SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): June 30, 1999
PLAYTEX PRODUCTS, INC.
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(Exact name of registrant as specified in charter)
Delaware 1-12620 51-0312772
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
300 Nyala Farms Road, Westport, CT 06880
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 341-4000
N/A
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(Former name or former address, if changed since last report)
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2
Item 2. Acquisition or Disposition of Assets.
On June 30, 1999, pursuant to an Asset Sale Agreement, dated as of May
13, 1999, by and between Playtex Products, Inc., a Delaware corporation (the
"Company"), and Colgate-Palmolive Company, a Delaware corporation (the
"Seller"), as amended by Amendment No. 1 to the Asset Sale Agreement, dated as
of June 25, 1999, by and between the Company and the Seller, the Company
acquired the Baby Magic(R) brand of infant-related bath, lotion, shampoo, oil
and powder products in the U.S., Canada, and Puerto Rico from the Sellers for
$90 million in cash. The Sellers will retain the rights to the Baby Magic(R)
brand outside of the U.S., Canada, and Puerto Rico. The consideration paid to
the Sellers was determined by negotiations among the parties and was based on
the value of the Baby Magic business on an ongoing basis. The acquisition
consideration was obtained from borrowings under one of the Company's existing
credit facilities which facilities were amended in connection with the
acquisition.
Item 5. Other Events.
On June 30, 1999, the registrant issued a press release regarding the
acquisition from Colgate-Palmolive Company of the Baby Magic(R) brand of infant-
related bath, lotion, shampoo, oil and powder products for the U.S., Canada and
Puerto Rico. A copy of this press release is attached hereto as Exhibit 99.1.
Item 7. Financial Statements and Exhibits
(a) Financial statements of business acquired.
N/A
(b) Pro forma financial information.
N/A
(c) Exhibits
Exhibit Description
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2.1 Asset Sale Agreement, dated as of May 13, 1999,
by and between Playtex Products, Inc. and
Colgate-Palmolive Company. (The Registrant
agrees to furnish copies of the exhibits and
schedules hereto supplementally to the
Commission on request.)
2.2 Amendment No. 1 to the Asset Sale Agreement, dated
as of June 25, 1999, by and between Playtex Products,
Inc. and Colgate-Palmolive Company.
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3
Exhibit Description
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10.1 Second Amendment to Credit Agreement dated as of
June 30, 1999, by and among Playtex Products,
Inc., the financial institutions listed on the
signature page thereto, DLJ Capital Funding,
Inc., and Wells Fargo Bank, N.A.
99.1 Press release of Playtex Products, Inc. dated June 30,
1999.
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4
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: July 15, 1999
PLAYTEX PRODUCTS, INC.
By: /s/ Michael F. Goss
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Michael F. Goss
Executive Vice President & Chief Financial Officer
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5
EXHIBIT INDEX
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Exhibit Description
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2.1 Asset Sale Agreement, dated as of May 13, 1999,
by and between Playtex Products, Inc. and
Colgate-Palmolive Company. (The Registrant
agrees to furnish copies of the exhibits and
schedules hereto supplementally to the
Commission on request.)
2.2 Amendment No. 1 to the Asset Sale Agreement, dated
as of June 25, 1999, by and between Playtex Products,
Inc. and Colgate-Palmolive Company.
10.1 Second Amendment to Credit Agreement dated as of
June 30, 1999, by and among Playtex Products,
Inc., the financial institutions listed on the
signature page thereto, DLJ Capital Funding,
Inc., and Wells Fargo Bank, N.A.
99.1 Press release of Playtex Products, Inc. dated June 30,
1999.
Exhibit 2.1
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EXECUTION COPY
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ASSET SALE AGREEMENT
between
COLGATE-PALMOLIVE COMPANY
and
PLAYTEX PRODUCTS, INC.
Dated as of May 13, 1999
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This ASSET SALE AGREEMENT, dated as of May 13, 1999, is by and between
COLGATE-PALMOLIVE COMPANY, a Delaware corporation ("SELLER"), and PLAYTEX
PRODUCTS, INC., a Delaware corporation ("BUYER").
WHEREAS, SELLER is engaged in the business of manufacturing, marketing
and selling baby care products under the brand name Baby Magic; and
WHEREAS, SELLER now desires to sell certain assets of such business to
BUYER, and BUYER agrees to purchase same, and to assume certain liabilities in
connection therewith, all upon the terms and conditions set forth herein;
NOW THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, intending to be legally bound, hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES
1.1 Certain Definitions. For all purposes of this Agreement except as
expressly provided or unless the context otherwise requires the following
definitions shall apply:
"Accounting Principles" shall have the meaning assigned thereto in
Section 3.8.
"Acquired Restricted Business" shall have the meaning assigned thereto
in Section 5.7(a).
"Assets" shall have the meaning assigned thereto in Section 1.4.
"Assumed Liabilities" shall have the meaning assigned thereto in
Section 1.6.
"Baby Category" shall mean the category of products targeted for use by
children up to three years old.
"Basket" shall have the meaning assigned thereto in Section 8.2.
"Bath Actives Project" shall mean the project to reformulate the bath
Products.
"Bottle License Agreement" shall mean the agreement entered into at
Closing substantially in the form attached hereto as Exhibit A.
"Brand" shall mean the Baby Magic brand in the Territory.
"Business" shall mean the manufacture, marketing and sale of the
Products.
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"BUYER's Diversion" shall have the meaning assigned thereto in Section
7.9.
"Closing" shall have the meaning assigned thereto in Section 2.1.
"Closing Date" shall have the meaning assigned thereto in Section 2.1.
"Closing Income Statement Information" shall have the meaning assigned
thereto in Section 3.8(b).
"Confidentiality Agreement" shall have the meaning assigned thereto in
Section 6.1.
"Collateral Agreements" shall have the meaning assigned thereto in
Section 2.1(d).
"Confidential Information" shall have the meaning assigned thereto in
Section 5.7(b).
"Contracts" shall mean the contracts and agreements set forth on
Schedule 3.5 hereto, each a "Contract."
"Customer Accommodations" shall have the meaning assigned thereto in
Section 1.6(b).
"DOJ" shall have the meaning assigned thereto in Section 7.3.
"Excess Inventory" shall have the meaning assigned thereto in Section
5.6.
"Excluded Assets" shall have the meaning assigned thereto in Section
1.5.
"Excluded Liabilities" shall have the meaning assigned thereto in
Section 1.7.
"Expiration Date" shall have the meaning assigned thereto in Section
8.1.
"Formulations" shall mean the current formulations for each Product,
prior formulations in the records of SELLER (to the extent available) for each
Product, and the substantially developed formula for the proposed Bath Actives
Project.
"FTC" shall have the meaning assigned thereto in Section 7.3.
"GAAP" shall mean generally accepted accounting principles in the
United States, consistently applied.
"HSR Act" shall have the meaning assigned thereto in Section 2.2(c).
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"Income Statement Information" shall have the meaning assigned thereto
in Section 3.8.
"Intellectual Property" shall have the meaning assigned thereto in
Section 1.4(c).
"Inventory" shall have the meaning assigned thereto in Section 1.4(a).
"Loss" shall have the meaning assigned thereto in Section 8.5.
"Marked Inventory" shall have the meaning assigned thereto in Section
5.5.
"Marketing and Sales Information" shall have the meaning assigned
thereto in Section 1.4(d).
"Omnibus Trademark Assignment" shall mean the agreement entered into
between BUYER and SELLER pursuant to which SELLER assigns, transfers and conveys
to BUYER all right, title, and interest in and to the Trademarks (as such term
is defined in Section 1.4 hereof), along with the accompanying goodwill
associated therewith and certain related rights.
"Packaging License Agreement" shall mean the agreement entered into at
Closing substantially in the form attached hereto as Exhibit B.
"Permitted Liens" shall have the meaning assigned thereto in Section
3.2.
"Processing Instructions" shall mean the current processing
instructions for each Product, the prior processing instructions in the records
of SELLER (to the extent available) for each Product, and the proposed
processing instructions (if any) for the proposed Bath Actives Project.
"Products" shall mean the products manufactured and sold in the
Territory under the Brand and listed or described on Schedule 1.1(a) hereto,
each a "Product."
"Purchase Orders" shall have the meaning assigned thereto in Section
1.4(b).
"Purchase Price" shall have the meaning assigned thereto in Section
1.2.
"Restricted Business" shall have the meaning assigned thereto in
Section 5.7(a).
"SELLER's Diversion" shall have the meaning assigned thereto in Section
7.9.
"SELLER's Goods" shall have the meaning assigned thereto in Section
7.9.
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"SELLER's Knowledge" shall mean to the knowledge of Rick Cote, Sheila
Hopkins, Jules Kaufman, Sharon Lichten, Leah Rios, Don Bushner, and Tom Bennett,
after due inquiry, provided, however, that with respect to the sixth sentence of
Section 3.3(a) only, the term SELLER's Knowledge shall also mean to the
knowledge of Anita Young, after due inquiry.
"Specifications" shall mean the current raw materials, manufacturing,
packaging, labeling and quality assurance specifications for each Product, the
prior raw materials, manufacturing, packaging, labeling and quality assurance
specifications in the records of SELLER (to the extent available) for each
Product, and the proposed raw materials, manufacturing, packaging, labeling and
quality assurance specifications (if any) for the proposed Bath Actives Project.
"Territory" shall mean the fifty states of the United States, Puerto
Rico (exclusive of all other territories) and Canada.
"Third-Party Claim" shall have the meaning assigned thereto in Section
8.6(a).
"Trademarks" shall have the meaning assigned thereto in Section 1.4(c).
"Transition Supply Agreement" shall mean the agreement providing for
the interim manufacturing and supply of the Products, entered into at Closing
substantially in the form attached hereto as Exhibit C.
1.2 Purchase and Sale of Assets. Upon the terms, and subject to the
conditions of this Agreement, on the Closing Date, SELLER will sell, convey,
transfer and assign, or cause to be sold, conveyed, transferred and assigned to
BUYER, and BUYER will purchase, the Assets (as defined in Section 1.4) for an
aggregate cash purchase price of ninety million and 00/100 United States Dollars
($90,000,000) (the "Purchase Price"), payable as set forth in Article 2.
1.3 Allocation of Purchase Price. The Purchase Price shall be allocated
among the Assets as set forth in Schedule 1.3 hereto. Neither BUYER nor SELLER,
nor any of their respective affiliates, shall take any position on any tax
return or audit inconsistent with such allocation of the Purchase Price unless
required to do so by applicable law. SELLER and BUYER shall each provide to the
other for review a copy of its report with respect to this transaction pursuant
to Section 1060 of the Internal Revenue Code of 1986, as amended, at least ten
(10) business days prior to its submission to the Internal Revenue Service. Such
reports shall be consistent with the allocations of the Purchase Price contained
in Schedule 1.3.
1.4 Assets. The term "Assets" shall mean all right, title and interest
of SELLER in and to the following enumerated assets, to the extent exclusively
related to the Brand:
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(a) finished goods inventory of the Products which is current,
non-obsolete and saleable in the ordinary course (the "Inventory"), in the
amount set forth, and as specified, in Section 5.6;
(b) all commitments and orders (subject to the terms and
conditions of such commitments and orders) for the purchase of goods from SELLER
for the Products that have not been shipped as of the Closing Date
(collectively, the "Purchase Orders");
(c) (i) the registered trademarks and trademark applications
listed on Schedule 3.3, together with the goodwill associated therewith (the
"Trademarks") and (ii) all Formulations, Specifications, Processing
Instructions, trade secrets, know-how, trade dress, trade names, common-law
trademarks and service marks and copyrights, relating exclusively to the
Products in the Territory (collectively, the "Intellectual Property");
(d) all product literature, advertising materials, promotional
materials, historical sales information for customers, and other books and
records (except SELLER's corporate records) that are exclusively used in or
exclusively related to the Products, except to the extent SELLER is required by
law to retain same (collectively, the "Marketing and Sales Information");
(e) all lists of customers who purchased Products in the year
ended December 31, 1998 and are customers as of the date hereof; and
(f) the specific Contracts which are indicated on Schedule 3.5
as being assigned to, and assumed by, BUYER.
1.5 Excluded Assets. The Assets shall not include any assets other than
the assets specifically listed or described in Section 1.4, and, without
limiting the generality of the foregoing, shall expressly exclude (1) any
manufacturing and distribution facilities, (2) the "By Mennen" trademark or
related intellectual property, (3) any broker agreements pursuant to which third
parties sell products of SELLER including the Products, (4) all accounts
receivable relating to the Business as of the Closing Date and (5) any assets
that are not exclusively related to the Business (collectively, the "Excluded
Assets").
1.6 Assumption of Liabilities. BUYER shall assume on the Closing Date
and shall pay, perform and discharge when due the following obligations and
liabilities of whatever kind and nature, primary or secondary, direct or
indirect, absolute or contingent, known or unknown, whether or not accrued, of
SELLER (collectively, the "Assumed Liabilities"):
(a) all obligations, liabilities and commitments in respect of
any and all Products sold by BUYER at any time after the Closing Date;
(b) all obligations and liabilities for refunds, adjustments,
allowances (including, without limitation, off-invoice allowances and co-op
advertising allowances), repairs, exchanges, returns, advertising commitments,
coupons, free standing inserts, slotting,
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sampling and account specific programs (collectively, "Customer Accommodations")
specifically related to the Products and allocated to BUYER in the manner
described on Schedule 1.6(b), unless any such Customer Accommodation is canceled
by BUYER (BUYER bearing the costs of any such cancellation) following the
Closing;
(c) all obligations and liabilities of SELLER under Purchase
Orders (subject to the terms and conditions of such commitments and orders) that
are outstanding as of the Closing Date, but expressly excluding all accounts
payable relating to the Business as of the Closing Date; and
(d) the specific Contracts which are indicated on Schedule 3.5
as being assigned to, and assumed by, BUYER.
BUYER's obligations under this Section 1.6 shall not be subject to offset or
reduction by reason of any actual or alleged breach of any representation,
warranty or covenant contained in this Agreement or any document delivered in
connection herewith or any right or alleged right to indemnification hereunder.
