and changes in financial position of Target for the eight months ended November
22, 1997.
"GAAP" means generally accepted accounting principles.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administration functions of or pertaining
to government, including the Securities Exchange Commission ("SEC") or any other
government authority, agency, department, board, commission or instrumentality
of the United States, any foreign government, any state of the United States or
any political subdivision thereof, and any court, tribunal or arbitrator(s) of
competent jurisdiction, and any governmental or non-governmental self-regulatory
organization, agency or authority.
4
<PAGE>
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder.
"Indebtedness" means, without duplication, (i) all indebtedness of or
any obligation of any of the Acquired Companies for borrowed money, whether
current, short-term, or long-term, secured or unsecured, (ii) all indebtedness
of any Acquired Company for the deferred purchase price for purchases of
property (other than trade payables which are not overdue by more than 90 days),
(iii) all indebtedness of any Acquired Company created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by any Acquired Company, (iv) all lease obligations of any Acquired
Company under leases which are capital leases in accordance with GAAP, (v) all
off-balance sheet financings including, without limitation, synthetic leases and
other similar financing arrangements, (vi) any payment obligations of any
Acquired Company in respect of banker's acceptances or letters of credit (other
than stand-by letters of credit in support of ordinary course trade payables),
(vii) any liability of any Acquired Company with respect to interest rate swaps,
collars, caps and similar obligation, (viii) any debt of any Acquired Company
paid or prepaid since November 22, 1997, which payment or prepayment is a breach
of the representations and warranties set forth in Section 5.11 or in violation
of Section 9.1, (ix) obligations of any Acquired Company under the Personal Care
Holdings, Inc. Long-Term Incentive Plan (the "Long-Term Plan"); (x) obligations
of any Acquired Company to make any severance payments to the persons identified
on Schedule 1.1(a) pursuant to arrangements with Target or any Acquired Company;
(xi) present, future or contingent obligations of any Acquired Company (other
than those obligations under
5
<PAGE>
the Personal Care Group, Inc. 1996 Management Incentive Plan, the Sales
Incentive Plan or bonus arrangements with employees of any Acquired Company
other than the President and Chief Executive Officer of Target, which are being
satisfied by the Surviving Corporation pursuant to Section 9.10) under (A) any
phantom stock or similar equity appreciation rights, plan or agreement, (B) any
consulting, deferred pay-out or earn-out arrangements in connection with the
purchase of any business or entity or (C) any non-competition agreement,
(xii) any accrued and unpaid interest or other charges (including any
contractual prepayment premiums, penalties or similar charges resulting from the
transactions contemplated hereby or the discharge of such obligations) with
respect to any of the foregoing and (xiii) the excess, if any, of the Acquired
Companies' Transaction Costs over $1,600,000 (where the "Acquired Companies'
Transaction Costs" means an amount equal to all costs or expenses incurred by
the Acquired Companies in connection with the transactions contemplated hereby,
including legal fees and disbursements, Hart Scott Rodino filing fees incurred
by the Principal Stockholder and any other payments to any broker, finders,
agents or similar intermediary). Indebtedness shall be reduced by all cash and
cash equivalents held by Target as of the Effective Date. Indebtedness will be
increased by the amount of severance obligation to any of the three employees
listed on Schedule 1.1(a)(i) pursuant to the letters described therein which
severance obligation arises from or is triggered by the Company's or
Subsidiary's failure to employ any such employee at the Effective Time, if such
severance obligation is in excess of the Company's standard severance policy and
then only to the extent of such excess. The amount of any such excess severance
obligation which is to be added to Indebtedness will be calculated as
6
<PAGE>
of the Effective Time as far in advance thereof as practicable. No severance
obligation under such aforesaid letters arising from any action or omission of
the Company or Subsidiary after the Effective Time shall be added to
Indebtedness.
"IRS" means the United States Internal Revenue Service.
"Knowledge" means the actual knowledge of (x) in the case of Target,
the persons listed on Schedule 1.1(b), and (y) in the case of the Company or
Subsidiary, the persons listed on Schedule 1.1(c).
"Lien" means any lien, pledge, mortgage, deed of trust, security
interest, claim, lease, license, charge, option, right of first refusal,
easement, servitude, transfer restriction, encumbrance or any other restriction
or limitation whatsoever.
"Material Adverse Effect" means a material adverse effect upon the
business, results of operations, properties, assets or condition (financial or
otherwise) of the Acquired Companies taken as a whole or of the Company and its
subsidiaries taken as a whole, as the case may be.
"Pension Plan" means each "employee pension benefit plan," as defined
in Section 3(2) of ERISA, which is sponsored by any Acquired Company with
respect to past and/or present employees of any Acquired Company.
"person" means any individual, corporation, partnership, limited
liability company, firm, joint venture, association, joint-stock company, trust,
unincorporated organization or other entity.
"Registration Rights Agreement" means the agreement so called, to be
executed on the Effective Date, among the Company and the Principal Stockholder.
7
<PAGE>
"Stock Consideration" means, if the Closing Company Stock Price is
(a) equal to or less than $12.50, 9,257,375 shares of Company Common Stock, or
(b) greater than $12.50, a number of shares of Company Common Stock derived by
dividing $115,720,000 by the Closing Company Stock Price.
"Stock Consideration Per Share" means a number of shares equal to
(a) the Stock Consideration divided by (b) the number of shares of Target Common
Stock outstanding as of the Effective Time except as otherwise set forth in
Section 3.1(b).
"Stockholders Agreement" means the agreement so called, to be executed
on the Effective Date, among the Company and the Principal Stockholder.
"Target Common Stock" means the common stock, par value $.01 per
share, of Target.
"Target Subsidiary" means an entity which Target directly or
indirectly owns or has the power to vote shares of any capital stock or other
ownership interests having voting power to elect a majority of the directors of
such entity, or other persons performing similar functions of such entity, as
the case may be.
"Taxes" means (i) any federal, state, local, foreign or other net
income, gross income, property (real or personal), sales, use, license,
franchise, employment, payroll, withholding, transfer, stamp or other tax,
custom, duty or other governmental charge, together with any interest, penalty
or addition to tax with respect thereto and (ii) any liability of any Acquired
Company for the payment of any amount described in clause (i) as a result of
such Acquired Company being a member of an affiliated or
8
<PAGE>
combined group with, or a successor to, or guarantor or transferee of, any other
person.
"Tax Return" means any return, report, statement, form or other
information required to be filed with respect to any Taxes.
"Welfare Plan" means (i) each "employee welfare benefit plan," as
defined in Section 3(1) of ERISA; (ii) any stock option, incentive, or deferred
compensation or bonus plan or arrangement; and (iii) any severance plan or
arrangement, in each case which is sponsored by any Acquired Company with
respect to past and/or present employees of any Acquired Company.
(b) The following terms shall have the meanings specified in the
indicated section of this Agreement:
Term Section
- ---- ------------
Agreement ............................. Recitals
Branded Products ...................... Section 5.11
Cashless Exercise Option
Shares ................................ Section 3.1
Cashless Exercise Price ............... Section 3.1
Company ............................... Recitals
Company Permits........................ Section 7.6
Company 1996 Financial Statements ..... Section 7.8
Constituent Corporations .............. Section 2.1
DGCL .................................. Section 2.1
Dissenting Stockholder ................ Section 4.1
Effective Date ........................ Section 2.2
Effective Time ........................ Section 2.2
Improvements .......................... Section 5.8
Leased Real Property .................. Section 5.8
Indemnified Party ..................... Section 12.2
Indemnifying Party .................... Section 12.2
Leases ................................ Section 5.8
Letter of Transmittal ................. Section 3.4
Liabilities ........................... Section 5.21
Losses ................................ Section 12.1
Merger ................................ Recitals
Merger Expenses ....................... Section 14.1
Owned Real Property ................... Section 5.8
Permits ............................... Section 5.15
Permitted Encumbrances ................ Section 5.7
Principal Stockholder ................. Recitals
Proprietary Information ............... Section 9.2
Real Property ......................... Section 5.8
Stock Plan ............................ Section 7.3
Subsidiary ............................ Recitals
Subsidiary Common Stock ............... Section 3.1
Surviving Corporation ................. Section 2.1
Surviving Corporation By-laws ......... Section 2.4
Surviving Corporation Certificate ..... Section 2.3
Surviving Corporation Common Stock .... Section 3.1
Target ................................ Recitals
Target Options ........................ Section 3.1
Title Defect .......................... Section 5.8
(c) All references herein to dollars or "$" shall be to
United States dollars.
<PAGE>
ARTICLE 2
THE MERGER
2.1 Merger. Upon the terms and subject to the conditions set
forth in this Agreement and in accordance with the Delaware General
Corporation Law (the "DGCL"), at the Effective Time, Target shall be merged
with and into Subsidiary, whereupon Subsidiary shall continue as the
surviving corporation (sometimes referred to herein as the "Surviving
Corporation") and the separate corporate existence of Target shall cease.
Target and Subsidiary are sometimes referred to herein, collectively, as the
"Constituent Corporations".
2.2 Effective Time. (a) The Merger shall be effective when a properly
executed certificate of merger (together with any other documents,
certificates and instruments required by law to effectuate and consummate the
Merger) shall be filed with the Secretary of State of the State of Delaware
(or at such other time as shall be specified in such certificate of merger),
which filing shall be made as soon as practicable after satisfaction of the
conditions set forth in Articles 10 and 11.
(b) When used herein, the term "Effective Time" shall mean the
date and time at which the Merger becomes effective and the term "Effective
Date" shall mean the date upon which the Effective Time occurs.
(c) Target, the Company and Subsidiary shall use reasonable best
efforts to consummate the Merger no earlier than the fifth or later than the
fifteenth Business Day following notification by Target, the Company and
Subsidiary that the condition set forth in Section 10.6 shall have been
satisfied, provided that at
10
<PAGE>
such time all other conditions necessary to be satisfied by Target, the Company
and Subsidiary have been satisfied or waived in accordance with Articles 10 and
11.
2.3 Certificate of Incorporation. The Certificate of Incorporation
of Subsidiary in effect immediately prior to the Effective Time shall be the
Certificate of Incorporation of the Surviving Corporation (the "Surviving
Corporation Certificate"), unless and until amended as provided by the Surviving
Corporation Certificate or by law.
2.4 By-laws. The By-laws of Subsidiary in effect immediately prior
to the Effective Time shall be the By-laws of the Surviving Corporation (the
"Surviving Corporation By-laws") unless and until altered, amended or repealed
as provided by law, the Surviving Corporation Certificate or the Surviving
Corporation By-laws.
2.5 Officers and Directors. The officers of Subsidiary immediately
prior to the Effective Time shall be the officers of the Surviving Corporation
until their successors shall have been duly elected and qualified, or as
otherwise provided in the Surviving Corporation By-laws. The directors of
Subsidiary shall be the directors of Surviving Corporation until their
successors shall have been duly elected and qualified, or as otherwise provided
in the Surviving Corporation Certificate, the Surviving Corporation By-laws or
as otherwise provided by applicable law.
2.6 Effect of Merger. (a) At the Effective Time, the Merger shall
have the effects set forth in Section 259 of the DGCL. Without limiting the
generality of the foregoing, and subject thereto: (i) the Surviving Corporation
shall possess all the rights, privileges, powers and franchises, of a public and
private nature, and shall be subject to all the restrictions, disabilities and
duties of each of the Constituent
11
<PAGE>
Corporations; (ii) all property, real, personal and mixed, and all debts due to
either Constituent Corporation on whatever account, including all choses in
action and other things belonging to the Constituent Corporations, shall be
vested in the Surviving Corporation; (iii) all property, rights, privileges,
powers and franchises, and every other interest of each of the Constituent
Corporations shall be, from and after the Effective Date, the property of the
Surviving Corporation and the title to any real estate vested by deed or
otherwise in the Constituent Corporations shall not revert or be impaired in any
way by this Agreement or the Merger provided for herein, but all rights of
creditors and all liens upon any property of either Constituent Corporation
shall be preserved unimpaired, and all debts, liabilities and duties of the
Constituent Corporations shall, from and after the Effective Time, attach to and
become the debts, liabilities and duties of the Surviving Corporation, and may
be enforced against the Surviving Corporation to the same extent as if said
debts, liabilities and duties had been incurred or contracted by the Surviving
Corporation; and (iv) all transfers vesting in the Surviving Corporation
referred to herein shall be deemed to occur by operation of law and no consent
or approval of any other person shall be required in connection with any such
transfer or vesting unless such consent or approval is specifically required in
the event of merger or consolidation by law or express provision of any
contract, agreement, decree, order or other instrument to which either or both
of the Constituent Corporations is a party or is bound.
(b) The Surviving Corporation shall assume and be liable for all
the liabilities, obligations and penalties of each of the Constituent
Corporations. No liability or obligation due or to become due, and no claim or
demand for any cause
12
<PAGE>
existing against either Constituent Corporation or any stockholder, officer or
director thereof, shall be released or impaired by the Merger. No action or
proceeding, whether civil or criminal, then pending by or against either
Constituent Corporation or any stockholder, officer or director thereof, shall
abate or be discontinued by the Merger, but may be enforced, prosecuted, settled
or compromised as if the Merger had not occurred. The Surviving Corporation may
be substituted in any such action or special proceeding in place of either
Constituent Corporation.
(c) At the Effective Time, the accounting entries with respect
to the assets, liabilities, capital, surplus and any and all other items of the
Constituent Corporations shall be taken up on the books of the Surviving
Corporation at the amounts which they, respectively, are then carried on the
books of said Constituent Corporations, subject to such adjustments as may be
appropriate in giving effect to the Merger.
(d) The employees of the Acquired Companies and Subsidiary shall
become the employees of the Surviving Corporation.
ARTICLE 3
CONVERSION
3.1 Conversion. The manner and basis of converting the shares of
common stock of each of the Constituent Corporations, and the consideration that
the holders of such shares shall receive are as follows:
(a) At the Effective Time, by virtue of the Merger and without
any action on the part of the holder thereof, each share of Target Common
13
<PAGE>
Stock issued and outstanding immediately prior to the Effective Time (other than
shares as to which appraisal rights have not been forfeited under the DGCL, if
an effective notice of exercise of appraisal rights with respect to such shares
under Section 262 of the DGCL was required and given prior to the Effective
Time) shall be converted into the right to receive the Consideration Per Share.
All certificates or other instruments representing shares of Target Common Stock
issued and outstanding immediately prior to the Effective Time shall, by virtue
of the Merger, cease to have any rights with respect to such certificates except
the right to receive, upon surrender thereof, the Consideration Per Share
represented thereby. At the Effective Time, each share of Target Common Stock
issued and outstanding prior to the Effective Time (all of which shares will be
converted into the right to receive the Consideration Per Share) shall be
canceled and retired and shall cease to exist.
(b) Schedule 3.1(b) sets forth as of the date hereof a list of
the outstanding stock options issued by Target ("Target Options"). It is
contemplated herein that Target will enable the holders of the Target Options
which are or become vested at or prior to the Effective Time to exercise such
Target Options, to the extent vested, by means of a deemed exercise whereby the
exercise price of the Target Options with respect to which the holders thereof
have indicated they wish to elect cashless exercise (the "Cashless Exercise
Price") will be deducted from the portion of the Cash Consideration and Stock
Consideration as would otherwise be distributable to such holders had they paid
the exercise price of the Target Options in full and acquired shares of Target
Common Stock prior to the Effective Time. Such deduction for the Cashless
Exercise Price shall be allocated between the Cash Consideration Per Share
14
<PAGE>
and the Stock Consideration Per Share according to the relative proportions of
the aggregate Cash Consideration and the aggregate Stock Consideration (valued
at the Closing Company Stock Price) delivered in the Merger. The amount of such
Cashless Exercise Price allocated to the Cash Consideration Per Share, as
aforesaid, is called the "Cash Portion of the Cashless Exercise Price," and that
allocated to the Stock Consideration Per Share is called the "Stock Portion of
the Cashless Exercise Price." The Company will effect any required tax
withholding in respect of the foregoing and make appropriate charges to the
exercising holders. The aggregate number of shares of Target Common Stock
subject to Target Options with respect to which cashless exercise elections as
aforesaid shall have been made at the Effective Time shall be called the
"Cashless Exercise Option Shares." If, at the Effective Time, there are any
Cashless Exercise Option Shares, the calculation of the "Cash Consideration per
Share" shall be changed to mean the amount determined by dividing (a) the Cash
Consideration plus the Cash Portion of the Cashless Exercise Price of all of the
Cashless Exercise Option Shares by (b) the number of shares of Target Common
Stock outstanding as of the Effective Time, including, without limitation, all
of the Cashless Exercise Option Shares, and the calculation of "Stock
Consideration Per Share" shall be changed to mean the amount determined by
dividing (x) the Stock Consideration plus the Stock Portion of the Cashless
Exercise Price of all of the Cashless Exercise Option Shares by (y) the number
of shares of Target Common Stock outstanding as of the Effective Time,
including, without limitation, all of the Cashless Exercise Option Shares. All
Target Options not exercised at or prior to the Effective Time shall
15
<PAGE>
terminate at the Effective Time. Notices of exercise in respect of Cashless
Exercise Option Shares shall be void if the Effective Time does not occur.
(c) At the Effective Time, each share of common stock, par value
$.01 per share, of Subsidiary (the "Subsidiary Common Stock"), issued and
outstanding immediately prior to the Effective Time, shall be converted into,
and become the right to receive, one (1) share of the common stock, par value
$.01 per share, of the Surviving Corporation (the "Surviving Corporation Common
Stock"), by virtue of the Merger and without any action on the part of the
holder thereof. Immediately upon such conversion into shares of the Surviving
Corporation Common Stock, each share of Subsidiary Common Stock shall be
canceled and retired and shall cease to exist.
(d) Each share of Common Stock which is held in the treasury of
Target, at the Effective Time, shall, by virtue of the Merger and without
further action, be canceled and retired and shall cease to exist.
(e) As of the Effective Time, the stock transfer books of Target
shall be closed.
3.2 Exchange of Certificates. As of the Effective Time, the Company
shall (a) make payment of the Cash Consideration Per Share, all in cash in
immediately available same day funds, for the benefit of the holders of shares
of Target Common Stock, and (b) issue and deliver the Stock Consideration.
3.3 Exchange Procedures. At the Effective Time, each holder of an
outstanding certificate or certificates which, prior thereto, represented shares
of Target Common Stock shall, upon surrender to the Surviving Corporation of
such certificate
16
<PAGE>
or certificates together with a Letter of Transmittal, be entitled to the
Consideration Per Share for each share of Target Common Stock represented by
such certificate or certificates so surrendered. If the Consideration Per Share
is to be paid to any person other than the person in whose name the certificate
representing shares of Target Common Stock surrendered in exchange therefor is
registered, it shall be a condition to such exchange that the certificate so
surrendered shall be properly endorsed or otherwise be in proper form for
transfer and that the person requesting such exchange shall pay to the Surviving
Corporation any transfer or other taxes required by reason of the payment of
such consideration to a person other than the registered holder of the
certificate surrendered, or shall establish to the reasonable satisfaction of
the Surviving Corporation that such tax has been paid or is not applicable.
Subsequent to the Effective Time, there shall be no further transfer on the
records of Target or its transfer agent of certificates representing shares of
Target Common Stock. Until surrendered as contemplated by this Section 3.3,
each certificate representing shares of Target Common Stock (other than
certificates representing shares which are to be canceled in accordance with
Section 3.1(d) or shares of Target Common Stock of Dissenting Stockholders)
shall be deemed at any time after the Effective Time to represent only the right
to receive upon such surrender the Consideration Per Share, as contemplated by
Section 3.1(a). No interest will be paid or will accrue on any cash payable as
Cash Consideration Per Share but shares of Company Common Stock to be issued as
Stock Consideration will be deemed to be issued on the Effective Date and
accumulate dividends and other rights to distributions associated with such
shares (if any) from such date.
17
<PAGE>
3.4 Letter of Transmittal. Prior to the Effective Time (but in no
event less than ten days prior thereto), Target shall mail to each record holder
of certificates that, immediately prior to the Effective Time, shall represent
shares of Target Common Stock a letter of transmittal (a "Letter of
Transmittal") and instructions for use in surrendering such certificates and
receiving the consideration to which such holder shall be entitled therefor
pursuant to the terms of Section 3.1.
3.5 No Further Ownership Rights in Target Common Stock. The
Consideration Per Share paid upon the surrender for exchange of certificates
representing shares of Target Common Stock in accordance with the terms of this
Article 3 shall be deemed to be full satisfaction of all rights pertaining to
the shares of Target Common Stock theretofore represented by such certificates.
