Common Stock, $0.01 par value
per share, of Elizabeth Arden, Inc. (which we refer to as Elizabeth Arden common stock)
Series A Serial Preferred Stock, $0.01
par value per share, of Elizabeth Arden, Inc. (which we refer to as Elizabeth Arden preferred stock)
50,000 shares of Elizabeth Arden
preferred stock and 31,668,889 shares of Elizabeth Arden common stock, which consists of (i) 29,949,317 shares of Elizabeth Arden common stock outstanding as of June 16, 2016, (ii) 941,400 shares of Elizabeth Arden common stock
subject to issuance upon exercise of outstanding options with exercise prices below $14.00 as of June 16, 2016 , (iii) 778,172 shares of Elizabeth Arden common stock with respect to outstanding awards of restricted stock units as of
June 16, 2016 and (iv) 0 shares of Elizabeth Arden common stock subject to issuance upon exercise of outstanding warrants of Elizabeth Arden with exercise prices below $14.00 as of June 16, 2016.
In accordance with Exchange Act Rule 0-11, the filing fee of $49,513.07 was determined by multiplying 0.0001007 by the proposed maximum
aggregate value of the transaction. The proposed maximum aggregate value of the transaction was calculated as the sum of (i) 50,000 preferred shares multiplied by $1,152.02 per share (consisting of $1,100 per share, plus $52.02 per share in
accrued but unpaid dividends as of June 16, 2016), (ii) 29,949,317 shares of Elizabeth Arden common stock multiplied by $14.00 per share, (iii) options to purchase 941,400 shares of Elizabeth Arden common stock with exercise prices
below $14.00 per share, multiplied by $4.146 per share (which is the difference between $14.00 and the weighted average exercise price per share of $9.854), (iv) 778,172 shares of Elizabeth Arden common stock with respect to outstanding awards
of restricted stock units as of June 16, 2016, multiplied by $14.00 per share and (v) 0 shares of Elizabeth Arden common stock subject to issuance upon exercise of outstanding warrants with exercise prices below $14.00 as of June 16,
2016.
A special meeting
of shareholders of Elizabeth Arden, Inc., a Florida corporation (
Elizabeth Arden
), will be held on September 7, 2016, at 10:00 a.m. Eastern Time, at Elizabeth Ardens corporate office located at 880 Southwest 145th
Avenue, Suite #200, Pembroke Pines, Florida 33207. You are cordially invited to attend. The purpose of the meeting is to consider and vote on proposals relating to the proposed acquisition of Elizabeth Arden by Revlon, Inc., a Delaware corporation
(
Revlon
), for $14.00 per share of Elizabeth Arden common stock, par value $0.01 (
Elizabeth Arden common stock
), in cash. Regardless of whether you plan to attend the meeting, we encourage you to
vote your shares by mail, by telephone or through the Internet following the procedures outlined below.
On June 16, 2016,
Elizabeth Arden entered into an Agreement and Plan of Merger (the
merger agreement
) with Revlon, Revlon Consumer Products Corporation, Revlons direct wholly-owned operating subsidiary
(
RCPC
)
,
and RR Transaction Corp., a wholly-owned subsidiary of RCPC (
Sub
), providing for, subject to the satisfaction or waiver of specified conditions, the acquisition of Elizabeth Arden by
Revlon at a price of $14.00 per share of Elizabeth Arden common stock in cash. Subject to the terms and conditions of the merger agreement, Sub will be merged with and into Elizabeth Arden (the
merger
), with Elizabeth Arden
surviving the merger as a wholly-owned subsidiary of RCPC. At the special meeting, Elizabeth Arden will ask you to approve the merger agreement.
At the effective time of the merger, each share of Elizabeth Arden common stock issued and outstanding immediately prior to the effective time
(other than any shares held by Elizabeth Arden as treasury shares or shares held by Revlon, RCPC or Sub) will be canceled, extinguished and automatically converted into the right to receive $14.00 per share in cash, without interest, subject to any
applicable withholding taxes. Pursuant to a Preferred Stock Repurchase and Warrant Cancellation Agreement entered into on June 16, 2016, by and among Elizabeth Arden, Revlon, RCPC, Sub, Nightingale Onshore Holdings, L.P.
(
Nightingale Onshore
) and Nightingale Offshore Holdings, L.P. (
Nightingale Offshore
and, together with Nightingale Onshore,
Nightingale
), immediately prior to the
effective time of the merger, Elizabeth Arden will purchase all issued and outstanding shares of Elizabeth Arden Series A Serial Preferred Stock, par value $0.01 (
Elizabeth Arden preferred stock
), beneficially held by
Nightingale, with funds provided to (or paid on behalf of) Elizabeth Arden by Revlon and the warrants owned by Nightingale to purchase 2,452,267 shares of Elizabeth Arden common stock at an exercise price of $20.39 (the
Nightingale
Warrants
) will be canceled for no additional consideration.
In connection with entering into the merger agreement, on
June 16, 2016, Revlon, RCPC and Sub entered into a support agreement with Nightingale, and a support agreement with E. Scott Beattie, Elizabeth Ardens Chairman, President and Chief Executive Officer. Pursuant to such support agreements,
each of Nightingale and E. Scott Beattie agreed to vote their shares of capital stock in Elizabeth Arden in favor of the approval of the merger agreement and against any competing proposal or any other action that would reasonably be expected to
prevent, interfere with or delay the consummation of the merger. As of the close of business on the record date of August 4, 2016, (i) E. Scott Beattie and his affiliates held approximately 1,180,116 shares of Elizabeth Arden common stock,
which represent approximately 3.9% of the total outstanding shares of Elizabeth Arden common stock, and (ii) Nightingale held approximately 4,064,897 shares of Elizabeth Arden common stock and 50,000 shares of Elizabeth Arden preferred stock,
which represent approximately 13.6% of the total outstanding shares of Elizabeth Arden common stock and 100% of the outstanding shares of Elizabeth Arden preferred stock,
respectively. As of the record date, based on the number of shares of Elizabeth Arden common stock, Elizabeth Arden preferred stock and Nightingale Warrants outstanding, Nightingale held
approximately 20% of outstanding voting power where Elizabeth Arden common stock and Elizabeth Arden preferred stock vote as a single class.
The proxy statement accompanying this letter provides you with more specific information concerning the special meeting, the merger agreement,
the merger and the other transactions contemplated by the merger agreement. We encourage you to carefully read the accompanying proxy statement and the copy of the merger agreement attached as
Annex A
to the proxy statement.
If the proposal to approve the merger agreement does not receive the required approval from Elizabeth Ardens shareholders, or if the
merger is not completed for any other reason, you will not receive any consideration from Revlon, RCPC or Sub for your shares of Elizabeth Arden common stock. Instead, Elizabeth Arden will remain a public company and Elizabeth Arden common stock
will continue to be listed and traded on the NASDAQ Global Select Market.
After reading the accompanying proxy statement, please make
sure to vote your shares promptly by completing, signing and dating the accompanying proxy card and returning it in the enclosed prepaid envelope or by voting by telephone or through the Internet by following the instructions on the accompanying
proxy card. Instructions regarding all three methods of voting are provided on the proxy card. If you hold shares through an account with a bank, broker, trust or other nominee, please follow the instructions you receive from it to vote your shares.
Thank you in advance for your continued support and your consideration of this matter.
The accompanying proxy statement is dated August 5, 2016 and is first being mailed to Elizabeth Ardens shareholders on or about August
5, 2016.
For purposes of this
discussion, we use the term
U.S. holder
to mean a beneficial owner of shares of Elizabeth Arden common stock that is, for U.S. federal income tax purposes:
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an individual citizen or resident of the United States;
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a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States, any state thereof or the District of Columbia;
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a trust that (i) is subject to the supervision of a court within the United States and the control of one or more U.S. persons or (ii) has a valid election in effect under applicable U.S. Treasury regulations
to be treated as a U.S. person; or
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an estate that is subject to U.S. federal income tax on its income regardless of its source.
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We use the term
non-U.S. holder
to mean a beneficial owner of Elizabeth Arden common stock (other than a partnership
or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) that is not a U.S. holder.
If a partnership
(including an entity or arrangement treated as a partnership for U.S. federal income tax purposes) beneficially owns shares of Elizabeth Arden common stock, the tax treatment of the partnership and its partners generally will depend on the status of
the partners and the activities of the partnership. A partner in a partnership holding shares of Elizabeth Arden common stock should consult such partners tax advisor.
U.S. Holders
General.
A U.S. holders receipt of cash in exchange for shares of Elizabeth Arden common stock pursuant to the merger will be a
taxable transaction for U.S. federal income tax purposes, and a U.S. holder who receives cash in exchange for shares of Elizabeth Arden common stock in the merger will recognize gain or loss equal to the difference, if any, between the amount of
cash received and the U.S. holders adjusted tax basis in the shares converted into the right to receive cash in the merger. Gain or loss will be determined separately for each block of shares of Elizabeth Arden common stock (that is, shares
acquired at the same cost in a single transaction). Such gain or loss will be capital gain or loss, and will be long-term capital gain or loss if the U.S. holders holding period for the shares is more than one year at the effective time of the
merger. Long-term capital gain recognized by individuals and other non-corporate persons that are U.S. holders generally is subject to tax at a reduced rate of U.S. federal income tax. There are limitations on the deductibility of capital losses.
Tax on Net Investment Income.
A 3.8% tax is imposed on all or a portion of the net investment income (within the
meaning of the Code) of certain individuals, trusts and estates if their income exceeds certain thresholds. For individuals, the additional 3.8% tax will be imposed on the lesser of (i) an individuals net investment income for
the taxable year or (ii) the amount by which an individuals modified adjusted gross income for the taxable year exceeds $250,000 (if the individual is married and filing jointly or a surviving spouse), $125,000 (if the individual is
married and filing separately) or $200,000 (in any other case). In the case of an estate or trust, the tax will be imposed on the lesser of (i) undistributed net investment income for the taxable year or (ii) the excess of
adjusted gross income for the taxable year over the dollar amount at which the highest income tax bracket applicable to an estate or trust begins. For these purposes, net investment income generally will include any gain recognized on
the receipt of cash for shares in the merger.
Information Reporting and Backup Withholding.
A U.S. holder may be subject to
information reporting. In addition, all payments to which a U.S. holder would be entitled pursuant to the merger will be subject to backup withholding at the statutory rate unless such holder (i) is a corporation or other exempt recipient (and,
when required, demonstrates this fact), or (ii) provides a taxpayer identification number (which we refer to as a
TIN
) and certifies, under penalty of perjury, that the U.S. holder is not subject to backup withholding,
and otherwise complies with applicable requirements of the backup withholding rules. A U.S. holder that does not otherwise establish exemption should complete and sign an IRS Form W-9 in order to provide the information and certification necessary
to avoid backup withholding and possible penalties. If a U.S. holder does not provide a correct TIN, such U.S. holder may be subject to backup withholding and penalties imposed by the IRS.
Any amount paid as backup withholding does not constitute an additional tax and will be creditable against a U.S. holders U.S. federal
income tax liability, provided the required information is given to the IRS in a timely manner. If backup withholding results in an overpayment of tax, a U.S. holder may obtain a refund by filing a
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U.S. federal income tax return in a timely manner. U.S. holders are urged to consult their tax advisors as to qualifications for exemption from backup withholding and the procedure for obtaining
the exemption.
Non-U.S. Holders
General.
A non-U.S. holders receipt of cash for shares of Elizabeth Arden common stock pursuant to the merger generally will not
be subject to U.S. federal income tax unless:
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the non-U.S. holder is an individual who was present in the United States for 183 days or more during the taxable year of the merger and certain other conditions are met;
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the gain is effectively connected with the non-U.S. holders conduct of a trade or business in the United States and, if required by an applicable tax treaty, attributable to a permanent establishment maintained by
the non-U.S. holder in the United States; or
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we are or have been a United States real property holding corporation, or
USRPHC
, for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date
of the merger or the period that the non-U.S. holder held our shares and the non-U.S. holder held (actually or constructively) more than 5% of our common shares at any time during the five-year period ending on the date of the merger.
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Gain described in the first bullet point above generally will be subject to tax at a flat rate of 30% (or such lower rate
as may be specified under an applicable income tax treaty), net of applicable U.S.-source losses from sales or exchanges of other capital assets recognized by such non-U.S. holder during the taxable year. Unless a tax treaty provides otherwise, gain
described in the second bullet point above will be subject to U.S. federal income tax on a net income basis in the same manner as if the non-U.S. holder were a U.S. holder. A non-U.S. holder that is a foreign corporation also may be subject to a 30%
branch profits tax (or applicable lower treaty rate). Non-U.S. holders are urged to consult their tax advisors as to any applicable tax treaties that might provide for different rules.
With respect to the third bullet point above, the determination whether we are a USRPHC depends on the fair market value of our United States
real property interests relative to the fair market value of our other trade or business assets and our United States and foreign real property interests. We believe that we have not been a USRPHC for U.S. federal income tax purposes at any time
during the five-year period ending on the date of the merger.