1.7 Excluded Liabilities. BUYER shall not assume, or in any way be
liable for the payment, performance or discharge of, any of the following
liabilities or obligations of SELLER or any of its affiliates (collectively, the
"Excluded Liabilities"):
(a) the accounts payable relating to the Business as of the
Closing Date;
(b) any product liability relating to Products sold by SELLER;
(c) all Customer Accommodations which are not assumed by BUYER
pursuant to Section 1.6(b) and Schedule 1.6(b); and
(d) all other liabilities and obligations of SELLER or any of
its affiliates, except the Assumed Liabilities.
ARTICLE 2
CLOSING
2.1 Closing. The closing (the "Closing") of the purchase and sale of
the Assets and of the transactions contemplated by this Agreement shall be held
at the offices of Paul, Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of the
Americas, New York, New York, at 10:00 a.m. on June 15, 1999, or if the
conditions to Closing set forth in Sections 2.2 and 2.3 shall not have been
waived or satisfied by such date, on the tenth business day following
satisfaction of such conditions. The date on which the Closing shall occur is
hereinafter referred to as the "Closing Date."
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(a) At the Closing, BUYER shall deliver to SELLER (i) by wire
transfer to SELLER's bank account per the wire transfer instructions on Schedule
2.1(a) hereto immediately available funds in an amount equal to the Purchase
Price and (ii) instruments of assumption in form and substance reasonably
satisfactory to SELLER and its counsel evidencing and effecting the assumption
by BUYER of the Assumed Liabilities and such other documents as are specifically
required by this Agreement (it being understood that such instruments shall not
require BUYER or any other person to assume any liabilities or obligations other
than the Assumed Liabilities).
(b) At the Closing, SELLER shall deliver or cause to be
delivered to BUYER such appropriately executed instruments of sale, assignment,
transfer and conveyance in form and substance reasonably satisfactory to BUYER
and its counsel evidencing and effecting the sale and transfer to BUYER of the
Assets (it being understood that such instruments shall not require SELLER or
any other person to make any additional representations, warranties or
covenants, express or implied, not contained in this Agreement).
(c) SELLER and BUYER shall cooperate with each other
regarding, and shall use their respective commercially reasonable efforts to
cause, the sale to BUYER of all the Assets on the Closing Date on the terms and
conditions set forth in this Agreement.
(d) At the Closing, SELLER and BUYER shall execute and deliver
(i) the Transition Supply Agreement, (ii) the Bottle License Agreement, (iii)
the Packaging License Agreement and (iv) the Omnibus Trademark Assignment
substantially in the form attached as Exhibit D hereto (collectively, the
"Collateral Agreements").
2.2 BUYER's Conditions to Closing. The obligation of BUYER to purchase
and pay for the Assets and assume the Assumed Liabilities is subject to the
satisfaction (or waiver by BUYER) as of the Closing of the following conditions:
(a) (i) The representations and warranties of SELLER made in
Article 3 of this Agreement shall be true and correct in all respects (in the
case of any representation or warranty containing any materiality qualification)
or in all material respects (in the case of any representation or warranty
without any materiality qualification) on and as of the Closing Date, as though
made on and as of the Closing Date (unless and to the extent any such
representation or warranty speaks specifically as of an earlier date, in which
case, as of such earlier date); (ii) SELLER shall have performed or complied in
all material respects with all obligations and covenants required by this
Agreement to be performed or complied with by SELLER by the time of the Closing;
and (iii) SELLER shall have delivered to BUYER a certificate dated the Closing
Date and signed by an authorized officer of SELLER confirming the foregoing.
(b) No injunction or order of any court or administrative
agency of competent jurisdiction shall be in effect as of the Closing that
restrains or prohibits the purchase and sale of the Assets or the exercise by
BUYER of control over the Assets.
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(c) The waiting period under the Hart-Scott Rodino Antitrust
Improvements Act of 1976 (the "HSR Act"), if applicable to the transactions
contemplated hereby, shall have expired or been terminated.
(d) SELLER shall have executed and delivered to BUYER each of
the Collateral Agreements.
2.3 SELLER's Conditions to Closing. The obligation of SELLER to sell
and deliver or cause to be sold and delivered the Assets to BUYER is subject to
the satisfaction (or waiver by SELLER) as of the Closing of the following
conditions:
(a) The representations and warranties of BUYER made in
Article 4 of this Agreement shall be true and correct in all respects (in the
case of any representation or warranty containing any materiality qualification)
or in all material respects (in the case of any representation or warranty
without any materiality qualification), on and as of the Closing Date, as though
made on and as of the Closing Date (unless and to the extent any such
representation or warranty speaks specifically as of an earlier date, in which
case, as of such earlier date), and BUYER shall have performed or complied in
all material respects with the obligations and covenants required by this
Agreement to be performed or complied with by BUYER by the time of the Closing;
and BUYER shall have delivered to SELLER a certificate dated the Closing Date
and signed by a duly authorized officer of BUYER confirming the foregoing.
(b) No injunction or order of any court or administrative
agency of competent jurisdiction shall be in effect as of the Closing that
restrains or prohibits the purchase and sale of the Assets.
(c) The waiting period under the HSR Act, if applicable to the
transactions contemplated hereby, shall have expired or been terminated.
(d) BUYER shall have executed and delivered to SELLER each of
the Collateral Agreements.
(e) BUYER shall have delivered to SELLER properly executed
resale exemption certificates containing the requisite tax registration numbers
for the Inventory being transferred by SELLER pursuant to this Agreement.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
SELLER hereby represents and warrants to BUYER as follows:
3.1 SELLER's Authority; No Conflicts.
(a) SELLER is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. SELLER has all
requisite corporate power and authority to enter into this Agreement and the
Collateral Agreements and to consummate the transactions contemplated hereby and
thereby. All corporate acts and other proceedings required to be taken by SELLER
to authorize the execution, delivery and performance of this Agreement and the
Collateral Agreements and the consummation of the transactions contemplated
hereby and thereby have been duly and properly taken. This Agreement has been
(and the Collateral Agreements at the Closing will be) duly executed and
delivered by SELLER and, assuming the due execution hereof by BUYER, this
Agreement constitutes (and the Collateral Agreements, when executed, will
constitute) the valid and binding obligation of SELLER, enforceable against
SELLER in accordance with its terms, except as enforcement hereof may be limited
by applicable bankruptcy, insolvency or other similar laws affecting creditors'
rights generally and by general equitable principles.
(b) The execution, delivery and performance by SELLER of this
Agreement and the Collateral Agreements will not (i) violate any provision of
SELLER's certificate of incorporation or bylaws, (ii) violate any provision of,
or be an event that is (or with the passage of time will result in) a violation
of, or result in the acceleration of or entitle any party to accelerate (whether
after the giving of notice or lapse of time or both) any obligation under, or
result in the imposition of any lien upon or the creation of a security interest
in any of the Assets pursuant to, any mortgage, lien, lease, agreement,
instrument, order, arbitration award, judgment, injunction or decree to which
SELLER is a party or by which SELLER is bound, or (iii) violate or conflict with
any statute, rule or regulation applicable to SELLER or any of its properties or
assets or any other material restriction of any kind or character to which
SELLER is subject, that, in the case of clauses (ii) and (iii), would,
individually or in the aggregate, have a material adverse effect on the ability
of SELLER to consummate the transactions hereunder.
3.2 Title to Tangible Assets. SELLER has good title to the Inventory
included in the Assets, free and clear of all mortgages, liens, security
interests or encumbrances of any nature whatsoever, except mechanics',
carriers', workmen's, repairmen's or other like liens arising or incurred in the
ordinary course of business or liens for taxes and other governmental charges
that are not due and payable or that may thereafter be paid without penalty
(collectively, the "Permitted Liens").
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3.3 Intellectual Property.
(a) SELLER is the sole owner of the Intellectual Property and
has good and marketable title (both legal and equitable) to the Intellectual
Property. Other than the patents licensed to BUYER pursuant to the Bottle
License Agreement, SELLER has no patents or patent applications relating
exclusively to the Business. To SELLER's Knowledge, (i) the Intellectual
Property is free and clear of all restrictions, security interests, court
orders, injunctions, decrees, writs or other encumbrances, whether by written
agreement or otherwise, except as set forth in Schedule 3.3(a) and excluding any
claims of invalidity on the grounds of non-use that could be asserted against
the Trademarks, and (ii) no person other than SELLER owns any right in the
Intellectual Property. All Trademarks and copyrights relating to the Products
are valid and subsisting and SELLER has taken all necessary reasonable action to
maintain and protect the Intellectual Property. All trade secrets relating to
the Products are protected against the use of such trade secrets by other
persons to an extent and in a manner customary in the industry in which SELLER
operates. To SELLER's Knowledge, the use of the Intellectual Property in the
Business and the conduct of the Business as presently conducted do not infringe
or violate the rights of any other party. SELLER has not received any written
claim or notice alleging any such infringement during the past 12 months
(including any written claim that SELLER must license or refrain from using the
Intellectual Property rights of any third party). The Intellectual Property,
together with the rights being licensed to BUYER pursuant to the Packaging
License Agreement and the Bottle License Agreement, constitutes all intellectual
property necessary to the conduct of the Business in a similar manner as to how
it has been conducted prior to the date hereof.
(b) There is no litigation or proceeding (judicial or
administrative) pending by or against SELLER challenging the registration,
grant, validity or enforceability of the Intellectual Property or the use of the
Intellectual Property; and no litigation or proceeding is otherwise pending by
or against SELLER alleging infringement with respect to the use, or challenging
the validity or enforceability of any of the Intellectual Property or with
regard to the infringement of any rights of third parties. Except as set forth
on Schedule 3.3(b), to SELLER's Knowledge, no person is infringing the
Intellectual Property. Except as set forth on Schedule 3.3(b), no person has
been granted any license or other right or interest by SELLER to any of the
Intellectual Property anywhere in the Territory.
3.4 Litigation; Proceedings. There are no (a) outstanding judgments,
orders, writs, injunctions or decrees of any court, governmental agency or
arbitration tribunal relating to the Business or any Product or (b) actions,
suits, claims or legal, administrative or arbitration proceedings pending or, to
SELLER's Knowledge threatened, which relate to the Business or any Product or
which seek any material injunctive relief that could reasonably be expected to
have a material adverse effect on the ability of SELLER to consummate the
transactions contemplated hereby. To SELLER's Knowledge, there are no
investigations pending which relate to the Business or any Product.
3.5 Contracts. SELLER has delivered current and complete copies of the
documents constituting all Contracts. Except for the Contracts, and as specified
on Schedule 3.5, there
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are no material contracts or agreements relating to the Business or any Product.
Each Contract is a valid and binding obligation of SELLER (except as otherwise
specified on Schedule 3.5) and, to SELLER's Knowledge, is in full force and
effect. SELLER has performed all material obligations required to be performed
by it to date under the Contracts and is not (with or without the lapse of time
or the giving of notice, or both) in breach or default in any material respect
thereunder.
3.6 Compliance with Applicable Laws. The Business is being conducted in
compliance with all applicable statutes, laws, ordinances, rules, orders and
regulations of any governmental authority or instrumentality, that are material
to the conduct of the Business. To SELLER's Knowledge, except as set forth on
Schedule 3.6, since January 1, 1996 SELLER, in conducting the Business, has not
violated any applicable statutes, laws, ordinances, rules, orders or regulations
of any governmental authority or instrumentality.
3.7 Brokers. There is no broker or other person who would have any
valid claim against BUYER for a fee, commission or brokerage in connection with
this Agreement or the transactions contemplated hereby as a result of any
agreement, understanding or action by SELLER. SELLER shall be solely responsible
for all fees and expenses of any broker, finder or other person engaged by or on
behalf of it or otherwise claiming through it in connection with the
transactions contemplated by this Agreement.
3.8 Financial Information. (a) Attached as Schedule 3.8 hereto is
capsulized unaudited income statement information in respect of the Products for
(i) the years ended December 31, 1997 and December 31, 1998 and (ii) for the
quarter ended March 31, 1999 (collectively the "Income Statement Information").
The Income Statement Information was prepared (A) from the books and records of
SELLER in accordance with the internal accounting practices of SELLER, as
described in Schedule 3.8 (the "Accounting Principles") and (B) on a consistent
basis for each of the periods presented in all material respects. Subject to
Schedule 3.8, the Income Statement Information fairly presents in all material
respects the operations of the Business. Schedule 3.8 contains a description of
the material differences between the Accounting Principles and the application
of GAAP at the same level of financial detail.
(b) Prior to Closing, SELLER will deliver to BUYER capsulized
unaudited income statement information in respect of the Products for the 1999
year to date, ending on the latest month end occurring prior to Closing (the
"Closing Income Statement Information"). The Closing Income Statement
Information will be prepared (i) from the books and records of SELLER in
accordance with the Accounting Principles and (ii) on a consistent basis for
each of the periods presented in all material respects. Subject to Schedule 3.8,
the Closing Income Statement Information will fairly present in all material
respects the operations of the Business.
3.9 Inventory. At the Closing, the Inventory will (A) be current,
non-obsolete and saleable in the ordinary course and (B) meet applicable
manufacturing specifications and be free of defects in workmanship and
materials. Finished goods inventory of Products having a book
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value as of the Closing Date of two million and 00/100 United States Dollars
($2,000,000) represents between four and six weeks of historical inventory
coverage.
3.10 Product Liability Claims. Except as set forth on Schedule 3.10,
there are no product liability claims pending, or to SELLER's Knowledge,
threatened, relating to any Product and no such claim has been settled,
adjudicated or otherwise disposed of since January 1, 1996.
3.11 No Material Adverse Change. Except as set forth on Schedule 3.11,
since December 31, 1998, there has been no material adverse change in the
Business, nor has there been any damage, destruction, loss, or event or other
circumstance which would reasonably be expected to have or has had a material
adverse effect on the Business, whether or not covered by insurance.