ARTICLE 4
DISSENTING STOCKHOLDERS
4.1 Election. The provisions of Article 3 to the contrary
notwithstanding, any shares of Target Common Stock as to which the holder
thereof shall have properly demanded appraisal in accordance with the
requirements of Section 262 of the DGCL (any holder duly making such demand is
referred to herein as a "Dissenting Stockholder") shall not be converted into
the right to receive the Consideration Per Share, unless and until such holder
shall have failed to perfect, or shall have effectively withdrawn or lost, the
right to appraisal of and payment for such shares of Target Common Stock under
Section 262 of the DGCL. In the event that a notice of exercise of appraisal
rights under Section 262 of the DGCL was not required
18
<PAGE>
prior to the Effective Time, at such time as a holder of shares of Target Common
Stock subsequently properly demands appraisal rights, certificates for shares of
Target Common Stock as to which such appraisal rights are properly demanded (to
the extent such certificates have not theretofore surrendered pursuant to
Section 3.3) shall thereupon cease to represent the right to receive the
Consideration Per Share, and shall represent only the right to receive payment
for such shares under Section 262 of the DGCL.
4.2 Payment. Each Dissenting Stockholder who becomes entitled,
pursuant to the provisions of Section 262 of the DGCL, to payment of the value
of its shares of Target Common Stock shall receive payment therefor from the
Company (but only after the value thereof shall have been agreed upon or finally
determined pursuant to such provisions). If a Dissenting Stockholder fails to
perfect, or effectively withdraws or loses the right to receive payment for such
shares of Target Common Stock, pursuant to Section 262 of the DGCL, such
Dissenting Stockholder (to the extent the certificates representing such shares
have not theretofore been surrendered in accordance with Section 3.3) shall be
entitled to convert such shares of Target Common Stock as provided in
Section 3.1.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF TARGET
Target represents and warrants to the Company and Subsidiary as
follows:
19
<PAGE>
5.1 Organization and Qualification. Each of the Acquired Companies
is a corporation duly incorporated, validly existing and in good standing under
the laws of the state of its organization, with corporate power and authority to
own its properties and carry on its business as presently owned or conducted,
and is in good standing as a foreign corporation and is duly licensed or
qualified to transact business in each jurisdiction set forth on
Schedule 5.1(a), which constitutes each jurisdiction in which the character of
its properties owned or leased, or the nature of its activities, makes such
qualification necessary except where failure to be so qualified, individually or
in the aggregate, would not have a Material Adverse Effect. None of the
Acquired Companies owns or leases property in any jurisdiction other than the
jurisdictions set forth on Schedule 5.1(b). Target has delivered to the Company
complete and correct copies of the Certificate of Incorporation, By-laws and
minute books, each as currently in effect, of each of the Acquired Companies.
5.2 Capitalization. (a) Schedule 5.2 sets forth the authorized,
outstanding and treasury capital stock of each Acquired Company. Except as set
forth on Schedule 5.2, there are no shares of Target Common Stock or other
equity securities of any Acquired Company issued, reserved for issuance or
outstanding and no outstanding options, warrants, convertible or exchangeable
securities, subscriptions, rights (including any preemptive rights), stock
appreciation rights, calls or commitments of any character whatsoever to which
such Acquired Company is a party or may be bound requiring the issuance or sale
of shares of any capital stock of such Acquired Company, and there are no
contracts or other agreements by which any Acquired Company is or may become
bound to issue additional shares of capital stock
20
<PAGE>
or any options, warrants, convertible or exchangeable securities, subscriptions,
rights (including any preemptive rights), stock appreciation rights, calls or
commitments of any character whatsoever relating to such shares.
(b) All of the issued and outstanding shares of capital stock of
each Acquired Company have been duly authorized and validly issued and are fully
paid and non-assessable.
5.3 Subsidiaries. Each Target Subsidiary is listed on
Schedule 5.3(a). The outstanding shares of capital stock of each of the Target
Subsidiaries have been duly authorized and validly issued and are fully paid and
non-assessable and are owned by Target, directly, free and clear of any lien,
charge, encumbrance or other security interest other than such liens, charges,
encumbrances or other security interests set forth in Schedule 5.3(b).
5.4 Binding Obligation. This Agreement and the other agreements
being entered into herewith have been duly authorized and approved by the board
of directors of Target and the requisite number of stockholders of Target by
consent in lieu of a meeting and have been duly executed and delivered by Target
and, assuming that this Agreement and such other agreements constitute valid and
binding obligations of the Company and Subsidiary, this Agreement and such other
agreements constitute the legal, valid and binding obligations of Target,
enforceable against Target in accordance with their respective terms, except to
the extent that the enforceability thereof may be limited by: (i) applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
similar laws from time to time in effect affecting generally the enforcement of
creditors' rights and remedies; and (ii) general
21
<PAGE>
principles of equity, including, without limitation, principles of
reasonableness, good faith and fair dealing (regardless of whether enforcement
is sought in equity or at law).
5.5 No Defaults or Conflicts. The execution and delivery of this
Agreement by Target and performance by Target of its obligations hereunder and
thereunder (i) do not and, as of the Effective Time, will not result in any
violation of the certificate of incorporation or by-laws of any Acquired
Company; and (ii) as of the Effective Time, will not conflict with, or result in
a breach of any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of any Acquired Company under: (A) any indenture, mortgage
or loan agreement or any other agreement or instrument to which any Acquired
Company is a party or by which any Acquired Company may be bound or to which any
of the properties of any Acquired Company may be subject; or (B) any existing
applicable law, rule, regulation, judgment, order or decree of any Governmental
Authority having jurisdiction over any Acquired Company or any of the properties
of any Acquired Company, other than such consents, approvals, authorizations,
filings or notices as are set forth in Schedule 5.5.
5.6 No Governmental Authorization or Consent Required. Except for
the filing of the certificate of merger as contemplated by Section 2.2(a) and as
set forth in Schedule 5.6, no authorization or approval or other action by, and
no notice to or filing with, any Governmental Authority will be required to be
obtained or made by any Acquired Company in connection with the due execution
and delivery by Target of this Agreement and the consummation by Target of the
transactions contemplated hereby.
22
<PAGE>
5.7 Title to Properties; Liens. (a) Each of the Acquired Companies
has good, sufficient and legal title to all its respective properties and assets
(except that this representation shall not apply to Real Property, which is
addressed in Section 5.8), free and clear of any Lien or encumbrances, except
for (a) Liens specifically described in the Financial Statements; (b) properties
disposed of, or subject to purchase and sales orders, in the ordinary course of
business since the Balance Sheet Date; (c) Liens securing Taxes, assessments,
governmental charges or levies, or the claims of materialmen, carriers,
landlords and like persons, all of which are not yet due and payable or are
being contested in good faith by appropriate proceedings, so long as such
contest does not involve any substantial risk of the sale, forfeiture or loss of
any material assets; and (d) Liens set forth in Schedule 5.7 (the Liens
described in the foregoing clauses (a) through (d) being collectively referred
to herein as "Permitted Encumbrances"). Except for Permitted Encumbrances, all
such properties and assets are free and clear of liens or encumbrances of any
kind.
(b) The inventories of the Acquired Companies located in the
United States and reflected on the Financial Statement net of appropriate
reserves under GAAP are of a quality and quantity consistent with the historical
practices of such Acquired Companies, are in good and marketable condition, and
are reasonably saleable in the ordinary course of business of the Acquired
Companies.
(c) The assets of the Acquired Companies include all of the
assets and services necessary, in all material respects, for the conduct by the
Acquired Companies of their business currently and through the Effective Date as
contemplated herein.
23
<PAGE>
5.8 Real Estate. (a) An Acquired Company, as indicated upon Schedule
5.8(a), is the owner of good and insurable fee title to the land described on
Schedule 5.8(a) and to all of the buildings, structures and other improvements
located thereon (collectively, the "Owned Real Property") free and clear of all
Liens, restrictive covenants, encroachments or other defects ("Title Defects")
except for the matters listed on Schedule 5.8(a) and non-monetary encumbrances
of a minor nature that do not individually or in the aggregate interfere in any
material respect with, or materially increase the cost of, the use, occupancy or
operation of the applicable parcel of Owned Real Property as currently used,
occupied and operated. The Owned Real Property constitutes all of the real
property owned by the Acquired Companies.
(b) Schedule 5.8(b) is a true, correct and complete schedule of
all leases, subleases, licenses and other agreements (collectively, the
"Leases") under which any of the Acquired Companies uses or occupies or has the
right to use or occupy, now or in the future, any real property that is not
Owned Real Property (the land, buildings and other improvements covered by the
Real Property Leases being herein referred to as the "Leased Real Property").
Target has heretofore delivered to, or has caused the relevant Target Subsidiary
to deliver to, the Company true, correct and complete copies of all Leases
(including all modifications, amendments and supplements thereto). Each Lease
is valid, binding and in full force and effect, all rent and other sums and
charges payable by the relevant Acquired Company as tenant thereunder are
current, no notice of default or termination under any Lease is outstanding, and
no termination event or condition or uncured default on the part of the relevant
Acquired Company or, to the knowledge of Target and the relevant Target
24
<PAGE>
Subsidiary, the applicable landlord, exists under any Lease. Except as set
forth on Schedule 5.8(b), each Acquired Company holds the leasehold estate and
interest in its Leases free and clear of all Liens.
(c) All of the land, buildings, structures and other
improvements used by the Acquired Companies in the conduct of their businesses
are included in the Owned Real Property and the Leased Real Property. The
Leased Real Property and the Owned Real Property are hereinafter collectively
referred to as the "Real Property." No person or entity other than the Acquired
Companies has any right to the possession, use, occupancy or enjoyment of the
Real Property or any portion thereof.
(d) To the Target's knowledge, all material components of all
buildings, structures, fixtures and other improvements in, on or within the Real
Property (the "Improvements"), including to the roofs, structural elements and
the building systems and facilities thereof, utilities serving the Real Property
are in generally good operating condition and repair, subject to continued
repair and replacement in accordance with past practice.
(e) None of the Acquired Companies has received notice of, and,
to the knowledge of Target and the relevant Target Subsidiary, there is not any
pending, threatened or contemplated condemnation proceeding affecting the Real
Property or any part thereof, and no sale or other disposition of the Real
Property or any part thereof in lieu of condemnation.
(f) No portion of the Real Property has suffered any material
damage by fire or other casualty which has not heretofore been completely
repaired and
25
<PAGE>
restored. No portion of the Real Property is located in a special flood hazard
area as designated by Governmental Authority.
5.9 Know-How, Trademarks, Patents, Copyrights, Etc. Schedule 5.9
sets forth all patents, patent licenses, trademarks, service marks, trade names,
copyrights, franchises, all applications for any of the foregoing, and all
permits, grants and licenses or other rights running to or from the Acquired
Companies relating to any of the foregoing which are owned by the Acquired
Companies or used in the business of the Acquired Companies. Each of the
Acquired Companies owns, possesses or licenses adequate patents, patent
licenses, trademarks, service marks, copyrights, franchises and trade names
necessary to carry on its business as presently conducted. Except as set forth
on Schedule 5.9, none of the Acquired Companies has received any notice of
infringement of or conflict with asserted rights of others with respect to any
inventions, processes, know-how, formulas, trade secrets, patents, trademarks,
trade names, brand names and copyrights that are owned or used by, or licensed
to, any Acquired Company. To the knowledge of Target, except as set forth on
Schedule 5.9, none of the Acquired Companies is infringing or has infringed any
patent, trademark, service mark, trade name, copyright or franchise rights of
any third person or is using or has used without authorization any trade secret
process or confidential information of any third party. The patents, patent
licenses, trademarks, service marks, trade names, copyrights, licenses of the
foregoing and franchises set forth on Schedule 5.9 represent all of the patents,
patent licenses, trademarks, service marks, trade names, copyrights, licenses of
the foregoing and franchises used by, or
26
<PAGE>
necessary to the operation of the businesses of, the Acquired Companies, as
currently conducted and are freely transferable thereby.
5.10 Financial Statements. (a) The consolidated balance sheets
included in the Financial Statements (copies of which have been provided to the
Company) present fairly the consolidated financial position of the Acquired
Companies as of their respective dates, and the other related statements
included in the Financial Statements present fairly the results of their
consolidated operations and cash flows for the years indicated, in each case in
accordance with GAAP applied on a consistent basis, with only such deviations
from such accounting principles and/or their consistent application as are
referred to in the notes to the Financial Statements and subject, in the case of
the unaudited interim statements, to the absence of footnotes and to normal
recurring audit adjustments, which are not individually or in the aggregate
material.
(b) All of the receivables reflected in the Financial Statements
were generated in the ordinary course of business of the relevant Acquired
Company consistent with past practice and, except for reserves and appropriate
trade provisions therein reflected (which reserves and trade provisions are
adequate), constitute valid, undisputed claims of the relevant Acquired Company
in the amounts reflected therein, not subject to valid claims of set-off or
counterclaim other than normal cash discounts accrued in the ordinary course of
business consistent with past practice.
5.11 Absence of Certain Changes or Events. Since the Balance Sheet
Date, except as set forth in Schedule 5.11 and except for the transactions
contemplated by this Agreement, there has not been: (a) any change, occurrence
or event which (individually or together with other changes, occurrences and
events) has had or is
27
<PAGE>
likely to have a Material Adverse Effect; (b) any declaration, setting aside or
payment of any dividend or other distribution (whether in cash, stock or
property) with respect to any of the outstanding capital stock of any Acquired
Company or any direct or indirect redemption, retirement, purchase or other
acquisition of any shares of its capital stock; (c) any split, combination or
reclassification of any of the outstanding capital stock of Target or any
issuance or the authorization of any issuance of any other securities in respect
of, in lieu of or in substitution for shares of the outstanding capital stock of
Target other than by reason of exercise of options granted and existing as of
the Balance Sheet Date; (d) any issuance or sale of Target Common Stock or any
right to acquire Target Common Stock by Target or any authorization for such
action or any issuance or grant of any options or warrants; (e) any change in
accounting methods, principles or practices by any Acquired Company affecting
its assets, liabilities or businesses, except insofar as may have been required
by a change in GAAP; (f) any adoption of a plan of liquidation or resolutions
providing for the liquidation, dissolution, merger, consolidation or other
reorganization of any Acquired Company (other than as contemplated by this
Agreement); (g) any material adverse change in the business policies of any
Acquired Company, including, without limitation, advertising, marketing,
pricing, purchasing, personnel, sales, returns, budget or product acquisition
policies; (h) any agreement relating to, or the occurrence of any wage or salary
increase or bonus, or increase in any other direct or indirect compensation or
benefits (including any severance or termination payment) for or to any
officers, directors, employees, consultants or agents of any Acquired Company or
any accrual for or contract or other agreement to make or pay the same except in
the ordinary course of
28
<PAGE>
business, in a manner consistent with past practice; (i) any loan or advance
made to any officers, directors, employees, consultants, agents or other
representatives of any Acquired Company (other than travel advances made in the
ordinary course of business in a manner consistent with past practice) or any
other loan or advance except in the ordinary course of business in a manner
consistent with past practice; (j) except for any acquisition of tangible
property acquired in the ordinary course of business in a manner consistent with
past practice, any acquisition of all or any part of the assets, properties,
capital stock or business of any other person; (k) any action by Target that is
outside the ordinary course of business or in a manner inconsistent with past
practice, (l) any actions by Target outside of the ordinary course of business
which would affect the cash position of Target, including (i) any failure to
make scheduled capital expenditures substantially in accordance with its
ordinary course and customary practice; (ii) any failure to pay trade payables
or other liabilities when due, (iii) any discounting or other actions designed
to accelerate the payment of accounts receivable or (iv) any use of cash to
prepay Indebtedness, otherwise than in the ordinary course of business, (m) any
material change in the method of computation of the prices charged for the
products manufactured by or on behalf of any of the Acquired Companies that bear
a trademark owned by any of the Acquired Companies (each a "Branded Product") or
change in the credit practices of any of the Acquired Companies, except changes
in the ordinary course of business consistent with past practice, (n) any
material damage, destruction or loss, whether or not covered by insurance, to
any material assets of any Acquired Company, (o) any cancellation, compromise,
waiver or release of any right or claim (or series of rights or claims) by any
Acquired Company except such as would not have
29
<PAGE>
a Material Adverse Effect, (p) any grant by any Acquired Company of any material
license or sublicense of any rights under or with respect to any of its
intangible property not in the ordinary course of business or (q) any agreement
to do any of the foregoing.
5.12 Contracts. Schedule 5.12 lists or describes, and the Company has
been furnished copies of, all material contracts or arrangements to which any
Acquired Company is a party or to which its assets, property or business are
bound or subject as of the date hereof which (a) obligate such Acquired Company
to pay more than $50,000 in any year, or entitle such Acquired Company to
receive more than $50,000 in any year; (b) are financing documents, loan
agreements, security agreements, or agreements providing for the guarantee of
the obligations of any party (other than any Acquired Company); (c) are
distributorship, sales agency or representative, marketing or other agreements
providing for the distribution of products of such Acquired Company; (d) are
contracts with any person for the manufacture of any products of such Acquired
Company; (e) are contracts containing covenants of any of the Acquired Companies
not to compete in any line of business or with any person in any geographical
area or covenants of any other person not to compete with any Acquired Company
in any line of business or in any geographical area; (f) are contracts or other
agreements with any current or former officer, director, employee, consultant,
agent or shareholder; (g) are contracts or other agreements with any labor union
or association relating to any current or former employee; (h) are patent,
trademark, service mark, trade name, copyright or franchise licenses, royalty
agreements or similar contracts or other agreements; (i) are management
agreements; (j) are contracts
30
<PAGE>
or other agreements for the grant to any person of any preferential rights to
purchase any of the Acquired Companies' assets, properties or business; (k) are
joint venture contracts or other agreements of a similar nature; (l) are
contracts or other agreements under which any Acquired Company has guaranteed
the obligations of any person; (m) are contracts or other agreements under which
any Acquired Company agrees to indemnify any person or to share Tax liability
with any person; (n) are contracts or other agreements relating to the
acquisition by any Acquired Company of any operating business or the capital
stock of any person; or (o) are contracts or other agreements for the payment of
fees or other consideration to any officer or director of any Acquired Company
or any other entity in which any of the foregoing has an interest; Schedule 5.12
lists or describes any other material contract or other agreement, whether or
not made in the ordinary course of business. With respect to all such
contracts, none of the Acquired Companies nor, to Target's or the relevant
Target Subsidiary's knowledge, any other party to any such contract is in breach
thereof or default thereunder and there does not exist under any thereof any
event which, with the giving of notice or the lapse of time, would constitute
such a breach or default, except for such breaches, defaults and events as to
which requisite waivers or consents have been obtained or which would not, in
the aggregate, have a Material Adverse Effect.
5.13 Litigation. Except as set forth in Schedule 5.13, there are no
outstanding judgments, rulings, orders, writs, injunctions, awards or decrees of
any court or any foreign, federal, state, county or local government or any
other governmental, regulatory or administrative agency or authority or
arbitrator against or involving any Acquired Company. Except as set forth on
Schedule 5.13, as of the date
31
<PAGE>
hereof, none of the Acquired Companies is a party to, or to the knowledge of
Target threatened with, any litigation or judicial, governmental, regulatory,
administrative or arbitration proceeding which, if decided adversely to any such
Acquired Company, could individually or in the aggregate have a material adverse
effect upon the transactions contemplated hereby or that could be reasonably
likely to have a Material Adverse Effect on any of the Acquired Companies.
5.14 Taxes. All the representations and warranties set forth in this
Section 5.14 are qualified by Schedule 5.14. All United States federal income
Tax Returns of or with respect to each of the Acquired Companies required by law
to be filed have been timely filed, all such Tax Returns are true and complete
and all Taxes shown on such returns have been timely paid; all other Tax Returns
of or with respect to each of the Acquired Companies required to be filed
pursuant to applicable federal, foreign, state, local or other law have been
filed, except insofar as the failure to file such Tax Returns would not
reasonably be expected to have a Material Adverse Effect, all such Tax Returns
are true and complete and all Taxes shown on such Tax Returns and all other
Taxes due, or claimed to be due whether by proposed assessment or otherwise, by
any taxing authority have been timely paid except for Taxes which are being
contested in good faith by proper proceedings with adequate reserves having been
taken in accordance with GAAP; and the charges, accruals and reserves on the
books of the Acquired Companies in respect of any liability for Taxes based on
or measured by net income for any years not finally determined or with respect
to which the applicable statute of limitations has not expired are believed to
be adequate to satisfy any assessment for such Taxes for any such years, except
to the extent of any
32
<PAGE>
inadequacy that would not have a Material Adverse Effect. None of the Acquired
Companies has any liability for taxes of any person or entity other than the
Acquired Companies. The unused "net operating losses" (as defined in
Section 172 of the Code or similar provisions of state or local law) of each of
the Acquired Companies are set forth for each taxable year on Schedule 5.14 and
the utilization of such net operating losses are not subject to any limitations
under Section 382 and 384 of the Code except as set forth in Schedule 5.14.