Information Reporting and Backup Withholding
. Information reporting
and backup withholding will generally apply to payments made pursuant to the merger to a non-U.S. holder effected by or through the U.S. office of any broker, U.S. or foreign, unless the holder certifies its status as a non-U.S. holder and satisfies
certain other requirements, or otherwise establishes an exemption. Dispositions effected through a non-U.S. office of a U.S. broker or a non-U.S. broker with substantial U.S. ownership or operations generally will be treated in a manner similar to
dispositions effected through a U.S. office of a broker. A non-U.S. holder must generally submit an IRS Form W-8BEN or W-8BEN-E (or other applicable IRS Form W-8) attesting to its exempt foreign status in order to qualify as an exempt recipient. Any
amount paid as backup withholding does not constitute an additional tax and will be creditable against a non-U.S. holders U.S. federal income tax liability, provided the required information is given to the IRS in a timely manner. If backup
withholding results in an overpayment of tax, a non-U.S. holder may obtain a refund by filing a U.S. federal income tax return in a timely manner. Non-U.S. holders are urged to consult their tax advisors as to qualifications for exemption from
backup withholding and the procedure for obtaining the exemption.
THE FOREGOING SUMMARY DOES NOT DISCUSS ALL ASPECTS OF U.S. FEDERAL
INCOME TAXATION THAT MAY BE RELEVANT TO PARTICULAR HOLDERS OF SHARES OF ELIZABETH ARDEN COMMON STOCK. HOLDERS OF SHARES ARE URGED TO CONSULT THEIR TAX ADVISORS
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AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE RECEIPT OF CASH FOR THEIR SHARES PURSUANT TO THE MERGER UNDER ANY U.S. FEDERAL, STATE, FOREIGN, LOCAL OR OTHER TAX LAWS.
Regulatory Approvals Required for the Merger
Under the merger agreement, the respective obligations of Elizabeth Arden, Revlon, RCPC and Sub to complete the merger are subject to, among
other things, the expiration or termination of any applicable waiting period (and any extension thereof) applicable to the completion of the merger under the HSR Act and receipt of all other antitrust approvals including those under the antitrust
laws of Germany and South Africa. On June 30, 2016, Elizabeth Arden and Revlon filed their respective notification and report forms under the HSR Act with the Antitrust Division of the United States Department of Justice (which we refer to as
the
DOJ
) and the United States Federal Trade Commission (which we refer to as the
FTC
), which triggered the start of the HSR Act waiting period.
On June 27, 2016 and June 28, 2016, Revlon and Elizabeth Arden jointly filed for regulatory approval under the antitrust laws of
Germany and South Africa, respectively.
On July 13, 2016, Revlon and Elizabeth Arden received early termination of the HSR Act waiting
period. On July 18, 2016, after an expedited review, the German competition authority cleared the merger to proceed.
At any time
before or after the effective time of the merger, the DOJ, the FTC, antitrust authorities outside the United States or U.S. state attorneys general could take action under applicable antitrust laws, including seeking to enjoin the completion of the
merger, conditionally approving the merger upon the divestiture of Elizabeth Ardens, RCPCs or Revlons assets, subjecting the completion of the merger to regulatory conditions or seeking other remedies. Private parties may also seek
to take legal action under the antitrust laws under certain circumstances. See the section entitled The Agreement and Plan of MergerEfforts to Complete the Merger beginning on page 80.
We currently expect to obtain all remaining antitrust and other regulatory approvals that are required for the completion of the merger by the
end of 2016; however, we cannot guarantee when any such approvals will be obtained, or that they will be obtained at all.
Litigation Related to the Merger
On June 24, 2016, a putative shareholder class action lawsuit (Parker v. Elizabeth Arden, Inc. et al., Case No. CACE-16-011781) (which we refer
to as the
Parker complaint
) was filed in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida against Elizabeth Arden, the members of the Board, Revlon, RCPC, and Sub. In general, the
Parker complaint alleges that: (i) the members of the Board breached their fiduciary duties to Elizabeth Arden shareholders by, among other things, approving the merger pursuant to an unfair process and at an inadequate and unfair price; and (ii)
Elizabeth Arden, Revlon, RCPC, and Sub aided and abetted the breaches of fiduciary duty by the members of the Board. The plaintiff seeks, among other things, injunctive relief prohibiting consummation of the merger, compensatory damages, rescissory
damages in the event the merger is consummated, and an award of attorneys fees and expenses. On July 26, 2016, the plaintiff in this action filed an amended complaint which asserts a claim against Rhône Capital L.L.C., Nightingale
Onshore and Nightingale Offshore, an alleged controlling shareholder of Elizabeth Arden, breached its alleged fiduciary duties to the holders of Elizabeth Arden common stock by forcing Elizabeth Arden to agree to the unfair terms of the merger, and
which includes allegations that the members of the Board breached their fiduciary duties by failing to disclose to Elizabeth Arden shareholders all material information about the merger and that Elizabeth Arden, Revlon, RCPC, and Sub aided and
abetted the alleged breaches of fiduciary duty by Rhône Capital L.L.C., Nightingale Onshore and Nightingale Offshore. On August 1, 2016, the plaintiff in this action and in the Ross action filed a motion seeking, among other things, to
consolidate this action and the Ross
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action with the various other actions that have been filed and to be appointed as co-lead plaintiffs in the consolidated action, which motion is currently pending. A hearing on plaintiffs
motion is scheduled for August 5, 2016.
On June 29, 2016, a putative shareholder class action and derivative lawsuit (Christiansen
v. Rhône Capital L.L.C. et al., Case No. CACE-16-011746) (which we refer to as the
Christiansen complaint
) was filed in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida against
Rhône Capital L.L.C., Nightingale Onshore, Nightingale Offshore, the members of the Board, Revlon, RCPC, and Sub. In general, the Christiansen complaint alleges that: (i) the members of the Board breached their fiduciary duties to the holders
of Elizabeth Ardens common stock and to the company by, among other things, approving the merger pursuant to a flawed process that placed the interests of the holders of the Elizabeth Arden preferred stock ahead of the interests of Elizabeth
Arden and the holders of Elizabeth Arden common stock; (ii) Rhône Capital L.L.C., Nightingale Onshore and Nightingale Offshore, an alleged controlling shareholder of Elizabeth Arden, breached its alleged fiduciary duties to the holders of
Elizabeth Arden common stock and to Elizabeth Arden by forcing Elizabeth Arden to agree to the unfair terms of the merger; and (iii) Revlon, RCPC, and Sub aided and abetted the breaches of fiduciary duty by the members of the Board to the holders of
Elizabeth Arden common stock and to Elizabeth Arden. The plaintiff seeks, among other things, injunctive relief prohibiting consummation of the merger, a declaration that the merger agreement was entered into in breach of the fiduciary duties owed
to Elizabeth Arden and holders of Elizabeth Arden common stock by the members of the Board, Rhône Capital L.L.C., Nightingale Onshore and Nightingale Offshore, and an award of attorneys fees and expenses. On July 22, 2016, the plaintiff
in this action filed a motion seeking, among other things, to consolidate this action with the various other actions that have been filed and to be appointed as lead plaintiff in the consolidated action, which motion is currently pending. A hearing
on plaintiffs motion is scheduled for August 5, 2016.
On July 19, 2016, a putative shareholder class action lawsuit (Ross v.
Elizabeth Arden, Inc. et al., Case No. CACE-16-013220) (which we refer to as the
Ross complaint
) was filed in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida against Elizabeth Arden,
the members of the Board, Revlon, RCPC, and Sub. In general, the Ross complaint alleges that: (i) the members of the Board breached their fiduciary duties to Elizabeth Arden shareholders by, among other things, approving the merger pursuant to an
unfair process and at an inadequate and unfair price and failing to disclose to Elizabeth Arden shareholders all material information related to the merger; and (ii) Revlon, RCPC, and Sub aided and abetted the breaches of fiduciary duty by the
members of the Board. The plaintiff seeks, among other things, injunctive relief prohibiting consummation of the merger, compensatory damages, rescissory damages in the event the merger is consummated, and an award of attorneys fees and
expenses. On July 20, 2016, the plaintiff in this action filed a motion seeking expedited discovery and proceedings in contemplation of filing a motion for preliminary injunction, which motion is currently pending. On August 1, 2016, the
plaintiff in this action and in the Parker action filed a motion seeking, among other things, to consolidate this action and the Ross action with the various other actions that have been filed and to be appointed as co-lead plaintiffs in the
consolidated action, which motion is currently pending. A hearing on plaintiffs motion is scheduled for August 5, 2016.
On
July 25, 2016, a putative shareholder class action lawsuit (Hutson v. Elizabeth Arden, Inc. et al., Case No. CACE-16-013566) (which we refer to as the
Hutson complaint
) was filed in the Circuit Court of the Seventeenth
Judicial Circuit in and for Broward County, Florida against Elizabeth Arden, the members of the Board, Revlon, RCPC, and Sub. In general, the Hutson complaint alleges that: (i) the members of the Board breached their fiduciary duties to Elizabeth
Arden shareholders by, among other things, approving the merger pursuant to an unfair process and at an inadequate and unfair price and failing to disclose to Elizabeth Arden shareholders all material information related to the merger; and (ii)
Revlon, RCPC, and Sub aided and abetted the breaches of fiduciary duty by the members of the Board. The plaintiff seeks, among other things, injunctive relief prohibiting consummation of the merger, compensatory damages, rescissory damages in the
event the merger is consummated, and an award of attorneys fees and expenses.
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On July 25, 2016, a putative shareholder class action lawsuit (Stein v. Rhône Capital
L.L.C. et al., Case No. CACE-16-013580) (which we refer to as the
Stein complaint
) was filed in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida against Rhône Capital L.L.C.,
Nightingale Onshore, Nightingale Offshore, the members of the Board, Revlon, RCPC, and Sub. In general, the Stein complaint alleges that: (i) the members of the Board breached their fiduciary duties to Elizabeth Arden shareholders by, among other
things, approving the merger pursuant to an unfair process and at an inadequate and unfair price and failing to disclose to Elizabeth Arden shareholders all material information related to the merger; (ii) Rhône Capital L.L.C., Nightingale
Onshore and Nightingale Offshore, an alleged controlling shareholder of Elizabeth Arden, breached its alleged fiduciary duties to the holders of Elizabeth Arden common stock by forcing Elizabeth Arden to agree to the unfair terms of the merger; and
(iii) Revlon, RCPC, and Sub aided and abetted the breaches of fiduciary duty by the members of the Board and by Rhône Capital L.L.C., Nightingale Onshore and Nightingale Offshore. The plaintiff seeks, among other things, injunctive relief
prohibiting consummation of the merger, rescission of the merger agreement, and an award of attorneys fees and expenses.
Additional lawsuits arising out of or relating to the merger agreement or the merger may be filed in the future.
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THE AGREEMENT AND PLAN OF MERGER
The summary of the material provisions of the merger agreement set forth below and elsewhere in this proxy statement is qualified in its
entirety by reference to the merger agreement, a copy of which is attached to this proxy statement as
Annex A
and which is incorporated by reference in this proxy statement. This summary does not purport to be complete and may not contain all
of the information about the merger agreement that is important to you. We encourage you to read the merger agreement carefully in its entirety.
The merger agreement is described in this proxy statement and included as
Annex A
only to provide you with information regarding its
terms and conditions and not to provide any other factual information regarding Elizabeth Arden, Revlon, RCPC or Sub or their respective businesses. Such information can be found elsewhere in this proxy statement or, in the case of Elizabeth Arden,
in the public filings that Elizabeth Arden makes with the SEC, which are available without charge through the SECs website at www.sec.gov. See the section entitled Where You Can Find More Information, beginning on page 103.
The representations, warranties and covenants made in the merger agreement by Elizabeth Arden, Revlon, RCPC and Sub are qualified and
subject to important limitations agreed to by Elizabeth Arden, Revlon, RCPC and Sub in connection with negotiating the terms of the merger agreement. In particular, in your review of the representations and warranties contained in the merger
agreement and described in this summary, it is important to bear in mind that the representations and warranties were negotiated with the principal purposes of establishing the circumstances in which a party to the merger agreement may have the
right not to close the merger if the representations and warranties of the other party prove to be untrue due to a change in circumstance or otherwise, and allocating risk between the parties to the merger agreement. The representations and
warranties may also be subject to a contractual standard of materiality different from those generally applicable to shareholders and reports and documents filed with the SEC and in some cases were qualified by disclosures that were made by
Elizabeth Arden, which disclosures are not reflected in the merger agreement. Moreover, information concerning the subject matter of the representations and warranties, which do not purport to be accurate as of the date of this proxy statement, may
have changed since the date of the merger agreement and subsequent developments or new information qualifying a representation or warranty may have been included in this proxy statement.
Date of the Merger Agreement
The merger agreement was executed by Elizabeth Arden, Revlon, RCPC and Sub on June 16, 2016 (which we refer to as the
date of
the merger agreement
).