3.12 Suppliers and Customers. Schedule 3.12 lists the 10 largest (in
terms of dollar amount) suppliers and the 10 largest (in terms of dollar amount)
customers of the Business as conducted by SELLER, in each case, for the year
ended on December 31, 1998. Except as set forth on Schedule 3.12, to SELLER's
Knowledge: (i) no person listed on Schedule 3.12 within the last twelve months
has threatened to cancel or otherwise terminate, or to SELLER's Knowledge,
intends to cancel or otherwise terminate, the relationship of such person with
respect to the Business and (ii) no such person has during the last twelve
months decreased materially or threatened to decrease or limit materially, or
has informed SELLER of its intention to modify materially its relationship with
respect to the Business or to decrease or limit materially its services or
supplies to the person conducting the Business or its usage or purchase of the
services or products of the person conducting the Business.
3.13 Customer Accommodations. Other than programs conducted in the
ordinary course of business, there are no material special programs with
accounts except as listed on Schedule 1.6(b). All expenses for all material
Customer Accommodations (including all items enumerated on Schedule 1.6(b)) have
been accounted for in the Income Statement Information in a manner consistent
with SELLER's internal accounting practices.
3.14 Operations of the Business. Except as set forth on Schedule 3.14,
since December 31, 1998 SELLER, with respect to the Business has not: (a) waived
any material right under any Contract or other agreement of the type required to
be set forth on any Schedule; (b) made any change in its accounting methods or
practices or made any change in depreciation or amortization policies or rates
adopted by it, except insofar as may have been required by a change in GAAP; (c)
materially changed any of its business policies, including, without limitation,
advertising, investment, marketing, pricing, purchasing, production, personnel,
sales, returns, budget or product acquisition policies; (d) terminated or failed
to renew, or received any written threat (that was not subsequently withdrawn)
to terminate or fail to renew, any Contract or other agreement that is or was
material to the Business; (e) made any material capital expenditures (or series
of related capital expenditures) outside the ordinary course of business; or (f)
granted any license or sublicense of any rights under or with respect to any
Intellectual Property outside the ordinary course of business.
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3.15 Complete Copies. All agreements listed in the Schedules attached
hereto and delivered by or on behalf of SELLER to BUYER in connection with this
Agreement and the transactions contemplated hereby are true, complete and
authentic copies of the documentation constituting such agreements.
3.16 No Other Representations or Warranties. Except for the
representations and warranties contained in (a) this Article 3, (b) the
certificate described in Section 2.2(a), and (c) the Collateral Agreements,
neither SELLER nor any of its agents, affiliates or representatives, nor any
other person, makes or shall be deemed to make any representation or warranty to
BUYER, express or implied.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
BUYER hereby represents and warrants to SELLER as follows:
4.1 Authority; No Conflicts; Governmental Consents.
(a) BUYER is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. BUYER has all
requisite corporate power and authority to enter into this Agreement and the
Collateral Agreements and to consummate the transactions contemplated hereby and
thereby. All corporate acts and other proceedings required to be taken by BUYER
to authorize the execution, delivery and performance of this Agreement and the
Collateral Agreements and the consummation of the transactions contemplated
hereby and thereby have been duly and properly taken. This Agreement has been
(and the Collateral Agreements at the Closing will be) duly executed and
delivered by BUYER and, assuming the due execution hereof by SELLER, this
Agreement constitutes (and the Collateral Agreements, when executed, will
constitute) the valid and binding obligation of BUYER, enforceable against BUYER
in accordance with its terms, except as enforcement hereof may be limited by
applicable bankruptcy, insolvency or other similar laws affecting creditors'
rights generally and by general equitable principles.
(b) Except as set forth on Schedule 4.1(b), the execution,
delivery and performance of this Agreement and the Collateral Agreements will
not (i) violate any provision of the charter or by-laws or similar
organizational instrument of BUYER, (ii) violate any provision of, or be an
event that is (or with the passage of time will result in) a violation of, or
result in the acceleration of or entitle any party to accelerate (whether after
the giving of notice or lapse of time or both) any obligation under, or result
in the imposition of any lien upon or the creation of a security interest in any
of BUYER'S assets or properties pursuant to, any mortgage, lien, lease,
agreement, instrument, order, arbitration award, judgment, injunction or decree
to which BUYER is a party or by which BUYER is bound, or (iii) violate or
conflict with any statute, rule or regulation applicable to BUYER or any of its
properties or assets or any other material restriction of any kind or character
to which BUYER is subject, that, in the case of clauses (ii) and (iii), would,
individually or in the aggregate, have a material adverse
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effect on the assets or financial condition of BUYER or the ability of BUYER to
consummate the transactions hereunder.
4.2 Actions and Proceedings, etc. There are no (a) outstanding
judgments, orders, writs, injunctions or decrees of any court, governmental
agency or arbitration tribunal against BUYER that would or could prevent, or
otherwise materially adversely affect the ability of BUYER to consummate, the
transactions contemplated hereby or (b) actions, suits, claims or legal,
administrative or arbitration proceedings or investigations pending or, to the
best knowledge of BUYER, threatened against BUYER, that would or could prevent,
or otherwise materially adversely affect the ability of BUYER to consummate, the
transactions contemplated hereby.
4.3 Financing Commitments. Pursuant to the financing commitment set
forth in Schedule 4.3, BUYER has financing capacity sufficient to enable it to
consummate the transactions contemplated by this Agreement. BUYER acknowledges
that the conditions contained in the financing commitment shall not be deemed to
be conditions to BUYER's obligations under this Agreement, which are limited to
those set forth in Section 2.2 hereof.
4.4 Brokers. There is no broker or other person who would have any
valid claim against SELLER for a fee, commission or brokerage in connection with
this Agreement or the transactions contemplated hereby as a result of any
agreement, understanding or action by BUYER. BUYER shall be solely responsible
for all fees and expenses of any broker, finder or other person engaged by or on
behalf of it or otherwise claiming through it in connection with the
transactions contemplated by this Agreement.
ARTICLE 5
COVENANTS OF SELLER
SELLER covenants and agrees as follows:
5.1 Access. Prior to the Closing, SELLER will grant to BUYER or cause
to be granted to BUYER and its representatives, employees, counsel and
accountants reasonable access, during normal business hours and upon reasonable
notice, to the personnel, properties, books and records of SELLER relating
exclusively to the transition of the Assets to BUYER; provided, that such access
does not unreasonably interfere with the normal operations of SELLER or the
Business, and provided further, that all requests for access shall be directed
to Rick Cote or Sheila Hopkins, or such other person as SELLER shall designate
from time to time.
5.2 Ordinary Conduct of the Business. Except as permitted by the terms
of this Agreement, from the date hereof to the Closing, SELLER will cause the
Business to be conducted in the ordinary course consistent with past practice.
Except as provided in this Agreement, SELLER shall not, without the prior
written consent of BUYER:
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(a) Sell or otherwise dispose of or abandon any of the Assets,
except for sales of finished goods inventory in the ordinary course of business
consistent with past practice.
(b) Mortgage, pledge or grant any security interest in any of
the Assets in connection with the borrowing of money or for the deferred
purchase of any property; or otherwise permit the imposition of a lien on any of
the Assets other than Permitted Liens.
(c) Engage in any activity that would cause a breach of the
representations set forth in Section 3.14.
5.3 Delivery. Notwithstanding anything contained in this Agreement to
the contrary, at the Closing SELLER shall make available to BUYER the
Formulations, Specifications and Processing Instructions corresponding to each
Product.
5.4 Accounts Receivable. SELLER shall promptly forward or cause to be
forwarded to BUYER any and all proceeds from accounts receivable relating to the
Products that are received by SELLER after the Closing Date with respect to
receivables that arose from sales made after the Closing Date.
5.5 Use of Trademarks, Trade Names and Designations. (a) To the extent
the "By Mennen" trademark, the "Colgate-Palmolive Company" trade name, the "CP"
logo, or any other trademark, trade name or designation belonging to SELLER
following the Closing Date appears on any Inventory transferred to BUYER
pursuant to Section 1.4 hereof or otherwise transferred to BUYER by SELLER (the
"Marked Inventory"), BUYER may sell such Marked Inventory for a period not to
exceed one year following the Closing Date without altering or modifying such
Marked Inventory, or removing such trademarks, trade names or designations, but
shall not use such trademarks, trade names or designations in any other manner
without the prior written consent of SELLER. Notwithstanding the foregoing,
SELLER shall not be liable for any obligations, liabilities or commitments in
respect of any Marked Inventory sold at any time after the Closing Date.
(b) In no event shall BUYER use the "By Mennen" trademark, the
"Colgate-Palmolive Company" trade name, the "CP" logo, or any other trademark,
trade name or designation belonging to SELLER following the Closing Date in
connection with the advertising or publicizing of the Products.
5.6 Inventory. Schedule 5.6 contains a list of inventory (based on the
customary mix and quantities of Products anticipated to be required by the
Business following the Closing) expected to be on hand and delivered as the
Inventory to be transferred pursuant to Section 1.4(a) hereof. SELLER shall
update such list no later than ten (10) business days prior to Closing,
provided, however, that such list shall not deviate from Schedule 5.6 by more
than (i) ten percent (10%) with respect to any individual SKU that represents
more than 5% of the total value of Inventory or (ii) twenty-five percent (25%)
with respect to any other individual SKU. Notwithstanding anything to the
contrary contained herein, the Inventory transferred
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pursuant to Section 1.4(a) shall be equal to two million and 00/100 United
States Dollars ($2,000,000) in book value as of the Closing Date. To the extent
finished goods inventory of Products on hand at Closing has a book value in
excess of two million and 00/100 United States Dollars ($2,000,000), any such
excess (the "Excess Inventory") may be purchased by BUYER in accordance with the
terms of the Transition Supply Agreement. In the event that BUYER does not
purchase or agree to purchase the Excess Inventory within three months of the
Closing Date, SELLER shall have the right to sell such Excess Inventory outside
of the Territory. SELLER shall cause all the Inventory purchased by BUYER
pursuant to this Agreement to be delivered within three (3) business days of the
Closing (at BUYER's sole cost and expense) to such facilities designated by
BUYER.
5.7 (a) SELLER Noncompete. For a period of three years after the
Closing Date, SELLER shall not anywhere in the Territory, directly or
indirectly, (i) manufacture, market or sell any products that compete directly
or indirectly with the Products in the Baby Category (the "Restricted Business")
for SELLER'S own account; (ii) enter the employ of, render any services to, or
have an ownership interest in, any person, partnership, firm or corporation in
material direct competition with the Restricted Business conducted by BUYER or
any of its affiliates in any capacity, including, without limitation, as a
partner, shareholder, principal, agent, trustee, or consultant; or (iii)
interfere with business relationships in connection with the Business (whether
formed before or after the date of this Agreement) between BUYER or any of its
subsidiaries or affiliates that are engaged in the Restricted Business and
customers or suppliers of BUYER or such affiliates or subsidiaries of BUYER;
provided, however, that (A) SELLER may own, directly or indirectly, but solely
as an investment, less than 5% of any class of equity securities of any
corporation that is publicly traded and engaged in the Restricted Business and
(B) so long as such activities do not include use of the "By Mennen" trademark
or brand in the Restricted Business, the restrictions of this Section 5.7(a)
shall not apply to (I) acquisitions by SELLER of 100% of any person,
partnership, firm or corporation that derives less than 20% of its revenue from
the Restricted Business, or (II) any person, partnership, firm or corporation
that engages in a merger or business combination with SELLER, or otherwise
acquires SELLER (each such person, partnership, firm or corporation in clauses
(I) and (II), an "Acquired Restricted Business"). SELLER agrees that the
geographic scope of the covenants set forth in this Section 5.7 is necessary in
order to secure for BUYER the benefits it has contracted for and is reasonable.
(b) Confidential Information; Personal Relationship. After the
Closing Date, SELLER shall keep secret and retain in strictest confidence, and
shall not use for the benefit of itself or others, all confidential information
exclusively relating to the Business in the Territory (the "Confidential
Information"), including, without limitation, "know-how," trade secrets,
customer lists, details of client or consultant contracts, pricing policies,
marketing plans or strategies, product development techniques or plans, business
acquisition plans, designs and design projects, inventions and research projects
exclusively relating to the Business, the Assets or the Assumed Liabilities in
the Territory and shall not disclose such Confidential Information to anyone
outside of BUYER (including, without limitation, any Acquired Restricted
Business) except with BUYER's express written consent. BUYER and SELLER shall
maintain the
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confidentiality of the Formulations in accordance with their applicable policies
and procedures for the maintenance of confidential and proprietary information.
(c) Rights and Remedies Upon Breach. If SELLER breaches (or
threatens to commit a breach of) the covenants contained in this Section 5.7,
BUYER shall have, in addition to, and not in lieu of, any other rights and
remedies available to BUYER under law or in equity, the right and remedy to have
such covenant(s) specifically enforced by any court of competent jurisdiction,
it being agreed that any breach or threatened breach of such covenant(s) would
cause irreparable injury to BUYER and the Business and that money damages would
not provide an adequate remedy to BUYER. SELLER hereby consents to the
nonexclusive jurisdiction and venue of the United States federal district court
of any jurisdiction within the geographic scope of such covenant(s).
(d) Severability of Covenants. SELLER acknowledges and agrees
that the covenants contained in this Section 5.7 are reasonable and valid in
geographical and temporal scope and in all other respects. If any court
determines that any of the covenants contained in this Section 5.7, or any part
thereof, is invalid or unenforceable, the remainder of such covenants shall not
thereby be affected and shall be given full effect without regard to the invalid
portions.
(e) Blue-Pencilling. If any court determines that any of the
covenants contained in this Section 5.7, or any part thereof, is unenforceable
because of the duration or geographic scope of such provision, such court shall
have the power to reduce the duration or scope of such provision, as the case
may be, and, in its reduced form, such provision shall then be enforceable.
5.8 Consents, etc. Prior to the Closing Date, SELLER shall use
reasonable efforts to secure required written consents or waivers under or with
respect to any Contract annotated on Schedule 3.5 as being assigned to, and
assumed by, BUYER. In the event that any Contract annotated on Schedule 3.5 as
being assigned to BUYER cannot be so assigned to BUYER, SELLER shall use
commercially reasonable efforts to maintain such Contract for the benefit of
BUYER, provided that BUYER shall be responsible for performing SELLER's
obligations under any such Contract.