Schedule 5.14 sets forth any "separate return year" limitations (as defined in
the Treasury Regulations under Section 1502 of the Code) upon the unused net
operating losses of each of the Acquired Companies. With respect to any period
for which Tax Returns have not yet been filed, or with respect to which Taxes
are not yet due or owing, the Acquired Companies have made due and sufficient
current accruals for such Taxes in accordance with GAAP. Each of the Acquired
Companies has made all required estimated Tax payments sufficient to avoid any
underpayment penalties. The Tax Returns of each of the Acquired Companies and
of each affiliated, consolidated, combined or unitary group of which any
Acquired Company is or has been a member have not been audited (or if audited
have subsequently been closed by the application of the statute of limitations)
or examined by the IRS. There are no outstanding agreements, waivers or
arrangements extending the statutory period of limitations applicable to any
claim for, or the period for the collection or assessment of, Taxes due from or
with respect to any Acquired Company for any taxable period. No closing
agreement pursuant to Section 7121 of the Code (or any predecessor provision) or
any similar provision of any state, local or foreign law has been entered into
by or with respect to any Acquired Company. No audit or other
33
<PAGE>
proceeding by any court, governmental or regulatory authority or similar
authority is pending or threatened with respect to any Taxes due from any
Acquired Company. No assessment of Tax is proposed against any Acquired
Company or any of its properties or assets. No consent to the application of
Section 341(f)(2) of the Code (or any predecessor provision) has been made or
filed by or with respect to any Acquired Company or any of its properties or
assets. None of the assets of any Acquired Company is an asset or property
that is or will be required to be treated as being (i) owned by any person
(other than Target or a Target Subsidiaries) pursuant to the provisions of
Section 168(f)(8) of the Internal Revenue Code of 1954, as amended and in
effect immediately before the enactment of the Tax Reform Act of 1986 or (ii)
tax-exempt use property within the meaning of Section 168(h)(1) of the Code.
None of the Acquired Companies has agreed to or is required to make any
adjustment pursuant to Section 481(a) of the Code (or any predecessor
provision) by reason of any change in any accounting method of such Acquired
Company, there is no application pending with any taxing authority requesting
permission for any such change in any accounting method of any Acquired
Company and the IRS has not proposed any such adjustment or change in
accounting method. None of the Acquired Companies has been or is in
violation (or with notice or lapse of time or both, would be in violation) of
any applicable law relating to the payment or withholding of Taxes, the
result of which violation has or may reasonably be expected to have a
Material Adverse Effect. Each of the Acquired Companies has duly and timely
withheld from employee salaries, wages and other compensation and paid over
to the appropriate taxing authorities all material amounts required to be so
withheld and paid over for all periods under all
34
<PAGE>
applicable laws. Except as disclosed on Schedule 5.14, none of the Acquired
Companies is a party to, is bound by, or has any obligation under, any Tax
sharing agreement or similar contract. There is no contract, agreement, plan or
arrangement covering any person that, individually or collectively, could give
rise to the payment of any amount that would not be deductible by any Acquired
Company by reason of Section 280G of the Code. None of the Acquired Companies
has been a United States real property holding corporation within the meaning of
Section 897(c)(2) of the Code during the applicable period specified in
Section 897(c)(1)(A)(ii) of the Code.
5.15 Permits. Each of the Acquired Companies has in full force and
effect all material federal, state, local and foreign governmental approvals,
consents, authorizations, certificates, filings, franchises, licenses, notices,
permits and rights (collectively, "Permits") necessary to conduct its business
as presently conducted the lack of which could be reasonably likely to have a
Material Adverse Effect. There has occurred no default under any Permit that
could be reasonably likely to have a Material Adverse Effect on any Acquired
Company. There are no proceedings relating to the suspension, revocation or
modification of any Permit in which an adverse determination could be reasonably
likely to have a Material Adverse Effect on any Acquired Company.
5.16 Employment Matters. Schedule 5.16 lists or describes, and the
Company has been furnished access to, all material employment, severance,
consulting or similar contracts to which any Acquired Company is a party or by
which any of them is bound, and, with respect to all such contracts, none of the
Acquired Companies is in material breach thereof or material default thereunder
and there does not exist
35
<PAGE>
under any thereof any event which, with the giving of notice or the lapse of
time, would constitute such a breach or default by any Acquired Company. There
are not in existence any (a) grievance or arbitration proceedings arising out of
agreements to which any Acquired Company is a party, or (b) unfair labor
practice complaints against any Acquired Company. Except as set forth on
Schedule 5.16, none of the Acquired Companies is a party to any collective
bargaining agreement and no work stoppage, strike or similar activity is in
effect or threatened.
5.17 Employee Benefit Plans. (a) Schedule 5.17 contains a true and
complete list of each "employee benefit plan" (within the meaning of
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), including, without limitation, multiemployer plans within the meaning
of ERISA section 3(37)), stock purchase, stock option, severance, employment,
change-in-control, fringe benefit, collective bargaining, bonus, incentive,
deferred compensation and all other employee benefit plans, agreements,
programs, policies or other arrangements, whether or not subject to ERISA
(including any funding mechanism therefor now in effect or required in the
future as a result of the transaction contemplated by this Agreement or
otherwise), whether formal or informal, oral or written, legally binding or not,
under which any employee or former employee of the Target or Target Subsidiaries
has any present or future right to benefits or under which the Target or Target
Subsidiaries has any present or future liability. All such plans, agreements,
programs, policies and arrangements shall be collectively referred to as the
"Target Plans".
(b) With respect to each Target Plan, Target has delivered to
the Buyer a current, accurate and complete copy (or, to the extent no such copy
exists,
36
<PAGE>
an accurate description) thereof and, to the extent applicable: (i) any related
trust agreement or other funding instrument; (ii) the most recent determination
letter, if applicable; (iii) any summary plan description and other written
communications (or a description of any oral communications) by the Target or
Target Subsidiaries to their employees concerning the extent of the benefits
provided under a Target Plan; and (iv) for the most recent year (A) the Form
5500 and attached schedules, (B) audited financial statements, (C) actuarial
valuation reports and (D) attorney's response to an auditor's request for
information.
(c)(i) To the extent material, each Target Plan has been
established and administered in accordance with its terms, and in compliance
with the applicable provisions of ERISA, the Code and other applicable laws,
rules and regulations; (ii) to the extent material, each Target Plan which is
intended to be qualified within the meaning of Code section 401(a) is so
qualified and has received a favorable determination letter as to its
qualification, and nothing has occurred, whether by action or failure to act,
that could reasonably be expected to cause the loss of such qualification;
(iii) no event has occurred and no condition exists that would subject the
Target or Target Subsidiaries, either directly or by reason of their affiliation
with any member of their "Controlled Group" (defined as any organization which
is a member of a controlled group of organizations within the meaning of Code
sections 414(b), (c), (m) or (o)), to any tax, fine, lien, penalty or other
liability imposed by ERISA, the Code or other applicable laws, rules and
regulations; (iv) for each Target Plan with respect to which a Form 5500 has
been filed, no material change has occurred with respect to the matters covered
by the most recent Form since the date thereof; (v) no
37
<PAGE>
Target Plan has entered into or proposes entering into any "prohibited
transaction" (as such term is defined in ERISA section 406 and Code section
4975); and (vi) no Target Plan is subject to Title IV of ERISA, ERISA section
302 or Code section 412 (including, without limitation, a multiemployer plan
within the meaning of section 4001(a)(3) of ERISA).
(d) With respect to any Target Plan, (i) no actions, suits or
claims (other than routine claims for benefits in the ordinary course) are
pending or threatened, (ii) no facts or circumstances exist that could give rise
to any such actions, suits or claims, and (iii) no written or oral communication
has been received from the PBGC in respect of any Target Plan subject to Title
IV of ERISA concerning the funded status of any such plan or any transfer of
assets and liabilities from any such plan in connection with the transactions
contemplated herein.
5.18 Brokers. Other than PaineWebber Incorporated and other than as
previously disclosed to the Company, no broker, finder or similar intermediary
has acted for or on behalf of Target in connection with this Agreement or the
transactions contemplated hereby, and no broker, finder, agent or similar
intermediary is entitled to any broker's, finder's or similar fee or other
commission in connection therewith based on any agreement, arrangement or
understanding with Target or any action taken by it.
5.19 Environmental Compliances. Except as set forth in Schedule 5.19,
(i) each Acquired Company is in compliance in all material respects with all
applicable Environmental Laws; (ii) each of the Acquired Companies has all
material permits, authorizations and approvals required under any applicable
Environmental Laws and is in compliance in all material respects with their
respective requirements;
38
<PAGE>
(iii) to the knowledge of Target, there are no pending or threatened
Environmental Claims against any Acquired Company; and (iv) under applicable
Environmental Laws, to the knowledge of Target there are no circumstances with
respect to any property or operations of any Acquired Company that are
reasonably likely to form the basis of an Environmental Claim against such
Acquired Company.
5.20 Employee Relations. To the knowledge of Target, the
employer-employee relations of each Acquired Company are satisfactory in all
material respects. The employment practices of each Acquired Company have
complied in all materials respects with all applicable plant closing and
anti-discrimination laws including, without limitation, the Workers
Adjustment and Retraining Notification Act, the Age Discrimination in
Employment Act and the Americans with Disabilities Act and any similar state
laws.
5.21 Liabilities. Except as set forth on Schedule 5.21 or as
otherwise expressly disclosed in this Agreement or the Schedules or as fully and
adequately reflected or reserved against on the Balance Sheet (less Liabilities
that have been discharged in the ordinary course of business since the Balance
Sheet Date), Target does not have any direct or indirect indebtedness,
liability, claim, loss, damage, deficiency, obligation or responsibility, known
or unknown, fixed or unfixed, choate or inchoate, liquidated or unliquidated,
secured or unsecured, subordinated or unsubordinated, matured or unmatured,
accrued, absolute, contingent or otherwise, including, without limitation,
liabilities on account of Taxes, other governmental, regulatory or
administrative charges or lawsuits brought, of a kind required by GAAP to be set
forth on a financial statement (collectively, "Liabilities"). Except as
39
<PAGE>
specifically noted on Schedule 5.21, all Liabilities were incurred in the
ordinary course of business. Except as set forth on Schedule 5.21, Target has
not incurred any Liabilities since the Balance Sheet Date except in the ordinary
course of business and for the Acquired Companies' Transaction Expenses. Target
has no knowledge of any circumstances, conditions, events or arrangements which
may hereafter give rise to any Liabilities, individually or in the aggregate,
material to the Acquired Companies, except in the ordinary course of business.
5.22 Suppliers and Customers. Schedule 5.22 lists the ten largest
suppliers and the ten largest customers of the Acquired Companies (by dollar)
and their dollar values of sales or purchases, as the case may be, for the
period since the Balance Sheet Date. The relationships of the Acquired
Companies with their respective suppliers and customers are generally good
commercial working relationships, and none of the suppliers or customers listed
on Schedule 5.22 has canceled or otherwise terminated, or threatened to cancel
or otherwise terminate, its relationship with any Acquired Company or has during
the last twelve (12) months materially decreased or limited or threatened to
materially decrease or limit, its business with the relevant Acquired Company,
and no Acquired Company has received notice that any such supplier or customer
intends to cancel or otherwise modify its relationship with any Acquired Company
or to decrease or limit materially its services, supplies or materials to any
Acquired Company or its purchase of the products of any Acquired Company. To
the knowledge of Target, the transactions contemplated by this Agreement will
not cause a material and adverse effect upon the relationship of any Acquired
Company with any of the suppliers or customers listed on Schedule 5.22.
40
<PAGE>
5.23 Insurance. Schedule 5.23 sets forth all policies or binders of
fire, liability, workmen's compensation, vehicular or other insurance held by or
on behalf of any of the Acquired Companies (specifying the insurer, the policy
number or covering note number with respect to binders, and describing each
pending claim thereunder of more than $50,000, setting forth the aggregate
amounts paid out under each such policy since April 1, 1996 through the date
hereof and the aggregate limit of any of the insurer's liability thereunder).
To the knowledge of the Target, such policies are valid and binding in
accordance with their terms and are in full force and effect and insure against
risks and liabilities customary for the business in which the relevant Acquired
Company is engaged. None of the Acquired Companies is in default with respect
to any provision contained in any such policy or binder or has failed to give
any notice or present any claim under any such policy or binder in due and
timely fashion. Except as disclosed on Schedule 5.23, there are no outstanding
unpaid claims under any such policy or binder. None of the Acquired Companies
has received a notice of cancellation or non-renewal of any such policy or
binder and no facts exist which might form the basis for termination of any such
insurance other than for delinquencies which have been cured or for policies
replaced with other policies. Each of the Acquired Companies has or will make
provision for, insurance coverage consistent with current practices through the
Effective Date. Each of the Acquired Companies paid or will pay all premiums
due and payable for periods prior to the Effective Date with respect to
insurance policies set forth on Schedule 5.23.
5.24 Transactions with Affiliates. Except as set forth in Schedule
5.24 and transactions among the Acquired Companies, (a) none of the Acquired
Companies
41
<PAGE>
has engaged in any transaction with any stockholder, director or executive
officer of any Acquired Company (or any affiliate thereof) and (b) none of
the Acquired Companies is a party to or bound by any lease, purchase contract
or other agreement with any stockholder, director or executive officer of any
Acquired Company (or any affiliate of any of the foregoing).
5.25 Full Disclosure. All documents and other papers identified
herein or listed in the Schedules attached hereto and delivered by or on behalf
of the Acquired Companies to the Company and Subsidiary in connection with this
Agreement and the transactions contemplated hereby are true, complete and
authentic copies thereof. The representations and warranties of Target in this
Agreement taken together with the attached Schedules and with all of the
documents and other papers expressly identified herein or listed in such
Schedules, taken as a whole, do not, to the knowledge of Target, contain any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements made not false or misleading.
5.26 Solvency. The aggregate value of all of the assets of all of the
Acquired Companies on a consolidated basis, at a fair valuation, exceeds the
total liabilities of all of the Acquired Companies on a consolidated basis
(including contingent, subordinated, unmatured and unliquidated liabilities).
Each of the Acquired Companies has the ability to pay its debts as they mature
and does not have unreasonably small capital with which to conduct its business.
For purposes of this Section 5.26, the "fair valuation" of such assets shall be
determined on the basis of that amount which may be realized within a reasonable
time, in any manner through realization of the value of or dispositions of such
assets at the regular market value,
42
<PAGE>
conceiving the latter as the amount which could be obtained for the assets in
question within such period by a capable and diligent business person from an
interested buyer who is willing to purchase under ordinary selling conditions.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
OF THE PRINCIPAL STOCKHOLDER
The Principal Stockholder represents and warrants to the Company and
Subsidiary as follows:
6.1 Full Disclosure. All documents and other papers identified
herein or listed in the Schedules attached hereto and delivered by or on behalf
of the Acquired Companies to the Company and Subsidiary in connection with this
Agreement and the transactions contemplated hereby are true, complete and
authentic copies thereof. The representations and warranties of Target in this
Agreement taken together with the attached Schedules and with all of the
documents and other papers expressly identified herein or listed in such
Schedules, taken as a whole, do not, to the Knowledge of the Target, contain any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements made not false or misleading.
6.2 Indebtedness. Except as set forth in a certificate of the
Principal Stockholder delivered to the Company on the Effective Date, there is
no "Indebtedness" (as defined in Section 1.1) with respect to any of the
Acquired Companies.
6.3 Capitalization. The representation and warranty of Target
contained in Section 5.2 is true and correct.
43
<PAGE>
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND SUBSIDIARY TO TARGET
The Company and Subsidiary represent and warrant to Target as follows:
7.1 Organization; Standing and Power. Each of the Company and
Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted, and is duly qualified and in good standing
to do business in each jurisdiction in which the nature of its business or
the ownership or leasing of its properties makes such qualification necessary
other than in such jurisdictions where the failure so to qualify would not
have a Material Adverse Effect.
7.2 Articles of Incorporation and By-Laws. The Company has
heretofore made available to Target a complete and correct copy of its and
Subsidiary's Articles of Incorporation and By-Laws, each as amended to date.
Such Articles of Incorporation and By-Laws are in full force and effect. The
Company is not in violation of any provision of its Articles of Incorporation
or By-Laws, except for such violations that would not, individually or in the
aggregate, have a Material Adverse Effect.
7.3 Capital Structure. As of the date hereof, the authorized
capital stock of the Company consists of 100,000,000 shares of the Company
Common Stock. As of the close of business on December 12, 1997, (i)
50,931,559 shares of the
44
<PAGE>
Company Common Stock were outstanding, 2,985,764 shares of Common Stock were
reserved for issuance pursuant to the 1994 Stock Option Plan (the "Stock
Plan") and (ii) no shares of Company Common Stock were held by the Company in
its treasury. All outstanding shares of the Company Common Stock are, and
the shares of Company Common Stock to be issued pursuant to or as
specifically contemplated by this Agreement will be, validly issued, fully
paid and nonassessable and not subject to preemptive rights. As of the date
of this Agreement, except for this Agreement and shares of the Company Common
Stock available for issuance under the Stock Plan, there are no options,
warrants, calls, rights, commitments or agreements of any character to which
the Company is a party or by which it is bound obligating the Company to
issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock or obligating the Company to grant, extend or enter
into any such option, warrant, call, right, commitment or agreement. Except
as disclosed in the Company SEC Documents (as defined below), as of the date
hereof, the Company is not party to any agreement relating to the voting of
shares of Company Common Stock, to any voting trust with respect to Company
Common Stock or to any agreement granting any other party registration rights
with respect to shares of Company Common Stock. As of the date hereof, the
authorized capital stock of Subsidiary consists of 1,000 shares of Subsidiary
Common Stock, par value $.01 per share, all of which are validly issued,
fully paid and nonassessable and are owned by the Company.
7.4 Authority. The Company and Subsidiary have all requisite
corporate power to enter into this Agreement and the other agreements being
entered into in connection herewith and, subject to compliance with the DGCL,
to perform
45
<PAGE>
their obligations hereunder and thereunder to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this
Agreement and such other agreements and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
necessary corporate action on the part of the Company and Subsidiary and no
other corporate proceedings on the part of the Company and Subsidiary are
necessary to authorize this Agreement or such other agreements or to
consummate the transactions contemplated hereby and thereby, other than the
filing and recordation of appropriate merger documents as required by the
DGCL. Each of this Agreement and such other agreements has been or will be
duly and validly executed and delivered by the Company and Subsidiary and,
assuming that this Agreement and such other agreements constitute valid and
binding obligations of Target and the Principal Stockholder, this Agreement
and such other agreements constitute or will constitute valid and binding
obligations of the Company and Subsidiary enforceable in accordance with
their respective terms, except to the extent that the enforceability thereof
may be limited by: (i) applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar laws from time to time in
effect affecting generally the enforcement of creditors' rights and remedies;
and (ii) general principles of equity, including, without limitation,
principles of reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in equity or at law). Assuming that all
filings, authorizations, consents and stockholder approvals have been duly
made or obtained as expressly provided herein, the execution and delivery of
this Agreement do not, and the execution and delivery of such other
agreements will not, and the consummation of the transactions contemplated
46
<PAGE>
hereby and thereby will not, result in any violation pursuant to any
provision of the Certificate of Incorporation or By-laws of the Company and
Subsidiary or, except (i) as contemplated by the next sentence hereof and
(ii) for certain consents that may be required from the Company's senior,
secured lenders, (which consents, if required, will be obtained prior to the
Effective Date) result in any violation of any loan or credit agreement,
note, mortgage, indenture, lease, benefit plan or other agreement,
obligation, instrument, permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to the
Company, Subsidiary or their respective properties or assets, which violation
would, individually or in the aggregate with any other violations, have a
Material Adverse Effect. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Authority is
required by or with respect to the Company and Subsidiary in connection with
the execution and delivery of this Agreement and the other agreements being
entered into in connection herewith by the Company and Subsidiary or the
consummation by the Company and Subsidiary of the transactions contemplated
hereby and thereby, the failure to obtain which, individually or in the
aggregate with any other such failures, would have a Material Adverse Effect,
except for (i) the premerger notification requirements applicable to the
Company under the HSR Act, and (ii) the filing of the Certificate of Merger
with the Secretary of State of the state of Delaware and appropriate
documents with the relevant authorities of other states in which Target is
qualified to do business.
7.5 SEC Documents; Financial Statements. Schedule 7.5 lists each
report, schedule, registration statement and definitive proxy statement filed
by the
47
<PAGE>
Company with the SEC since December 31, 1996 (as such documents have since
the time of their filing been amended, the "Company SEC Documents"), which
include all the documents (other than preliminary material) that the Company
was required to file with the SEC since such date. The Company has made
available to Target a true and complete copy of each of such Company SEC
Documents. As of their respective dates, the Company SEC Documents and any
forms, reports and other documents filed with the SEC by the Company after
the date of this Agreement complied or will comply in all material respects
with the requirements of the Securities Act or the Exchange Act, as the case
may be, and the rules and regulations of the SEC thereunder applicable to
such Company SEC Documents, and none of the Company SEC Documents contained,
or will contain at the time they are filed or amended, any untrue statement
of a material fact or omitted, or will omit at the time they are filed or
amended, 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. The financial statements of the Company
included in the Company SEC Documents comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto, have been prepared in
accordance with GAAP applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto or, in the case of
the unaudited statements, as permitted by Form 10-Q of the SEC) and fairly
present (subject, in the case of the unaudited statements, to normal,
recurring audit adjustments, which were not individually or in the aggregate
material) in all material respects the financial position
48
<PAGE>
of the Company as at the dates thereof and the results of its operations and
cash flows for the periods then ended.