The Merger
The merger agreement provides that Sub will be merged with and into Elizabeth Arden upon the terms, and subject to the conditions, set forth in
the merger agreement, with Elizabeth Arden continuing as the surviving corporation and a wholly-owned subsidiary of RCPC.
Following the
completion of the merger, Elizabeth Arden will become a wholly-owned subsidiary of RCPC, and Elizabeth Arden common stock will be delisted from NASDAQ, deregistered under the Exchange Act and cease to be publicly traded.
Closing; Effective Time of the Merger
Unless otherwise mutually agreed in writing among Elizabeth Arden, Revlon, RCPC and Sub, the closing of the merger will take place no later
than the third business day following the day on which all of the conditions to the merger (described under Conditions to the Merger beginning on page 86) are satisfied or waived (other than any condition that by its nature cannot
be satisfied until the closing of the merger, but subject to the
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satisfaction or waiver of any such condition) unless the marketing period (as described below) has not been completed at such time. If the marketing period has not ended at such time, the closing
of the merger will instead occur on the earlier to occur of (i) the third business day after the final day of the marketing period or (ii) a business day during the marketing period specified by Revlon on no less than three business
days written notice to Elizabeth Arden, but subject, in each case, to the satisfaction or waiver of all conditions to the merger (other than any condition that by its nature cannot be satisfied until the closing of the merger, but subject to
the satisfaction or waiver of any such condition).
The merger will become effective at such date and time as articles of merger are duly
filed with the Department of State of the State of Florida, or a later date and time agreed to by the parties and specified in the articles of merger. Assuming timely satisfaction of the conditions to the merger, we currently expect the closing of
the merger to occur by the end of 2016.
Marketing Period
The marketing period referred to above is the first period of twenty-two consecutive calendar days beginning on the date all of the
required financial information (as described under FinancingElizabeth Arden Cooperation with Financing beginning on page 82) regarding Elizabeth Arden is delivered to Revlon and RCPC and (i) throughout which Revlon and
RCPC will have all of the required financial information and such required financial information will be compliant (as defined below), and (ii) nothing will have occurred and no condition will exist that would cause any of the conditions to the
obligations of Revlon, RCPC and Sub to close the merger (other than conditions that by their nature are to be satisfied at the closing of the merger) to fail to be satisfied assuming that the date of the closing of the merger was to be scheduled for
any time during such twenty-two consecutive calendar day period. The marketing period will (a) not count the days from and including July 1, 2016 through and including July 4, 2016; (c) either end on or prior to August 19,
2016 or will not commence prior to September 6, 2016; and (c) not count the days from and including November 24, 2016 through and including November 27, 2016. The marketing period will end on any earlier date on which the debt
financing is consummated.
Required financial information is compliant if (i) it does not contain any untrue
statement of material fact or omit to state any material fact necessary in order to make it not materially misleading and (ii) the historical financial statements of Elizabeth Arden included in such required financial information complies in
all material respects, subject to certain exceptions, with the requirements of Regulations S-X for an offering under the Securities Act pursuant to a registration statement on Form S-1 in connection with the registration of debt securities of Revlon
or RCPC of the type contemplated by the debt financing (as further described under Financing of the Merger beginning on page 58), and are sufficient to permit Revlons and RCPCs independent accountants to issue customary
comfort letters, in order to consummate any offering of debt securities on any day during the marketing period.
Merger
Consideration
Elizabeth Arden Common Stock
At the effective time of the merger, each share of Elizabeth Arden common stock issued and outstanding immediately prior thereto (other than
Excluded Shares) will be converted into the right to receive $14.00 in cash, without interest and less any applicable withholding taxes.
Treatment of Equity Awards Stock Options and RSU Awards
Stock Options
Each Stock Option that is outstanding and unexercised immediately prior to the effective time of the merger (whether vested or unvested) will
be canceled by virtue of the merger and without any action on the part of any
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holder of any Stock Option, in consideration for the right to receive, at or as promptly as practicable following the effective time of the merger, a cash payment, if any, equal to the product of
(i) the number of shares of Elizabeth Arden common stock subject to such Stock Option immediately prior to the effective time of the merger and (ii) the excess, if any, of the merger consideration over the exercise price of such Stock
Option, less any required withholding taxes and without interest. Any Stock Option with an exercise price per share that is greater than or equal to the merger consideration will be canceled in exchange for no consideration.
RSU Awards
Each
RSU Award outstanding immediately prior to the effective time of the merger will become fully vested and be converted into the right to receive, at or as promptly as practicable following the effective time of the merger, an amount in cash equal to
the merger consideration, less any required withholding taxes and without interest.
Treatment of Series A Serial Preferred
Stock and Warrants
Pursuant to the Repurchase Agreement, immediately prior to the effective time of the merger, Elizabeth Arden
will purchase all issued and outstanding shares of Elizabeth Arden preferred stock beneficially held by Nightingale, with funds provided to (or paid on behalf of) Elizabeth Arden by Revlon and RCPC, and all Nightingale Warrants will be canceled for
no additional consideration. See the section entitled The Preferred Stock Repurchase and Warrant Cancellation Agreement beginning on page 96.
Exchange and Payment Procedures
You should not send in your share certificate(s) with your proxy card. A letter of transmittal with instructions for the surrender of
certificates representing shares of Elizabeth Arden common stock will be mailed to shareholders if the merger is completed.
At or
before the effective time of the merger, Revlon will deposit, or will cause to be deposited, with the paying agent cash in the aggregate amount necessary for the paying agent to make payment of the aggregate merger consideration to all holders of
shares of Elizabeth Arden common stock (other than holders of Excluded Shares). If the funds deposited with the paying agent diminish for any reason below the amount required to make prompt payment of the merger consideration in full, then Revlon
will promptly deposit or cause to be deposited, additional funds with the paying agent in an amount that is equal to the deficiency in the amount required to make such payment.
As promptly as practicable, and in any event within three business days, after the date of the effective time of the merger, the surviving
corporation will cause the paying agent to mail to each record holder of shares of Elizabeth Arden common stock (whether holding a share certificate or book-entry shares) a letter of transmittal and instructions describing how such record holder may
exchange, his, her or its shares of Elizabeth Arden common stock for the merger consideration.
If you hold a share certificate, you
should NOT return your share certificate with the enclosed proxy card, and you should not forward your share certificate to the paying agent without a duly completely letter of transmittal.
If you are a record holder of shares of Elizabeth Arden common stock (and do not hold such shares by book-entry) you will not be entitled
to receive the merger consideration until you deliver a duly completed and executed letter of transmittal to the paying agent and such other documents as may be required under the instructions delivered with the letter of transmittal. If your shares
are certificated, you must also surrender your share certificate or certificates to the paying agent.
No holder of book-entry shares
of Elizabeth Arden common stock will be required to deliver a share certificate or an executed letter of transmittal to the paying agent to receive the merger consideration such holder
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is entitled to receive (and, at the effective time of the merger, such holder will automatically be entitled to receive such merger consideration) so long as such holder has delivered, or
Elizabeth Arden possesses, information sufficient to effect payment to such holder of the merger consideration such holder is entitled to receive in accordance with the merger agreement.
If payment of all or any portion of the merger consideration in respect of a surrendered share of Elizabeth Arden common stock is to be made
to a person other than the registered holder of such surrendered share of Elizabeth Arden common stock, such payment will not be made unless such share of Elizabeth Arden common stock is properly endorsed or otherwise in proper form for transfer and
the person requesting such payment has paid all applicable taxes with respect to such transfer or required by reason of such payment in a name other than that of the registered holder of such share of Elizabeth Arden common stock, or will have
established to the satisfaction of the payment agent that any such tax is not applicable.
No interest will be paid or accrued on the
merger consideration payable upon your surrender of your shares of Elizabeth Arden common stock (whether held by share certificate or book-entry). Revlon, RCPC, Sub, the surviving corporation and the paying agent will be entitled to deduct and
withhold any applicable taxes from the merger consideration, the amounts payable to the holders of Stock Options and the amounts payable to the holders of RSU Awards. Any sum that is withheld and paid over to the appropriate governmental authority
will be treated for all purposes of the merger agreement to have been paid to the person with regard to whom it is withheld.
From and
after the effective time of the merger, the stock transfer books of Elizabeth Arden will be closed and there will be no registration of transfers on Elizabeth Ardens stock transfer books of shares of Elizabeth Arden common stock that were
outstanding immediately prior to the effective time of the merger. If, after the effective time of the merger, certificates representing shares of Elizabeth Arden common stock are presented to the surviving corporation for transfer, such
certificates will be canceled against delivery of the merger consideration in accordance with the procedures set forth in the merger agreement.
Any portion of the merger consideration deposited with the paying agent that remains undistributed to the holders of Elizabeth Arden common
stock for twelve months after the effective time of the merger will be delivered to Revlon, or its designee, upon demand. Record holders of shares of Elizabeth Arden common stock (other than holders of Excluded Shares) who have not received the
merger consideration may thereafter look only to Revlon, or such designee, for payment of their claims to cash to which such holders may be entitled. None of the surviving corporation, Revlon, Sub, RCPC, Elizabeth Arden or the paying agent will be
liable to any person for any merger consideration delivered to a public official pursuant to any applicable abandoned property, escheat or similar legal requirements.
If you have lost a certificate representing shares of Elizabeth Arden common stock, or if it has been stolen or destroyed, then before you
will be entitled to receive the merger consideration, you will have to make an affidavit of the loss, theft or destruction, and if required by the surviving corporation or paying agent, post a bond in a reasonable amount determined by the surviving
corporation or the paying agent, as applicable, as indemnity against any claim that may be made with respect to such lost, stolen or destroyed certificate. These procedures will be described in the letter of transmittal and instructions that you
will receive, which you are strongly encouraged to read carefully and in their entirety.
Representations and Warranties
Representations and Warranties of Elizabeth Arden
Elizabeth Arden made customary representations and warranties in the merger agreement that are subject, in some cases, to specified exceptions
and qualifications contained in the merger agreement or in the disclosure
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letter that we delivered in connection with the merger agreement. These representations and warranties relate to, among other things:
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Elizabeth Arden and Elizabeth Ardens subsidiaries due organization, existence, good standing, authority to carry on Elizabeth Ardens businesses, and qualification to do business;
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governing documents of Elizabeth Arden and Elizabeth Ardens subsidiaries;
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Elizabeth Ardens capitalization;
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the Stock Options and RSU Awards outstanding as of June 9, 2016;
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the absence of any subscriptions, options, warrants, puts, calls, convertible, equity-linked securities or other similar rights, agreements, commitments or contracts of any kind obligating Elizabeth Arden or any of its
subsidiaries to issue, deliver, repurchase, transfer or sell any shares of capital stock, voting or equity interests, or securities convertible into shares capital stock of Elizabeth Arden or any of its subsidiaries;
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the absence of voting trusts, shareholders agreements, proxies or other agreements to which Elizabeth Arden or Elizabeth Ardens subsidiaries are party relating to the voting or transfer of the shares of
Elizabeth Arden or any of its subsidiaries;
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the absence of bonds, debentures, notes, or other indebtedness of Elizabeth Arden which provide the right to vote (or convertible into, or exchangeable for, securities which provide the right to vote) on any matters on
which holders of shares of common stock of Elizabeth Arden or any of its subsidiaries may vote;
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Elizabeth Ardens corporate power and authority to enter into and, subject to obtaining the Elizabeth Arden shareholder approval, consummate the transactions contemplated by the merger agreement, and the
enforceability of the merger agreement against Elizabeth Arden;
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(i) the declaration by the Board of the advisability and the fairness to Elizabeth Ardens shareholders of the merger agreement, the merger and other transactions contemplated by the merger agreement, (ii) the
approval and adoption by the Board of the merger agreement and the merger and the transactions contemplated by the merger agreement and (iii) the Boards recommendation;
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the absence of conflicts with, or violations of, Elizabeth Ardens or Elizabeth Ardens subsidiaries governing documents, applicable legal requirements and Elizabeth Ardens material contracts, or
the creation of any lien (other than permitted liens), as a result of Elizabeth Arden entering into and performing under the merger agreement;
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required governmental consents, approvals, notices and filings;
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Elizabeth Ardens and Elizabeth Ardens subsidiaries products;
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compliance with applicable legal requirements and permits and licenses;
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the accuracy, and level of compliance with applicable legal requirements, rules and regulations, of Elizabeth Ardens SEC filings since June 30, 2013 and the financial statements included therein, and
Elizabeth Ardens disclosure controls and procedures and internal controls over financial reporting;
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the absence of a Company material adverse effect (as described below) since June 30, 2015, and the absence of certain undisclosed liabilities;
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inventory of Elizabeth Arden and its subsidiaries, and returns of Elizabeth Ardens and its subsidiaries products;
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the absence of legal proceedings, investigations and governmental orders against Elizabeth Arden or Elizabeth Ardens subsidiaries;
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employee benefit plans and labor matters;
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material contracts and the absence of any default under any material contract;
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the receipt of a fairness opinion from Centerview;
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the absence of any undisclosed brokers or finders fees;
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real property and leases;
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the inapplicability of any anti-takeover law and that Elizabeth Arden is not a party to a shareholder rights agreement, poison pill or similar agreement or plan;
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related party transactions;
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business relationships;
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compliance with foreign asset control regulations and anti-corruption and anti-bribery laws;
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the approval required of Elizabeth Ardens shareholders for approval of the merger agreement and the transactions contemplated thereby; and
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accuracy of information contained in this proxy statement.