ARTICLE 6
COVENANTS OF BUYER
6.1 Confidentiality. BUYER acknowledges that all information provided
to it by SELLER and its affiliates, agents and representatives is subject to the
terms of a confidentiality agreement between BUYER and SELLER (the
"Confidentiality Agreement"), the terms of which are incorporated herein by
reference. Effective upon, and only upon, the Closing, the Confidentiality
Agreement will terminate only with respect to information provided to BUYER or
its affiliates that relates solely to the Business, the Assets and the Assumed
Liabilities; and BUYER acknowledges that any and all information provided to it
by SELLER concerning
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SELLER (other than information relating solely to the Business, the Assets and
the Assumed Liabilities) shall remain subject to the terms and conditions of the
Confidentiality Agreement after the date of the Closing.
6.2 Accounts Receivable. BUYER shall promptly forward or cause to be
forwarded to SELLER any and all proceeds from accounts receivable relating to
the Products that are received by BUYER after the Closing Date and that were
outstanding as of the Closing Date.
ARTICLE 7
MUTUAL COVENANTS OF THE PARTIES
Each of SELLER and BUYER covenants and agrees as follows:
7.1 Cooperation. In addition to the specific obligations created by the
Collateral Agreements, BUYER and SELLER shall reasonably cooperate with each
other and shall cause their officers, employees, agents and representatives to
reasonably cooperate with each other for a period of 60 calendar days both
before and after the Closing (and for a period of 90 calendar days thereafter,
provided that during such 90 day period such cooperation shall not include any
requirement of SELLER to incur any out-of-pocket expenses, except to the extent
that BUYER reimburses SELLER for such out-of-pocket expenses) to ensure the
orderly transition of the Assets and the Assumed Liabilities to BUYER and to
minimize the disruption to the respective businesses of the parties hereto
resulting from the transactions contemplated hereby. No party shall be required
by this Section 7.1 to take any action that would unreasonably interfere with
the conduct of its business.
7.2 Publicity. SELLER and BUYER agree that, from the date hereof
through the Closing Date, no public release or announcement concerning the
transactions contemplated hereby shall be issued by a party without the prior
consent of the other party (which consent shall not be unreasonably withheld),
except as such release or announcement may be required by law or the rules or
regulations of any United States or foreign securities exchange. SELLER and
BUYER agree for a period of three years following the Closing Date to keep the
terms of this Agreement confidential, except to the extent required by
applicable law and except that the parties may disclose such terms to their
respective accountants and other representatives as necessary in connection with
the ordinary conduct of their respective businesses (so long as such persons
agree to keep the terms of this Agreement confidential).
7.3 Antitrust Notification. SELLER and BUYER will, as promptly as
practicable, but in no event later than five business days following the
execution and delivery of this Agreement, file with the United States Federal
Trade Commission (the "FTC") and the United States Department of Justice (the
"DOJ") the notification and report form, if any, required for the transactions
contemplated hereby and any supplemental information requested in connection
therewith pursuant to the HSR Act. Each of SELLER and BUYER shall furnish to the
other such necessary information and reasonable assistance as the other may
request in connection with its preparation of any filing or submission that is
necessary under the HSR Act. SELLER
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and BUYER shall keep each other apprised of the status of any communications
with, and inquiries or requests for additional information from, the FTC and the
DOJ and shall comply promptly with any such inquiry or request. Each of SELLER
and BUYER will use its reasonable good faith efforts to obtain as promptly as
possible any clearance required under the HSR Act for the purchase and sale of
the Assets. BUYER shall take or cause to be taken, any and all reasonable
actions that may be required to eliminate any legal impediment arising from the
antitrust laws of the United States or other jurisdiction in order to obtain
consent or non-opposition to the transaction from the United States and other
relevant jurisdictions or to permit the consummation of the Closing of the
transactions contemplated hereby on terms and conditions consistent with the
terms of any judgment, decree or order issued by any court of competent
jurisdiction that may be in effect on the Closing Date.
7.4 Sales or Transfer Taxes. All sales, use, value-added, business,
goods and services, transfer, documentary, conveyancing or similar taxes or
expenses that may be imposed as a result of the sale and transfer of the Assets
(including, without limitation, any stamp duty or other tax chargeable in
respect of any instrument transferring property and any taxes (other than income
taxes) payable in connection with the sale and transfer of the Intellectual
Property), together with any and all penalties, interest and additions to tax
with respect thereto, shall be paid equally, one half by SELLER and one-half by
BUYER, and SELLER and BUYER shall cooperate in timely making all filings,
returns, reports and forms as may be required to comply with the provisions of
such tax laws; provided that BUYER shall bear the cost of any registration of
Trademarks.
7.5 Access to Information. After the Closing, upon reasonable notice,
BUYER and SELLER agree to furnish or cause to be furnished to each other and
their representatives, employees, counsel and accountants access, during normal
business hours, to such information (including records pertinent to the
Business) and assistance relating to the Business as are reasonably necessary
for financial reporting and accounting matters, the preparation and filing of
any tax returns, reports or forms or the defense of any tax claim or assessment,
provided, however, that such access and assistance do not unreasonably disrupt
the normal operations of BUYER or SELLER.
7.6 Bulk Sales Waiver. BUYER and SELLER hereby waive compliance with
the terms and conditions of any applicable bulk sales law or similar laws that
may be applicable to the sale or transfer of the Assets.
7.7 Expenses. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby will be paid by the party
incurring such costs and expenses, whether or not the transactions contemplated
hereby are consummated, except as otherwise expressly provided herein.
7.8 Further Assurances. Subject to the terms and conditions of this
Agreement, each of the parties hereto will use all reasonable efforts to take,
or cause to be taken, all action, and to do, or cause to be done, all things
necessary under applicable laws and regulations to consummate the transactions
contemplated by this Agreement.
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7.9 Diversion. Because SELLER continues to market goods similar to the
Products bearing the Trademarks outside the Territory ("SELLER's Goods"), the
parties understand that SELLER's Goods may be shipped into and sold in the
Territory by third parties ("SELLER's Diversion"). The parties also understand
that the Products may be shipped and sold outside the Territory by third parties
("BUYER's Diversion"). SELLER will not directly ship, offer for sale or sell
SELLER's Goods into the Territory and BUYER will not directly ship, offer for
sale or sell the Products outside the Territory. SELLER will not sell SELLER's
Goods to anyone who SELLER has actual knowledge will distribute or sell such
goods into the Territory. BUYER will not sell the Products to anyone who BUYER
has actual knowledge will distribute or sell such Products outside the
Territory. When BUYER or SELLER learn about, respectively, a BUYER's Diversion
or a SELLER's Diversion, they will reasonably cooperate with each other in
resolving such situations after notice from the other. Notwithstanding the
provisions of this Agreement, (i) SELLER may manufacture SELLER's Goods in the
Territory for distribution and sale outside the Territory and (ii) BUYER may
manufacture the Products outside the Territory for distribution and sale within
the Territory.
7.10 Transition Services. To the extent necessary, BUYER and SELLER
agree to work together to develop a mutually agreeable transition services
agreement or arrangement to ensure the orderly transition of the Business
immediately following the Closing, which agreement or arrangement shall be cost
neutral to SELLER.
ARTICLE 8
INDEMNIFICATION
8.1 Survival. The representations, warranties, covenants and agreements
of the parties hereto, shall survive the execution and delivery hereof and the
delivery of all of the documents executed in connection herewith and shall
continue in full force and effect after the date hereof and after the Closing
Date for a period of one year after the Closing Date (the "Expiration Date"),
except that any covenants or agreements contained herein or made pursuant hereto
that by their terms are to be performed after the Closing Date, shall survive
until fully discharged. No action or proceeding may be brought with respect to
any of the representations and warranties unless written notice thereof, setting
forth in reasonable detail the claimed misrepresentation or breach of warranty,
shall have been delivered to the party alleged to have breached such
representation or warranty prior to the Expiration Date.
8.2 Indemnification by SELLER. SELLER shall indemnify BUYER, its
affiliates and each of their respective officers, directors, employees and
agents and hold them harmless from any loss, liability, claim, damage or expense
(including reasonable legal fees and expenses) suffered or incurred by any such
indemnified party to the extent arising from (i) any breach of any
representation or warranty of SELLER contained in this Agreement or in the
certificate delivered pursuant to Section 2.2(a) hereof; (ii) any breach of any
covenant of SELLER contained in this Agreement; (iii) the Excluded Liabilities
and (iv) any costs incurred due to the existence of a Permitted Lien on the
Inventory; provided, however, that SELLER shall not have any liability under
clause (i) (other than with respect to Section 3.1, Section 3.2,
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the first sentence of Section 3.3, or Section 3.7 of this Agreement) above
unless the aggregate of all losses, liabilities, costs and expenses relating
thereto for which SELLER would, but for this proviso, be liable exceeds on a
cumulative basis an amount equal to two million five hundred thousand and 00/100
United States Dollars ($2,500,000) (the "Basket"), and then only to the extent
that the aggregate of all such losses, liabilities, costs and expenses relating
thereto exceeds the Basket; provided further, however, that SELLER's aggregate
liability under clause (i) (other than with respect to Section 3.1, Section 3.2,
the first sentence of Section 3.3, or Section 3.7 of this Agreement) above shall
in no event exceed 30% of the Purchase Price. Notwithstanding any language to
the contrary contained herein, in no event shall SELLER's aggregate liability
under this Section 8.2 exceed the Purchase Price.
8.3 Exclusive Remedy. Except as otherwise provided in Section 5.7 of
this Agreement, BUYER and SELLER each acknowledge and agree that, from and after
the Closing, their sole and exclusive remedy, with respect to any and all claims
relating to the subject matter of this Agreement shall be pursuant to the
indemnification provisions set forth in this Article 8. Except as otherwise
provided in Sections 5.7 of this Agreement, in furtherance of the foregoing,
BUYER and SELLER hereby waive, from and after the Closing, to the fullest extent
permitted under applicable law, any and all rights, claims and causes of action,
they may have against each other relating to the subject matter of this
Agreement arising under or based upon any federal, state or local statute, law
(including common law), ordinance, rule or regulation or otherwise.
8.4 Indemnification by BUYER. BUYER shall indemnify SELLER and its
respective officers, directors, employees and agents against and hold them
harmless from any loss, liability, claim, damage or expense (including
reasonable legal fees and expenses) suffered or incurred by any such indemnified
party to the extent arising from (i) any breach of any representation or
warranty of BUYER contained in this Agreement or in the certificate delivered
pursuant to Section 2.3(a) hereof, (ii) any breach of any covenant of BUYER
contained in this Agreement and (iii) the Assumed Liabilities.
8.5 Losses Net of Insurance, etc. The amount of any loss, liability,
claim, damage or expense for which indemnification is provided under this
Article 8 shall be net of any amounts recovered by the indemnified party under
its insurance policies with respect to such loss, liability, claim, damage or
expense (collectively, a "Loss"). Each party hereby waives, to the extent
permitted under its applicable insurance policies, any subrogation rights that
its insurer may have with respect to any indemnified Loss.
8.6 Procedures Relating to Indemnification.
(a) In order for an indemnified party to be entitled to any
indemnification provided for under this Article 8 in respect of, arising out of
or involving a claim or demand made by any person, firm, governmental authority
or corporation against the indemnified party (a "Third-Party Claim"), such
indemnified party must notify the indemnifying party in writing, and in
reasonable detail, of the Third-Party Claim as promptly as reasonably possible
after receipt by such indemnified party of written notice of the Third-Party
Claim; provided,
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however, that failure to give such notification shall not affect the
indemnification provided hereunder except to the extent the indemnifying party
shall have been actually prejudiced as a result of such failure. The indemnified
party shall deliver to the indemnifying party, within five business days after
the indemnified party's receipt thereof, copies of all notices and documents
(including court papers) received by the indemnified party relating to the
Third-Party Claim.
(b) If a Third-Party Claim is made against an indemnified
party, the indemnifying party will be entitled to participate in the defense
thereof and, if it so chooses and acknowledges its obligation to indemnify the
indemnified party therefor, to assume the defense thereof with counsel selected
by the indemnifying party and reasonably satisfactory to the indemnified party.
Should the indemnifying party so elect to assume the defense of a Third-Party
Claim, the indemnifying party will not be liable to the indemnified party for
legal expenses subsequently incurred by the indemnified party in connection with
the defense thereof. If the indemnifying party assumes such defense, the
indemnified party shall have the right to participate in the defense thereof and
to employ counsel, at its own expense, separate from the counsel employed by the
indemnifying party, it being understood that the indemnifying party shall
control such defense. The indemnifying party shall be liable for the fees and
expenses of counsel employed by the indemnified party for any period during
which the indemnifying party has not assumed the defense thereof. If the
indemnifying party chooses to defend any Third-Party Claim, all the parties
hereto shall cooperate in the defense or prosecution thereof. Such cooperation
shall include the retention and (upon the indemnifying party's request) the
provision to the indemnifying party of records and information that are
reasonably relevant to such Third-Party Claim, and making employees available on
a mutually convenient basis to provide additional information and explanation of
any material provided hereunder. Whether or not the indemnifying party shall
have assumed the defense of a Third-Party Claim, the indemnified party shall not
admit any liability with respect to, or settle, compromise or discharge, such
Third-Party Claim without the indemnifying party's prior written consent (which
consent shall not be unreasonably withheld).
ARTICLE 9
TERMINATION
9.1 Bases for Termination. Anything contained herein to the contrary
notwithstanding, this Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing Date:
(a) by mutual written consent of SELLER and BUYER;
(b) by BUYER if any of the conditions set forth in Section 2.2
shall have become incapable of fulfillment, and shall not have been waived by
BUYER;
(c) by SELLER if any of the conditions set forth in Section
2.3 shall have become incapable of fulfillment, and shall not have been waived
by SELLER;
-22-
<PAGE>
(d) by SELLER or BUYER if the Closing does not occur on or
prior to July 31, 1999;
provided, however, that the party seeking termination pursuant to clause (b),
(c), or (d) is not in breach of any of its representations, warranties,
covenants or agreements contained in this Agreement.