7.6 Compliance with Applicable Laws. The Company holds all
permits, licenses, variances, certificates of occupancy, exemptions, orders
and approvals of all Governmental Authorities, which are material to the
operation of the business of the Company (the "Company Permits"). The
Company is in compliance with the terms of the Company Permits, except where
any such failure so to comply, individually or in the aggregate with any
other such failures, would not have a Material Adverse Effect. Except as
disclosed in the Company SEC Documents filed prior to the date of this
Agreement, the business of the Company is not being conducted in violation of
any law, ordinance or regulation of any Governmental Authority, except for
violations, which individually or in the aggregate with other violations,
would not have a Material Adverse Effect. As of the date of this Agreement,
no investigation or review by any Governmental Authority with respect to the
Company which would result in a Material Adverse Effect is pending or, to the
knowledge of the Company, threatened.
7.7 Litigation. As of the date of this Agreement, except as
disclosed in the Company SEC Documents filed prior to the date of this
Agreement, there is no claim pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of its properties, which,
individually or in the aggregate with any
49
<PAGE>
other such claims, would have a Material Adverse Effect, nor is there any
judgment, decree, injunction, rule or order of any Governmental Authority or
arbitrator outstanding against the Company, which, individually or in the
aggregate with any other such judgments, orders, decrees, injunctions, rules
or orders, would have a Material Adverse Effect.
7.8 Absence of Certain Changes or Events. Except as disclosed in
the Company SEC Documents filed prior to the date of this Agreement or in the
audited balance sheets of the Company and the related consolidated statements
of income, shareholders' equity and cash flows as of and for the period ended
December 31, 1996 (the "Company 1996 Financial Statements"), true and correct
copies of which are included in the Company SEC Documents, or except as
contemplated by this Agreement, since the date of the Company 1996 Financial
Statements, there has not been (i) any damage, destruction or loss, whether
covered by insurance or not, which has, or insofar as reasonably can be
foreseen in the future is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect; (ii) any declaration, setting aside or
payment of any dividend or other distribution (whether in cash, stock or
property) with respect to any of the Company's capital stock; or (iii) any
change, occurrence or event which (individually or together with other
changes, occurrences and events) has had or is reasonably likely to have a
Material Adverse Effect.
7.9 Full Disclosure. All documents and other papers identified
herein or listed on the Schedules attached hereto and delivered by or on
behalf of the Company or Subsidiary to Target in connection with this
Agreement and the transactions contemplated hereby are true, complete and
authentic copies thereof. The representations and warranties of the Company
and Subsidiary in this Agreement taken together with the attached Schedules
and with all of the documents and other papers
50
<PAGE>
expressly identified herein or listed in such Schedules, taken as a whole, do
not, to the knowledge of the Company or Subsidiary, contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements made not false or misleading.
7.10 Financing Commitments. The Company has delivered to Target
true and complete copies of written commitments of third parties to provide
the Company and Subsidiary with financing in an amount sufficient to
effectuate the transactions contemplated hereby.
7.11 Brokers. Other than Donaldson, Lufkin & Jenrette Securities
Corporation, no broker, finder or similar intermediary has acted for or on
behalf of the Company or Subsidiary in connection with this Agreement or the
transactions contemplated hereby, and no broker, finder, agent or similar
intermediary is entitled to any broker's, finder's or similar fee or other
commission in connection therewith based on any agreement, arrangement or
understanding with the Company or Subsidiary or any action taken by it.
7.12 Certain Actions. The Company has no present plan or intention
to sell or otherwise transfer or dispose of any of the stock or assets of
Target following the Merger, except for dispositions made in the ordinary
course of business. The Company has no present plan or intention to
reacquire any of its stock issued in the Merger. Following the Effective
Time, the Company has no present plan or intention to cause Target no longer
to continue (a) the historic business of Target or (b) to use a significant
portion of Target's historic business assets in a business.
51
<PAGE>
7.13 Solvency. As of the date hereof and, after giving effect to
the Merger and assuming the representations and warranties of Target
contained in this Agreement are true and correct as of the Effective Date, as
of the Effective Date (a) the aggregate value of all of the assets of the
Company and its subsidiaries on a consolidated basis, at a fair valuation, do
and will exceed the total liabilities of the Company and its subsidiaries on
a consolidated basis (including contingent, subordinated, unmatured and
unliquidated liabilities), (b) the Company has and will have the ability to
pay its debts as they mature and does not and will not have unreasonably
small capital with which to conduct its business. For purposes of this
Section 7.13, the "fair valuation" of such assets shall be determined on the
basis of that amount which may be realized within a reasonable time, in any
manner through realization of the value of or dispositions of such assets at
the regular market value, conceiving the latter as the amount which could be
obtained for the assets in question within such period by a capable and
diligent business person from an interested buyer who is willing to purchase
under ordinary selling conditions.
ARTICLE 8
REPRESENTATIONS AND WARRANTIES OF THE
COMPANY AND SUBSIDIARY TO TARGET STOCKHOLDERS
The Company and Subsidiary represent and warrant to Target for the
benefit of all holders of Target Common Stock on the Effective Date as follows:
8.1 Full Disclosure. All documents and other papers identified
herein or listed on the Schedules attached hereto and delivered by or on
behalf of the Company or Subsidiary to Target in connection with this
Agreement and the
52
<PAGE>
transactions contemplated hereby are true, complete and authentic copies
thereof. The representations and warranties of the Company and Subsidiary in
the Agreement taken together with the attached Schedules and with all of the
documents and other papers expressly identified herein or listed in such
Schedules, taken as a whole, do not, to the knowledge of the Company or
Subsidiary, contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements made therein not false or
misleading.
8.2 Validity of Stock Consideration. The representations and
warranties of the Company and Subsidiary contained in Section 7.3 are true
and correct.
ARTICLE 9
COVENANTS
From the date of this Agreement up to and including the Effective Time
(unless this Agreement is terminated pursuant to Article 12), the parties hereto
covenant and agree as follows:
9.1 Conduct of Business of the Acquired Companies. Except as
contemplated by this Agreement, during the period from the date of this
Agreement to the Effective Time,(a) the Target shall, and shall cause each
Target Subsidiary to, conduct its business and operations only in the ordinary
course and, without the prior written consent of the Company, the Target shall
not, and shall ensure that the Target Subsidiaries do not, undertake any of the
actions specified in Section 5.11 other than in
53
<PAGE>
the ordinary cause of business and (b) the Company shall, and shall cause
each of its subsidiaries to, conduct its business and operations only in the
ordinary course.
9.2 Access to Information; Confidentiality. (a) During the period
from the date of this Agreement to the Effective Time, each of Target and the
Company shall, and shall cause their respective subsidiaries to, during
regular business hours and upon reasonable written request, give the other
party, and the other party's authorized representatives, reasonable access to
all of its respective subsidiaries books, records, offices and other
facilities and properties; provided however, that any such access shall not
interfere with the businesses or operations of the relevant entity.
(b) Any information provided to or obtained by the Company,
Subsidiary, Target or their respective representatives pursuant to paragraph
(a) above shall be "Proprietary Information" and shall be held by the party
obtaining such information and its representatives in confidence and no party
shall use any of the Proprietary Information for any purpose other than
evaluating the transactions contemplated hereby or disclose any of the
Proprietary Information to any other party. Proprietary Information shall
not include, however, information that (i) becomes generally available to the
public other than as a result of a disclosure by the Company, Subsidiary,
Target or representatives, (ii) was known to the party obtaining such
information on a non-confidential basis prior to its disclosure pursuant to
this Agreement or (iii) becomes available to the party obtaining such
information on a non-confidential basis.
9.3 Publicity. Until the earlier of the date on which this Agreement
ceases to be in effect and the Effective Date, none of the parties hereto will
make any
54
<PAGE>
public release or other public disclosure of information regarding the
transactions contemplated by this Agreement, including the existence or terms
of this Agreement, without the prior approval of the other parties, which
approval shall not be unreasonably withheld or delayed, except as required by
law or court order.
9.4 Filings and Authorizations. Each of the Company, Subsidiary
and Target, within three Business Days of the date hereof, shall (a) file or
supply, or cause to be filed or supplied, all notifications and information
required to be filed or supplied pursuant to the HSR Act in connection with
the Merger and consummation of the other transactions contemplated hereby,
and (b) request early termination of the waiting period under the HSR Act.
Each of the parties hereto, as promptly as practicable, shall (i) make, or
cause to be made, all such other filings and submissions under laws, rules
and regulations applicable to it, or to its subsidiaries and affiliates, as
may be required for it to consummate the Merger and other transactions
contemplated hereby in accordance with the terms of this Agreement; (ii) use
its diligent efforts to obtain, or cause to be obtained, all authorizations,
approvals, consents and waivers from all persons and Governmental Authorities
necessary to be obtained by it, or its subsidiaries or affiliates, in order
for it so to consummate such transactions; and (iii) use its reasonable best
efforts to take, or cause to be taken, all other actions necessary, proper or
advisable in order for it to fulfill its obligations hereunder. The parties
hereto shall coordinate and cooperate with one another in exchanging such
information and supplying such reasonable assistance as may be reasonably
requested by each in connection with the foregoing.
55
<PAGE>
9.5 Notice of Events. During the period of this Agreement to the
Effective Time, Target shall give prompt notice to the Company, and the Company
shall give prompt notice to Target, of (i) the occurrence, or non-occurrence, of
any event of which it has knowledge the occurrence, or non-occurrence, of which
would be likely to result in any of the conditions specified in (x) in the case
of the Company, Sections 10.1 and 10.6 or (y) in the case of Target,
Sections 11.1 and 11.5 not being satisfied so as to permit the consummation of
the Merger at the Effective Time; and (ii) any material failure on its part to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it hereunder; provided, however, that the delivery of any notice
pursuant to this Section 9.5 shall not limit or otherwise affect the remedies
available hereunder to any party.
9.6 Further Assurances. Each of the parties hereto shall execute
such documents and other papers and perform such further acts as may be
reasonably required to carry out the provisions hereof and the actions
contemplated hereby. Each such party shall, on or prior to the Effective Time,
use its best efforts to fulfill or obtain the fulfillment of the conditions
precedent to the consummation of the transactions contemplated hereby, including
the execution and delivery of any documents, certificates, instruments or other
papers that are reasonably required for the consummation of the transactions
contemplated hereby.
9.7 Notice to Stockholders. The Target shall give prompt notice of
all action taken by consent in lieu of a meeting pursuant to Section 228(d) of
the DGCL to approve the Merger.
56
<PAGE>
9.8 No Section 338 Election. Neither the Company nor any affiliate
thereof shall (i) make an election under Section 338 of the Code or any similar
provision of state or local law in respect of the Merger or (ii) cause any
Acquired Company to engage in any transaction that could cause the Merger to be
treated as a purchase or sale of the assets of any Acquired Company for federal,
state, local or foreign Tax purposes.
9.9 Affiliate Transactions. Except as consented to in writing by the
Company, each of the Acquired Companies shall terminate, as of the Effective
Date, all transactions with any stockholder, director or executive officer of
any Acquired Company (or any affiliate thereof) and any agreement or contract in
respect thereof.
9.10 Employees. (a) The Company shall cause the Surviving
Corporation to extend to all employees of the Acquired Companies other than
those identified on the Schedule 1.1(a) the Company's standard severance policy
as heretofore delivered to the Target. For the avoidance of doubt, time spent
in prior service by an employee of any Acquired Company with Target's
predecessor companies, L&F Products and Reckitt & Colman, Inc., shall be
included in calculating the period an employee was employed by Target and the
Surviving Corporation to determine severance entitlement under such standard
severance policy.
(b) The Company agrees to cause the Surviving Corporation to pay
no later than April 6, 1998, to the employees of the Acquired Companies
identified on Schedule 9.10(b) to the extent such employees are employed by such
Acquired Company on the Effective Date and on March 31, 1998, the amount as
calculated on Schedule 9.10(b) in satisfaction of the Acquired Company's
obligations
57
<PAGE>
under the terms of the Personal Care Group, Inc. 1996 Management Incentive Plan.
The Company will assume the Acquired Company's obligations under the PCG -
Fiscal Year 1998 Sales Incentive Plan.
9.11 Indemnification of Directors and Officers. The Company and
Subsidiary agree that all rights to indemnification and exculpation from
liability for acts or omissions occurring prior to the Effective Time now
existing in favor of the current or former directors or officers of the
Acquired Companies, as provided in the respective certificates of
incorporation or by-laws of the Acquired Companies, shall survive the
Effective Time and shall continue in full force and effect in accordance with
their respective terms for a period of six years after the Effective Time;
provided, that notwithstanding anything to the contrary herein or in the
certificate of incorporation or by-laws of any of the Acquired Companies, in
no event will the Company or Subsidiary indemnify or exculpate any current or
former director or officer of any Acquired Company from liability for acts or
omissions constituting fraud or wilful misconduct; and provided, further,
that the Company shall be entitled to reimbursement from such director or
officer, of all amounts expended by it or any of its subsidiaries in the
defense of any claim against a current or former director or officer of an
Acquired Company if a court of competent jurisdiction finds that such
director or officer has liability for an act or omission which constituted
fraud or wilful misconduct.
9.12 Solvency Opinion. If, in connection with the Company's obtaining
financing to satisfy its obligation to pay the consideration for the Merger, the
Company obtains a solvency opinion, then such opinion shall also be addressed to
and delivered to the Target.
58
<PAGE>
ARTICLE 10
CONDITIONS PRECEDENT TO
OBLIGATIONS OF THE COMPANY AND SUBSIDIARY
The obligation of the Company and Subsidiary under this Agreement to
consummate the Merger shall be subject to the satisfaction, at or prior to the
Effective Time, of all of the following conditions, any one or more of which may
be waived by the Company:
10.1 Representations and Warranties Accurate. All representations and
warranties of Target contained in Article 5 and all representations and
warranties of the Principal Stockholder contained in Article 6 shall be true and
correct on and as of the Effective Date with the same force and effect as though
made on and as of the Effective Date.
10.2 Performance. Target shall have performed and complied with all
agreements, covenants and conditions required by this Agreement to be performed
and complied with by it prior to or on the Effective Time.
10.3 Certificates. The Company shall have received a (i) certificate,
dated the Effective Date, executed by an officer of the Target to the effect
that (a) the condition set forth in Section 10.2 has been satisfied and (b) that
the representations and warranties of Target contained in Article 5 are true and
correct on and as of the Effective Date, (ii) a certificate from the Principal
Stockholder that the representations and warranties of the Principal Stockholder
contained in Article 6 are true and correct on and as of the Effective Date and
(iii) the certificate contemplated by Section 6.2.
59
<PAGE>
10.4 Other Agreements. The Principal Stockholder shall have executed
the Stockholders Agreement and the Registration Rights Agreement.
10.5 Corporate Matters. The holders of not more than one percent of
Target Common Stock shall have perfected appraisal rights under Section 262 of
the DGCL with respect to the Merger.
10.6 HSR Act: Authorizations; Legal Prohibition.
(a) With respect to the transactions contemplated hereby, all
applicable waiting periods under the HSR Act shall have expired or been
terminated.
(b) The Company and Subsidiary shall have obtained all
governmental authorizations, approvals, consents and waivers, the lack of which
prior to the Effective Time, under any applicable law, rule or regulation, would
render legally impermissible the consummation of the Merger by the Company and
Subsidiary.
(c) Target shall have obtained or made all governmental
authorizations, approvals, consents, waivers and filings, the lack of which
prior to the Effective Time, under any applicable law, rule or regulation, would
render legally impermissible the consummation of the Merger by Target.
10.7 No Injunction. There shall be no judgment, injunction,
order or decree enjoining the Company, Subsidiary or Target from consummating
the transactions contemplated by this Agreement.
10.8 Legal Opinion. The Company shall have received a legal opinion
from Target's counsel, Sullivan & Worcester LLP, covering such matters as are
customarily included in legal opinions delivered in connection with transactions
of the
60
<PAGE>
types contemplated by this Agreement, in form and substance reasonably
satisfactory to the Company.
ARTICLE 11
CONDITIONS PRECEDENT TO OBLIGATIONS OF TARGET
The obligation of Target to consummate the Merger shall be subject to
the satisfaction, at or prior to the Effective Time, of all of the following
conditions, any one or more of which may be waived by Target:
11.1 Representations and Warranties Accurate. All representations and
warranties of the Company and Subsidiary contained in Articles 7 and 8 shall be
true and correct on and as of the Effective Date with the same force and effect
as though made on and as of the Effective Date.
11.2 Performance by Others. The Company and Subsidiary shall have
performed and complied with all agreements, covenants and conditions required by
this Agreement to be performed and complied with by it prior to or on the
Effective Date.
11.3 Certificate. Target shall have received a certificate, dated the
Effective Date, signed by an officer of the Company, to the effect that the
conditions set forth in Sections 11.1 and 11.2 have been satisfied.
11.4 Other Agreements. The Company shall have executed the
Stockholders Agreement and the Registration Rights Agreements, and the
individual named in Section 2.1 of the Stockholders Agreement shall have been
appointed to the Board of Directors of the Company.
61
<PAGE>
11.5 HSR Act: Authorization; Legal Prohibition.
(a) With respect to the transactions contemplated hereby, all
applicable waiting periods under the HSR Act shall have expired or been
terminated.
(b) The Company and Subsidiary shall have obtained all
governmental authorizations, approvals, consents and waivers, the lack of which
prior to the Effective Time, under any applicable law, rule or regulation, would
render legally impermissible the consummation of the Merger by the Company and
Subsidiary.
11.6 No Injunction. There shall be no judgment, injunction, order or
decree enjoining the Company, Subsidiary or Target from consummating the
transactions contemplated by this Agreement.
11.7 Legal Opinion. Target shall have received a legal opinion from
the Company's counsel, Paul, Weiss, Rifkind, Wharton & Garrison, covering such
matters as are customarily included in legal opinions delivered in connection
with transactions of the type contemplated by this Agreement, in form and
substance reasonably satisfactory to the Target.
ARTICLE 12
INDEMNIFICATION
12.1 Indemnification. Subject to the limitations contained in Section
12.3 and Section 14.3:
(a) the Principal Stockholder agrees to indemnify, defend and
hold harmless each of the Company and Subsidiary (and each of their respective
62
<PAGE>
directors, officers, employees, successors and assigns) from and against any and
all losses, claims, damages, liabilities and expenses ("Losses") based upon,
arising out of or otherwise in respect of any inaccuracy in or any breach of any
representation, or warranty made by the Principal Stockholder in this Agreement
or in any certificate delivered pursuant hereto;
(b) the Company agrees to indemnify, defend and hold harmless
the Principal Stockholder (and its directors, officers, employees, successors
and assigns) from and against any and all Losses based upon, arising out of or
otherwise in respect of any inaccuracy in or any breach of any representation or
warranty made by the Company or Subsidiary contained in Article 8 of this
Agreement or in any certificate delivered pursuant hereto; and
(c) the Company and the Principal Stockholder hereby acknowledge and
agree that a claim for indemnification under this Section 12.1 arising under
Section 6.1 or 8.1 shall not be nullified solely because the facts,
circumstances and/or events giving rise to such claim may have constituted a
breach of a representation or warranty which terminated at the Effective Time
pursuant to Section 14.3.
12.2 Notice and Opportunity to Defend. Each person making a claim
under this Article 12 (an "Indemnified Party") shall, promptly after the receipt
of notice of the commencement of any action, investigation, claim or other
proceeding against such Indemnified Party in respect of which indemnity may be
sought from the indemnifying party under this Article 12 (the "Indemnifying
Party"), notify the Indemnifying Party in writing of the commencement thereof.
The failure of any Indemnified Party to so notify the Indemnifying Party of any
such action shall not
63
<PAGE>
relieve the Indemnifying Party from any liability which it may have to such
Indemnified Party (a) other than pursuant to this Article 12 or (b) under this
Article 12 unless, and only to the extent that, such failure results in the
Indemnifying Party's forfeiture of substantial rights or defenses. In any case
in which any action, claim or other proceeding shall be brought against any
Indemnified Party, and it shall notify the Indemnifying Party of the
commencement thereof, the Indemnifying Party shall be entitled to assume the
defense thereof at its own expense, with counsel reasonably satisfactory to such
Indemnified Party; provided, however, that any Indemnified Party may, at its own
expense, retain separate counsel to participate in such defense.
Notwithstanding the foregoing, in any action, claim or proceeding in which both
the Indemnifying Party, on the one hand, and the Indemnified Party, on the other
hand, are, or are reasonably likely to become, a party, such Indemnified Party
shall have the right to employ separate counsel at the expense of the
Indemnifying Party and to control its own defense of such action, claim or
proceeding if, in the reasonable opinion of counsel to such Indemnified Party, a
conflict or potential conflict exists between the Indemnifying Party, on the one
hand, and such Indemnified Party, on the other hand, that would make such
separate representation advisable; provided, however, that the Indemnifying
Party shall not be liable for the fees and expenses of more than one counsel to
all Indemnified Parties. Each Indemnifying Party agrees that it will not,
without the prior written consent of the Indemnified Party, settle, compromise
or consent to the entry of any judgment in any pending or threatened claim,
action or proceeding relating to the matters contemplated hereby (if any
Indemnified Party is a party thereto or has been actually threatened to be made
a party
64
<PAGE>
thereto) unless such settlement, compromise or consent includes an unconditional
release of the Indemnified Party and each other Indemnified Party from all
liability arising or that may arise out of such claim, action or proceeding.