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Many of Elizabeth Ardens
representations and warranties are qualified by, among other things, exceptions relating to the absence of a
Company material adverse effect
, which is any event, occurrence, state of facts, circumstance, condition or effect
or change or development that (i) would reasonably be expected to prevent or materially impair the ability of Elizabeth Arden or any of its subsidiaries to consummate the merger and the other transactions contemplated by the merger agreement,
or (ii) has a material adverse effect on the business, results of operations or financial condition of Elizabeth Arden and its subsidiaries taken as a whole; provided that, in the case of clause (ii) above, no event, occurrence, state of
facts, circumstance, condition or effect or change or development resulting from or arising out of any of the following will constitute or be taken into account in determining whether there has been a Company material adverse effect:
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changes in general economic or political conditions or financial, credit or securities markets in general (including changes in interest or exchange rates) in any country or region in which Elizabeth Arden or any of its
subsidiaries conducts business;
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any effects that affect the industries in which Elizabeth Arden or any of Elizabeth Ardens subsidiaries operate;
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any changes in legal requirements applicable to Elizabeth Arden or any of Elizabeth Ardens subsidiaries or any of their respective properties or assets or changes in GAAP, or any changes in interpretations of the
foregoing;
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acts of war, armed hostilities, sabotage or terrorism, or any escalation or worsening of any acts of war, armed hostilities, sabotage or terrorism;
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the negotiation, announcement or existence of, or any action taken that is required or expressly contemplated by the merger agreement and the transactions contemplated thereby (including the impact thereof on
relationships, contractual or otherwise, with customers, suppliers, vendors, lenders, employees, investors, or venture partners) or any action taken by Elizabeth Arden at the written request of or with the written consent of Revlon;
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any changes in the credit rating of Elizabeth Arden or any of its subsidiaries, the market price or trading
volume of shares of Elizabeth Arden common stock or any failure to meet internal or published
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projections, forecasts or revenue or earnings predictions for any period (however, any underlying event causing such changes or failures in whole or in part may be taken into account in
determining whether a Company material adverse effect has occurred);
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any litigation arising from allegations of a breach of fiduciary duty relating to the merger agreement or the transactions contemplated by the merger agreement; or
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any weather-related events, earthquakes, floods, hurricanes, tropical storms, fires or other natural disasters or any national, international or regional calamity.
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Additionally, solely with respect to the exceptions described in the first, second, third, fourth or eight bullets above, any effect,
escalation or worsening that has a materially disproportionate adverse impact on Elizabeth Arden and its subsidiaries relative to other companies operating in the geographic markets or segments of the industry in which Elizabeth Arden and its
subsidiaries operate will be considered for purposes of determining whether a Company material adverse effect has occurred.
Representations and Warranties of Revlon, RCPC and Sub
The merger agreement also contains customary representations and warranties made by Revlon, RCPC and Sub that are subject, in some cases, to
specified exceptions and qualifications contained in the merger agreement. The representations and warranties of Revlon, RCPC and Sub relate to, among other things:
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their due organization or formation, existence, good standing, authority and all necessary governmental approvals to own, lease and operate their properties and to carry on their businesses, and qualified or licensed to
do business;
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their governing documents;
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their corporate or similar power and authority to enter into, and consummate the transactions under the merger agreement, and the enforceability of the merger agreement against them;
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the absence of conflicts with, or violations of, their governing documents, applicable legal requirements and agreements to which they are a party, or the creation of a lien, as a result of entering into and performing
under the merger agreement;
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required governmental consents, approvals, notices and filings;
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the absence of legal proceedings, investigations and governmental orders against them;
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the debt commitment letter and related fee letter;
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the absence of any amendments or modifications to the debt commitment letter and related fee letter;
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the absence of conditions related to the debt financing other than as set forth in the debt commitment letter or any alternative debt financing;
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the net proceeds contemplated by the debt commitment letter will, with Revlons, RCPCs and their subsidiaries available cash, be sufficient to pay the aggregate merger consideration (and any repayment
or refinancing of debt contemplated by the merger agreement or the debt commitment letter) and any other amounts required to be paid in connection with the consummation of the transactions contemplated by the merger agreement;
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the capitalization and formation of Sub;
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the absence of any undisclosed brokers or finders fees;
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ownership of Elizabeth Arden common stock by Revlon and its subsidiaries; and
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accuracy of information supplied by Revlon, RCPC and Sub to be included in this proxy statement.
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Many of Revlon, RCPC and Subs representations and warranties are qualified by, among other things, exceptions relating to the absence of
a
Parent material adverse effect
, which is any change, effect or
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circumstance that would reasonably be expected to prevent or materially impair the ability of Revlon to consummate the merger and the other transactions contemplated by the merger agreement.
The representations and warranties in the merger agreement of Elizabeth Arden, Revlon, RCPC and Sub will not survive the consummation of the
merger or the termination of the merger agreement.
Conduct of Elizabeth Ardens Business Pending the Merger
Under the merger agreement, Elizabeth Arden has agreed that, subject to certain exceptions in the merger agreement and the disclosure letter
Elizabeth Arden delivered in connection with the merger agreement or as required by applicable legal requirements, between the date of the merger agreement and the effective time of the merger, unless Revlon provides its prior written consent (which
cannot be unreasonably withheld, conditioned or delayed), Elizabeth Arden will, and will cause Elizabeth Ardens subsidiaries, to cause Elizabeth Ardens businesses to be conducted in the ordinary course of business and in a manner
consistent with past practice. Elizabeth Arden has also agreed to, and to cause Elizabeth Ardens subsidiaries to, use commercially reasonable efforts to (i) maintain and preserve intact Elizabeth Ardens business organizations and
reputation, (ii) keep available the services of key personnel, (iii) maintain existing relations and goodwill with governmental authorities and other persons having significant business relationships with Elizabeth Arden and (iv) pay
trade payables in the ordinary course of business.
Subject to certain exceptions set forth in the merger agreement and the disclosure
letter Elizabeth Arden delivered in connection with the merger agreement or as required by applicable legal requirement, between the date of the merger agreement and the effective time of the merger, unless Revlon provides its prior written consent
(which cannot be unreasonably withheld, conditioned or delayed), Elizabeth Arden will not, and will not permit Elizabeth Ardens subsidiaries to take any of the following actions:
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amend or otherwise change Elizabeth Ardens articles of incorporation or by-laws or similar organizational documents of any of Elizabeth Ardens subsidiaries;
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split, combine, subdivide, reclassify, purchase, redeem or otherwise acquire, issue, sell, pledge, dispose, encumber or grant any shares of Elizabeth Ardens or its subsidiaries capital stock, or any options,
warrants, convertible securities or other rights to acquire any shares of Elizabeth Ardens or its subsidiaries capital stock, except for any such transaction by one of Elizabeth Ardens wholly-owned subsidiaries which remains
Elizabeth Ardens wholly-owned subsidiary after consummation of such transaction;
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declare, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to Elizabeth Ardens or any of Elizabeth Ardens subsidiaries capital
stock, other than (i) those paid by Elizabeth Ardens subsidiaries to Elizabeth Arden or any wholly-owned subsidiary of Elizabeth Arden and (ii) cash dividends paid on Elizabeth Arden preferred stock;
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except as required pursuant to any benefit plan of Elizabeth Arden or its subsidiaries in effect as of the date
of the merger agreement: (i) increase the compensation or benefits payable to any of Elizabeth Arden or Elizabeth Ardens subsidiaries directors, executive officers, employees or individual service providers; (ii) grant any
severance or termination pay to, or enter into any employment, retention, change of control or severance agreement or arrangement with any of Elizabeth Ardens or Elizabeth Ardens subsidiaries directors, executive officers,
employees or individual service providers; (iii) establish, amend or terminate any benefit plan of Elizabeth Arden or its subsidiaries or other plan, trust, fund, policy, agreement, program or arrangement for the benefit of any current or
former directors, officers, employees or individual service providers, or any of their respective beneficiaries, except for renewals or amendments in the ordinary course of business consistent with past practice that do not materially increase the
cost to Elizabeth Arden, Elizabeth Ardens subsidiaries or Revlon or RCPC; (iv) adopt, enter into, amend or terminate any collective bargaining agreement or arrangement
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relating to union or organized employees; (v) hire any employees; or (vi) adopt, enter into, grant, or establish any incentive compensation or any program for incentive compensation;
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grant, confer or award options, convertible securities, restricted stock, restricted stock units or other rights to acquire Elizabeth Ardens or Elizabeth Ardens subsidiaries capital stock or take any
action to accelerate the vesting of or cause to be exercisable any unvested or unexercisable option or other equity-based award (except as provided by the terms of any unexercisable options or other equity awards outstanding as of the date of the
merger agreement);
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acquire any entity, business or material portion of the assets of any person except for (i) inventory in the ordinary course of business consistent with past practices and (ii) licenses in the ordinary course
of business consistent with past practices requiring an upfront or similar payment not in excess of $2,000,000 and/or guaranteed minimum royalty or similar payments by Elizabeth Arden or any of Elizabeth Ardens subsidiaries for any 12-month
period not in excess of $1,000,000;
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enter into new lines of business outside of the existing businesses;
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create, incur, guarantee or become liable for or modify in any material respect the terms of any indebtedness other than (i) guarantees by Elizabeth Arden of indebtedness of Elizabeth Ardens wholly-owned
subsidiaries and (ii) indebtedness of Elizabeth Ardens subsidiaries payable to Elizabeth Arden or a wholly-owned subsidiary of Elizabeth Arden;
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enter into, modify or amend in any respect materially adverse to Elizabeth Arden or any of Elizabeth Ardens subsidiaries, waive or grant any material release or relinquish any material rights under, or terminate,
any material contract or material lease;
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make any material change to Elizabeth Ardens or Elizabeth Ardens subsidiaries methods of accounting in effect at June 30, 2015, except as required by GAAP, Regulation S-X of the Exchange Act,
a governmental authority, or a change in applicable legal requirement;
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except for transactions among Elizabeth Arden and Elizabeth Ardens wholly-owned subsidiaries or among Elizabeth Ardens wholly-owned subsidiaries, sell, lease, license, transfer, exchange or swap, mortgage or
otherwise encumber or subject to any lien (other than permitted liens) or otherwise dispose of any material portion of Elizabeth Arden or Elizabeth Ardens subsidiaries properties or assets, other than dispositions by Elizabeth Arden and
Elizabeth Ardens subsidiaries in the ordinary course of business consistent with past practice in an amount not to exceed $2,000,000 in the aggregate;
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make any investment in, or loan or advance (other than travel and similar advances to employees in the ordinary course of business consistent with past practice) to, any person other than (i) in the ordinary course
of business consistent with past practice in an amount not to exceed $1,000,000 in the aggregate or (ii) a direct or indirect wholly-owned subsidiary of Elizabeth Arden in the ordinary course of business consistent with past practice;
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(i) make any material tax election other than in the ordinary course of business consistent with past practice,
(ii) revoke or change any material tax election, (iii) change (or request any taxing authority to change) any material aspect of its method of tax accounting or annual tax accounting period, (iv) file any amended tax return with
respect to any material tax, (v) incur any material tax liability outside of the ordinary course of business, (vi) incur any material amount of gross income for U.S. federal income tax purposes as a result of any intercompany transaction
or a transaction in which cash is not a material portion of the consideration outside of the ordinary course of business, (vii) file any material tax return prepared in a manner inconsistent with past practice, (viii) settle or compromise
any audit or proceeding relating to a material amount of taxes, (ix) enter into any material agreement principally relating to taxes with respect to Elizabeth Arden or any of Elizabeth Ardens subsidiaries, (x) waive or extend the
statute of limitations in respect of any material taxes (other than for extensions of time to file tax returns obtained in the ordinary course of business), (xi) issue, increase or modify any
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intercompany indebtedness (A) where a non-U.S. subsidiary of Elizabeth Arden is the borrower other than in the ordinary course of business or (B) where a non-U.S. subsidiary of
Elizabeth Arden is a lender or guarantor and Elizabeth Arden or a U.S. subsidiary of Elizabeth Arden is the borrower, or (xii) surrender any material claim for a refund of taxes;
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make or agree to make capital expenditures totaling in the aggregate more than $5,000,000 per fiscal quarter;
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adopt or enter into, or permit to be adopted or entered into, a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Elizabeth Arden or
any of Elizabeth Ardens subsidiaries;
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release, withdraw, concur with the dismissal of, or settle any material claim, action, suit or proceeding involving Elizabeth Arden or any of Elizabeth Ardens subsidiaries, other than routine, immaterial matters
in the ordinary course of business;
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settle, pay, discharge or satisfy any claim, action, suit, proceeding or investigation against or regarding Elizabeth Arden or any of Elizabeth Ardens subsidiaries, other than matters that involve only the payment
of monetary damages not in excess of $250,000 individually or $500,000 in the aggregate;
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take, or omit to take, any action which would reasonably be expected to cause a default or event of default under any of Elizabeth Ardens existing indebtedness;
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enter into any agreement, understanding or arrangement with respect to the voting or registration of the shares of Elizabeth Ardens or any of Elizabeth Ardens subsidiaries capital stock;
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enter into, amend, modify, waive or terminate any related party transaction; or
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authorize or enter into, or permit any of Elizabeth Ardens subsidiaries to authorize or enter into, any agreement or otherwise make any commitment to do any of the foregoing.