9.2 Notice of Termination, Return of Documents, Continuing
Confidentiality Obligation. In the event of termination by SELLER or BUYER
pursuant to this Article 9, written notice thereof shall forthwith be given to
the other party and the transactions contemplated by this Agreement shall be
terminated, without further action by any party. If the transactions
contemplated by this Agreement are terminated as provided herein:
(a) BUYER shall return all documents and copies and other
material received from SELLER relating to the transactions contemplated hereby,
whether so obtained before or after the execution hereof, to SELLER; and
(b) all confidential information received by BUYER with
respect to the Business shall be treated in accordance with the Confidentiality
Agreement, which shall remain in full force and effect notwithstanding the
termination of this Agreement.
9.3 Effect of Termination. If this Agreement is terminated and the
transactions contemplated hereby are abandoned as described in this Article 9,
this Agreement shall become void and of no further force and effect, except for
the provisions of (a) Section 6.1 relating to the obligation of BUYER to keep
confidential certain information and data obtained by it, (b) Section 7.7
relating to expenses, (c) Section 7.2 relating to publicity, (d) Sections 3.7
and 4.4 relating to finders' fees and bankers' fees and (e) this Section 9.3.
Nothing in this Article 9 shall be deemed to release any party from any
liability for any breach by such party of the terms and provisions of this
Agreement or to impair the right of any party to compel specific performance by
another party of its obligations under this Agreement.
ARTICLE 10
GENERAL PROVISIONS
10.1 Assignment. Except as set forth below, this Agreement and the
rights and obligations hereunder shall not be assignable or transferable by
BUYER or SELLER (including by operation of law in connection with a merger, or
sale of substantially all the assets, of BUYER or SELLER) without the prior
written consent of each of the other parties hereto. Without the consent of any
party hereto BUYER may assign its right to purchase any of the Assets hereunder
to one or more majority-owned subsidiaries of BUYER, provided, however, that no
assignment shall limit or affect the assignor's obligations hereunder.
10.2 No Third-Party Beneficiaries. Except for persons entitled to
indemnification under Article 8 hereof, this Agreement is for the sole benefit
of the parties hereto, and nothing
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<PAGE>
herein express or implied shall give or be construed to give to any person or
entity, other than the parties hereto, any legal or equitable rights hereunder.
10.3 Amendments; Waiver. No amendment to this Agreement shall be
effective unless it shall be in writing and signed by each party hereto.
10.4 Waiver of Compliance. Except as otherwise provided in this
Agreement, any failure of any of the parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the party entitled to
the benefits thereof only by a written instrument signed by the party, granting
such waiver, but such waiver or failure to insist upon strict compliance with
such obligation, covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure.
10.5 Notices. All notices or other communications required or permitted
to be given hereunder shall be in writing and shall be delivered by hand or sent
by prepaid telex, cable or telecopy, or sent, postage prepaid, by registered,
certified or express mail, or reputable overnight courier service and shall be
deemed given when delivered by hand, telexed, cabled or telecopied, three days
after mailing (one business day in the case of express mail or overnight courier
service), as follows:
(i) If to SELLER:
Colgate-Palmolive Company
300 Park Avenue
New York, New York 10022
Attention: Andrew Hendry, General Counse
Facsimile: (212) 310-3754
(ii) if to BUYER:
Playtex Products, Inc.
300 Nyala Farms Road
Westport, CT 06880
Attention: General Counsel
Facsimile: (203) 341-4260
with a copy to
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019
Attention: Robert M. Hirsh
Facsimile: (212) 757-3990
-24-
<PAGE>
10.6 Interpretation. The headings contained in this Agreement, in any
Exhibit or Schedule hereto and in the table of contents to this Agreement, are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. This Agreement shall be construed without
regard to any presumption or rule requiring construction or interpretation
against the party drafting or causing any instrument to be drafted.
10.7 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other party.
10.8 Severability. If any provision of this Agreement or the
application of any such provision to any person or circumstance shall be held
invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision hereof.
10.9 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to agreements
made and to be performed entirely within such State, without regard to the
conflicts of law principles of such State.
10.10 Actions and Proceedings. BUYER hereby irrevocably consents to the
nonexclusive jurisdiction and venue of the Courts of the State of New York and
the United States District Court for the Southern District of New York, in
connection with any action or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby. BUYER hereby irrevocably
appoints CT Corporation Systems, 1633 Broadway, New York, NY 10019 as its
authorized agent upon whom process may be served in any such action or
proceeding instituted in any such court and waives any objections to personal
jurisdiction with respect thereto.
10.11 Exhibits and Schedules. All Exhibits and Schedules annexed hereto
or referred to herein are hereby incorporated in and made a part of this
Agreement as if set forth in full herein. Inclusion of any matter in any
Schedule does not imply that such matter would, under the provisions of this
Agreement, have to be included in such Schedule.
10.12 Entire Agreement. This Agreement contains the entire agreement
and understanding between the parties hereto with respect to the subject matter
hereof and, except to the extent specifically set forth herein, supersedes all
prior agreements and understandings relating to such subject matter.
10.13 Additional Products. Nothing herein shall prohibit BUYER from
utilizing the Brand or the Intellectual Property within the Territory with
respect to products other than the Products, provided that BUYER acknowledges
(a) that SELLER makes no representations or warranties with respect to any
rights other than the representations and warranties set forth in
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<PAGE>
Article 3 of this Agreement and (b) that SELLER conveys no assets other than the
Assets set forth in Section 1.4 hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first written above.
COLGATE-PALMOLIVE COMPANY
By: /s/ Lois D. Juliber
-------------------
Name: Lois D. Juliber
Title: Executive Vice President
PLAYTEX PRODUCTS, INC.
By: /s/ Michael F. Goss
-------------------
Name: Michael F. Goss
Title: Executive Vice President & Chief Financial Officer
-26-
Exhibit 2.2
================================================================================
AMENDMENT NO. 1
TO
ASSET SALE AGREEMENT
between
COLGATE-PALMOLIVE COMPANY
and
PLAYTEX PRODUCTS, INC.
-----------------------------------------------------
Dated as of June 25, 1999
-----------------------------------------------------
================================================================================
<PAGE>
AMENDMENT NO. 1
to
ASSET SALE AGREEMENT
This Amendment No. 1 to the Asset Sale Agreement (this "Amendment") is
made and entered into as of June 25, 1999, by and between COLGATE-PALMOLIVE
COMPANY, a Delaware corporation ("SELLER") and PLAYTEX PRODUCTS, INC., a
Delaware corporation ("BUYER"). All capitalized terms which are used but not
otherwise defined herein shall have meanings specified in the Agreement (as
defined below).
WHEREAS, SELLER and BUYER are parties to that certain Asset Sale
Agreement, dated May 13, 1999 (the "Agreement"), for the sale by SELLER to BUYER
of the assets related to the business of manufacturing, marketing and selling
baby care products under the brand name Baby Magic in the United States, Puerto
Rico (exclusive of all other territories) and Canada;
WHEREAS, the parties desire to clarify that BUYER shall for a period of
twelve (12) months following the Closing be able to freely employ and utilize
any pre-existing Marketing and Sales Information that constitutes certain of the
Assets being sold by SELLER to BUYER notwithstanding the general prohibition
contained in the Agreement on the use by BUYER of SELLER's trademarks, trade
names and designations in connection with the advertising or publicizing of the
Products;
WHEREAS, the parties hereto desire to change the Closing Date; and
WHEREAS, the parties hereto desire to revise Section 5.6 of the
Agreement as set forth below;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein and for other good and valuable
consideration,
<PAGE>
the receipt and adequacy of which is hereby acknowledged, the parties hereto
agree as follows:
1. Amendment to Section 2.1. Effective hereby, the following paragraph
shall be substituted in its entirety for the first paragraph of Section 2.1 of
the Agreement:
"2.1 Closing. The closing (the "Closing") of the purchase and sale of
the Assets and of the transactions contemplated by this Agreement shall be held
at the offices of Paul, Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of the
Americas, New York, New York, at 10:00 a.m. on June 30, 1999, or if the
conditions to Closing set forth in Sections 2.2 and 2.3 shall not have been
waived or satisfied by such date, on the tenth business day following
satisfaction of such conditions, or such other time or date as the parties may
mutually agree in writing. The date on which the Closing shall occur in
hereinafter referred to as the "Closing Date."
2. Amendment to Section 5.5. Effective hereby, the following shall be
added to the end of Section 5.5(b) of the Agreement:
"; provided, that during the twelve (12) months immediately following
the Closing nothing contained in this Section 5.5(b) shall prohibit or otherwise
restrain BUYER from employing and utilizing any pre-existing Marketing and Sales
Information containing any such trademarks, trade names or designations."
3. Amendment to Section 5.6. Effective hereby, the following sentence
shall be substituted in its entirety for the last sentence of Section 5.6:
"SELLER shall cause all of the Inventory purchased by BUYER pursuant to
this Agreement to be delivered no later than July 23, 1999 (at BUYER's sole cost
and expense) to such facilities designated by BUYER, provided that the two
parties shall work together to deliver the Inventory prior to July 23, 1999, to
the extent practicable."
4. Other Provisions Unchanged. Except as specifically amended hereby,
all other terms and conditions of the Agreement shall remain in full force and
effect. To the extent that the Agreement includes such terms as "herein,"
"hereto," "in this Agreement" and the like, such terms shall be interpreted to
refer to the Agreement, as modified by this Amendment.
2
<PAGE>
5. Counterparts. This Amendment may be executed in separate
counterparts, each of which shall be an original and all of which taken together
shall constitute one and the same instrument.
3
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
COLGATE-PALMOLIVE COMPANY
By: /s/ Dennis Hickey
-----------------
Name: Dennis Hickey
Title: Vice President
PLAYTEX PRODUCTS, INC.
By: /s/ Michael F. Goss
-------------------
Name: Michael F. Goss
Title: Executive Vice President & Chief Financial Officer
4
Exhibit 10.1
------------
EXECUTION COPY
PLAYTEX PRODUCTS, INC.
SECOND AMENDMENT TO CREDIT AGREEMENT
This SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is dated
as of June 30, 1999 and entered into by and among Playtex Products, Inc., a
Delaware corporation (the "Borrower"), the financial institutions listed on the
signature pages hereof ("Lenders"), DLJ Capital Funding, Inc., as the
Syndication Agent for Lenders ("Syndication Agent"), and Wells Fargo Bank, N.A.,
as administrative agent for the Lenders ("Administrative Agent"), and, for
purposes of Section 4 hereof, the Credit Support Parties (as defined in Section
4 hereof) listed on the signature pages hereof, and is made with reference to
that certain Credit Agreement dated as of July 21, 1997, as amended by the First
Amendment dated as of January 28, 1998 (as so amended, the "Credit Agreement"),
by and among the Borrower, Lenders, Syndication Agent and Administrative Agent.
Capitalized terms used herein without definition shall have the same meanings
herein as set forth in the Credit Agreement.
RECITALS
WHEREAS, the Borrower has advised Lenders that the Borrower desires to
directly acquire (the "Acquisition") certain business assets pertaining to the
manufacturing, marketing and selling of products under the Baby Magic brand name
(the "Baby Magic Business") for an aggregate cash purchase price of
approximately $93 million, including the payment of approximately $3 million in
related fees and expenses;
WHEREAS, the Borrower proposes to pay for the Acquisition and related
fees and expenses through the borrowing of up to $100 million of senior secured
debt consisting of additional Term A Loans funded under the Credit Agreement;
WHEREAS, the Borrower proposes to amend the Credit Agreement to reset
the permitted acquisition basket at $150 million following the Acquisition and
to increase the permitted amount of annual capital expenditures to $30 million;
WHEREAS, the Borrower has requested Lenders to amend the Credit
Agreement to (i) increase the outstanding Term A Loans by $100 million, (ii)
permit the Borrower to make the Acquisition and subsequently reset the permitted
acquisition basket at $150 million, (iii) increase the permitted amount of
annual capital expenditures under the Credit Agreement to $30 million and (iv)
make other related amendments as set forth below;
WHEREAS, subject to the terms and conditions set forth in this
Amendment, the Lenders are willing to agree to such amendments.
NOW, THEREFORE, in consideration of the premises and the agreements,
<PAGE>
covenants and other provisions herein contained, the parties hereto agree as
follows:
Section 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 Amendments to Cover Page
The cover page of the Credit Agreement is hereby amended by deleting
the reference to "$170,000,000" set forth thereon and substituting
"$270,000,000" therefor.
1.2 Amendments to Section 1: Definitions
A. Subsection 1.1 of the Credit Agreement is hereby amended by adding
thereto the following definitions, which shall be inserted in proper
alphabetical order:
"'Baby Magic Business': assets to be acquired by the Borrower on the
Second Amendment Effective Date pertaining to the manufacturing,
marketing, and selling of products under the Baby Magic (R) brand name
in the United States, Canada and Puerto Rico.
'Information Systems and Equipment of Borrower': all computer hardware
and software, as well as other information processing systems and any
equipment containing embedded microchips which are directly owned,
licensed, leased, operated or otherwise controlled by the Borrower or
any of its Subsidiaries (including through third-party service
providers), and which, in whole or in part, are used, operated, relied
upon or integral to the Borrower's or any of its Subsidiaries' conduct
of their business.
'New Term A Loan Lenders': those financial institutions making Term A
Loans to the Borrower on the Second Amendment Effective Date and
identified as New Term A Loan Lenders on Schedule 1.1. Upon the
effectiveness of the Second Amendment and the making of such Term A
Loan to the Borrower each New Term A Loan Lender shall become a Lender
for all purposes under the Credit Agreement to the same extent as if
originally a party thereto, and each reference to the term "Lender" in
the Credit Agreement shall include without limitation the New Term A
Loan Lenders.
'Second Amendment': the Second Amendment to Credit Agreement dated as
of June 30, 1999, by and among the Borrower, Lenders, Syndication Agent
and Administrative Agent.
'Second Amendment Effective Date': the date on which the conditions
precedent to the effectiveness of the Second Amendment as set forth in
Section 2 thereof shall have been satisfied.