The Indemnifying Party shall not be liable for any settlement of any claim,
action or proceeding effected against an Indemnified Party without its written
consent, which consent shall not be unreasonably withheld. The rights accorded
to an Indemnified Party hereunder shall be the exclusive remedy of such party
for any Losses based upon, arising out of or otherwise in respect of any
inaccuracy or in breach of any representation and warranty contained in this
Agreement or in any documents delivered pursuant hereto; provided, that, this
provision does not limit the liability of any holder of Target Common Stock for
any breach of any term of such holder's Letter of Transmittal for which each
such holder will be severally liable.
12.3 Limitations on Indemnifications. Except as provided in Section
12.3(c) below, the indemnification provided for in Section 12.1 shall be subject
to the following limitations:
(a) No Indemnifying Party shall be obligated to pay any amounts
for indemnification under Section 12.1 until the aggregate amount of Losses
equals one million dollars ($1,000,000) (the "Basket Amount"), whereupon the
Indemnifying Party shall be obligated to pay in full all amounts for
indemnification in excess of the Basket Amount.
(b)(i) The Company shall not be obligated to make any payment
for indemnification under Section 12.1 in excess of ten million dollars
($10,000,000) in the aggregate and (ii) the Principal Stockholder shall not be
obligated to make any
65
<PAGE>
payment for indemnification under Section 12.1 in excess of five million dollars
($5,000,000) in the aggregate.
(c) The limitations set forth in this Section 12.3 shall not
apply to any claims under Section 12.1 for (x) breaches of any of the
representations and warranties set forth in Sections 6.2, 6.3 and 8.2, and (y) a
breach by the Company of its representation and warranty set forth Section 7.13,
but only to the extent that the Principal Stockholder or any of the holders of
Target Common Stock at the Effective Time were required to return, and returned,
to the Company any Cash Consideration received by such persons pursuant to
Section 3.1.
(d) Each party's right to make a claim for indemnification under
Section 12.1 shall terminate on the first anniversary of the Effective Date.
ARTICLE 13
TERMINATION
13.1 Termination.
(a) This Agreement may be terminated prior to the Effective Date
as follows:
(i) by mutual consent of the Company and Target; and
(ii) at the election of the Company or Target, if the
Effective Date shall not have occurred on or before February 28, 1998, provided
that a party seeking to terminate this Agreement (the "Electing Party") may not
do so if the failure to consummate the transactions contemplated hereby is the
result of a willful
66
<PAGE>
and material breach of the representations, warranties or covenants under this
Agreement by such Electing Party or the Electing Party shall not have used its
best reasonable efforts to consummate the transaction contemplated hereby by
February 28, 1998; and
(iii) at the election of either the Company or the
Target, if on the proposed Effective Date the Closing Company Stock Price is
less than $7.50.
(b) The termination of this Agreement shall be effectuated by
the delivery by the party terminating this Agreement to the other party of a
written notice of such termination. If this Agreement so terminates, it shall
become null and void and have no further force or effect, except as provided in
Section 13.2.
13.2 Survival After Termination. If this Agreement is terminated in
accordance with Section 13.1 hereof and the transactions contemplated hereby are
not consummated, this Agreement shall become void and of no further force and
effect; provided, however, that none of the parties hereto shall have any
liability in respect of this Agreement or arising from the termination of this
Agreement, except to the extent that failure to satisfy the conditions of
Articles 10 or 11 results from the intentional or willful violation by such
party of this Agreement or the provisions of any agreement made or to be made
pursuant to this Agreement and except that the provisions of Section 9.2(b) and
Article 12 shall survive the termination of this Agreement for the periods
provided by their respective provisions.
67
<PAGE>
ARTICLE 14
MISCELLANEOUS
14.1 Expenses. If the Merger is not consummated, the Company and
Subsidiary, on the one hand, and Target and the Principal Stockholder, on the
other hand, shall each bear their respective direct and indirect expenses
incurred in connection with the negotiation and preparation of this Agreement
and the consummation of the transactions contemplated hereby. If the Merger is
consummated, the Company shall pay up to $1,600,000 of the Acquired Companies'
Transaction Expenses, and any excess of the Acquired Companies' Transaction
Expenses over $1,600,000 shall be included in the "Indebtedness" as defined in
Section 1.1.
14.2 Amendment. This Agreement shall not be amended or modified
except by a writing duly executed by all of the parties hereto.
14.3 Survival of Representations and Warranties. None of the
representations, warranties, covenants and agreements contained in this
Agreement shall survive the Effective Time, except those representations and
warranties contained in Articles 6 and 8 which shall survive until the first
anniversary of the Effective Date.
14.4 Entire Agreement. This Agreement including the Schedules
attached hereto, which are deemed for all purposes to be part of this Agreement,
and the Exhibits hereto and the other documents delivered pursuant to this
Agreement, including without limitation the Stockholders Agreement and the
Registration Rights Agreement, contain all of the terms, conditions and
representations and warranties agreed upon or made by the parties relating to
the subject matter of this Agreement and the businesses and operations of the
Acquired Companies and supersede all prior and
68
<PAGE>
contemporaneous agreements, negotiations, correspondence, undertakings and
communications of the parties or their representatives, oral or written,
respecting such subject matter.
14.5 Headings. The headings contained in this Agreement are intended
solely for convenience and shall not affect the rights of the parties to this
Agreement.
14.6 Notices. Any notice or other communication required or permitted
under this Agreement shall be in writing and shall be deemed to have been
delivered when delivered by hand or sent by telecopier (with receipt confirmed),
or if delivered by courier shall be deemed given on the close of business on the
second Business Day next following the day when deposited with an overnight
courier or the close of business on the fifth Business Day when deposited in the
United States mail, postage prepaid, certified or registered addressed to the
party at the address set forth below, with copies sent to the persons indicated:
If to Target, to it at:
Personal Care Holdings, Inc.
c/o J.W. Childs Associates, Inc.
One Federal Street
Boston, MA 02110
Attention: John W. Childs
Telecopier: (617) 753-1101
With a copy to:
Sullivan & Worcester LLP
One Post Office Square
Boston, MA 02109
Attention: Christopher Cabot, Esq.
Telecopier: (617) 338-2880
69
<PAGE>
If to the Principal Stockholder, to it at:
J.W. Childs Equity Partners, L.P.
c/o J.W. Childs Associates, Inc.
One Federal Street
Boston, MA 02110
Attention: John W. Childs
Telecopier: (617) 753-1101
With a copy to:
Sullivan & Worcester LLP
One Post Office Square
Boston, MA 02109
Attention: Christopher Cabot, Esq.
Telecopier: (617) 338-2880
If to the Company or Subsidiary, to it at:
Playtex Products, Inc.
300 Nyala Farms Road
Westport, Connecticut 06880
Attention: Michael F. Goss
Telecopier: (203) 341-4260
With a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Robert M. Hirsh, Esq.
Telecopier: (212) 757-3990
Such addresses may be changed, from time to time, by means of a notice
given in the manner provided in this Section 14.6.
14.7 Severability. If any provision of this Agreement, or the
application thereof to any person or circumstance, is invalid or unenforceable
in any jurisdiction, (i) a substitute and equitable provision shall be
substituted therefor in order to remove, so far as may be valid and enforceable
in such jurisdiction, the intent
70
<PAGE>
and purpose of the invalid or unenforceable provision; and (ii) the remainder of
this Agreement and the application of such provision to other persons or
circumstances shall not be affected by such invalidity or unenforceability, nor
shall such invalidity or unenforceability of such provision affect the validity
or enforceability of such provision, or the application thereof, in any other
jurisdiction.
14.8 Waiver. Waiver of any term or condition or breach of or failure
with respect to any such term or condition of this Agreement by any party shall
only be effective if in writing and shall not be construed as a waiver of any
subsequent breach of or failure with respect to the same term or condition, or a
waiver of any other term or condition of this Agreement.
14.9 Binding Effect; Assignment. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their permitted
successors and assigns. No party to this Agreement may assign or delegate, by
operation of law or otherwise, all or any portion of its rights, obligations or
liabilities under this Agreement without the prior written consent of the other
parties to this Agreement, which consent any such party may withhold in its
absolute discretion. Any purported assignment without such prior written
consents shall be void ab initio.
14.10 No Third Party Beneficiary. Nothing in this Agreement shall
confer any rights, remedies or claims upon any person or entity not a party or a
permitted assignee of a party to this Agreement.
14.11 Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures to each counterpart were
upon a
71
<PAGE>
single instrument, and all such counterparts together shall be deemed an
original of this Agreement.
14.12 Governing Law and Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
without giving effect to the principles of conflict of laws thereof except that
the Merger shall be governed by the DGCL.
72
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
PERSONAL CARE HOLDINGS, INC.
By: /s/ Adam Suttin
---------------
Name: Adam Suttin
Title: Vice President
J.W. CHILDS EQUITY PARTNERS, L.P.
By: J.W. Childs Advisors, L.P., its General
Partner
By: J.W. Childs Associates, L.P., its General
Partner
By: J.W. Childs Associates, Inc.
By: /s/ Adam Suttin
---------------
Name: Adam Suttin
Title: General Partner
PLAYTEX PRODUCTS, INC.
By: /s/ Michael F. Goss
-------------------
Name: Michael F. Goss
Title: EVP, CFO
PCG ACQUISITION CORP.
By: /s/ Michael F. Goss
-------------------
Name: Michael F. Goss
Title:
73
<PAGE>
J.W. CHILDS EQUITY PARTNERS, L.P.
One Federal Street
Boston, Massachusetts 02109
PERSONAL CARE HOLDINGS, INC.
One Paragon Drive
Montvale, New Jersey 07645
January 16, 1998
Playtex Products, Inc.
PCG Acquisition Corp.
300 Nyala Farms Road
Westport, Connecticut 06880
Attention: Michael F. Goss
Re: Merger Agreement dated as of December 22, 1997 among
the addressees hereof and the undersigned (the
"Agreement")
Dear Mr. Goss:
This letter amends the Agreement by adding thereto, immediately after
Section 3.1(b), a new Section 3.1(b-1), which shall read in its entirety as
follows:
(b-1) In addition to the foregoing and notwithstanding
anything to the contrary contained herein, the allocation of the
Consideration Per Share set forth above may be changed with respect to the
holders of Target Common Stock and Target Options listed on
Schedule 3.1(b-1) attached hereto (each, a "Management Holder") if, prior
to the Effective Date, a Management Holder elects to receive on the
Effective Date a cash payment in lieu of the Stock Consideration Per Share
to which such Management Holder would otherwise be entitled to hereunder
(an "All Cash Election"). The cash payment to be made to a Management
Holder who makes an All Cash Election will equal the Stock Consideration
Per Share to which such Management Holder would otherwise be entitled to
hereunder multiplied by 80% of the Closing Company Stock Price (the "Cash
Election Payment"). With respect to each electing Management Holder, the
aggregate Stock Consideration Per Share otherwise allocable to such
Management Holder hereunder shall be allocated instead to the Principal
Stockholder, and an amount equal to such Management Holder's Cash Election
Payment shall be reallocated from the portion of the Cash Consideration
otherwise allocable to the Principal Stockholder to such Management Holder.
Schedule 3.1(b-1), the list of Management Holders, is attached hereto. All
other provisions of the Agreement remain unchanged.
(Signatures on following page)
<PAGE>
Very truly yours,
J.W. CHILDS EQUITY PARTNERS, L.P.
By: J.W. Childs Advisors, L.P.,
its general partner
By: J.W. Childs Associates, L.P.,
its general partner
By: J.W. Childs Associates, Inc.,
its general partner
By: /s/ Adam Suttin
---------------
Title:
PERSONAL CARE HOLDINGS, INC.
By: /s/ Adam Suttin
---------------
Title:
Accepted and agreed as of the
date first written above:
PLAYTEX PRODUCTS, INC.
By: /s/ Michael F. Goss
-------------------
Title:
PCG ACQUISITION CORP.
By: /s/ Michael F. Goss
-------------------
Title:
2
<PAGE>
SCHEDULE 3.1(b-1)
PCH MANAGEMENT HOLDERS
Aleli Abordo
Karen A. August
Santo Auriemma
Christina Bartolick
Andy Bellizzi
Loren Block
Patricia C. Block
Patrick L. Brown
Stephen K. Carrico
Michael Cox
Nancy Cushing
Catherine J. Durden
Teresita Eugenio
Michael P. Ferry
Michael A. Fleury
Debra T. Follick
James P. Garvey
Bruce A. Goldsmith
Peter R. Gower
Marcie J. Griesmeyer
Neil P. Guller
David Hays
Jane B. Hoder
Thomas D. Horton
Lee S. Jacobs
Christine D. Kalafut
Dennis M. Kearney
William R. Kinder
<PAGE>
Nichelle R. Lange
Cheryl Lawler
Kim Levine
Daisy M. Madrazo
Michael J. Metzger
Donald W. Miller
David Montfort
Dennis L. Moore
Donald G. Morgan
James D. Murphy
Robert O'Brien
Joseph M. Pachella
Millard E. Page
Leslie Paparone
Sri Parthasarathy
Caren Passariello
Dennis G. Podlesak
Jay E. Politi
Kenneth F. Reilly
Joel A. Slank
Julie B. Sweeney
Daniel M. Synan
Anne Tashjian
James D. Tates
Sharad B. Tilak
Paul W. Tonnesen
Elizabeth Webster
Marianne Wojcicki
<PAGE>
J.W. CHILDS EQUITY PARTNERS, L.P.
One Federal Street
Boston, Massachusetts 02109
PERSONAL CARE HOLDINGS, INC.
One Paragon Drive
Montvale, New Jersey 07645
January 27, 1998
Playtex Products, Inc.
PCG Acquisition Corp.
300 Nyala Farms Road
Westport, Connecticut 06880
Attention: Michael F. Goss
Re: Merger Agreement dated as of December 22, 1997 among
the addressees hereof and the undersigned (as amended, the
"Agreement")
Dear Mr. Goss:
This letter amends Section 3.1(b-1) of the Agreement, which shall read in
its entirety as follows:
(b-1) In addition to the foregoing and notwithstanding
anything to the contrary contained herein, the allocation of the
Consideration Per Share set forth above may be changed with respect to the
holders of Target Common Stock and Target Options listed on
Schedule 3.1(b-1) attached hereto (each, a "Management Holder") if, prior
to the Effective Date, a Management Holder elects to receive on the
Effective Date a cash payment in lieu of the Stock Consideration Per Share
to which such Management Holder would otherwise be entitled to hereunder
(an "All Cash Election"). The cash payment to be made to a Management
Holder who makes an All Cash Election will equal the Stock Consideration
Per Share to which such Management Holder would otherwise be entitled to
hereunder multiplied by 80% of the Closing Company Stock Price (the "Cash
Election Payment"). With respect to each electing Management Holder, the
aggregate Stock Consideration Per Share otherwise allocable to such
Management Holder hereunder shall be allocated instead to the holders
listed on Schedule 3.1(b-1) (the "JWC Holders") in the percentage indicated
on such Schedule, and an amount equal to such Management Holder's Cash
Election Payment shall be reallocated to such Management Holder from the
portion of the Cash Consideration otherwise allocable to such JWC Holders.
Schedule 3.1(b-1), the list of Management Holders, is attached hereto. All
other provisions of the Agreement remain unchanged.
(Signatures on following page)
<PAGE>
Very truly yours,
J.W. CHILDS EQUITY PARTNERS, L.P.
By: J.W. Childs Advisors, L.P.,
its general partner
By: J.W. Childs Associates, L.P.,
its general partner
By: J.W. Childs Associates, Inc.,
its general partner
By: /s/ Adam Suttin
---------------
Title:
PERSONAL CARE HOLDINGS, INC.
By: /s/ Adam Suttin
---------------
Title:
Accepted and agreed as of the
date first written above:
PLAYTEX PRODUCTS, INC.
By: /s/ Michael F. Goss
-------------------
Title:
PCG ACQUISITION CORP.
By: /s/ Michael F. Goss
-------------------
Title:
<PAGE>
SCHEDULE 3.1(b-1)
PCH MANAGEMENT HOLDERS
Aleli Abordo
Karen A. August
Santo Auriemma
Christina Bartolick
Andy Bellizzi
Loren Block
Patricia C. Block
Patrick L. Brown
Stephen K. Carrico
Michael Cox
Nancy Cushing
Catherine J. Durden
Teresita Eugenio
Michael P. Ferry
Michael A. Fleury
Debra T. Follick
James P. Garvey
Bruce A. Goldsmith
Peter R. Gower
Marcie J. Griesmeyer
Neil P. Guller
David Hays
Jane B. Hoder
Thomas D. Horton
Lee S. Jacobs
Christine D. Kalafut
Dennis M. Kearney
William R. Kinder
<PAGE>
Nichelle R. Lange
Cheryl Lawler
Kim Levine
Daisy M. Madrazo
Michael J. Metzger
Donald W. Miller
David Montfort
Dennis L. Moore
Donald G. Morgan
James D. Murphy
Robert O'Brien
Joseph M. Pachella
Millard E. Page
Leslie Paparone
Sri Parthasarathy
Caren Passariello
Dennis G. Podlesak
Jay E. Politi
Kenneth F. Reilly
Joel A. Slank
Julie B. Sweeney
Daniel M. Synan
Anne Tashjian
James D. Tates
Sharad B. Tilak
Paul W. Tonnesen
Elizabeth Webster
Marianne Wojcicki
<PAGE>
JWC HOLDERS - PRO RATA
<TABLE>
<CAPTION>
Name Percentage
---- ----------
<S> <C>
Bock Family Trust 0.05138%
J.W. Childs Equity Partners, L.P. 93.89179%
James E. Childs 0.14087%
John W. Childs 3.26172%
Richard S. Childs 0.14087%
Dowds Family Investment Trust 0.02184%
Adam T. Feild 0.06769%
Glenn A. Hopkins 0.21388%
Jerry D. Horn 0.23124%
Lambros J. Lambros 0.29609%
Stephanie Mansfield 0.02569%
L. and E. Mansfield 0.01285%
Jenny Childs Preston 0.01242%
Raymond B. Rudy 0.18800%
Steven G. Segal 0.80782%
S. Segal Trust 0.14607%
Segal Family Limited Partnership 0.05793%
Segal III Family Limited Partnership 0.04566%
Adam Suttin 0.21388%
Suttin Family Trust 0.10808%
Gagan Verma 0.03211%
Stephen Wise 0.03211%
</TABLE>
<PAGE>
AMENDMENT NO. 3
TO
MERGER AGREEMENT
AMENDMENT NO. 3, dated as of January 27, 1998 (the "Amendment") by
and among Playtex Products, Inc., a Delaware corporation (the "Company"), PCG
Acquisition Corp., a wholly-owned subsidiary of the Company and a Delaware
corporation ("Subsidiary"), J.W. Childs Equity Partners L.P., a Delaware
limited partnership (the "Principal Stockholder") and Personal Care Holdings
Inc., a Delaware corporation ("Target") to the Merger Agreement, dated as of
December 22, 1997 (as amended, the "Merger Agreement"), among the same
parties. Capitalized terms used herein and not defined herein are used with
the meanings ascribed thereto in the Merger Agreement.
The parties desire to amend the Merger Agreement as set forth
herein. For good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree as follows:
1. Amendment to Section 3.1. Section 3.1 of the Merger Agreement
is hereby amended by redesignating Sections 3.1 (c), (d) and (e) as Sections
3.1(d), (e) and (f) respectively, and by inserting the following new Section
3.1(c):
"(c) Notwithstanding the foregoing, a portion of the aggregate Cash
Consideration Per Share that any person (such person, a "PCH Holder")
is entitled to receive pursuant to this Agreement in an amount (with
respect to each PCH Holder, such PCH Holder's "Contingent
Consideration") equal to the product of (x) $350,000 times (y) a
fraction the numerator of which is the aggregate Cash Consideration
Per Share that such PCH Holder is entitled to pursuant to this
Agreement (without giving effect to this Section 3.1(c)) and the
denominator of which is the Cash Consideration, shall, in lieu of
being delivered to such PCH Holder, be delivered to an account
designated by the Principal Stockholder. In the event that as of
January 28, 1999 the Principal Stockholder has not been required to
satisfy obligations pursuant to that certain Indemnification
Agreement, dated as of January 28, 1998, between the Company and the
Principal Stockholder (the "Indemnification Agreement"), in excess of
an aggregate of $350,000, then promptly following such date, the
Principal Stockholder will deliver to each PCH Holder an amount equal
to the product of (x) the excess of $350,000 over the aggregate
amounts paid by the Principal Stockholder in satisfaction of
obligations under the Indemnification Agreement
<PAGE>
through such date, times (y) a fraction the numerator of which is such
PCH Holder's Contingent Consideration and the denominator of which is
$350,000. PCH Holders may look solely to the Principal Stockholder for
payments, if any, to be made pursuant to this Section 3.1(c), and the
Company, the Subsidiary and the Surviving Corporation shall have no
liability whatsoever to any PCH Holder in connection with the
obligations of the Principal Stockholder to make payments hereunder."