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Restrictions on Solicitation of Competing Proposals
Subject to certain exceptions described below, Elizabeth Arden has agreed that it and its subsidiaries will, and Elizabeth Arden will cause its
and their officers, directors, employees, accountants, consultants, legal counsel, financial advisors, agents and other representatives (which we refer to collectively as
Elizabeth Arden representatives
) to, and will direct
its and their affiliates to, (i) immediately cease any discussions or negotiations with any persons that may be ongoing with respect to a competing proposal (as described below), and (ii) until the earlier of the effective time of the
merger or termination of the merger agreement (if any), not, directly or indirectly:
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solicit, initiate, knowingly facilitate or encourage any competing proposal;
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participate in any negotiations regarding, or furnish to any person any information with respect to, any competing proposal;
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engage in discussions with any person with respect to any competing proposal;
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approve or recommend any competing proposal;
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enter into any letter of intent or similar document, or any agreement or commitment, providing for any competing proposal;
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take any action to make the provisions of any fair price, moratorium, control share
acquisition, business combination or other similar anti-takeover statute or regulation (including (x) any transaction under, or a third party becoming an interested shareholder under, Section 607.0901 of the
FBCA and (y) any transaction under 607.0902 of the FBCA), or any restrictive provision of any applicable anti-takeover provision in the articles of incorporation or by-laws of Elizabeth Arden,
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inapplicable to any person other than Revlon, RCPC and their affiliates or to any transactions constituting or contemplated by any competing proposal; or
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adopt resolutions to do any of the foregoing or agree to do any of the foregoing.
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Elizabeth
Arden must take actions necessary to enforce, and not, without Revlons prior written consent, terminate, amend, modify or waive, any standstill or similar provision in any confidentiality or other agreement with another person.
However, if the Board determines in good faith (after consultation with outside counsel) that taking such action to enforce or the failure to take such other action would be inconsistent with its fiduciary duties, Elizabeth Arden may, upon delivery
of advance written notice to Revlon and RCPC, waive any standstill or similar provisions to the extent necessary to permit another person to make, on a confidential basis to the Board, a competing proposal conditioned upon such person agreeing that
Elizabeth Arden will not be prohibited from providing any information to Revlon and RCPC (including regarding any such competing proposal).
A
competing proposal
is defined in the merger agreement to mean any inquiry, bona fide proposal for (other than by
Revlon or any of its subsidiaries), or expression by any person or group for:
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any merger, consolidation or similar transaction, or issuance or acquisition of securities, recapitalization, tender offer or other similar transaction in which (i) a person or group of persons directly or
indirectly acquires, or if consummated in accordance with its terms would acquire, beneficial or record ownership of securities representing more than 20% of the outstanding shares of any class of voting securities of Elizabeth Arden or more than
20% of the aggregate voting power of Elizabeth Arden or (ii) Elizabeth Arden issues securities representing more than 20% of the issued and outstanding shares of any class of voting securities of Elizabeth Arden or more than 20% of the
aggregate voting power of Elizabeth Arden;
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any direct or indirect sale, lease, exchange, transfer, acquisition or disposition of any assets or business of Elizabeth Arden and Elizabeth Ardens subsidiaries (whether in a single transaction or series of
related transactions) (x) that constitutes or accounts for more than 20% of the consolidated net revenues of Elizabeth Arden or (y) for a price that is more than 20% of Elizabeth Ardens enterprise value giving effect to the amount of
the merger consideration; or
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any liquidation or dissolution of Elizabeth Arden. Notwithstanding the non-solicitation provisions described above, if, at any time following the date of the merger agreement and prior to the receipt of the Elizabeth
Arden shareholder approval, (i) Elizabeth Arden receives an unsolicited written competing proposal not resulting from any breach of the non-solicitation provisions described above, and (ii) the Board determines in good faith, after
consultation with Elizabeth Ardens outside counsel and financial advisors, that such competing proposal constitutes or would reasonably be expected to result in a superior proposal (as described below) if information is furnished
to the third party making the competing proposal and Elizabeth Arden engages in discussions or negotiations with such third party regarding the competing proposal, then Elizabeth Arden may furnish such information (provided that Elizabeth Arden
substantially simultaneously makes available to Revlon such information to the extent the information was not previously made available to Revlon) and engage in such discussions or negotiations. Elizabeth Arden must provide written and oral notice
to Revlon of such determination by the Board promptly (but in no event more than 36 hours) after taking any such actions. Prior to furnishing any information to a third party making such a competing proposal, Elizabeth Arden must receive from the
third party an executed confidentiality agreement on terms no less favorable in the aggregate to Elizabeth Arden than the confidentiality agreement, dated February 16, 2016 (the
parent confidentiality agreement
), by
and between Elizabeth Arden and MacAndrews & Forbes.
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Elizabeth Arden must notify Revlon (orally and in writing)
promptly (but in any event within 36 hours) following the receipt of any competing proposal, and (x) if the competing proposal is in writing, deliver to Revlon a copy of such competing proposal and any related draft agreement and other written
material setting forth the terms of the competing proposal, or (y) if oral, provide a reasonably detailed summary of the material terms and conditions of such competing proposal (including the identity of the person making such acquisition
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proposal). Elizabeth Arden must keep Revlon reasonably informed on a prompt and timely basis of the status and material details of any such competing proposal and with respect to any material
change to the terms of any such competing proposal within 36 hours following such material change.
A
superior
proposal
is defined in the merger agreement to mean a bona fide unsolicited written competing proposal (with all percentages in the definition of competing proposal increased to 70%) on terms that the Board determines in good faith
(after consultation with Elizabeth Ardens outside counsel and financial advisors) would be more favorable to Elizabeth Ardens shareholders than the transactions contemplated by the merger agreement, taking into account all factors that
the Board acting in good faith considers appropriate, including (i) any proposal by Revlon in writing to amend the terms of the merger agreement, (ii) the identity of the person (and such persons beneficial owners) making the
competing proposal and (iii) the consideration, terms, conditions, timing, likelihood of consummation, financing terms and legal, financial and regulatory aspects of the competing proposal.
At any time after the date of the merger agreement and prior to receipt of the Elizabeth Arden shareholder approval, the Board may cause
Elizabeth Arden to terminate the merger agreement to enter into a binding written agreement with respect to an unsolicited, written competing proposal not resulting from any breach of the non-solicitation provisions described above that the Board
concludes in good faith after consultation with Elizabeth Ardens outside counsel and financial advisors constitutes a superior proposal, provided that Elizabeth Arden must, concurrently with and as a condition to such termination, cause
Elizabeth Arden to pay the Elizabeth Arden Termination Fee (as described under Termination FeesElizabeth Arden Termination Fee beginning on page 90).
Obligation of the Board with Respect to Its Recommendation
Except as described below, neither the Board nor any committee of the Board may (i) withhold, withdraw, rescind, amend, qualify or modify
in any manner adverse to Revlon, or make any public announcement inconsistent with, the Boards recommendation, (ii) approve, adopt endorse or recommend a competing proposal or any inquiry or proposal that would reasonably be expected to
lead to a competing proposal, (iii) take any formal action or make any recommendation or public statement in connection with a tender or exchange offer (other than a recommendation against such offer or a customary stop, look and
listen or similar communication) or (iv) following the date any competing proposal or material modification to such competing proposal is first made public or sent to Elizabeth Ardens shareholders, fail to issue a press release
expressly reaffirming the Boards recommendation within five business days after Revlons written request to do so. The Board or a committee thereof taking, or failing to take, as applicable, any of these actions is referred to as a
Change of Recommendation
. In addition, except as set forth in the merger agreement, neither the Board nor any committee of the Board may cause or permit Elizabeth Arden or any of its subsidiaries to enter into any letter of
intent, memorandum of understanding, merger agreement, acquisition agreement or other similar agreement related to or providing for any competing proposal or requiring Elizabeth Arden to abandon, terminate, delay or fail to consummate the merger
contemplated by the merger agreement, or publicly propose or announce an intention to take any of the actions described above.
Nothing in
the provisions of the merger agreement relating to competing proposal prevents Elizabeth Arden or its subsidiaries from complying with Rule 14e-2, Rule 14d-9 or Item 1012(a) of Regulation M-A under the Exchange Act or from making any disclosure
if the Board determines in good faith (after consultation with outside counsel) that the failure to make such disclosure would be inconsistent with its fiduciary obligations under applicable legal requirements; provided that Elizabeth Arden may not
make any such disclosure, to the extent that it constitutes a Change of Recommendation, without complying with the provisions of the merger agreement relating to a Change of Recommendation, and any such disclosure that does not reaffirm the
Boards recommendation to approve the merger (subject to certain exceptions) will constitute a Change of Recommendation.
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At any time after the date of the merger agreement and prior to the receipt of the Elizabeth
Arden shareholder approval, the Board may effect a Change of Recommendation if (i) Elizabeth Arden has received an unsolicited, written competing proposal not resulting from any breach of the non-solicitation provisions described above and the
Board concludes in good faith, after consultation with Elizabeth Ardens outside counsel and financial advisors, constitutes a superior proposal, or (ii) the Board concludes in good faith, after consultation with Elizabeth Ardens
outside counsel and financial advisors, that in light of an event, development or change in circumstances that is material to Elizabeth Arden and Elizabeth Ardens subsidiaries as a whole and first arises after the date of the merger agreement
and was not known or reasonably foreseeable to Elizabeth Arden or the Board, on the date of the merger agreement, which event, development or change in circumstances does not relate to certain specified events (including a competing proposal) (any
such event, development or change, an
Intervening Event
), the failure to make a Change of Recommendation would be inconsistent with the Boards fiduciary duties.
Before the Board may make a Change of Recommendation, as described above, or terminate the merger agreement for a superior proposal (as
described under Restrictions on Solicitation of Competing Proposals beginning on page 75), the Board must determine in good faith, after consultation with Elizabeth Ardens outside counsel and financial advisors, taking into
account all proposed amendments to the merger agreement (as described below) that the competing proposal remains a superior proposal, or, in respect of an Intervening Event, that the failure to make the Change of Recommendation would remain
inconsistent with its fiduciary duties. In addition, Elizabeth Arden must:
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have complied with the non-solicitation provisions described above in all material respects;
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provide prior written notice to Revlon of its intent to take either such action specifying either the terms and conditions of the superior proposal (including a final draft of the definitive agreement for such superior
proposal) and the identity of the person making such proposal, or all available information with respect to the Intervening Event;
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provide Revlon five business days after receipt of such written notice to propose amendments to the merger agreement and negotiate with Revlon with respect to such amendments; and
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In addition, in the event of any change to the material terms and conditions of any such competing proposal, or a change in the material facts
and circumstances relating to such Intervening Event, Elizabeth Arden is required to notify Revlon in writing of such modification or change and again comply with the requirements summarized above, except that Revlons period for proposing
amendments to the merger agreement will be reduced to three business days.
If, in connection with Revlons matching rights described
above or otherwise, the merger agreement is amended to provide for, or the merger agreement is terminated and a new agreement is entered into for, the sale of less than all of the assets and business of the Elizabeth Arden (but enough assets and
business to constitute a superior proposal) to Revlon or any of its subsidiaries, then Revlon and any of its subsidiaries will have the right (but not an obligation) to, and Elizabeth Arden is obligated to take actions reasonably necessary or
appropriate to allow Revlon and any of its subsidiaries to, commence and consummate a tender offer to acquire Elizabeth Ardens common stock or otherwise offer to and consummate a transaction to acquire Elizabeth Arden. In connection with any
such tender offer or other transaction, (i) the per share price will be no less than the merger consideration minus the amount of any dividends or other distributions declared or paid with respect to the common stock of Elizabeth Arden since
the date of the merger agreement, (ii) any such tender offer or other transaction would be conditioned on the closing of Elizabeth Ardens sale of assets to Revlon or its subsidiaries, and (iii) Revlon and Elizabeth Arden will use
commercially reasonable efforts to ensure such tender offer or other transaction does not materially delay the consummation of such asset sale. Notwithstanding Elizabeth Ardens obligations in connection with any such tender offer or other
transaction with Revlon or any of its subsidiaries, the Board may make any recommendation with respect to any such proposed tender offer or other transaction as it determines in its sole discretion.