'Year 2000 Compliant': all Information Systems and Equipment of
Borrower accurately process date data (including, but not limited to,
calculating, comparing and sequencing) before, during and after the
year 2000, as well as same-century and multi-century dates, or between
the years 1999 and 2000,
<PAGE>
taking into account all leap years, including the fact that the year
2000 is a leap year, and further, that when used in combination with,
or interfacing with, other Information Systems and Equipment of
Borrower, shall accurately accept, release and exchange date data, and
shall in all material respects continue to function in the same manner
as it performs on the date hereof and shall not otherwise impair the
accuracy or functionality of Information Systems and Equipment of
Borrower."
B. Subsection 1.1 of the Credit Agreement is hereby further amended by
deleting the definition of "Applicable ABR Margin" therefrom and by substituting
the following therefor:
"'Applicable ABR Margin': as of any date of determination, a percentage
per annum determined by the Funded Debt Ratio set forth on the most
recent Level Determination Certificate as shown below; provided that
for the six months immediately following the funding of the Term A
Loans on the Second Amendment Effective Date, the Applicable ABR Margin
shall be deemed to be 0.25% per annum.
Funded Debt Ratio ABR Margin
- ------ ---- ----- --- ------
Greater than 5.25:1.0 0.25%
Greater than 4.5:1.0 and less than or equal to 0.00%
5.25:1.0
Greater than 4.0:1.0 and less than or equal to 4.5:1.0 0.00%
Less than or equal to 4.0:1.0 0.00%"
C. Subsection 1.1 of the Credit Agreement is hereby further amended by
deleting the definition of "Applicable Eurodollar Margin" therefrom and by
substituting the following therefor:
"'Applicable Eurodollar Margin': as of any date of
determination, a percentage per annum determined by the Funded
Debt Ratio set forth on the most recent Level Determination
Certificate as shown below; provided that for the six months
immediately following the funding of the Term A Loans on the
Second Amendment Effective Date, the Applicable Eurodollar
Margin shall be deemed to be 1.50% per annum.
Funded Debt Ratio Eurodollar Margin
- ------ ---- ----- ---------- ------
Greater than 5.25:1.0 1.50%
Greater than 4.5:1.0 and less than or equal to 1.25%
5.25:1.0
Greater than 4.0:1.0 and less than or equal to 4.5:1.0 1.00%
Less than or equal to 4.0:1.0 0.75%"
D. Subsection 1.1 of the Credit Agreement is hereby further amended by
deleting the definition of "Term A Loan Commitment" therefrom and by
substituting the following therefor:
<PAGE>
"'Term A Loan Commitment': as to any Lender, the obligation of such
Lender to make a Term A Loan to the Borrower on the Closing Date, or on
the Second Amendment Effective Date, as the case may be, in a principal
amount not to exceed the amount set forth opposite such Lender's name
on Schedule 1.1 under the heading 'Term A Loan Commitment'."
1.3 Amendments to Section 5: Term A Loans
A. Subsection 5.1(a) of the Credit Agreement is hereby amended by
adding the following sentence at the end thereof:
"Subject to the terms and conditions hereof, each New Term A Loan
Lender severally agrees to make a Term A Loan to the Borrower upon the
Second Amendment Effective Date in an amount not to exceed the amount
of the Term A Loan Commitment of such New Term A Loan Lender as set
forth on Schedule 1.1 hereto."
B. Subsection 5.1(c) of the Credit Agreement is hereby amended by
adding the following sentence at the end thereof:
"The proceeds of the Term A Loans made by the New Term A Loan Lenders
upon the Second Amendment Effective Date shall be used to finance the
purchase of the Baby Magic Business by the Borrower and to pay related
fees and expenses in an aggregate amount of approximately $3,000,000,
and to the extent of any monies remaining, to reduce the outstanding
Revolving Credit Loans, without reduction of the Revolving Credit
Commitments."
C. Subsection 5.2 of the Credit Agreement is hereby amended
(i) by adding the phrase "or the Second Amendment Effective Date, as the case
may be" to such subsection after each place the phrase "Closing Date" appears
therein and (ii) in the second to last sentence thereof, by deleting the phrase
"of its Term A Loans" and by substituting therefor the phrase "of the Term A
Loans to be made available on such date".
1.4 Amendments to Section 3: General Provisions
Subsection 6.1 of the Credit Agreement is hereby amended by adding a
new clause (e) at the end thereof as follows:
"(e) The Borrower shall pay to the Arranger and the Syndication Agent
on the Second Amendment Effective Date such fees as have been
separately agreed upon by the Arranger, the Syndication Agent and the
Borrower. After receipt of such fees from the Borrower, the Arranger
shall pay on the Second Amendment Effective Date to each New Term A
Loan Lender such amounts as have been separately agreed upon by the
Arranger and such New Term A Loan Lender. On the Second Amendment
Effective Date,
<PAGE>
the Borrower shall pay to the Administrative Agent, for distribution to
each Lender consenting to the Second Amendment, and party to the Credit
Agreement prior to the Second Amendment Effective Date, an amendment
fee in an amount equal to 0.125% of the sum of such Lender's Term A
Loans and Revolving Credit Commitments prior to the Second Amendment
Effective Date."
1.5 Amendments to Section 7: Representations and Warranties
Section 7 of the Credit Agreement is hereby amended by inserting the
following subsection 7.21 directly after subsection 7.20 thereof:
"7.21 Year 2000 Compliance. The Borrower has (i) initiated a review and
assessment of its and its Subsidiaries' business and operations (including those
affected by suppliers and vendors) that the Borrower believes could be adversely
affected by the "Year 2000 Problem" (that is, the risk that computer
applications used by the Borrower or its Subsidiaries (or suppliers and vendors)
may be unable to recognize and perform properly date-sensitive functions
involving certain dates prior to, and including, and after the date December 31,
1999), (ii) developed a plan and timeline for addressing the Year 2000 Problem
on a timely basis, and (iii) to date, implemented that plan substantially in
accordance with that timetable. The Borrower believes that all Information
Systems and Equipment of Borrower that are material to its or its Subsidiaries'
business and operations are on a timely basis to be Year 2000 Compliant and able
to perform properly date-sensitive functions for all dates before and after
January 1, 2000, except to the extent that a failure to do so could not
reasonably be expected to have a Material Adverse Effect."
1.6 Amendments to Section 9: Affirmative Covenants
Section 9 of the Credit Agreement is hereby amended by inserting the
following subsection 9.9 directly after subsection 9.8 thereof:
"9.9 Year 2000 Compliance. The Borrower will promptly notify the
Administrative Agent in the event the Borrower discovers or determines that any
Information Systems and Equipment of Borrower that is material to its or any of
its Subsidiaries' business and operations will not be Year 2000 Compliant as of
January 1, 2000, except to the extent that such failure could not reasonably be
expected to have a Material Adverse Effect. Additionally, the Borrower shall
provide the Administrative Agent and any Lender with such information about its
Year 2000 readiness (including, without limitation, information as to
contingency plans, budgets and testing results) as the Administrative Agent or
such Lender shall reasonably request."
<PAGE>
1.7 Amendments to Section 10: Negative Covenants
A. Subsection 10.8 of the Credit Agreement is hereby amended by
deleting the number "$20,000,000" from each place where it appears therein and
by substituting the number "$30,000,000" therefor and by deleting the number
$10,000,000 from the last sentence of such subsection and by substituting the
number $15,000,000 therefor.
B. Subsection 10.9(h) of the Credit Agreement is hereby amended by
inserting after the phrase "not to exceed $150,000,000 in the aggregate", the
following:
", commencing as of the Second Amendment Effective Date subsequent to
the Borrower's acquisition of the Baby Magic Business"
1.8 Substitution of Schedules
A. Schedule 1.1: Addresses for Notice, Commitments. Schedule 1.1 to the
Credit Agreement is hereby amended by deleting said Schedule 1.1 in its entirety
and substituting in place thereof a new Schedule 1.1 in the form of Annex A to
this Amendment.
B. Schedule 6.2: Amortization of Term A Loans. Schedule 6.2 to the
Credit Agreement is hereby amended by deleting said Schedule 6.2 in its entirety
and substituting in place thereof a new Schedule 6.2 in the form of Annex B to
this Amendment.
C. Schedule 7.20: Uniform Commercial Code Filing Locations. Schedule
7.20 to the Credit Agreement is hereby amended by deleting said Schedule 7.20 in
its entirety and substituting in place thereof a new Schedule 7.20 in the form
of Annex C to this Amendment.
Section 2. CONDITIONS TO EFFECTIVENESS
Section 1 of this Amendment shall become effective only upon the
satisfaction of all of the following conditions precedent (such date of
satisfaction being referred to herein as the "Second Amendment Effective Date"):
A. On or before the Second Amendment Effective Date, the Borrower shall
deliver to Lenders (or to the Administrative Agent for Lenders with sufficient
originally executed copies, where appropriate, for each Lender and its counsel)
the following with respect to the Borrower, each, unless otherwise noted, dated
the Second Amendment Effective Date:
1. Certified copies of its Articles or Certificate of
Incorporation, or a certificate by its corporate secretary or an
assistant secretary certifying that there has been no change in the
Articles or Certificate of Incorporation subsequent to the First
Amendment Effective Date, except as disclosed in such certificate and
attaching thereto copies of any such amendments certified by the
Secretary of State of the
<PAGE>
jurisdiction of its incorporation, together with a good standing
certificate from the Secretary of State of the jurisdiction of its
incorporation and the jurisdiction in which its principal place of
business is located, each dated a recent date prior to the Second
Amendment Effective Date;
2. Copies of its Bylaws, certified as of the Second Amendment
Effective Date by its corporate secretary or an assistant secretary, or
a certificate by such secretary or assistant secretary certifying that
there has been no change in the Bylaws subsequent to the First
Amendment Effective Date;
3. Resolutions of the Executive Committee of its Board of
Directors approving and authorizing: (i) the execution, delivery and
performance of this Amendment, (ii) the borrowing of the Term A Loans
on the Second Amendment Effective Date and (iii) the delivery and
payment of the Notes issued to the New Term A Loan Lenders (the "New
Term A Loan Notes"), certified as of the Second Amendment Effective
Date by its corporate secretary or an assistant secretary as being in
full force and effect without modification or amendment;
4. Signature and incumbency certificates of its officers
executing this Amendment and the New Term A Loan Notes;
5. This Amendment executed by the Borrower and the Credit
Support Parties and the New Term A Loan Notes executed by the Borrower
and drawn to the order of the New Term A Loan Lenders;
6. An officer's certificate of a Responsible Officer of the
Borrower to the effect that: (i) there has been no material adverse
change in the business, assets, debt service capacity, tax position,
liabilities (including environmental liabilities), financial condition,
operations or prospects of the Borrower and its Subsidiaries and of the
assets and operations purchased in the Acquisition, in each case taken
as a whole since December 31, 1998, (ii) there exists no pending or
threatened materially adverse litigation as to the Borrower or its
Subsidiaries or pertaining to the assets purchased in the Acquisition
and (iii) immediately upon the funding of the Term A Loans on the
Second Amendment Effective Date, the Borrower will consummate the
Acquisition and will deliver any security documents, liens or
guarantees, as applicable, to the Administrative Agent, together with
such other documents and certificates as may be required under the Loan
Documents, including without limitation UCC-1 Financing Statements;
7. The Lenders shall have received: (i) the audited financial
statements for the Borrower as of December 31, 1998, (ii) capsulized
unaudited income statement information for the assets of the business
acquired by the Borrower in the Acquisition (a) for the years ended
December 31, 1997 and December 31, 1998 and (b) for the quarter ended
March 31, 1999, to the extent available, and (iii) an unaudited pro
forma opening balance sheet of the Borrower as of the Second
<PAGE>
Amendment Effective Date, giving effect to the Acquisition and the
payment of all fees related thereto; and
8. Any existing indebtedness of the business and operations
acquired in the Acquisition shall have paid in full, including the
release of any liens and collateral or other security interests
associated therewith, and any necessary consents and approvals shall
have been obtained.
B. On or before the Second Amendment Effective Date, Lenders and their
respective counsel shall have received originally executed copies of one or more
favorable written opinions of Paul, Weiss, Rifkind, Wharton & Garrison, counsel
to the Borrower, and of Paul E. Yestrumakas, general counsel and secretary of
the Borrower, in form and substance reasonably satisfactory to the Lead Arranger
and the Administrative Agent and their counsel, dated as of the Second Amendment
Effective Date, substantially in the forms set forth in Annex D hereto and as to
such other matters as the Lead Arranger or the Administrative Agent may
reasonably request.
C. On or before the Second Amendment Effective Date, Required Lenders
shall have delivered to Lead Arranger and Administrative Agent originally
executed copies of this Amendment.
D. On or before the Second Amendment Effective Date, all corporate and
other proceedings taken or to be taken in connection with this Amendment and all
documents incidental thereto not previously found acceptable by Lead Arranger
and Administrative Agent and its counsel shall be reasonably satisfactory in
form and substance to Lead Arranger and Administrative Agent and such counsel,
and Lead Arranger and Administrative Agent and such counsel shall have received
all such counterpart originals or certified copies of such documents as Lead
Arranger and Administrative Agent may reasonably request.
Section 3. BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to amend
the Credit Agreement in the manner provided herein, the Borrower represents and
warrants to each Lender that the following statements are true, correct and
complete:
A. Corporate Power and Authority. The Borrower has all requisite
corporate power and authority to enter into this Amendment and to carry out the
transactions contemplated by, and perform its obligations under, the Credit
Agreement as amended by this Amendment (the "Amended Agreement") and to issue
the New Term A Loan Notes.
B. Authorization of Agreements. The execution and delivery of this
Amendment and of the New Term A Loan Notes and the performance of the Amended
Agreement and the payment of the New Term A Loan Notes have been duly authorized
by all necessary corporate action on the part of the Borrower.