2. Except as amended hereby, the Merger Agreement shall in all
respects continue in full force and effect. This Amendment may be executed in
two or more counterparts, all of which shall be considered one and the same
Agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties. This
Amendment shall be governed by, and construed in accordance with the laws of the
State of New York, regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof.
2
<PAGE>
IN WITNESS WHEREOF, each of the parties have signed or caused
this Agreement to be signed as of the date first above written.
PERSONAL CARE HOLDINGS, INC.
By: /s/ Adam Suttin
---------------
Name: Adam Suttin
Title: Vice President
J.W. CHILDS EQUITY PARTNERS, L.P.
By: J.W. Childs Advisors, L.P., its General
Partner
By: J.W. Childs Associates, L.P., its General
Partner
By: J.W. Childs Associates, Inc.
By: /s/ Adam Suttin
---------------
Name: Adam Suttin
Title: General Partner
PLAYTEX PRODUCTS, INC.
By: /s/ Michael F. Goss
-------------------
Name: Michael F. Goss
Title: EVP, CFO
PCG ACQUISITION CORP.
By: /s/ Michael F. Goss
-------------------
Name: Michael F. Goss
Title:
3
Exhibit 2.2
REGISTRATION RIGHTS AGREEMENT
among
PLAYTEX PRODUCTS, INC.
and
J.W. CHILDS EQUITY PARTNERS, L.P.
_______________________________________
Dated as of January 28, 1998
_______________________________________
<PAGE>
TABLE OF CONTENTS
Page
1. Background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
2. Registration Under Securities Act, etc. . . . . . . . . . . . . . . . . .1
2.1 Registration on Request . . . . . . . . . . . . . . . . . . . . . . . . .1
2.2 Incidental Registration . . . . . . . . . . . . . . . . . . . . . . . . .5
2.3 Registration Procedures . . . . . . . . . . . . . . . . . . . . . . . . .9
2.4 Underwritten Offerings. . . . . . . . . . . . . . . . . . . . . . . . . 12
2.5 Preparation; Reasonable Investigation . . . . . . . . . . . . . . . . . 13
2.6 Limitations, Conditions and Qualifications to Obligations under
Registration Covenants . . . . . . . . . . . . . . . . . . . . . . . . 13
2.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4. Rule 144 and Rule 144A. . . . . . . . . . . . . . . . . . . . . . . . . 20
5. Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . . . . . 20
6. Nominees for Beneficial Owners. . . . . . . . . . . . . . . . . . . . . 20
7. Appointment of Representative . . . . . . . . . . . . . . . . . . . . . 20
8. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9. Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10. Calculation of Percentage Interests in Registrable Securities . . . . . 21
11. No Inconsistent Agreements. . . . . . . . . . . . . . . . . . . . . . . 21
12. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
13. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
14. Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
15. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
16. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
17. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
i
<PAGE>
REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of January
28, 1998, between PLAYTEX PRODUCTS, INC., a Delaware corporation (the "Company")
and J.W. CHILDS EQUITY PARTNERS, L.P., a Delaware limited partnership (the
"Principal Stockholder") and the other persons who are set forth in Schedule A
hereto (collectively with the Principal Stockholder, the "Childs Holders").
The parties hereby agree as follows:
1. Background. Pursuant to that certain Merger Agreement (as
amended, the "Merger Agreement"), dated as of December 22, 1997, among the
Company, PCG Acquisition Corp., a Delaware corporation and wholly-owned
subsidiary of the Company ("Subsidiary"), Personal Care Holdings Inc., a
Delaware corporation ("Target"), and the Principal Stockholder, the Childs
Holders received as part of the consideration for their shares of common stock
of Target, par value $.01 per share, among other things, in the aggregate,
9,257,375 shares (the "Shares") of Common Stock, par value $.01 per share, of
the Company. Capitalized terms used herein but not otherwise defined shall have
the meanings given them in Section 3.
2. Registration Under Securities Act, etc.
2.1 Registration on Request.
(a) Request. At any time after the date that is six months
after the Effective Date (as defined in the Merger Agreement), upon the written
request of the Childs Representative on behalf of one or more holders (the
"Initiating Holders") of Registrable Securities that the Company effect the
registration under the Securities Act of all or part of such Initiating Holders'
Registrable Securities, the Company promptly will give written notice of such
requested registration to all registered holders of Registrable Securities, and
thereupon the Company will use its best efforts to effect, at the earliest
possible date, the registration under the Securities Act of:
(i) the Registrable Securities which the Company has
been so requested to register by such Initiating Holders; and
(ii) all other Registrable Securities which the Company
has been requested to register by the Childs Representative on behalf of
the holders thereof (such holders together with the Initiating Holders
hereinafter are referred to as the "Selling Holders") by written request
given to
<PAGE>
the Company within 30 days after the giving of such written notice by the
Company, all to the extent necessary to permit the disposition of the
Registrable Securities so to be registered.
(b) Registration of Other Securities. Whenever the Company
shall effect a registration pursuant to this Section 2.1, no securities other
than Registrable Securities shall be included among the securities covered by
such registration unless the Selling Holders of not less than 66-2/3% of all
Registrable Securities to be covered by such registration shall have consented
in writing to the inclusion of such other securities; provided, however, that
such consent shall not be required with respect to securities required to be
registered by (a) the holders thereof (the "HWH Selling Holders") pursuant to
Section 2.2(a) of the HWH Agreement (such securities, "HWH Securities") and (b)
the holders thereof (the "Third Party Selling Holders" and together with the HWH
Selling Holders, the "Other Selling Holders") pursuant to Section 3(a) of the
Stockholders Agreement (such securities, "Third Party Securities" and, together
with the HWH Securities, the "Other Securities").
(c) Registration Statement Form. Registrations under this
Section 2.1 shall be on such appropriate registration form of the Commission as
shall be reasonably selected by the Company.
(d) Effective Registration Statement. A registration
requested pursuant to this Section 2.1 shall be deemed to have been effected if
a registration statement with respect thereto has become effective and remained
effective in compliance with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities covered by such registration
statement until such time as all of such Registrable Securities have been
disposed of in accordance with the intended methods of disposition by the seller
or sellers thereof set forth in such registration statement (unless the failure
to so dispose of such Registrable Securities shall be caused solely by reason of
a failure on the part of the Selling Holders); provided, that such period need
not exceed 135 days. Notwithstanding the foregoing, a registration requested
pursuant to this Section 2.1 shall not be deemed to have been effected if (i)
after it has become effective, such registration is interfered with by any stop
order, injunction or other order or requirement of the Commission or other
governmental agency or court for any reason not attributable solely to the
Selling Holders and has not thereafter become effective, or (ii) the conditions
to closing specified in the underwriting agreement, if any, entered into in
connection with such registration are not satisfied or waived, other than solely
by reason of a failure on the part of the Selling Holders.
(e) Selection of Underwriters. The underwriter or
underwriters of each underwritten offering of the Registrable Securities so to
2
<PAGE>
be registered shall be selected by the Childs Representative on behalf of
Selling Holders of more than 50% of Registrable Securities to be included in
such registration and shall be reasonably acceptable to the Company. For
purposes of this Section 2.1(e), the Company hereby acknowledges that each of
the underwriters identified on Schedule 2.1(e) hereto shall be deemed to be
acceptable to the Company; provided that such acknowledgment is subject to the
condition that with respect to any underwriter identified on such Schedule
selected by the Selling Holders, there shall have not occurred since the date
hereof any material change with respect to such underwriter which, in the
reasonable determination of the Company, makes such underwriter unqualified to
participate in an underwritten offering of Common Stock of which change the
Company shall have notified the Childs Representative prior to any such demand
under this Section 2.1 upon request from the Childs Representative.
(f) Priority in Requested Registration. If the managing
underwriter of any underwritten offering shall advise the Company in writing
(and the Company shall so advise each Selling Holder of Registrable Securities
requesting registration of such advice) that, in its opinion, the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering within a price range acceptable to the Childs
Representative on behalf of Selling Holders of 66-2/3% of the Registrable
Securities requested to be included in such registration, the Company, except as
provided below, will include in such registration, to the extent of the number
and type which the Company is so advised can be sold in (or during the time of)
such offering (the "Maximum Amount"),
first, Third Party Securities requested to be included in such
registration to the extent required to be included therein pursuant to the
Stockholders Agreement, pro rata (based on the number of Third Party Securities
requested to be included in such registration) among the Third Party Selling
Holders requesting participation in such registration;
second, Registrable Securities requested to be included in such
registration up to an aggregate amount equal to the lesser of (A) the aggregate
amount of Registrable Securities requested to be included in such registration
and (B) (x) if such registration is the first requested pursuant to this Section
2.1 (the "first registration"), the excess, if any, of the Maximum Amount over
the amount of securities provided for in the preceding paragraph (such amount,
the "Adjusted Maximum Amount"), but not in excess of 75% of the Maximum Amount,
or (y) if such registration is the second requested pursuant to this Section 2.1
(the "second registration"), the sum of 50% of the Adjusted Maximum Amount plus
the Recapture Amount;
3
<PAGE>
third, HWH Securities requested to be included in such registration up
to an aggregate amount equal to the lesser of (A) the aggregate amount of HWH
Securities requested to be included in such registration and (B) (x) if such
registration is the first registration, the excess, if any, of the Maximum
Amount over the amount of securities provided for in the two preceding
paragraphs but not in excess of 25% of the Maximum Amount, or (y) if such
registration is the second registration, 50% of the Adjusted Maximum Amount less
the Recapture Amount;
fourth, to the extent that the amount of securities provided for in
the three immediately preceding paragraphs is less than the Maximum Amount,
Registrable Securities or HWH Securities, as applicable, requested to be
included in such registration, up to the aggregate amount requested by the
Selling Holders and HWH Selling Holders, respectively, to be included in such
registration in excess of the amounts provided for in the three immediately
preceding paragraphs; and
fifth, all securities proposed to be sold by the Company for its own
account;
provided, that from and after the date on which the Stockholders Agreement is no
longer in effect, all references to Third Party Securities in the foregoing
priorities shall be deleted and the priorities provided for herein shall be
automatically adjusted accordingly.
For purposes of the foregoing (A) all Registrable Securities included
in such registration shall be allocated pro rata (based on the number of
Registrable Securities held by each of the Selling Holders) among the Selling
Holders requesting such registration and (B) all HWH Securities included in such
registration shall be allocated pro rata (based on the number of HWH Securities
held by each of the HWH Selling Holders) among the HWH Selling Holders
requesting participation in such registration.
Notwithstanding the foregoing, if the total number of Registrable
Securities requested to be included in any registration cannot be included, the
Childs Representative on behalf of the holders of Registrable Securities
requesting registration thereof pursuant to this Section 2.1, representing not
less than 50% of the Registrable Securities with respect to which registration
has been requested, shall have the right to withdraw the request for
registration by giving written notice to the Company within 20 days after
receipt of the notice from the managing underwriter described above by the
Company and, in the event of such withdrawal, such request shall not be counted
for purposes of the requests for registration to which holders of Registrable
4
<PAGE>
Securities are entitled pursuant to this Section 2.1. If a request for
registration is withdrawn pursuant to the immediately preceding sentence and at
least 80% of the Registrable Securities requested to be included could have been
included therein, the Registration Expenses incurred by the Company in
connection with such withdrawn registration through the date of the Company's
receipt of the notice requesting such withdrawal, shall be reimbursed by the
Selling Holders, pro rata (based on the number of registrable securities
requested to be included therein) among the Selling Holders.
(g) Limitations on Registration Requests. Notwithstanding
anything in this Section 2.1 to the contrary, in no event will the Company be
required to effect (i) in the aggregate, more than two registrations pursuant to
this Section 2.1; provided that in the event that the holders of Registrable
Securities are unable to include at least 50% of the relevant Maximum Amount
with respect to any such registration requested pursuant to Section 2.1(a) as a
result solely of the participation of the Third Party Selling Holders in such
registration, then, unless the amount requested to be included in such
registration is less than 50% of the relevant Maximum Amount, such registration
shall not be counted for purposes of this clause (i), (ii) a registration
pursuant to this Section 2.1 within the six-month period occurring immediately
subsequent to the effectiveness (within the meaning of Section 2.1(d)) of a
registration statement filed pursuant to this Section 2.1, unless a majority of
the Disinterested Directors determines that effecting such second registration
within the six-month period would not have a material adverse effect on the
market price of the Common Stock, or (iii) a registration pursuant to
Section 2.1 covering less than 30% of the then outstanding Registrable
Securities.
(h) Expenses. The Company will pay all Registration
Expenses in connection with any registrations requested pursuant to this
Section 2.1.
2.2 Incidental Registration.
(a) Right to Include Registrable Securities. If the
Company at any time proposes to register any of its Common Stock under the
Securities Act by registration on any form other than Forms S-4 or S-8, whether
or not for sale for its own account, it will each such time give prompt written
notice to all registered holders of Registrable Securities of its intention to
do so and of such holders' rights under this Section 2.2. Upon the written
request of any such holder (a "Requesting Holder") (which request shall specify
the Registrable Securities intended to be disposed of by such Requesting Holder)
made as promptly as practicable and in any event within 30 days after the
receipt of any such notice from the Company (15 days if the Company states in
such written notice or gives telephonic or telecopied notice to all registered
holders of Registrable Securities, with written confirmation to follow promptly
thereafter, that (i) such registration will be on Form S-3 and (ii) such shorter
period of time is required because of a planned filing date), the Company will
use its best efforts to effect the registration under the Securities Act of all
Registrable
5
<PAGE>
Securities which the Company has been so requested to register by the Requesting
Holders thereof; provided, that prior to the effective date of the registration
statement filed in connection with such registration, promptly upon notification
to the Company from the managing underwriter of the price at which such
securities are to be sold, if such price is below the price which any Requesting
Holder shall have indicated to be acceptable to such Requesting Holder, the
Company shall so advise such Requesting Holder of such price, and such
Requesting Holder shall then have the right to withdraw its request to have its
Registrable Securities included in such registration statement; provided,
further, however, that if, at any time after giving written notice of its
intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each Requesting Holder of Registrable Securities and (x) in the
case of a determination not to register, shall be relieved of its obligation to
register any Registrable Securities in connection with such registration (but
not from any obligation of the Company to pay the Registration Expenses in
connection therewith), without prejudice, however, to the rights of any holder
or holders of Registrable Securities entitled to do so to cause such
registration to be effected as a registration under Section 2.1, and (y) in the
case of a determination to delay registering, shall be permitted to delay
registering any Registrable Securities, for the same period as the delay in
registering such other securities. No registration effected under this
Section 2.2 shall relieve the Company of its obligation to effect any
registration upon request under Section 2.1.
(b) Priority in Incidental Registrations. If the managing
underwriter of any underwritten offering shall inform the Company by letter of
its opinion that the number or type of Registrable Securities and Other
Securities requested to be included in such registration would materially
adversely affect such offering, and the Company has so advised the Requesting
Holders and the holders of Other Securities that have requested Other Securities
to be included in such registration ("Other Requesting Holders") in writing,
then the Company will include in such registration, to the extent of the number
and type which the Company is so advised can be sold in (or during the time of)
such offering (the "Incidental Maximum Amount"):
(A) if such registration is the first or second registration
initiated pursuant to Section 2.1 of the HWH Agreement:
first, Registrable Securities requested to be included in such
registration up to the Recapture Amount;
second, HWH Securities requested to be included in such registration
up to an amount equal to the lesser of (i) the aggregate amount of HWH
Securities
6
<PAGE>
requested to be included in such registration and (ii) 85% of the Incidental
Maximum Amount less the Recapture Amount;
third, Third Party Securities requested to be included in such
registration to the extent required to be included therein pursuant to the
Stockholders Agreement, pro rata (based on the number of Third Party Securities
requested to be included in such registration) among the Third Party Requesting
Holders requesting participation in such registration;
fourth, Registrable Securities requested to be included in such
registration up to an amount equal to the lesser of (i) the aggregate amount of
Registrable Securities requested to be included in such registration, (ii) the
excess of the Incidental Maximum Amount over the amount provided for in the
three preceding paragraphs and (iii) 15% of the Incidental Maximum Amount;
fifth, Registrable Securities and Other Securities requested to be
included in such registration, up to the aggregate amount requested by the
Selling Holders and HWH Selling Holders to be included in such registration in
excess of the amounts provided for in the preceding paragraphs; and
sixth, securities proposed by the Company to be sold for its own
account;
(B) if such registration is the third or fourth registration
initiated pursuant to Section 2.1 of the HWH Agreement:
first, Third Party Securities requested to be included in such
registration to the extent required to be included therein pursuant to the
Stockholders Agreement, pro rata (based on the number of Third Party Securities
requested to be included in such registration) among the Third Party Requesting
Holders requesting participation in such registration;
second, Registrable Securities and HWH Securities requested to be
included in such registration, pro rata (based on the number of securities of
the Company held by each Requesting Holder and each HWH Selling Holder) among
such Requesting Holders and HWH Selling Holders; and
third, securities proposed by the Company to be sold for its own
account;
(C) if such registration is initiated by the Third Party Selling
Holders pursuant to Section 3(b) of the Stockholders Agreement:
7
<PAGE>
first, Third Party Securities requested to be included in such
registration by the Third Party Requesting Holders to the extent required to be
included therein pursuant to the Stockholders Agreement, pro rata (based on the
number of Third Party Securities requested to be included in such registration);
second, Registrable Securities and HWH Securities requested to be
included in such registration, pro rata (based on the number of securities of
the Company held by each Requesting Holder and each HWH Requesting Holder) among
such Requesting Holders and HWH Requesting Holders; and
third, securities proposed by the Company to be sold for its own
account; and
(D) in all other incidental registrations:
first, securities proposed by the Company to be sold for its own
account;
second, Third Party Securities requested to be included in such
registration to the extent required to be included therein pursuant to the
Stockholders Agreement and HWH Securities, pro rata (based on the number of
Other Securities requested to be included in such registration by each Other
Requesting Holder) among the Other Requesting Holders requesting participation
in such registration; and
third, Registrable Securities;
provided, that from and after the date that the Stockholders Agreement is no
longer in effect, (x) all references to Third Party Securities in the priorities
set forth in clauses (A) and (B) above shall be deleted and the priorities
provided for herein shall be automatically adjusted accordingly, (y) clause (C)
above shall be deleted in its entirety, and (z) clause (D) shall be redesignated
as clause (C) and shall be amended in its entirety to read as follows:
"(C) in all other incidental registrations:
first, securities proposed by the Company to be sold for its own
account; and
second, Registrable Securities and HWH Securities requested to be
included in such registration, pro rata (based on the number of securities of
the Company held by each Requesting Holder and each HWH Requesting Holder) among
the Requesting Holders and the HWH Requesting Holders requesting participation
in such registration."
8
<PAGE>
For purposes of the foregoing, to the extent not otherwise provided
for above, (x) all Registrable Securities included in any such registration
shall be allocated pro rata (based on the number of Registrable Securities held
by each of the Requesting Holders) among the Requesting Holders and (y) all HWH
Securities included in any such registration shall be allocated pro rata (based
on the number of HWH Securities held by each of the HWH Requesting Holders)
among the HWH Requesting Holders.
(c) Expenses. The Company will pay all Registration
Expenses in connection with any registration contemplated pursuant to this
Section 2.2.