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If, however, the merger agreement is terminated by Elizabeth Arden in connection with
Elizabeth Arden entering into a definitive agreement with respect to a superior proposal for the sale of less than all of the assets and business of the Elizabeth Arden (but enough assets and business to constitute a superior proposal) in accordance
with the merger agreement (as described under Restrictions on Solicitation of Competing Proposals beginning on page 75), then the standstill provisions (including those applicable to MacAndrews & Forbes, Revlon, RCPC and
their respective affiliates) set forth in the parent confidentiality agreement shall remain in effect until the later to occur of (i) the expiration of the period set forth in the parent confidentiality agreement in accordance with the terms
thereof and (ii) the date that is six months following the consummation of such transaction, except that in no event will such standstill provisions terminate later than June 30, 2017. However, the provisions in the foregoing sentence will
automatically cease to apply with respect to any such superior proposal that, following Elizabeth Ardens entry into the definitive agreement with respect to such superior proposal, is amended or modified in a manner that has the effect of
materially reducing the purchase price payable with respect thereto.
Shareholders Meeting
Elizabeth Arden is required to convene a meeting of Elizabeth Ardens shareholders as promptly as practicable after the mailing of this
proxy statement and (other than in the case in which Elizabeth Arden is required to allow reasonable additional time for the filing and mailing of any supplemental or amended disclosure that the SEC or its staff or a court of competent jurisdiction
has instructed Elizabeth Arden is necessary under applicable legal requirement or order and for such supplemental or amended disclosure to be disseminated and reviewed by Elizabeth Ardens shareholders prior to such meeting) in no event will
such meeting be held later than forty-five days after the date the proxy statement is mailed to Elizabeth Ardens shareholders.
Elizabeth Arden may adjourn or postpone the meeting of Elizabeth Ardens shareholders only if (i) Elizabeth Arden has determined in
good faith after consultation with its outside counsel that the failure to adjourn or postpone such meeting would reasonably be expected to be a violation of applicable legal requirements, (ii) as of the time that such meeting is originally
scheduled there are insufficient shares of Elizabeth Arden common stock represented to constitute a quorum necessary to conduct the business of such meeting or insufficient proxies returned to obtain the Elizabeth Arden shareholder approval and
Revlon requests an adjournment or postponement, or (iii) after consultation with Revlon, to the extent reasonably necessary to allow reasonable additional time for the filing and/or mailing of any supplement or amendment to this proxy statement
that Elizabeth Arden determines in good faith after consultation with its outside counsel is required under applicable legal requirements and for such supplement or amendment to be disseminated to and reviewed by Elizabeth Ardens shareholders
in advance of such meeting. However, without the prior written consent of Revlon, Elizabeth Arden may only adjourn or postpone the shareholders meeting for an aggregate period of no more than thirty days after the day on which the
shareholders meeting is originally scheduled, and in no circumstance will Elizabeth Arden be permitted to adjourn or postpone such meeting to a date that is on or after the date that is five business days before the termination date (as
described under Termination beginning on page 88).
Unless the Board makes a Change of Recommendation due to a
superior proposal or an Intervening Event, Elizabeth Arden will use its reasonable best efforts to solicit proxies from the holders of Elizabeth Arden common stock for the purposes of obtaining the Elizabeth Arden shareholder approval at the
shareholders meeting. Notwithstanding any Change of Recommendation by the Board, unless the merger agreement is terminated in accordance with its terms, the merger agreement will be submitted to the holders of Elizabeth Arden common stock as
promptly as reasonably practicable for the purpose of obtaining the Elizabeth Arden shareholder approval at the shareholders meeting.
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Efforts to Complete the Merger
Each of Revlon, RCPC, Sub and Elizabeth Arden will cooperate and use their reasonable best efforts to consummate the transactions contemplated
by the merger agreement as soon as practicable and to cause all conditions to the merger (as described under Conditions to the Merger beginning on page 86) to be satisfied, including obtaining and maintaining all necessary actions
or nonactions, consents, clearances and approvals from governmental authorities (including with respect to obtaining U.S., German and South African antitrust approvals) or other persons necessary in connection with the consummation of the
transactions contemplated by the merger agreement, and the making of all necessary registrations and filings (including those with governmental authorities, if any) and the taking of all reasonable or customary steps as may be necessary to obtain an
approval from, or to avoid an action or proceeding by, any governmental authority or other persons necessary in connection with the consummation of the transactions contemplated by the merger agreement.
Revlon, RCPC and Sub have agreed to take (and to cause their subsidiaries to take) promptly any and all actions necessary to avoid or
eliminate each and every impediment and obtain all antitrust approvals that may be required by any foreign or U.S. federal, state or local governmental authority to enable the parties to close the transactions contemplated by the merger agreement as
promptly as practicable and prior to the termination date (as described under Termination beginning on page 88), including the following actions:
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each of Revlon and Elizabeth Arden complying substantially with any requests for additional information or documentary material from any governmental authority under any antitrust laws;
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Revlon proposing, negotiating, offering to commit and effect (and if such offer is accepted, committing to and effecting), by consent decree, hold separate order or otherwise, the sale, divestiture, license or
disposition of the assets or businesses of Revlon, RCPC, the surviving corporation or their respective subsidiaries;
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Revlon proposing, negotiating or offering to commit and effect (and, if accepted, committing to and effecting) actions that limit its freedom of action with respect to, or its ability to retain, any of the businesses,
services or assets of Revlon, the surviving corporation or their respective subsidiaries; and
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each of Revlon and Elizabeth Arden taking any and all other actions reasonably necessary to ensure that the waiting period under the HSR Act expires or terminates and that any other required antitrust approvals,
including those required in Germany and South Africa, are obtained and that no decree, judgment, injunction, temporary restraining order or any other order in any suit or proceeding relating to any antitrust laws would preclude consummation of the
merger by the termination date (as described under Termination beginning on page 88).
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To assist
Revlon in complying with its obligations described above, Elizabeth Arden and its subsidiaries and affiliates have agreed to take any action reasonably in furtherance of the foregoing if requested in writing by Revlon and so long as such action is
conditioned on the closing of the merger. None of Revlons affiliates (other than its subsidiaries) are required to take or agree to take any actions in furtherance of the obligations described above.
In connection with the preparation of any required governmental filings or submissions, the parties to the merger agreement have agreed to
furnish to the other parties any necessary information and reasonable assistance as such other party may reasonably request, and will use its reasonable best efforts to cooperate in responding to any inquiry from a governmental authority, including
immediately informing the other party of such inquiry, consulting before making any presentations or submissions to a governmental authority, and supplying each other with copies of all material correspondence, filings or substantive communications
between such party and any governmental authority, except that such materials may be redacted to remove references concerning the valuation of Elizabeth Arden and as necessary to address privilege concerns. Each party has agreed to give the other
parties the opportunity to attend any meetings, or to participate in any substantive communication with, a governmental authority to the extent permitted by such governmental authority. Elizabeth Arden has agreed to
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give (or to cause its subsidiaries to give) notices to third parties to obtain any third-party consents that are necessary or proper to consummate the merger, and Revlon will, and will cause its
subsidiaries to, use reasonable best efforts to cooperate with Elizabeth Arden in its efforts to obtain such consents.
In the event any
control share acquisition, fair price, business combination or other anti-takeover legal requirements becomes applicable to the merger agreement or any transaction contemplated thereby, then Revlon, Elizabeth
Arden and their respective boards of directors will take all reasonable action necessary so that the transactions contemplated by the merger agreement may be consummated as promptly as practicable and otherwise act to eliminate if possible, and
otherwise to minimize, the effects of such legal requirement on the transactions contemplated by the merger agreement.
Financing
Generally
Each of
Revlon, RCPC and Sub have agreed to use commercially reasonable efforts to:
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maintain in effect the debt commitment letter and the fee letter;
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negotiate definitive agreements consistent with the terms and conditions contained in the debt commitment letter (or on other terms that would not (i) adversely affect the ability of Revlon, RCPC and Sub to
consummate the transactions contemplated by the merger agreement, (ii) reduce the aggregate amount of the financing commitment below the amount required to consummate the transactions contemplated by the merger agreement and pay related fees
and expenses and (iii) add new or amend the existing conditions to the debt financing in a manner that would reasonably be expected to prevent, impede or materially delay the consummation of the merger and other transactions contemplated by the
merger agreement);
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satisfy (or obtain the waiver of) on a timely basis all conditions in the debt commitment letter, the fee letter and the definitive agreements and otherwise comply with all of its obligations thereunder; and
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upon satisfaction of such conditions (or waiver) in the debt commitment letter, consummate the closing of the merger and cause each lender to fund its respective committed portion of the financing commitment required to
consummate the transaction contemplated by the merger agreement and pay related fees and expenses.
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Revlon, RCPC and Sub
have agreed to use commercially reasonable efforts to obtain the debt financing on the terms and conditions described in the debt commitment letter (which we refer to as the
financing commitment
), and will not, subject to
certain exceptions, without the prior written consent of Elizabeth Arden, permit any amendment or modification to be made to, or any waiver of any provision or remedy under, or replacement to, the financing commitment if such amendment,
modification, waiver or replacement: (i) adds new or adversely modifies the existing conditions to the debt financing in a manner that would reasonably be expected to prevent, impede or materially delay the consummation of the transactions
contemplated by the merger agreement, (ii) adversely affects the ability of Revlon, RCPC or Sub to enforce their rights against other parties to the debt commitment letter or the definitive agreements relative to the ability of Elizabeth Arden
to enforce its rights against other parties to the debt commitment letter or definitive documents in effect as of the date of the merger agreement, (iii) reduces the aggregate amount of the financing commitment below the amount required to
consummate the transactions contemplated in the merger agreement and pay related fees and expenses, or (iv) would otherwise reasonably be expected to prevent, impede or materially delay the consummation of the transactions contemplated by the
merger agreement.
If any portion of the debt financing becomes unavailable, Revlon, RCPC and Sub will (i) promptly notify Elizabeth
Arden and the reason therefor and (ii) use their commercially reasonable efforts to obtain alternative
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financing from the same or other sources in an amount sufficient, when taken together with available cash on hand and any other debt financing then-available, to consummate the transactions
contemplated by the merger agreement with terms that are not less favorable in the aggregate to Revlon and RCPC than the terms contained in the debt commitment letter and the related fee letter (taking into account any flex provisions).
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Elizabeth Arden Cooperation with Financing
Elizabeth Arden has agreed to, and agreed to cause Elizabeth Ardens subsidiaries to, and agreed to use commercially reasonable efforts to
cause Elizabeth Arden and their officers, employees, consultants and advisors (including legal and accounting advisors) to, use commercially reasonable efforts to provide to Revlon and RCPC, all cooperation reasonably requested by Revlon in
connection with the arrangement of the debt financing (provided, that (i) no such requested cooperation may unreasonably interfere with the business or operations of Elizabeth Arden or Elizabeth Ardens subsidiaries, (ii) the taking
of any action would not conflict with the governing documents of Elizabeth Arden or any legal requirements), including:
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making senior management and advisors of Elizabeth Arden and Elizabeth Ardens subsidiaries available to assist in the preparation for, and participate in, a reasonable number of meetings, presentations, road
shows, due diligence sessions, drafting sessions and sessions with prospective financing sources, investors and rating agencies in connection with the financing;
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assisting with the preparation of pro forma financial information and pro forma financial statements for rating agency presentations, offering documents, bank information memoranda, prospectuses, business projections
and all other material to be used in connection with the debt financing (including customary authorization and management representation letters) and providing customary estimates and other forward-looking financial information regarding the future
performance of the business of Elizabeth Arden and Elizabeth Ardens subsidiaries to the extent requested by the financing sources;
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using commercially reasonable efforts to cause Elizabeth Ardens independent accountants to provide assistance and cooperation, including participating in a reasonable number of drafting sessions and accounting due
diligence sessions, providing consents to Revlon to use their audit reports relating to Elizabeth Arden and providing drafts of any customary comfort letters prior to the commencement of any road show, which the accountants would be
prepared to issue at the time of pricing or closing of any offering or private placement;
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assisting in the preparation of and executing and delivering definitive financing documents, including interest hedging arrangements, pledge and security documents, and certificates and other documents and back-up for
legal opinions, in each case as applicable and to the extent reasonably requested by Revlon, and otherwise reasonably facilitating the pledging of collateral;
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requesting and cooperating in obtaining customary lien terminations and payoff letters relating to any indebtedness of Elizabeth Arden and Elizabeth Ardens subsidiaries, to be effective no earlier than the
consummation of the merger;
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providing reasonable access during business hours by Revlon, RCPC and any financing sources, and their respective officers, employees, consultants and advisors (including legal, valuation, and accounting advisors) to
the books and records, properties, officers, directors, agents and representatives of Elizabeth Arden and Elizabeth Ardens subsidiaries;
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furnishing to Revlon and the financing sources all financial and other pertinent information regarding Elizabeth Arden and Elizabeth Ardens subsidiaries as may be necessary in connection with any debt financing or
otherwise reasonably requested by Revlon promptly following such request to consummate the debt financing (the
required financial information
);
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taking all actions reasonably requested to (i) permit the prospective lenders involved in the debt financing
to evaluate Elizabeth Ardens and Elizabeth Ardens subsidiaries assets, cash
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management and accounting systems, policies and procedures relating thereto, including inventory appraisals and field audits, for the purpose of establishing collateral arrangements and
(ii) establish bank and other accounts and blocked account contracts and lock box arrangements in connection with the foregoing;
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providing all documentation and other information about Elizabeth Arden and Elizabeth Ardens subsidiaries required by applicable know your customer and anti-money laundering rules and regulations
including the USA Patriot Act;
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subject to the occurrence of the consummation of the merger, taking all corporate actions necessary to permit consummation of the debt financing; and
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at the reasonable request of Revlon, use commercially reasonable efforts to update any information provided by Elizabeth Arden regarding Elizabeth Arden and Elizabeth Ardens subsidiaries included in any offering
document to be used in connection with the debt financing to the extent that such information would, when taken as a whole in the absence of such an update, contain untrue statements of material fact or omit to state any material fact necessary in
order to make the statements contained therein not misleading.