<PAGE>
C. No Conflict. The execution and delivery by the Borrower of this
Amendment and the New Term A Loan Notes and the performance by the Borrower of
the Amended Agreement and the payment of the New Term A Loan Notes do not and
will not (i) violate any provision of any law or any governmental rule or
regulation applicable to the Borrower or any of its Subsidiaries, the
Certificate or Articles of Incorporation or Bylaws of the Borrower or any of its
Subsidiaries or any order, judgment or decree of any court or other agency of
government binding on the Borrower or any of its Subsidiaries; (ii) conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any Contractual Obligation of the Borrower or any of its
Subsidiaries; (iii) result in or require the creation or imposition of any Lien
upon any of the properties or assets of the Borrower or any of its Subsidiaries
(other than Liens created under any of the Loan Documents in favor of the
Collateral Agent on behalf of Lenders); or (iv) require any approval of
stockholders or any approval or consent of any Person under any Contractual
Obligation of the Borrower or any of its Subsidiaries.
D. Governmental Consents. The execution and delivery by the Borrower of
this Amendment and the New Term A Loan Notes and the performance by the Borrower
of the Amended Agreement and the payment of the New Term A Loan Notes do not and
will not require any registration with, consent or approval of, notice to, or
other action to, with or by, any federal, state or other governmental authority
or regulatory body.
E. Binding Obligation. This Amendment and the New Term A Loan Notes
have been duly executed and delivered by the Borrower and this Amendment, the
New Term A Loan Notes and the Amended Agreement are the legally valid and
binding obligations of the Borrower, enforceable against the Borrower in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability.
F. Incorporation of Representations and Warranties From Credit
Agreement. The representations and warranties contained in Section 7 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the Second Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
G. Absence of Default. No event has occurred and is continuing or will
result from the consummation of the transactions contemplated by this Amendment
that would constitute an Event of Default or a Default.
<PAGE>
Section 4. ACKNOWLEDGEMENT AND CONSENT
Each Subsidiary Guarantor is a party to the Subsidiaries Guarantee and
the other Security Documents to which such Credit Support Parties are parties
pursuant to which such Subsidiary Guarantor has (i) guarantied the Borrower's
obligations under the Loan Documents and (ii) created Liens in favor of
Collateral Agent on certain Collateral to secure the obligations of such
Subsidiary Guarantor under the Subsidiaries Guarantee. The Subsidiary Guarantors
are collectively referred to herein as the "Credit Support Parties", and the
Subsidiaries Guarantee and the other Security Documents are collectively
referred to herein as the "Credit Support Documents".
Each Credit Support Party hereby acknowledges that it has reviewed the
terms and provisions of the Credit Agreement and this Amendment and consents to
the amendment of the Credit Agreement effected pursuant to this Amendment. Each
Credit Support Party hereby confirms that each Credit Support Document to which
it is a party or otherwise bound and all Collateral encumbered thereby will
continue to guaranty or secure, as the case may be, to the fullest extent
possible the payment and performance of all "Obligations" (as such term is
defined in the applicable Credit Support Document), including without limitation
the payment and performance of all such "Obligations" in respect of the Borrower
now or hereafter existing under or in respect of the Amended Agreement and the
New Term A Loan Notes defined therein. Without limiting the generality of the
foregoing, each Credit Support Party hereby acknowledges and confirms the
understanding and intent of such party that, upon the effectiveness of this
Amendment, and as a result thereof, the definition of "Obligations" contained in
the Amended Agreement includes the obligations of the Borrower under the New
Term A Loan Notes.
Each Credit Support Party acknowledges and agrees that any of the
Credit Support Documents to which it is a party or otherwise bound shall
continue in full force and effect and that all of its obligations thereunder
shall be valid and enforceable and shall not be impaired or limited by the
execution or effectiveness of this Amendment. Each Credit Support Party
represents and warrants that all representations and warranties contained in the
Amended Agreement and the Credit Support Documents to which it is a party or
otherwise bound are true, correct and complete in all material respects on and
as of the Second Amendment Effective Date to the same extent as though made on
and as of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects on and as of such earlier date.
Each Credit Support Party acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Amendment,
such Credit Support Party is not required by the terms of the Credit Agreement
or any other Loan Document to consent to the amendments to the Credit Agreement
effected pursuant to this Amendment and (ii) nothing in the Credit Agreement,
this Amendment or any other Loan Document shall be deemed to require the consent
of such Credit Support Party to any future amendments to the Credit Agreement.
<PAGE>
Section 5. MISCELLANEOUS
A. Reference to and Effect on the Credit Agreement and the Other Loan
Documents.
(i) On and after the Second Amendment Effective Date, each reference in
the Credit Agreement to "this Agreement," "hereunder," "hereof,"
"herein" or words of like import referring to the Credit Agreement, and
each reference in the other Loan Documents to the "Credit Agreement,"
"thereunder," "thereof" or words of like import referring to the Credit
Agreement shall mean and be a reference to the Amended Agreement.
(ii) Except as specifically amended by this Amendment, the Credit
Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this Amendment shall
not, except as expressly provided herein, constitute a waiver of any
provision of, or operate as a waiver of any right, power or remedy of
the Syndication Agent or the Administrative Agent or any Lender under,
the Credit Agreement or any of the other Loan Documents.
B. Fees and Expenses. The Borrower acknowledges that all costs, fees
and expenses as described in subsection 13.5 of the Credit Agreement, as
amended, incurred by any of the Lead Arranger, the Administrative Agent or the
Agents and their counsel with respect to this Amendment and the documents and
transactions contemplated hereby shall be for the account of the Borrower.
C. Headings. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
D. Applicable Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are
<PAGE>
physically attached to the same document.
[Remainder of page intentionally left blank]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
BORROWER: PLAYTEX PRODUCTS, INC.
By: /s/ Michael F. Goss
-----------------------
Title: Executive Vice President & Chief
Financial Officer
CREDIT SUPPORT PARTIES: Playtex Investment Corp.
Playtex International Corp.
Playtex Manufacturing, Inc.
Playtex Sales & Services, Inc.
Sun Pharmaceuticals Corp.
Smile-Tote, Inc.
Personal Care Holdings, Inc.
Personal Care Group, Inc.
Carewell Industries, Inc.
TH Marketing Corp.,
(for purposes of Section 4 only)
as Credit Support Parties
By: /s/ Michael F. Goss
-----------------------
Title: Executive Vice President & Chief
Financial Officer
<PAGE>
LENDERS: WELLS FARGO BANK, N.A.,
individually and as Administrative Agent
By: /s/ Jeff Browing
--------------------
Title: Relationship Manager
<PAGE>
DLJ CAPITAL FUNDING, INC.,
individually and as Syndication Agent
By: /s/ Eric Swanson
--------------------
Title: Managing Director
<PAGE>
AMSOUTH BANK N.A.
By: /s/ Brock E. Fredette
-------------------------
Title: Vice President
<PAGE>
TORONTO-DOMINION BANK
By: /s/ Jorge A. Garcia
-----------------------
Title: Vice President
<PAGE>
CREDIT LYONNAIS New York Branch
By: /s/ Vladimir Labun
----------------------
Title: First Vice President - Manager
<PAGE>
MITSUBISHI TRUST & BANKING
CORP.
By: /s/ Toshihiro Hayashi
-------------------------
Title: Senior Vice President
<PAGE>
COMPAGNIE FINANCIERE DE CIC ET
DE L'UNION EUROPEENNE
By: /s/ Sean Mounier
--------------------
Title: First Vice President
By: /s/ Marcus Edward
---------------------
Title: Vice President
<PAGE>
BANCO POPULAR NORTH AMERICA
By: /s/ Andrew H. Melville
--------------------------
Title: Assistant Vice President
<PAGE>
ABN AMRO BANK, N.V.
By: /s/ Cameron D. Gateman
--------------------------
Title: Vice President
By: /s/ Anna Bezdenejnykk Guille
--------------------------------
Title: Assistant Vice President
<PAGE>
ERSTE BANK
By: /s/ Rima Terradista
-----------------------
Title: Vice President
By: /s/ Anca Trifan
-------------------
Title: Assistant Vice President
<PAGE>
GENERAL ELECTRIC CAPITAL
CORPORATION
By: /s/ Robert M. Kadlick
-------------------------
Name: Robert M. Kadlick
Title: Duly Authorized Signatory
<PAGE>
CREDIT AGRICOLE INDOSUEZ
By: /s/ Craig Welch
-------------------
Title: First Vice President
By: /s/ Rene LeBlanc
--------------------
Title: Vice President
<PAGE>
THE LONG-TERM CREDIT BANK OF
JAPAN, LIMITED, NEW YORK
BRANCH
By: /s/ Nozami Move
-------------------
Title: Deputy General Manager
<PAGE>
SOCIETE GENERALE
By: /s/ Christopher Speltz
--------------------------
Title: Director-Head SG Dallas
<PAGE>
IMPERIAL BANK
By: /s/ Ray Vadalma
-------------------
Title: Senior Vice President
<PAGE>
PEOPLE'S BANK
By: /s/ Michael T. Schewighoffer
--------------------------------
Title: Vice President
<PAGE>
IKB DEUTSCHE INDUSTRIEBANK AG,
LUXEMBOURG BRANCH
By: /s/ Edwin Brecht
--------------------
Title: Executive Director
By: /s/ Manfred Ziwey
---------------------
Title: Director
<PAGE>
DG BANK
By: /s/ Steve Santor
--------------------
Title: Vice President
By: /s/ Craig Adleson
---------------------
Title: AVP
<PAGE>
CHEVY CHASE BANK
By: /s/ Mary Ann Facente
------------------------
Title: Vice President
<PAGE>
NATEXIS BANQUE BFCE
By: /s/ Frank H. Madden, Jr.
----------------------------
Title: Vice President & Group Manager
By: /s/ Jordan Sadler
---------------------
Title: Associate
<PAGE>
TORONTO DOMINION (NEW YORK), INC
By: /s/ Jorge A. Garcia
-----------------------
Title: Vice President
<PAGE>
Annex A
I. Closing Date
Schedule 1.1 - Addresses for Notice, Commitments
<TABLE>
<CAPTION>
Working Cap. Revolving
LENDERS Term A Loan Acq. Revolving Credit Credit
- ------- ----------- --------------------- ----------------------
<S> <C> <C> <C>
DLJ Capital Funding, Inc. $49,823,527.00 $36,235,296.00 $67,941,177.00
2121 Avenue of the Stars
Los Angeles, CA 90067
Attention: Eric Swanson
Alexis Maged
Telephone: 310-282-7427
Telecopy: 310-282-6178
Wells Fargo Bank, N.A. $5,176,473.00 $3,764,704.00 $7,058,823.00
420 Montgomery Street
9th Floor
San Francisco, CA 94104
Attention: Judi Steele
Telephone: 415-477-5414
Telecopy: 415-512-9408
with a copy to:
Jeff Browning
Wells Fargo Bank
1445 Ross Avenue
Suite 400
Dallas, TX 75202
TOTAL: $55,000,000.00 $40,000,000.00 $75,000,000.00
===== ============== ============== ==============
</TABLE>
A-1
<PAGE>
II. Second Amendment Effective Date
New Term A Loan Lenders:
- ------------------------
LENDERS Term A Loan
- ------- -----------
People's Bank 13,500,000.00
One Financial Plaza
Hartford, CT 06103
Attention: Linda J. Ryan
Telephone: 860-280-2607
Telecopy: 860-280-2737
IKB Deutsche Industriebank 13,500,000.00
AG
P.O. Box 101118
4002 Dusseldorf
Germany
Attention: Thomas Bleher
Telephone: 011-49-211-
8221-4887
Telecopy: 011-49-211-8221-
2887
DG Bank 13,500,000.00
609 Fifth Avenue, 8th Floor
New York, NY 10017
Attention: Craig Anderson
Telephone: 212-745-1583
Telecopy: 212-745-1556
Compagnie Financiere de 13,500,000.00
CIC et de l'Union
Europeenne
520 Madison Avenue,
37th Floor
New York, New York
10006
Attention: Sean Mounier
Telephone: 212-715-4413
Telecopy: 212-715-4535
Chevy Chase Bank 13,500,000.00
8401 Connecticut Avenue
Chevy Chase, MD 20815
Attention: Marianne Facente
Telephone: 301-986-7305
Telecopy: 301-986-7038
A-2
<PAGE>
Natexis Banque BFCE 5,000,000.00
Corporate Finance Group
645 Fifth Avenue, 20th
Floor
New York, NY 10022
Attention: Frank Madden
Telephone: 212-872-5180
Telecopy: 212-872-5045
New Term A Loan Lenders (continued from previous page):
- -------------------------------------------------------
LENDERS Term A Loan
- ------- -----------
ABN AMRO Bank, N.V. 5,000,000.00
500 Park Avenue
New York, New York
10022
Attention: Cameron
Gateman
Telephone: 212-446-4388
Telecopy: 212-832-7129
with a copy to:
208 South LaSalle Street,
Suite 1500
Chicago, Illinois 60604
Attention: Monica
Podbielski Telephone: 312-
992-5132
Telecopy: 312-992-5111
DLJ Capital Funding, Inc. $22,500,000.00
2121 Avenue of the Stars
Los Angeles, CA 90067
Attention: Eric Swanson
Alexis Maged
Telephone: 310-282-7427
Telecopy: 310-282-6178
TOTAL: $100,000,000.00
====== ===============
A-3
<PAGE>
Annex B
Schedule 6.2 - Amortization of Term A Loans
- -------------------------------------------
Amortization of Term A Loans
----------------------------
Payment Date Amount
- ------------ ------
September 15, 1999 $1,937,500
December 15, 1999 1,937,500
March 15, 2000 1,937,500
June 15, 2000 1,937,500
September 15, 2000 8,718,750
December 15, 2000 8,718,750
March 15, 2001 8,718,750
June 15, 2001 8,718,750
September 15, 2001 12,593,750
December 15, 2001 12,593,750
March 15, 2002 12,593,750
June 15, 2002 12,593,750
September 15, 2002 15,500,000
December 15, 2002 15,500,000
March 15, 2003 15,500,000
June 15, 2003 15,500,000
------------
TOTAL $155,000,000
B-1
<PAGE>
Annex C
Schedule 7.20 - Uniform Commercial Code Filing Locations
--------------------------------------------------------
1. Secretary of State of Alabama
2. Secretary of State of Arizona
3. Secretary of State of California
4. Secretary of State of Connecticut
5. Secretary of State of Delaware
6. Secretary of State of Florida
7. DeKalb County, Georgia
8. Fulton County, Georgia
9. Gwinnett County, Georgia
10. Secretary of State of Idaho
11. Secretary of State of Illinois
12. Secretary of State of Indiana
13. Secretary of State of Iowa
14. Secretary of State of Kentucky
15. Department of Assessments & Taxation, Maryland
16. Secretary of State of Massachusetts
17. City of Boston, Massachusetts
18. Town of Easton, Massachusetts
19. Town of Leominster, Massachusetts
20. Town of Rowley, Massachusetts
21. Secretary of State of Michigan
22. Kent County, Michigan
23. Secretary of State of Missouri
24. Franklin County, Missouri
25. Greene County, Missouri
26. Secretary of State of New Jersey
27. Secretary of State of New York
28. Albany County, New York
29. New York County, New York
30. Orange County, New York
31. Rensselaer County, New York
32. Rockland County, New York
33. Westchester County, New York
34. Secretary of State of North Carolina
35. New Hanover County, North Carolina
36. Secretary of State of Ohio
37. Cuyahoga County, Ohio
38. Franklin County, Ohio
C-1
<PAGE>
39. Geauga County, Ohio
40. Guernsey County, Ohio
41. Hamilton County, Ohio
42. Ohio Knox County, Ohio
43. Montgomery County,
44. Portage County, Ohio
45. Shelby County, Ohio
46. Tuscarawas County, Ohio
47. Wayne County, Ohio
48. Oklahoma County, Oklahoma
49. Secretary of State of Oregon
50. Secretary of the Commonwealth of Pennsylvania
51. Adams County Prothonotary, Pennsylvania
52. Berks County Prothonotary, Pennsylvania
53. Cumberland County, Pennsylvania
54. Erie County, Pennsylvania
55. Lancaster County, Pennsylvania
56. Lebanon County Prothonotary, Pennsylvania
57. Lehigh County, Pennsylvania
58. Montgomery County, Pennsylvania
59. North Hampton County, Pennsylvania
60. Somerset County, Pennsylvania
61. York County, Pennsylvania
62. Secretary of State of Rhode Island
63. Secretary of State of South Carolina
64. Secretary of State of Tennessee
65. Shelby County, Tennessee
66. Secretary of State of Texas
67. Secretary of State of Utah
68. Secretary of State of Virginia
69. Virginia Beach Independent City, Virginia
70. Department of Licensing, Washington
71. Secretary of State of Wisconsin
C-2
<PAGE>
Annex D
[Form of Legal Opinion]
June __, 1999
To the Lenders party to the
Credit Agreement referred
to below, DLJ Capital
Funding, Inc., as Syndication Agent,
and Wells Fargo Bank, N.A.,
as Administrative Agent
Ladies and Gentlemen:
We have acted as special counsel to Playtex Products, Inc., a Delaware
corporation (the "Borrower"), in connection with the Second Amendment to the
Credit Agreement (the "Second Amendment") dated as of June __, 1999 among the
Borrower, the financial institutions listed on the signature pages thereof (the
"Lenders"), DLJ Capital Funding, Inc., as Syndication Agent (the "Syndication
Agent"), and Wells Fargo Bank, N.A., as Administrative Agent (the
"Administrative Agent"). Capitalized terms used herein and not otherwise defined
have the respective meanings given those terms in the Credit Agreement dated as
of July 21, 1997, as amended by the First Amendment dated as of January 28, 1998
(as so amended, the "Credit Agreement") among the Borrower, Lenders, Syndication
Agent and Administrative Agent and as amended by the Second Amendment on the
date hereof (the "Amended Credit Agreement"). This opinion is being furnished to
you at the request of the Borrower pursuant to Section 2.B of the Second
Amendment.