2.3 Registration Procedures. If and whenever the Company is
required to use its best efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in Sections 2.1 and 2.2, the
Company will, as expeditiously as possible:
(i) prepare and (within 90 days after the end of the period
within which requests for registration may be given to the Company) file
with the Commission the requisite registration statement to effect such
registration and thereafter use its best efforts to cause such registration
statement to become effective; provided, however, that the Company may
discontinue any registration of its securities which are not Registrable
Securities (and, under the circumstances specified in Section 2.2(a),
Registrable Securities) at any time prior to the effective date of the
registration statement relating thereto;
(ii) prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective in accordance with Section 2.1(d) hereof and to comply
with the provisions of the Securities Act with respect to the disposition
of all Registrable Securities covered by such registration statement until
such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or
sellers thereof set forth in such registration statement; provided, that
except with respect to any such registration statement filed pursuant to
Rule 415 under the Securities Act, such period need not exceed 135 days;
(iii) furnish to each seller of Registrable Securities
covered by such registration statement, such number of conformed copies of
such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of the
prospectus contained in such registration statement (including each
preliminary prospectus
9
<PAGE>
and any summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the Securities Act,
and such other documents, as such seller may reasonably request;
(iv) use its reasonable best efforts (x) to register or
qualify all Registrable Securities and other securities covered by such
registration statement under such other securities or blue sky laws of such
States of the United States of America where an exemption is not available
and as the sellers of Registrable Securities covered by such registration
statement shall reasonably request, (y) to keep such registration or
qualification in effect for so long as such registration statement remains
in effect and (z) to take any other action which may be reasonably
necessary or advisable to enable such sellers to consummate the disposition
in such jurisdictions of the securities to be sold by such sellers, except
that the Company shall not for any such purpose be required to qualify
generally to do business as a foreign corporation in any jurisdiction
wherein it would not but for the requirements of this subdivision (iv) be
obligated to be so qualified or to consent to general service of process in
any such jurisdiction;
(v) use its best efforts to cause all Registrable
Securities covered by such registration statement to be registered with or
approved by such other federal or state governmental agencies or
authorities as may be necessary in the reasonable opinion of counsel to the
Company and counsel to the seller or sellers of Registrable Securities to
enable the seller or sellers thereof to consummate the disposition of such
Registrable Securities;
(vi) furnish at the effective date of such registration
statement to each seller of Registrable Securities, and each such seller's
underwriters, if any, a signed counterpart of:
(x) an opinion of counsel for the Company, dated the
effective date of such registration statement and, if applicable, the
date of the closing under the underwriting agreement; and
(y) a "comfort" letter signed by the independent
public accountants who have certified the Company's financial
statements included or incorporated by reference in such registration
statement,
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountants' comfort letter, with respect to events subsequent to the date
of such
10
<PAGE>
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' comfort letters delivered to the underwriters in
underwritten public offerings of securities and, in the case of the accountants'
comfort letter, such other financial matters, and, in the case of the legal
opinion, such other legal matters, as the underwriters may reasonably request;
(vii) notify each seller of Registrable Securities
covered by such registration statement at any time when a prospectus
relating thereto is required to be delivered under the Securities Act,
upon discovery that, or upon the happening of any event as a result of
which, the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading, in the light of the
circumstances under which they were made, and at the request of any such
seller promptly prepare and furnish to it a reasonable number of copies
of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such
securities, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in
the light of the circumstances under which they were made;
(viii) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to
its security holders, as soon as reasonably practicable (but not more than
eighteen months after the effective date of such registration statement),
an earnings statement covering the period of at least twelve months
beginning with the first full calendar month after the effective date of
such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 promulgated
thereunder;
(ix) provide and cause to be maintained a transfer agent and
registrar (which, in each case, may be the Company) for all Registrable
Securities covered by such registration statement from and after a date not
later than the effective date of such registration; and
(x) use its best efforts to list all Registrable Securities
covered by such registration statement on any national securities exchange
on which Registrable Securities of the same class covered by such
registration statement are then listed and, if no such Registrable
Securities are so listed, on any national securities exchange on which the
Common Stock is then listed.
11
<PAGE>
The Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company such information regarding
such seller and the distribution of such securities as the Company may from time
to time reasonably request in writing.
Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
happening of any event of the kind described in subdivision (vii) of this
Section 2.3, such holder will forthwith discontinue such holder's disposition of
Registrable Securities pursuant to the registration statement relating to such
Registrable Securities until such holder's receipt of the copies of the
supplemented or amended prospectus contemplated by subdivision (vii) of this
Section 2.3 and, if so directed by the Company, will deliver to the Company (at
the Company's expense) all copies, other than permanent file copies, then in
such holder's possession of the prospectus relating to such Registrable
Securities current at the time of receipt of such notice.
2.4 Underwritten Offerings.
(a) Requested Underwritten Offerings. If requested by the
underwriters for any underwritten offering by holders of Registrable Securities
pursuant to a registration requested under Section 2.1, the Company will enter
into an underwriting agreement with such underwriters for such offering, such
agreement to be reasonably satisfactory in substance and form to the Childs
Representative on behalf of the holders of Registrable Securities representing
at least 50% of all Registrable Securities and the underwriters and to contain
such representations and warranties by the Company and such other terms as are
generally prevailing in agreements of that type, including, without limitation,
indemnities to the effect and to the extent provided in Section 2.7 or such
other indemnities as are customarily received by underwriters in public
offerings of similar securities. The holders of the Registrable Securities
proposed to be sold by such underwriters will reasonably cooperate with the
Company in the negotiation of the underwriting agreement. Such holders of
Registrable Securities to be sold by such underwriters shall be parties to such
underwriting agreement and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such holders of Registrable Securities and that any or all of
the conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
holders of Registrable Securities. No holder of Registrable Securities shall be
required to make any representations or warranties to or agreements with the
Company other than representations, warranties or agreements regarding such
holder, such holder's Registrable Securities and such holder's intended method
of distribution or any other representations required by applicable law.
12
<PAGE>
(b) Incidental Underwritten Offerings. If the Company
proposes to register any of its securities under the Securities Act as
contemplated by Section 2.2 and such securities are to be distributed by or
through one or more underwriters, the Company will, if requested by any
Requesting Holder of Registrable Securities, use its reasonable best efforts to
arrange for such underwriters to include all the Registrable Securities to be
offered and sold by such Requesting Holder among the securities of the Company
to be distributed by such underwriters, subject to the provisions of
Section 2.2(b). The holders of Registrable Securities to be distributed by such
underwriters shall be parties to the underwriting agreement between the Company
and such underwriters and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such holders of Registrable Securities and that any or all of
the conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
holders of Registrable Securities. Any such Requesting Holder of Registrable
Securities shall not be required to make any representations or warranties to or
agreements with the Company or the underwriters other than representations,
warranties or agreements regarding such Requesting Holder, such Requesting
Holder's Registrable Securities and such Requesting Holder's intended method of
distribution or any other representations required by applicable law.
2.5 Preparation; Reasonable Investigation. In connection with
the preparation and filing of each registration statement under the Securities
Act pursuant to this Agreement, the Company will give the Childs Representative
on behalf of the holders of Registrable Securities to be registered under such
registration statement, their underwriters, if any, and their respective counsel
the opportunity to participate in the preparation of such registration
statement, each prospectus included therein or filed with the Commission, and
each amendment thereof or supplement thereto, and will give each of them such
reasonable access to its books and records and such opportunities to discuss the
business of the Company with its officers and the independent public accountants
who have certified its financial statements as shall be necessary, in the
opinion of such holders' and such underwriters' respective counsel, to conduct a
reasonable investigation within the meaning of the Securities Act.
2.6 Limitations, Conditions and Qualifications to Obligations
under Registration Covenants. The Company shall be entitled to postpone for a
reasonable period of time (but not exceeding 90 days) the filing of any
registration statement otherwise required to be prepared and filed by it
pursuant to Section 2.1 if the Company determines, in its reasonable judgment,
that such registration and offering would interfere with any financing,
acquisition, corporate reorganization or other material transaction involving
the Company and promptly gives the holders of
13
<PAGE>
Registrable Securities requesting registration thereof pursuant to Section 2.1
written notice of such determination, containing a general statement of the
reasons for such postponement and an approximation of the anticipated delay. If
the Company shall so postpone the filing of a registration statement, holders of
Registrable Securities requesting registration thereof pursuant to Section 2.1,
representing not less than 50% of the Registrable Securities with respect to
which registration has been requested, shall have the right to withdraw the
request for registration by giving written notice to the Company within 30 days
after receipt of the notice of postponement and, in the event of such
withdrawal, such request shall not be counted for purposes of the requests for
registration to which holders of Registrable Securities are entitled pursuant to
Section 2.1 hereof.
2.7 Indemnification.
(a) Indemnification by the Company. The Company will, and
hereby does, indemnify and hold harmless, in the case of any registration
statement filed pursuant to Section 2.1 or 2.2, each seller of any Registrable
Securities covered by such registration statement and each other Person who
participates as an underwriter in the offering or sale of such securities and
each other Person, if any, who controls such seller or any such underwriter
within the meaning of the Securities Act or the Exchange Act, and their
respective directors, officers, partners, agents and affiliates, against any
losses, claims, damages or liabilities, joint or several, to which such seller
or underwriter or any such director, officer, partner, agent, affiliate or
controlling person may become subject under the Securities Act or otherwise,
including, without limitation, the reasonable fees and expenses of legal
counsel, insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and the Company will reimburse such seller or
underwriter and each such director, officer, partner, agent, affiliate and
controlling Person for any reasonable legal or any other expenses incurred by
them in connection with investigating or defending any such loss, claim,
liability, action or proceeding; provided, however, that the Company shall not
be liable in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished to
14
<PAGE>
the Company by or on behalf of such seller or underwriter, as the case may be,
specifically stating that it is for use in the preparation thereof; provided,
further, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or expense arises out of or is
based upon an untrue statement or alleged untrue statement of any material fact
contained in any such registration statement, preliminary prospectus, final
prospectus or summary prospectus contained therein or any omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances in which they were made not
misleading in a prospectus or prospectus supplement, if such untrue statement or
omission is completely corrected in an amendment or supplement to such
prospectus or prospectus supplement, the seller of the Registrable Securities
has an obligation under the Securities Act to deliver a prospectus or prospectus
supplement in connection with such sale of Registrable Securities and the seller
of Registrable Securities thereafter fails to deliver such prospectus or
prospectus supplement as so amended or supplemented prior to or concurrently
with the sale of Registrable Securities to the person asserting such loss,
claim, damage or liability after the Company has furnished such seller with a
sufficient number of copies of the same. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such
seller or underwriter or any such director, officer, partner, agent, affiliate
or controlling person and shall survive the transfer of such securities by such
seller or underwriter.
(b) Indemnification by the Sellers. As a condition to
including any Registrable Securities in any registration statement, the Company
shall have received an undertaking reasonably satisfactory to it from the
prospective seller of such Registrable Securities, to indemnify and hold
harmless (in the same manner and to the same extent as set forth in
Section 2.7(a)) the Company, and each director of the Company, each officer of
the Company and each other Person, if any, who participates as an underwriter in
the offering or sale of such securities and each other Person who controls the
Company or any such underwriter within the meaning of the Securities Act or the
Exchange Act, with respect to any statement or alleged statement in or omission
or alleged omission from such registration statement, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, if such statement or alleged statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by such seller specifically stating
that it is for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement; provided, however, that the liability of such indemnifying party
under this Section 2.7(b) shall be limited to the amount of proceeds received by
such indemnifying party in the offering giving rise to such liability. Such
indemnity shall remain in full force and effect, regardless of any investigation
made by or on
15
<PAGE>
behalf of the Company or any such director, officer or controlling person and
shall survive the transfer of such securities by such seller.
(c) Notices of Claims, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in Section 2.7(a) or (b), such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party,
give written notice to the latter of the commencement of such action; provided,
however, that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under the
preceding subdivisions of this Section 2.7, except to the extent that the
indemnifying party is actually and materially prejudiced by such failure to give
notice. In case any such action shall be brought against any indemnified party
and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it may wish, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, that any indemnified
party may, at its own expense, retain separate counsel to participate in such
defense. Notwithstanding the foregoing, in any action or proceeding in which
both the Company and an indemnified party is, or is reasonably likely to become,
a party, such indemnified party shall have the right to employ separate counsel
at the Company's expense and to control its own defense of such action or
proceeding if, in the reasonable opinion of counsel to such indemnified party,
(a) there are or may be legal defenses available to such indemnified party or to
other indemnified parties that are different from or additional to those
available to the Company or (b) any conflict or potential conflict exists
between the Company and such indemnified party that would make such separate
representation advisable; provided, however, that in no event shall the Company
be required to pay fees and expenses under this Section 2.7 for more than one
firm of attorneys representing the indemnified parties (together, if
appropriate, with one firm of local counsel per jurisdiction) in any one legal
action or group of related legal actions. No indemnifying party shall be liable
for any settlement of any action or proceeding effected without its written
consent, which consent shall not be unreasonably withheld. No indemnifying
party shall, without the consent of the indemnified party, which consent shall
not be unreasonably withheld, consent to entry of any judgment or enter into any
settlement which does not include as a term thereof the giving by the claimant
or plaintiff to such indemnified party of a release from all liability in
respect to such claim or litigation or which requires action other than the
payment of money by the indemnifying party.
(d) Contribution. If the indemnification provided for in
this Section 2.7 shall for any reason be held by a court to be unavailable to an
indemnified party under Section 2.7(a) or (b) hereof in respect of any loss,
claim, damage or liability, or any action in respect thereof, then, in lieu of
the amount paid or
16
<PAGE>
payable under Section 2.7(a) or (b), the indemnified party and the indemnifying
party under Section 2.7(a) or (b) shall contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating the same), (i) in such proportion as
is appropriate to reflect the relative fault of the Company and the prospective
sellers of Registrable Securities covered by the registration statement which
resulted in such loss, claim, damage or liability, or action or proceeding in
respect thereof, with respect to the statements or omissions which resulted in
such loss, claim, damage or liability, or action or proceeding in respect
thereof, as well as any other relevant equitable considerations or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and such prospective sellers from the offering of the
securities covered by such registration statement, provided, that for purposes
of this clause (ii), the relative benefits received by the prospective sellers
shall be deemed not to exceed the amount of proceeds received by such
prospective sellers. No Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. Such prospective sellers' obligations to contribute as
provided in this Section 2.7(d) are several in proportion to the relative value
of their respective Registrable Securities covered by such registration
statement and not joint. In addition, no Person shall be obligated to
contribute hereunder any amounts in payment for any settlement of any action or
claim effected without such Person's consent, which consent shall not be
unreasonably withheld.
(e) Other Indemnification. Indemnification and
contribution similar to that specified in the preceding subdivisions of this
Section 2.7 (with appropriate modifications) shall be given by the Company and
each seller of Registrable Securities with respect to any required registration
or other qualification of securities under any federal or state law or
regulation of any governmental authority other than the Securities Act.
(f) Indemnification Payments. The indemnification and
contribution required by this Section 2.7 shall be made by periodic payments of
the amount thereof during the course of the investigation or defense, as and
when bills are received or expense, loss, damage or liability is incurred.
3. Definitions. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:
"Commission" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
17
<PAGE>
"Common Stock" shall mean and include the Common Stock, par value $.01
per share, of the Company and each other class of capital stock of the Company
that does not have a preference over any other class of capital stock of the
Company as to dividends or upon liquidation, dissolution or winding up of the
Company and, in each case, shall include any other class of capital stock of the
Company into which such stock is reclassified or reconstituted.
"Disinterested Director" means, with respect to any transaction or
series of related transactions, a member of the board of directors of the
Company who does not have any material direct or indirect financial interest in
or with respect to such transaction or series of related transactions.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any superseding Federal statute, and the rules and regulations promulgated
thereunder, all as the same shall be in effect at the time. Reference to a
particular section of the Securities Exchange Act of 1934, as amended, shall
include a reference to the comparable section, if any, of any such superseding
Federal statute.
"HWH Agreement" means the Registration Rights Agreement dated as of
March 17, 1995 among the Company, HWH Capital Partners, L.P., HWH Valentine
Partners, L.P., and HWH Surplus Valentine Partner, L.P.
"Incidental Maximum Amount" is defined in Section 2.2(b).
"Initiating Holder" is defined in Section 2.1.
"Person" means any individual, firm, corporation, partnership, limited
liability company or partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, government (or an agency or
political subdivision thereof) or other entity of any kind and shall include any
successor (by merger or otherwise) of such entity.
"Recapture Amount" means the sum of (A) in the event that Selling
Holders have requested registration of Registrable Securities representing, in
the aggregate, more than the Adjusted Maximum Amount with respect to the first
registration effected by the Company pursuant to Section 2.1 hereof, the excess,
if any, of (x) the lower of 75% of the Maximum Amount with respect to such
registration or the aggregate amount requested by the Selling Holders to be
included in such registration, over (y) the number of Registrable Securities
included in such registration, plus (B) in the event that Requesting Holders
have requested registration of Registrable Securities representing, in the
aggregate, more than 15% of the Incidental Maximum Amount with respect to the
first registration effected by the Company pursuant to Section 2.1 of the HWH
Agreement, the excess, if any, of (x) 15% of such Incidental Maximum Amount,
over (y) the number of Registrable Securities included in such registration.
The Recapture Amount in respect of any registration effected by the Company
pursuant to
18
<PAGE>
Section 2.1 hereof or Section 2.1 of the
HWH Agreement shall be adjusted to reflect the inclusion of any portion of the
Recapture Amount included in any prior registration.
"Registrable Securities" means any Shares and any Related Registrable
Securities. As to any particular Registrable Securities, once issued, such
securities shall cease to be Registrable Securities when (a) a registration
statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement, (b) they shall have been sold
as permitted by Rule 144 (or any successor provision) under the Securities Act,
(c) they shall have been otherwise transferred, new certificates for them not
bearing a legend restricting further transfer shall have been delivered by the
Company and subsequent public distribution of them shall not require
registration of such distribution under the Securities Act, (d) they shall have
been transferred or distributed to any limited partner, general partner, member
or holder of interests (however called) of any Childs Holder or (e) they shall
have ceased to be outstanding.
"Registration Expenses" means all expenses incident to the Company's
performance of or compliance with Section 2, including, without limitation, all
registration and filing fees, all fees of the New York Stock Exchange, other
national securities exchanges or the National Association of Securities Dealers,
Inc., all fees and expenses of complying with securities or blue sky laws, all
word processing, duplicating and printing expenses, messenger and delivery
expenses, the fees and disbursements of counsel for the Company and of its
independent public accountants, including the expenses of "comfort" letters
required by or incident to such performance and compliance, any fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities (excluding any underwriting discounts or commissions with respect to
the Registrable Securities) and the reasonable fees and expenses of one counsel
to the Selling Holders (selected by Selling Holders representing at least 50% of
the Registrable Securities covered by such registration); provided, however,
that in the event the Company shall determine, in accordance with Section 2.2(a)
or Section 2.6, not to register any securities with respect to which it had
given written notice of its intention to so register to holders of Registrable
Securities, all of the costs of the type (and subject to any limitation to the
extent) set forth in this definition and incurred by Requesting Holders in
connection with such registration on or prior to the date the Company notifies
the Requesting Holders of such determination shall be deemed Registration
Expenses.
19
<PAGE>
"Related Registrable Securities" means with respect to the Shares any
securities of the Company issued or issuable with respect to any of the Shares
by way of a dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization or
otherwise.
"Requesting Holder" is defined in Section 2.2.
"Securities Act" means the Securities Act of 1933, as amended, or any
superseding Federal statute, and the rules and regulations promulgated
thereunder, all as the same shall be in effect at the time. References to a
particular section of the Securities Act of 1933, as amended, shall include a
reference to the comparable section, if any, of any such superseding Federal
statute.
"Securityholder" means any of the parties to the HWH Agreement and the
Stockholders Agreement, respectively, in each case other than the Company.
"Selling Holder" is defined in Section 2.1.
"Stockholders Agreement" means the Amended and Restated Stockholders
Agreement, dated as of November 5, 1991, by and among Playtex FP Group
Incorporated, the management investors listed on Schedule A thereto, ML-Lee
Acquisition Fund, L.P., Thomas H. Lee Company and the related persons thereof
set forth on Schedule B thereto, Chesterfield Investments and Sara Lee
Corporation, as amended by Amendment No. 1, dated as of March 17, 1995 and
effective as of June 6, 1995, by and among the Company, Joel E. Smilow, Richard
Smilow Trust, William Smilow Trust, Susan Varsa Trust, Hercules P. Sotos,
Christina Sotos Trust, Peter Sotos Trust, Cynthia Sotos Trust, Calvin J. Gauss
and the 1989 Thomas H. Lee Nominee Trust, dated as of September 29, 1989.
4. Rule 144 and Rule 144A. The Company shall take all actions
reasonably necessary to enable holders of Registrable Securities to sell such
securities without registration under the Securities Act within the limitation
of the provisions of (a) Rule 144 under the Securities Act, as such Rule may be
amended from time to time, (b) Rule 144A under the Securities Act, as such Rule
may be amended from time to time, or (c) any similar rules or regulations
hereafter adopted by the Commission. Upon the request of any holder of
Registrable Securities, the Company will deliver to such holder a written
statement as to whether it has complied with such requirements.
5. Amendments and Waivers. This Agreement may be amended with the
consent of the Company and the Company may take any action herein prohibited, or
omit to perform any act herein required to be performed by it, only if the
Company shall have obtained the written consent to such amendment, action or
omission to act, of the holder or holders of at least 50% of the Registrable
Securities affected by such amendment, action or
20
<PAGE>
omission to act. Each holder of any Registrable Securities at the time or
thereafter outstanding shall be bound by any consent authorized by this
Section 5, whether or not such Registrable Securities shall have been marked to
indicate such consent.
6. Nominees for Beneficial Owners. In the event that any
Registrable Securities are held by a nominee for the beneficial owner thereof,
the beneficial owner thereof may, at its election in writing delivered to the
Company, be treated as the holder of such Registrable Securities for purposes of
any request or other action by any holder or holders of Registrable Securities
pursuant to this Agreement or any determination of any number or percentage of
shares of Registrable Securities held by any holder or holders of Registrable
Securities contemplated by this Agreement. If the beneficial owner of any
Registrable Securities so elects, the Company may require assurances reasonably
satisfactory to it of such owner's beneficial ownership of such Registrable
Securities.
7. Appointment of Representative. Each Childs Holder hereby
authorizes and appoints the Principal Stockholder as its representative and
agent for purposes of accepting and delivering notices and taking actions
hereunder on behalf of each such Childs Holder hereunder and the Company
acknowledges and consents thereto. The Principal Stockholder acting in such
capacity is sometimes referred to herein as the "Childs Representative."