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Notwithstanding the foregoing, neither Elizabeth Arden nor
any of Elizabeth Ardens subsidiaries shall be required to: (i) bear any out-of-pocket cost or expense or pay any fee in connection with the debt financing; (ii) incur any liability (or cause their respective directors, officers or
employees to incur any liability) under the debt financing; (iii) deliver any legal opinions by its counsel; or (iv) enter into any agreement or commitment that would be effective prior to the closing of the merger (other than such
customary management representation letters and authorization letters referred to above).
Transaction Litigation
Prior to the earlier of the effective time of the merger or the termination of the merger agreement, Elizabeth Arden will control the defense
of any litigation brought by its shareholders against Elizabeth Arden and/or its directors relating to the transactions contemplated by the merger agreement. However, with respect to such litigation, the merger agreement requires that Elizabeth
Arden (i) promptly provide Revlon with copies of all proceedings and correspondence relating to any such litigation, (ii) give Revlon the opportunity to participate regarding the defense or settlement, (iii) give due consideration to
Revlons advice and (iv) not enter into a settlement agreement or consent to a settlement (other than any settlement solely for monetary damages paid entirely from proceeds of insurance, except for any applicable deductible) without
Revlons written consent (not to be unreasonably withheld, conditioned or delayed).
Employee Benefit Matters
For a period of two years following the date of the consummation of the merger (or, if earlier, the date of termination of the applicable
Elizabeth Arden employee (as defined below)), Revlon will, or will cause one of its subsidiaries to, provide to each employee of Elizabeth Arden and any of Elizabeth Ardens subsidiaries who continues his or her employment with Revlon or any of
Revlons subsidiaries (including the surviving corporation) (collectively,
Elizabeth Arden employees
) with: (i) base salary that is not less than the base salary in effect immediately prior to the effective time
of the merger; (ii) target annual and long-term incentive compensation opportunities that are not less favorable than those in effect immediately prior to the effective time of the merger; and (iii) subject to certain exceptions, employee
benefits (excluding any defined benefit or supplemental pension plan, and post-termination health, life or other welfare benefits, in each case, except as required by a benefit plan of Elizabeth Arden or any of Elizabeth Ardens subsidiaries or
by applicable legal requirement) that are, in the aggregate, not less favorable than those provided to such Elizabeth Arden employee as of the effective time of the merger.
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The surviving corporation will (i) honor the Elizabeth Arden, Inc. Severance Policy (in
effect as of the date of the merger agreement and as it may be amended in accordance with the terms of the merger agreement and the disclosure letter delivered by Elizabeth Arden in connection therewith), and (ii) honor any severance policy or
program applicable to an Elizabeth Arden employee as of the date of the merger agreement who does not participate in the Elizabeth Arden, Inc. Severance Policy and whose employment terminates before the second anniversary of the consummation of the
merger. Revlon will, or will cause the surviving corporation to, honor any fiscal year 2017 bonus program and long-term incentive awards, in each case implemented or granted by Elizabeth Arden in accordance with the terms of the merger agreement and
the disclosure letter delivered by Elizabeth Arden in connection with the merger agreement.
For purposes of eligibility and vesting under
Elizabeth Ardens or any of Elizabeth Ardens subsidiaries benefit plans and the employee benefit plans of Revlon, the surviving corporation and the surviving corporations subsidiaries (such employee benefit plans,
new plans
) providing benefits to any Elizabeth Arden employees after the effective time, and for purposes of accrual of vacation and other paid time off and severance benefits under any new plans, each Elizabeth Arden
employee will be credited for years of service with Elizabeth Arden or its subsidiaries prior to the effective time, except that this service credit will not apply for benefit accrual under any defined benefit pension plan or to the extent it would
result in a duplication of benefits. Additionally, (A) each Elizabeth Arden employee will be immediately eligible to participate, without any waiting period, in any and all new plans to the extent coverage under such new plan replaces coverage
under a comparable benefit plan of Elizabeth Arden or any of its subsidiaries in which such Elizabeth Arden employee participated immediately before the effective time, and (B) for any new plan providing medical, dental, pharmaceutical and/or
vision benefits to any Elizabeth Arden employee, Revlon will use commercially reasonable efforts to cause (i) all pre-existing condition exclusions, evidence of insurability requirements and actively-at-work requirements of any such new plan to
be waived for such Elizabeth Arden employee and his or her covered dependents and (ii) any eligible expenses incurred by such Elizabeth Arden employee and his or her covered dependents under the applicable benefit plan of Elizabeth Arden or its
subsidiaries during the portion of the plan year of such new plan ending on the date such Elizabeth Arden employee begins participation in such new plan to be taken into account under the new plan for purposes of satisfying all deductible,
coinsurance and maximum out-of-pocket requirements applicable to such Elizabeth Arden employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in accordance with such new plans.
Following the date of the merger agreement, no new offering periods will be commenced for purposes of Elizabeth Ardens 2011 Employee
Stock Purchase Plan.
Revlon and Elizabeth Arden have agreed to provide, and cause their respective subsidiaries to provide, and use their
reasonable best efforts to cause each of their respective representatives to provide, all cooperation reasonably requested by any other party to the merger agreement in connection with satisfying all legal obligations with respect to any works
council, economic committee, union or similar body. Except as required to comply with any applicable legal requirement, neither Elizabeth Arden nor any of Elizabeth Ardens affiliates will, without the prior written consent of Revlon, enter or
offer to enter into any agreement with any works council, economic committee, union or similar body which would result in changes in the terms and conditions of employment or pension benefits of any Elizabeth Arden employee.
None of the obligations in the merger agreement relating to employee benefits and labor matters create any third-party beneficiary right in
any person (including Elizabeth Arden employees or any other employee or service provider of Revlon, Elizabeth Arden, the surviving corporation or any of their respective subsidiaries or affiliates), or any rights in any such persons. Nothing in the
merger agreement will guarantee employment for any Elizabeth Arden employee or other employee, or require Revlon, Elizabeth Arden, the surviving corporation or any of their respective subsidiaries or affiliates to continue any benefit plan of
Elizabeth Arden or any of Elizabeth Ardens subsidiaries.
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Treatment of Elizabeth Ardens 7.375% Senior Notes due 2021
As soon as reasonably practicable (but in no event later than five business days) after Elizabeth Ardens receipt of a written request by
Revlon, Elizabeth Arden will use its commercially reasonable efforts to (i) make an offer (the
Debt Offer
) to purchase all of the outstanding aggregate principal amount of Elizabeth Ardens 7.375% Senior Notes due
2021 (the
Notes
) and (ii) commence a consent solicitation (the
Consent Solicitation
) to amend the indenture governing the Notes, dated as of January 21, 2011 (as supplemented from time to
time, the
Notes Indenture
), by and among Elizabeth Arden and U.S. Bank National Association, as trustee (the
Indenture Trustee
) to remove the negative covenants and default provisions from the
Notes Indenture that are required to be removed to effect the merger.
At the closing of the merger, subject to the satisfaction or waiver
of the conditions to the Debt Offer, Elizabeth Arden will accept for purchase each Note validly tendered and not withdrawn prior to such date pursuant to the Debt Offer. Revlon has the sole discretion to (x) set the terms and conditions of the
Debt Offer (including the price to be paid) and the amendments to the Notes and Notes Indenture, and (y) to terminate, amend or extend the Debt Offer.
To the extent the Debt Offer does not take place, then Elizabeth Arden will take the following actions (together with the Debt Offer and
Consent Solicitation, the notes refinancing) to cause the redemption of the Notes in accordance with the terms of the Notes Indenture:
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determine with Revlon the amount required to be deposited with the Indenture Trustee to discharge the Notes and the Notes Indenture (the
Indenture Discharge Amount
);
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mail or cause to be mailed a notice of redemption to the holders of the Notes;
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irrevocably deposit the Indenture Discharge Amount in trust with the Indenture Trustee;
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deliver to the Indenture Trustee irrevocable instructions to apply the Indenture Discharge Amount to the payment of the redemption price for the Notes as of the redemption date;
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deliver to the Indenture Trustee the officers certificate and opinion of counsel (which opinion will be provided by Revlon) specified in the terms of the Notes Indenture; and
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request in writing that the Indenture Trustee acknowledge in writing the discharge of the Notes and the Notes Indenture.
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The consummation of the notes refinancing is conditioned on the occurrence of the merger, and Revlon will provide all funds required to
consummation such notes refinancing (including all reasonable documented out-of-pocket expenses related thereto).
Elizabeth Arden
will and will cause Elizabeth Ardens representatives and Elizabeth Ardens advisors to use their commercially reasonable efforts to provide all cooperation reasonably requested by Revlon in connection with the notes refinancing, including
(i) entering into, at the closing of the Consent Solicitation (or on an earlier date as may be specified in the note refinancing materials) and receipt of the requisite consents of noteholders, one or more supplemental indentures reflecting the
amendments to the Notes Indenture approved in the Consent Solicitation and (ii) using commercially reasonable efforts to cause the Indenture Trustee to promptly enter into such supplemental indentures. Any such cooperation in connection with
the notes refinancing is subject to the same limitations, restrictions and conditions described under FinancingElizabeth Arden Cooperation with Financing beginning on page 82.
Revlon will prepare all necessary and appropriate documentation in connection with the notes refinancing, which such documentation will be in
form and substance reasonably satisfactory to Elizabeth Arden and Revlon. Revlon and Elizabeth Arden will make appropriate amendments or supplements to the notes refinancing documentation to ensure such documentation does not contain any untrue
statement of a material fact or omit to
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state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. Revlon is
entitled to select one or more dealer managers or other agents reasonably satisfactory to Elizabeth Arden to provide assistance with the notes refinancing, and Elizabeth Arden and its subsidiaries will use their commercially reasonable efforts to
cooperate with any such party, including by entering into customary agreements with such party. Revlon will indemnify Elizabeth Arden, its subsidiaries and respective officers, directors, employees, consultants, agents, advisors and representatives
from and against any and all losses, claims, costs or expenses incurred by such persons in connection with the Debt Offer, except to the extent such losses, claims, costs or expenses arise from the gross negligence or willful misconduct of any such
persons seeking indemnification.
Other Covenants and Agreements
Elizabeth Arden and Revlon, RCPC and Sub have made certain other covenants to, and agreements, with each other regarding various other matters,
including:
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preparation of this proxy statement, and public statements, disclosure and notification of certain matters related to, and concerning, the merger agreement and the transactions contemplated by the merger agreement;
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subject to certain exceptions and limitations, Elizabeth Arden providing reasonable access to Elizabeth Ardens employees, properties, books, contracts and records, tax returns and other information relating to
Elizabeth Arden or Elizabeth Ardens subsidiaries reasonably requested by Revlon between the date of the merger agreement and the effective time of the merger (or the date, if any, on which the merger agreement is terminated);
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confidentiality with respect to information provided by the parties under the terms of, or in connection with, the merger agreement and the merger;
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Elizabeth Arden taking all actions reasonably necessary or appropriate to ensure that the dispositions of equity securities of Elizabeth Arden (including derivative securities) pursuant to the transactions contemplated
by the merger agreement by any officer or director of Elizabeth Arden who is subject to Section 16 of the Exchange Act are exempt under Rule 16b-3 promulgated under the Exchange Act; and
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Elizabeth Arden cooperating with Revlon and using reasonable best efforts to take all actions reasonably necessary on its part under applicable legal requirements and rules and policies of NASDAQ to cause the delisting
of Elizabeth Arden and Elizabeth Arden common stock from NASDAQ and the deregistration of Elizabeth Arden common stock under the Exchange Act as promptly as practicable after the effective time of the merger.