D-1
<PAGE>
In connection with this opinion, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of the following
documents, each dated as of the date hereof (collectively, the "Documents"):
1. The Amended Credit Agreement;
2. The Borrower Security Agreement;
3. The Second Amendment; and
4. The New Term A Loan Notes executed by the Borrower on the Second
Amendment Effective Date.
In addition, we have examined: (i) such corporate records of the
Borrower as we have considered appropriate, including copies of the certificate
of incorporation, as amended, and by-laws, as amended, of the Borrower certified
as in effect on the date hereof (collectively, the "Charter Documents") and
certified copies of resolutions of the board of directors of the Borrower and of
the executive committee of the board of directors of the Borrower; and (ii) such
other certificates, agreements and documents as we deemed relevant and necessary
as a basis for the opinions hereinafter expressed.
In our examination of the aforesaid documents, we have assumed, without
independent investigation, (i) the genuineness of all signatures, (ii) the
enforceability of the documents against each party thereto other than the
Borrower, (iii) the legal capacity of all individuals who have executed any of
the documents and (iv) the authenticity of all documents submitted to us as
originals, the conformity to the original documents of all
D-2
<PAGE>
documents submitted to us as certified, photostatic, reproduced or conformed
copies of valid existing agreements or other documents and the authenticity of
all such latter documents.
In expressing the opinions set forth herein, we have relied upon the
factual matters contained in the representations and warranties of the Borrower
made in the Documents and upon certificates of public officials and officers of
the Borrower.
Based upon the foregoing, and subject to the assumptions, exceptions
and qualifications set forth herein, we are of the opinion that:
1. The Borrower (i) is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware and (ii)
has the corporate power and authority to own and operate its property and
assets, to lease the property it operates as lessee and to carry on its
respective businesses as now conducted.
2. The Borrower has all necessary corporate power and authority to
execute, deliver and perform its obligations under each Document and the
execution, delivery and performance by the Borrower of each of the Documents has
been duly authorized by all necessary corporate action on the part of the
Borrower.
3. Each Document has been duly executed and delivered by the Borrower
and constitutes the legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its terms.
D-3
<PAGE>
4. The execution and delivery by the Borrower of each of the Documents
and the consummation by the Borrower of the transactions contemplated thereby
does not (i) violate or result in a breach of or default under the Borrower's
Charter Documents, or any material applicable law or regulation of the United
States (including Regulations T, U or X of the Board of Governors of the Federal
Reserve System of the United States) or the State of New York or the General
Corporation Law of the State of Delaware (the "GCL") (other than any state
securities or "blue sky" laws, as to which we express no opinion), or any order,
writ, injunction or decree of which we have knowledge (without investigation) of
any court or governmental authority or agency of the United States or the State
of New York binding upon the Borrower or to which the Borrower is subject or any
instrument or document listed on Schedule 1 hereto to which the Borrower is a
party to or by which the Borrower is bound or (ii) result in the creation or
imposition of any Liens upon the assets of the Borrower pursuant to the terms of
any such agreement or instrument (except for Liens in favor of the Collateral
Agent contemplated by the Loan Documents).
5. The execution and delivery by the Borrower of each of the Documents
and the consummation by the Borrower of the transactions contemplated thereby
(a) does not violate, or constitute a default under, any of the material
Contractual Obligations of the Borrower and (b) will not result in or require
the creation or imposition of any Lien on any of its respective properties or
revenues, except the security interests created pursuant to the
D-4
<PAGE>
Borrower Security Agreement.*
6. Except for (i) filings which are necessary to perfect the security
interest granted under the Documents, (ii) filings, authorization or approvals
relating to state securities or "blue sky" laws (as to which we express no
opinion) and (iii) such other filings, authorizations or approvals as are
specifically contemplated by the Documents and the Amended Credit Agreement, no
authorization or approvals of, and no filings with, any governmental or
regulatory authority or agency of the United States or the State of New York, or
under the GCL, are necessary for the execution, delivery or performance by the
Borrower of the Documents.
7. The Borrower is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
8. The Borrower Security Agreement dated as of July 21, 1997, as
supplemented as of the date hereof (as so supplemented, the "Borrower Security
Agreement"), creates a valid security interest in favor of the Collateral Agent,
for the benefit of the Lenders, in all right,
- ---------------------------------
* Can be delivered by Borrower's General Counsel.
D-5
<PAGE>
title and interest of the Borrower in and to the Collateral to the extent that
Article 9 of the NY-UCC is applicable thereto. The UCC-1 financing statements
listed on Schedule 2 hereto (the "New York Financing Statements") are in
appropriate form for filing, and the filing offices listed on said Schedule 2
(the "New York Filing Offices") are all of the offices in New York in which
filings are required to perfect the security interest of the Collateral Agent
for the benefit of the Lenders in the Collateral to the extent that security
interests in the Collateral can be perfected by filing under the NY-UCC.
Assuming such New York Financing Statements have been duly presented for filing
to the New York Filing Officers with the appropriate filing fees tendered, or
duly accepted for filing by the appropriate filing officers in each New York
Filing Office, then to the extent that security interests in the Collateral may
be perfected by filing under the NY-UCC, such filings have resulted in the
perfection of such security interests.
9. The obligations of the Borrower under the Amended Credit Agreement
and the other Loan Documents constitute "Senior Indebtedness" and "Designated
Senior Indebtedness" as such terms are defined in the Senior Subordinated
Indenture.
The foregoing opinion is subject to the following assumptions,
exceptions and qualifications:
(a) The enforceability of the Documents may be: (i) subject to
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bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting creditors' rights generally; (ii) subject
to general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity); and (iii) subject to the
qualification that certain remedial provisions of the Borrower Security
Agreement are or may be unenforceable in whole or in part under the laws of the
State of New York, but the inclusion of such provisions does not make the
remedies afforded by the Borrower Security Agreement inadequate for the
practical realization of the rights and benefits purported to be provided
thereby except for the economic consequences resulting from any delay imposed
by, or any procedure required by, applicable New York laws, rules, regulations
and court decisions and by constitutional requirements in and of the State of
New York.
(b) We express no opinion as to: (i) the enforceability of any
provisions contained in the Documents that purport to establish (or may be
construed to establish) evidentiary standards; (ii) the enforceability of any
provisions contained in the Borrower Security Agreement that constitute waivers
which are prohibited under the NY-UCC prior to default; or (iv) the
enforceability of forum selection clauses in the federal courts.
(c) In giving the opinions set forth in paragraph 8 above, we
express no opinion as to: (i) the Borrower's right, title or interest in or to
any Collateral or
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the description of such Collateral in the Borrower Security Agreement; (ii) the
laws of any other state or the perfection and effect of perfection or
non-perfection of a security interest in the Collateral subject to the laws of
any state other than New York; (iii) the perfection of security interests in
fixtures, equipment used in farming operations, farm products, consumer goods,
timber or minerals or the like, or accounts resulting from the sale thereof; or
(iv) the creation, validity, perfection, priority or enforceability of any
security interest sought to be created in any patents, trademarks, trade names,
service marks, copyrights, deposit accounts, insurance policies, real property
or any other items of property to the extent that a security interest therein is
excluded from the coverage of Article 9 of the NY-UCC. In addition, except as
specifically set forth in paragraph 8 above, we express no opinion as to the
perfection of any security interest.
(d) We wish to point out that in the case of proceeds (as
defined in Article 9 of the NY-UCC), the continuation of perfection of any
security interest therein (i) is limited to the extent set forth in Section
9-306 of the NY-UCC, and (ii) if such proceeds consist of property in which a
perfected security interest cannot be obtained or maintained by the filing of
the New York Financing Statements in the New York Filing Offices, will require
additional compliance with applicable provisions of the NY-UCC.
(e) We call to your attention the fact that (i) Article 9 of
the NY-UCC requires the filing of continuation statements within the period of
six months prior
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to the expiration of each five year period from the date of the original filing
of financing statements, as applicable, in order to maintain the effectiveness
of the filings referred to in this opinion, and (ii) additional filings may be
necessary if the Borrower or any subsidiary of the Borrower changes its name,
identity or corporate structure or the jurisdictions in which its places of
business, its chief executive office or the Collateral are located.
Our opinions expressed above are limited to the laws of the State of
New York, the GCL and the Federal laws of the United States. Please be advised
that no member of this firm is admitted to practice in the State of Delaware.
Our opinions are rendered only with respect to the laws, and the rules,
regulations and orders thereunder, which are currently in effect.
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<PAGE>
This letter is furnished by us solely for your benefit in connection
with the transactions referred to in the Amended Credit Agreement and may not be
circulated to, or relied upon by, any other Person, except that this letter may
be circulated to any prospective Lender under the Amended Credit Agreement and,
subject to the following sentence, may be relied upon by any person who, in the
future, becomes a Lender to the Amended Credit Agreement. This opinion speaks
only as of the date hereof and we have no responsibility or obligation to update
this opinion, to consider its applicability or correctness to other than its
addressees, or to take into account changes in law, facts or any other
development of which we may later become aware.
Very truly yours,
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Exhibit 99.1
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FOR IMMEDIATE RELEASE Press Release
For more information, contact:
Julie K. Gottlieb
Director of Investor Relations & Communications
(203) 341-4262
Playtex Products Completes Acquisition of Baby Magic(R)
WESTPORT, CT (June 30, 1999)--Playtex Products, Inc. (NYSE:PYX), a leading
diversified consumer and personal products company, announced today that it has
completed the previously announced acquisition of the Baby Magic(R) brand of
infant-related bath, lotion, shampoo, oil and powder products in the U.S.,
Canada, and Puerto Rico from Colgate-Palmolive Company (NYSE:CL). The purchase
price was $90 million in cash; Playtex financed the acquisition with an increase
in its existing Senior Secured Credit Agreement.
Baby Magic is the second-largest selling brand in the U.S. infant toiletries
market with a 15% dollar share. In 1998, the Baby Magic brand generated net
sales of $48.9 million in the region.
Playtex Products, Inc. is a leading manufacturer and distributor of a
diversified portfolio of consumer and personal products. Infant Care is the
largest business segment and market leader with Playtex infant feeding products,
Binky pacifiers, Chubs baby wipes, Wet Ones, Diaper Genie and Mr. Bubble.
Feminine Care offers a wide range of Playtex tampons and leads the plastic
applicator segment. Sun Care includes the #2-selling Banana Boat and BioSun.
Household Products includes Woolite rug and upholstery cleaning products and
Playtex Gloves, the leader in the household latex glove market. Personal
Grooming includes market leaders Binaca and Ogilvie.
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