8. Notices. All notices, demands and other communications provided
for or permitted hereunder shall be made in writing and shall be by registered
or certified first-class mail, return receipt requested, telecopier, courier
service or personal delivery:
(a) if to the Principal Stockholder, addressed to it in the
manner set forth in the Merger Agreement, or at such other address as it shall
have furnished to the Company in writing in the manner set forth herein; or
(b) if to the Company, addressed to it in the manner set forth
in the Merger Agreement, or at such other address as the Company shall have
furnished to each holder of Registrable Securities at the time outstanding in
the manner set forth herein.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; when delivered by a
courier, if delivered by overnight courier service; three business days after
being deposited in the mail, postage prepaid, if mailed; and when receipt is
acknowledged, if telecopied.
21
<PAGE>
9. Assignment. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and, with respect to the
Company only, its respective successors and permitted assigns.
10. Calculation of Percentage Interests in Registrable Securities.
For purposes of this Agreement, all references to a percentage of the
Registrable Securities shall be calculated based upon the number of Registrable
Securities outstanding at the time such calculation is made.
11. No Inconsistent Agreements. The Company will not hereafter enter
into any agreement with respect to its securities, or modify, amend, supplement
or extend any existing agreement with respect to its securities, which is or
will be inconsistent with the rights granted to the holders of Registrable
Securities in this Agreement.
12. Remedies. Each holder of Registrable Securities, in addition to
being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.
13. Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended that all of the rights and privileges of the
Principal Stockholder shall be enforceable to the fullest extent permitted by
law.
14. Entire Agreement. This Agreement, together with the Merger
Agreement (including the exhibits and schedules thereto) and the Stockholders
Agreement, is intended by the parties as a final expression of their agreement
and intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and therein.
This Agreement, the Merger Agreement (including the exhibits and schedules
thereto) and the Stockholders Agreement supersede all prior agreements and
understandings between the parties with respect to such subject matter.
22
<PAGE>
15. Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
16. Governing Law. This Agreement has been negotiated, executed and
delivered in the State of New York and shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of law.
17. Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed an original and all of which taken together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their respective representatives hereunto duly
authorized as of the date first above written.
PLAYTEX PRODUCTS, INC.
By: /s/ Michael F. Goss
-------------------
Name: Michael F. Goss
Title: Executive Vice President
and Chief Financial Officer
23
<PAGE>
J.W. CHILDS EQUITY PARTNERS, L.P.
By: J.W. CHILDS ADVISORS, L.P., its
general partner
By: J.W. Childs Associates, L.P., its
general partner
By: J.W. Childs Associates, Inc.
By: /s/ Adam Suttin
---------------
Name:
Title:
24
<PAGE>
Schedule 2.1(e)
Acceptable Underwriters:
Merrill Lynch & Co., Inc.
Morgan Stanley, Dean Witter, Discover & Co.
Salomon Brothers Inc.
Donaldson Lufkin & Jenrette
NationsBank Montgomery
Goldman, Sachs & Co.
BT Alex Brown Incorporated
Credit Suisse First Boston
PaineWebber Incorporated
<PAGE>
SCHEDULE A
Bock Family Trust
J.W. Childs Equity Partners, L.P.
James E. Childs
John W. Childs
Richard S. Childs
The Dowds Family Investment Trust
Kenneth M. Evans
Adam T. Feild
Timothy J. Healy
Glenn A. Hopkins
Jerry D. Horn
Alan R. Ross Revocable Living Trust
Alan R. Koss
Lambros J. Lambros
Stephanie L. Mansfield
Lawrence J. Mansfield and Edith R. Mansfield
Jenny Childs Preston
Raymond B. Rudy
Steven G. Segal
Steven G. Segal 1995 Irrevocable Trust
SGS 1995 Family Limited Partnership
SGS-III Family Limited Partnership
Mario E. Soussou
Adam L. Suttin
Suttin Family Trust
Gagan Verma
Stephen H. Wise
<PAGE>
Catherine Durden
Michael P. Ferry
Debra T. Follick
Bruce A. Goldsmith
William R. Kinder
Michael J. Metzger
Donald W. Miller
Dennis L. Moore
Donald G. Morgan
James D. Murphy and Diane G. Murphy
Joseph Pachella
Leslie A. Paparone
Jay E. Politi
Kenneth F. Reilly
Joel Slank
Daniel M. Synan
Anne Tashjian
James D. Tates
Sharad B. Tilak
Paul W. Tonnesen
Mariane Wojcicki
Karen A. August
Dennis G. Podlesak
Julie B. Sweeney
Neil P. Guller
Stephen K. Carrico
Michael Fleury
James P. Garvey
Marcie J. Griesmeyer
<PAGE>
David Hays
Kim Levine
Michael Cox
Rebecca E. Cushing
Teresita Eugenio
Peter Gower
Thomas Horton
Lee Jacobs
Loren Block
Christina Bartolick
Cheryl Lawler
Exhibit 2.3
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT (the "Agreement") dated as of January 28, 1998,
between PLAYTEX PRODUCTS, INC., a Delaware corporation (the "Company"), and J.W.
CHILDS EQUITY PARTNERS, L.P., a Delaware limited partnership (the "Principal
Stockholder") and the other persons who are set forth in Schedule A hereto
(collectively with the Principal Stockholder, the "Childs Holders").
RECITALS
WHEREAS, the Company and the Principal Stockholder are, together with
PCG Acquisition Corp., a Delaware corporation and wholly owned subsidiary of the
Company ("Subsidiary"), and Personal Care Holdings Inc., a Delaware corporation
("Target"), parties to a Merger Agreement, dated as of December 22, 1997 (as
amended, the "Merger Agreement"), pursuant to which, on the Effective Date,
Subsidiary will be merged with and into Target (the "Merger"), whereupon
Subsidiary shall continue as the surviving corporation;
WHEREAS, after the Effective Date, the Childs Holders will hold, in
aggregate, 9,257,375 shares (the "Shares") of common stock of the Company, par
value $.01 ("Company Common Stock"); and
WHEREAS, as an inducement to and a condition of the Company entering
into the Merger Agreement, the Company has required that the Childs Holders, and
the Childs Holders have agreed, to execute and deliver this Agreement.
<PAGE>
NOW, THEREFORE, in consideration of the covenants and agreements set
forth herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. (a) The following terms, whenever used herein,
shall have the following meanings for all purposes of this Agreement.
"1933 Act" means the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.
"1934 Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
An "Affiliate" of, or a person "affiliated" with, a specified Person,
means a Person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the Person
specified. The term "control" (including the terms "controlling," "controlled
by" and "under common control with") means the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
a person, whether through the ownership of voting securities, by contract, or
otherwise. No owner of a limited partnership interest of the Principal
Stockholder shall be deemed an affiliate of, or a Person "affiliated" with, the
Principal Stockholder solely by reason of such ownership.
"By-laws" means the by-laws of the Company.
2
<PAGE>
"By-laws Amendment" means the proposed amendment to the By-laws in the
form attached as Exhibit A hereto.
"Transfer" means, in relation to any share of Company Common Stock,
any sale, assignment, transfer or disposition by gift or otherwise, including
without limitation, any distribution in liquidation or otherwise by a
corporation or partnership; provided, however, that "Transfer" does not mean,
with respect to any such share of Company Common Stock, any pledge, mortgage,
hypothecation or grant of a security interest therein or a transfer thereof
through the granting of participation rights.
"Person" means any individual, firm, corporation, partnership, limited
liability company or partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, government (or an agency or
political subdivision thereof) or other entity of any kind, and shall include
any successor (by merger or otherwise) of such entity.
(b) Capitalized terms not otherwise defined herein shall have
the meanings given such terms in the Merger Agreement.
ARTICLE II
DIRECTORS
2.1 Increase in the Size of the Board of Directors. The Company
hereby agrees that it will use its best efforts to (i) increase the size of its
Board of Directors (the "Board") by two persons effective on the date hereof,
and (ii) cause one
3
<PAGE>
of the vacancies thus created to be filled by John W. Childs in accordance with
the By-laws as in effect on the date hereof.
2.2 Nomination of Target Director. The Company hereby agrees that
for so long as the Principal Stockholder owns, in the aggregate, at least
4,628,688 Shares, as adjusted for stock splits, stock dividends, and
reclassifications, it will use its best efforts to ensure that, following any
vote for the election of directors of the Company at a stockholders' meeting or
otherwise, one director (the "Target Director") designated by the Principal
Stockholder is a member of the Board, provided, that the Principal Stockholder
shall ensure that the proposed Target Director is nominated in accordance with
the By-Laws.
2.3 Stockholder Meeting; Proxy Material; By-Laws Amendment. The
Company shall cause either (a) a meeting of its stockholders to be duly called
and held as soon as practicable following the Effective Time, subject to the
Company's right to adjourn such meeting at any time or from time to time if in
the Board's good faith judgment such adjournment is desirable, or (b) consents
of its stockholders to be solicited, in accordance with the By-laws and the 1934
Act, for the purpose of voting for the adoption of the By-Laws Amendment (the
"Stockholder Meeting"). In connection with the Stockholder Meeting, the
Company: (A) shall promptly prepare and file with the Securities and Exchange
Commission (the "SEC") in accordance with the 1934 Act an information statement
relating to the By-Laws Amendment (the "Information Statement"), use all
reasonable efforts to have the Information Statement and/or any amendment or
supplement thereto cleared by the SEC and thereafter mail to
4
<PAGE>
its stockholders as promptly as practicable following such clearance the
Information Statement; (B) shall use its reasonable best efforts to obtain the
necessary approvals by its stockholders for the adoption of the By-Laws
Amendment (unless the Board shall have determined in good faith, based upon
advice of outside counsel, that not taking such actions is necessary for the
Board to comply with its fiduciary duties under applicable law); and (C) shall
otherwise comply with all legal requirements applicable to the Stockholders
Meeting. The Company shall make available to the Principal Stockholder prior to
the filing thereof with the SEC copies of the preliminary Information Statement
and any amendments or supplements thereto and shall make any changes therein
reasonably requested by the Principal Stockholder insofar as such changes relate
to any matters relating to the Principal Stockholder.
ARTICLE III
TRANSFERS OF SECURITIES
3.1 Restrictions on Transfer of Company Common Stock. The Principal
Stockholder agrees that, prior to the third anniversary of the Effective Date,
it shall not Transfer any of the Shares, by distribution or otherwise, to any of
its shareholders, partners, members or owners.
3.2 Transfers Subject to Compliance with Securities Laws. No Shares
may be Transferred by the Childs Holders (other than pursuant to an effective
registration Statement under the 1933 Act) unless such Childs Holder first
delivers to
5
<PAGE>
the Company an opinion of counsel, reasonably satisfactory to the Company, to
the effect that such Transfer is not required to be registered under the 1933
Act.
3.3 Certificates for Shares To Bear Legends. (A) So long as
the Shares are not sold pursuant to an effective registration statement under
the 1933 Act or pursuant to Rule 144 under the 1933 Act, the Shares shall be
subject to a stop-transfer order and the certificates therefor shall bear the
following legend by which each holder thereof shall be bound:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933, OR (ii) AN APPLICABLE EXEMPTION FROM
REGISTRATION THEREUNDER."
(B) So long as the Shares are subject to the terms and
conditions of Section 3.1, the Shares shall be subject to a stop-transfer order
and the certificates shall bear the following legend:
"THE SALE OR TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS
FURTHER SUBJECT TO RESTRICTIONS WHICH ARE CONTAINED IN A STOCKHOLDERS
AGREEMENT DATED AS OF JANUARY 28, 1998 A COPY OF WHICH IS ON FILE WITH
THE ISSUER OF THESE SHARES AND WILL BE FURNISHED BY THE ISSUER OF
THESE SHARES TO THE STOCKHOLDER ON REQUEST AND WITHOUT CHARGE."
6
<PAGE>
(C) After the termination of the legend requirements of
either Section 3.3(A) or Section 3.3(B), the Company shall, upon the written
request of the holders of the Shares and receipt by the Company of evidence
reasonably satisfactory to it that such requirement has terminated (including,
with respect to the legend required by the Section 3.3(A), a written opinion of
outside counsel), issue certificates for such Shares that do not bear all or
part of the legend described in Section 3.3(A) or Section 3.3(B), as the case
may be.
ARTICLE IV
RESTRICTIONS ON PURCHASE
4.1 Restricted Purchases. Each Childs Holder agrees that it will
not, nor will it permit any of its Affiliates to, directly or indirectly, take
any action, including, without limitation, to acquire, offer to acquire, or
agree to acquire, by purchase or otherwise any Company Common Stock, where such
action or acquisition would, in the reasonable opinion of the Company, cause (A)
a "Change of Control" under, and as defined in, (x) the Indenture dated as of
February 2, 1994 among the Company, certain subsidiaries of the Company, as
Guarantors, and IBJ Schroder Bank & Trust Company, as Trustee (the "1994
Indenture"), (y) the Indenture dated as of July 21, 1997 among the Company,
certain subsidiaries of the Company, as Guarantors, and Marine Midland Bank, as
Trustee (the "1997 Indenture" and, together with the 1994 Indenture, the
"Indentures") or (z) any other presently existing or future agreement of the
Company (a copy of which has been delivered to the Childs Holders with the
7
<PAGE>
relevant provisions clearly identified) where such action or acquisition would
have a similar effect (any such agreement, a "Noticed Agreement"), or (B) a
default under the provisions of the Indentures or any Noticed Agreement, to the
extent that the relevant Childs Holder received a copy of such provisions prior
to taking any such action or making any such acquisition.
ARTICLE V
TERMINATION
5.1 Termination. This Agreement shall terminate ten years from the
date hereof.
ARTICLE VI
MISCELLANEOUS
6.1 Amendment. This Agreement may be altered or amended only with
the consent of the Company and the Childs Holders Representative.
6.2 Specific Performance. The parties recognize that the obligations
imposed on them in this Agreement are special, unique and of extraordinary
character, and that in the event of breach by any party, damages will be an
insufficient remedy; consequently, it is agreed that the parties hereto may have
specific performance (in addition to damages) as a remedy for the enforcement
hereof, without proving damages.
8
<PAGE>
6.3 Assignment. Except as other provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors of the parties hereto; provided, however, that this
Agreement may not be assigned by any party without the prior written consent of
the Company and the Childs Holders Representative except that the Company may
assign its rights herein to any successor to all or substantially all its assets
(by merger or otherwise). Any assignment of rights hereunder shall be coupled
with the assumption by the assignee of all of the obligations of the assignor
hereunder and shall thereby relieve such assignor of such obligations. Any
purported assignment made in violation of this Section 6.3 shall be void and of
no force and effect.
6.4 Appointment of Representative. Each Childs Holder hereby
authorizes and appoints John W. Childs (in such capacity, the "Childs Holders
Representative") as its representative and agent for purposes of accepting and
delivering notices and taking actions hereunder on behalf of each Childs Holder.
In the event that John W. Childs is unable or unwilling to be the Childs Holders
Representative, then the Childs Holders holding at least a majority of the
Shares at such time (the "Majority Childs Holders") shall appoint a successor
Childs Holders Representative and, until such successor is appointed, all
actions to be taken by the Childs Holders Representative hereunder shall be
taken by the Majority Childs Holders.
6.5 Notices. Any and all notices, designations, consents, offers,
acceptances, or any other communication provided for herein shall be given in
writing
9
<PAGE>
and deemed received when delivered by overnight courier or hand delivery, or
when sent by facsimile transmission which shall be addressed, or sent, as
follows:
If to the Company, to it at:
Playtex Products, Inc.
300 Nyala Farms Road
Westport, Connecticut 06880
Attention: Michael F. Goss, Chief Financial Officer
Telecopier: (203) 341-4260
With a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Robert M. Hirsh, Esq.
Telecopier: (212) 373-2159
If to the Childs Holders Representative to him at:
J.W. Childs Equity Partners, L.P.
c/o J.W. Childs Associates, Inc.
One Federal Street
Boston, MA 02110
Attention: John W. Childs
Telecopier: (617) 753-1101
With a copy to:
Sullivan & Worcester LLP
One Post Office Square
Boston, MA 02109
Attention: Christopher Cabot, Esq.
Telecopier: (617) 338-2880
or, in each case, such other address as the Principal Stockholder
shall specify to the Company and the other parties hereto.
10
<PAGE>
6.6 Counterparts. This Agreement may be executed in one or more
counterparts and each counterpart shall be deemed to be an original and which
counterparts together shall constitute one and the same agreement of the parties
hereto.
6.7 Section Headings. Headings contained in this Agreement are
inserted only as a matter of convenience and in no way define, limit or extend
the scope or intent of this Agreement or any provisions hereof.
6.8 Choice of Law. This Agreement shall be governed by the laws of
the State of New York, without regard to principles of conflicts of laws.
6.9 Entire Agreement. This Agreement, the Merger Agreement and the
Registration Rights Agreement contain the entire understanding of the parties
hereto respecting the subject matter hereof and thereof and supersede all prior
agreements, discussions, and understandings with respect to such subject
matters.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
PLAYTEX PRODUCTS, INC.
By: /s/ Michael F. Goss
------------------------------------
Name: Michael F. Goss
Title: Executive Vice President
and Chief Financial Officer
J.W. CHILDS EQUITY PARTNERS, L.P.
By: J.W. CHILDS ADVISORS, L.P., its General Partner
11
<PAGE>
By: J.W. CHILDS ASSOCIATES, L.P., its General Partner
By: J.W. CHILDS ASSOCIATES, INC.
By: /s/ Adam Suttin
------------------------------
Name:
Title:
12
<PAGE>
FORM OF AMENDMENT TO
THE BY-LAWS OF THE COMPANY
a. The existing Section 15(b) in Article III of the By-laws shall be
redesignated Section 15(b)(A) and a Section 15(b)(B) shall be added to read as
follows:
"(B) From the Effective Date until the earlier of (1) the
date upon which the Principal Stockholder holds, in the aggregate, less
than 4,628,688 shares of common stock of the Company or (2) the tenth
anniversary of the Effective Date, one of the Non-Purchaser Directors shall
be the Target Director. The "Effective Date" shall have the meaning given
that term in the Merger Agreement. The "Merger Agreement" means the Merger
Agreement, dated as of December 22, 1997 among the Corporation, PCG
Acquisition Corp., Personal Care Holdings, Inc. and J.W. Childs Equity
Partners, L.P. (the "Principal Stockholder"). The "Target Director" means
the Director designated by the Principal Stockholder."
13
<PAGE>
SCHEDULE A
Bock Family Trust
J.W. Childs Equity Partners, L.P.
James E. Childs
John W. Childs
Richard S. Childs
The Dowds Family Investment Trust
Kenneth M. Evans
Adam T. Feild
Timothy J. Healy
Glenn A. Hopkins
Jerry D. Horn
Alan R. Ross Revocable Living Trust
Alan R. Koss
Lambros J. Lambros
Stephanie L. Mansfield
Lawrence J. Mansfield and Edith R. Mansfield
Jenny Childs Preston
Raymond B. Rudy
Steven G. Segal
Steven G. Segal 1995 Irrevocable Trust
SGS 1995 Family Limited Partnership
SGS-III Family Limited Partnership
Mario E. Soussou
Adam L. Suttin
Suttin Family Trust
Gagan Verma
Stephen H. Wise
<PAGE>
Catherine Durden
Michael P. Ferry
Debra T. Follick
Bruce A. Goldsmith
William R. Kinder
Michael J. Metzger
Donald W. Miller
Dennis L. Moore
Donald G. Morgan
James D. Murphy and Diane G. Murphy
Joseph Pachella
Leslie A. Paparone
Jay E. Politi
Kenneth F. Reilly
Joel Slank
Daniel M. Synan
Anne Tashjian
James D. Tates
Sharad B. Tilak
Paul W. Tonnesen
Mariane Wojcicki
Karen A. August
Dennis G. Podlesak
Julie B. Sweeney
Neil P. Guller
Stephen K. Carrico
Michael Fleury
James P. Garvey
Marcie J. Griesmeyer
<PAGE>
David Hays
Kim Levine
Michael Cox
Rebecca E. Cushing
Teresita Eugenio
Peter Gower
Thomas Horton
Lee Jacobs
Loren Block
Christina Bartolick
Cheryl Lawler
Exhibit 99.1
Playtex Products Closes on Previously
Announced Acquisition of Personal
Care Group, Inc.
January 29, 1998 9:378 AM EST
WESTPORT, Conn.--January 29, 1998--Playtex Products, Inc. (NYSE:PYX)
announced today it has completed the previously announced acquisition of
Personal Care Group, Inc., owner of a number of leading consumer product
brands, including Wet Ones(R) pre-moistened towelettes, Chubs(R) babywipes,
Ogilvie(R) home permanent products, Binanca(R) breath spray and drops and Mr.
Bubble(R) children's bubble bath products, from J.W. Childs Equity Partners,
L.P. Consideration for the transaction was $91 million in cash and 9,257,375
shares of Playtex common stock.
Playtex Products is a leading manufacturer and distributor of personal care
products marketed under such brand names as Playtex(R), Banana Boat(R),
Biosun(R), Woolite(R), Jhirmack(R) and Tek(R).