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Conditions to the Merger
The respective obligations of Elizabeth Arden, Revlon, RCPC and Sub to consummate the merger are subject to the satisfaction (or mutual waiver
by each of Revlon and Elizabeth Arden) of the following conditions on or prior to the date of the closing of the merger:
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the Elizabeth Arden shareholder approval will have been obtained;
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all required antitrust approvals will have been received (including the expiration or termination of any waiting periods under the HSR Act, and the antitrust approvals under the antitrust laws of Germany and South
Africa); and
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the absence of any legal requirement or order enacted, issued, promulgated, enforced or entered by any governmental authority making the merger illegal or otherwise prohibiting the merger.
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The obligations of Revlon, RCPC and Sub to effect the merger are also subject to the satisfaction
(or waiver by Revlon) of the following additional conditions at or prior to the date of the closing of the merger:
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Elizabeth Ardens representations and warranties regarding the absence of a Company material adverse effect since June 30, 2015, must be true and correct both when made and as of the effective date of the
merger;
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Elizabeth Ardens representations and warranties regarding Elizabeth Ardens capitalization, the absence of any options, warrants, convertible securities or similar rights, agreements, commitments or
contracts, and the absence of certain agreements relating to the voting or transfer of Elizabeth Ardens shares, in each case, must be true and correct both when made and as of the effective date of the merger except for any
de minimis
inaccuracy (unless made as of another specified date, and then only as of that date);
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Elizabeth Ardens representations and warranties regarding Elizabeth Ardens organization, authority to carry on Elizabeth Ardens businesses, qualification to do business, governing documents,
outstanding Stock Options or RSUs, the absence of voting indebtedness, Elizabeth Ardens corporate power and authority with respect to the merger and the transactions contemplated thereby, the absence of any undisclosed brokers or
finders fees, the applicability of any anti-takeover statutes and absence of an Elizabeth Arden shareholder rights plan, in each case must be true and correct in all material respects both when made and as of the effective date of the merger
(unless made as of another specified date, and then only as of that date);
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Elizabeth Ardens other representations and warranties set forth in the merger agreement, and without giving effect to any limitations as to materiality or Company material adverse effect,
must be true and correct both when made and as of the effective date of the merger (unless made as of another specified date, and then only as of that date), except where the failure to be true and correct does not have, and would not reasonably be
expected to have, individually or in the aggregate, a Company material adverse effect;
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Elizabeth Arden has performed or complied in all material respects with its obligations, agreements and covenants under the merger agreement at or prior to closing of the merger;
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Elizabeth Arden has delivered to Revlon a certificate signed on behalf of Elizabeth Arden by Elizabeth Ardens chief executive officer and chief financial officer certifying that all of the above conditions with
respect to the representations and warranties and performance of the obligations of Elizabeth Arden have been satisfied; and
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since the date of the merger agreement there have been no changes, events, circumstances, effects, developments, occurrences or state of facts that, individually or in the aggregate, have had or would reasonably be
expected to have a Company material adverse effect.
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Elizabeth Ardens obligation to effect the merger is also subject
to the satisfaction or waiver by Elizabeth Arden at or prior to the effective time of the merger of the following additional conditions:
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the representations and warranties of Revlon, RCPC and Sub set forth in the merger agreement, and without giving effect to any limitations as to materiality or Parent material adverse effect,
must be true and correct both when made and as of the effective date of the merger (unless made as of another specified date, and then only as of that date), except where the failure to be true and correct does not have, and would not reasonably be
expected to have, individually or in the aggregate, a Parent material adverse effect;
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each of Revlon, RCPC and Sub has performed or complied in all material respects with its obligations under the merger agreement at or prior to the closing of the merger; and
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Revlon has delivered to Elizabeth Arden a certificate signed by an executive officer of Revlon certifying that all of the above conditions with respect to the representations and warranties and performance of the
obligations of Revlon, RCPC and Sub have been satisfied.
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None of Elizabeth Arden, Revlon, RCPC or Sub may rely on the failure of any condition described
above to be satisfied to excuse such partys obligation to effect the merger if such failure was caused by such partys failure to use the efforts required from such party to consummate the transactions contemplated by the merger
agreement.
Termination
Elizabeth Arden, Revlon, RCPC and Sub may, by mutual written consent, terminate and abandon the merger agreement at any time prior to the
effective time of the merger.
The merger agreement may also be terminated and abandoned at any time prior to the effective time of the
merger as follows by either Revlon or Elizabeth Arden, if:
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the merger has not been consummated on or before the termination date; provided that this termination right will not be available to any party if the failure of the merger to be so consummated on or before the
termination date was primarily due to the failure of such party to perform any of its obligations under the merger agreement;
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any order by a governmental authority of competent jurisdiction permanently restrains, enjoins or otherwise prohibits the consummation of the merger and such order is final and non-appealable; provided that this
termination right will not be available to any party if the issuance of the final, non-appealable order was primarily due to the failure of such party, and in the case of Revlon including the failure of RCPC or Sub, to perform any of its obligations
under the merger agreement; or
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the shareholders meeting has been held and concluded without the Elizabeth Arden shareholder approval having been obtained.
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The merger agreement may also be terminated and abandoned at any time prior to the effective time of the merger as follows by Revlon, if:
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there has been a breach of a representation, warranty, covenant or agreement made by Elizabeth Arden in the merger agreement, which breach or failure to perform would result in the failure of the conditions to the
closing of the merger relating to the accuracy of the representations and warranties of Elizabeth Arden or compliance by Elizabeth Arden with its obligations under the merger agreement (as described under Conditions to the Merger
beginning on page 86), and such breach or failure to be true cannot be cured on or prior to the termination date, or if curable before such time, is not cured within 30 days after Elizabeth Ardens receipt of written notice of such breach
or failure; provided that this termination right will not be available to Revlon if Revlon, RCPC or Sub is then in breach of any of its covenants, agreements, representations or warranties under the merger agreement such that the conditions to the
closing of the merger relating to the accuracy of Revlons, RCPCs and Subs representations and warranties or Revlons, RCPCs and Subs compliance with their respective obligations under the merger agreement would not
be satisfied;
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at any time prior to receipt of the Elizabeth Arden shareholder approval, the Board makes a Change of Recommendation (as described under Obligation of the Board with Respect to its Recommendation
beginning on page 77); or
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Elizabeth Arden shall have breached in any material respect its obligations under the restrictions on solicitation set forth in the merger agreement (as described under Restrictions on Solicitation of
Competing Proposals and Obligation of the Board with Respect to its Recommendation beginning on page 75 and 76, respectively).
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The merger agreement may also be terminated and abandoned at any time prior to the effective time
of the merger as follows by Elizabeth Arden, if:
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there has been a breach of a representation, warranty, covenant or agreement made by Revlon, RCPC or Sub in the merger agreement, which breach or failure to perform would result in the failure of the conditions to the
closing of the merger relating to the accuracy of the representations and warranties of Revlon, RCPC and Sub or compliance by Revlon, RCPC and Sub with their respective obligations under the merger agreement (as described under
Conditions to the Merger beginning on page 86), and such breach or failure to be true cannot be cured on or prior to the termination date, or if curable before such time, is not cured within 30 days after Revlons receipt of
written notice of such breach or failure; provided that this termination right will not be available to Elizabeth Arden if Elizabeth Arden is then in breach of any of its covenants, agreements, representations or warranties under the merger
agreement such that the conditions to the closing of the merger relating to the accuracy of Elizabeth Ardens representations and warranties or Elizabeth Ardens compliance with its obligations under the merger agreement would not be
satisfied;
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at any time after the date of the merger agreement and prior to receipt of the Elizabeth Arden shareholder approval, the Board caused Elizabeth Arden to terminate the merger agreement to enter into a binding written
agreement with respect to an unsolicited, written competing proposal not resulting from any breach of the non-solicitation provisions (as described under Restrictions on Solicitation of Competing Proposals beginning on page 75)
that the Board concluded in good faith after consultation with Elizabeth Ardens outside counsel and financial advisors constituted a superior proposal, provided that Elizabeth Arden must, concurrently with and as a condition to such
termination, cause Elizabeth Arden to pay the Elizabeth Arden Termination Fee (as described under Termination FeesElizabeth Arden Termination Fee beginning on page 90); or
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(i) the conditions to the obligations of each party, and the conditions to the obligations of Revlon, RCPC and Sub, to consummate the merger (other than those conditions that by their nature are to be satisfied or
waived on the date of the closing, provided such conditions are reasonably capable of being satisfied at the closing of the merger) have been satisfied or waived, (ii) Elizabeth Arden has irrevocably confirmed by written notice to Revlon after
the end of the marketing period (as described under Closing; Effective Time of the MergerMarketing Period beginning on page 66) that the conditions to Elizabeth Ardens obligation to consummate the merger (other
than those conditions that by their nature are to be satisfied on the date of the closing but that are expected to be satisfied at the closing of the merger) have been satisfied or that it is willing to waive any unsatisfied conditions and that
Elizabeth Arden stands, and will stand, ready, willing and able to consummate the merger, and (iii) Revlon, RCPC and Sub fail to consummate the merger agreement within five business days after delivery of such written notice and Elizabeth Arden
stood ready, willing and able to consummate the merger through the end of such period; provided that Elizabeth Arden will not have the right to terminate the merger agreement pursuant to this termination right if it is in material breach of the
merger agreement.
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If the merger agreement is terminated, the merger agreement shall become void and of no effect without
liability of any party (or any direct or indirect shareholder, affiliate or representative of such party or any lender or other provider of debt financing to Revlon or RCPC) to the other party hereto, except (i) that certain specified
provisions of the merger agreement will survive including, among others, those related to confidentiality, termination fees, exclusive remedies in connection with the merger agreement, allocation of expenses incurred in connection with the merger
agreement and certain other miscellaneous provisions; and (ii) in the event of any liability arising out of, or as the result of, fraud or any willful breach of any covenant, agreement, representation or warranty, the aggrieved party shall be
entitled to all rights and remedies available at law or in equity, subject to provisions regarding exclusive remedies and specific performance.
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Termination Fees
Elizabeth Arden Termination Fee
Elizabeth Arden is required to pay Revlon a $14,000,000 termination fee in cash (the
Elizabeth Arden Termination Fee
)
if:
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Each of the following three events occurs (provided that for purposes of the following 50% is substituted for references to 20% in the definition of competing proposal):
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prior to the termination of the merger agreement, any competing proposal is made directly to Elizabeth Ardens shareholders or otherwise becomes publicly known, or any person publicly announces or communicates a
competing proposal to Elizabeth Arden;
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the merger agreement is terminated (i) by Revlon or Elizabeth Arden pursuant to the termination date being reached or the failure to obtain the Elizabeth Arden shareholder approval or (ii) by Revlon pursuant
to its termination right for Elizabeth Ardens breach in any material respect of its obligations under the restrictions on solicitation set forth in the merger agreement under Restrictions on Solicitation of Competing
Proposals and Obligation of the Board with Respect to its Recommendation beginning on page 75 and 77, respectively; and
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within twelve months after any such termination of the merger agreement, Elizabeth Arden or any of Elizabeth Ardens subsidiaries consummates any competing proposal or enters into a definitive agreement with
respect to any competing proposal that is subsequently consummated;
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the merger agreement is terminated by Revlon pursuant to the Board having made a Change of Recommendation;
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the merger agreement is terminated by Elizabeth Arden or Revlon pursuant to any other termination right (other than Elizabeth Ardens termination right as described in the last bullet under
Termination beginning on page 87) and, at the time of such termination, (i) the Elizabeth Arden shareholder approval shall not have been obtained and (ii) Revlon would have been permitted to terminate the merger agreement
pursuant to the Board having made a Change of Recommendation; or
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at any time after the date of the merger agreement and prior to receipt of the Elizabeth Arden shareholder approval, the Board caused Elizabeth Arden to terminate the merger agreement to enter into a binding written
agreement with respect to an unsolicited, written competing proposal not resulting from any breach of the non-solicitation provisions (as described under Restrictions on Solicitation of Competing Proposals beginning on page 75)
that the Board concluded in good faith after consultation with Elizabeth Ardens outside counsel and financial advisors constituted a superior proposal.
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Upon payment of the Elizabeth Arden Termination Fee, neither Elizabeth Arden nor any other person will have any further liability to Revlon or
any other person with respect to the merger agreement or the transactions contemplated thereby.
Revlon Termination Fee
If the merger agreement is terminated by Elizabeth Arden pursuant Elizabeth Ardens termination right as described in the last bullet
under Termination beginning on page 88, and Revlon, RCPC and Sub have failed to consummate the merger by the required date as a result of the full amount of the debt financing failing to be funded or prospectively funded at the
closing of the merger (other than as a result of a willful breach by Revlon, RCPC or Sub of their obligations as described under FinancingGenerally beginning on page 81), then Revlon shall pay to Elizabeth Arden a $40,000,000
termination fee payable in cash (the
Revlon Termination Fee
).
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Upon payment of the Revlon Termination Fee, neither Revlon nor any other person (including the
debt financing sources) will have any further liability to Elizabeth Arden or any other person with respect to the merger agreement or the transaction contemplated hereby.
Remedies
If Revlon receives full payment of the Elizabeth Arden Termination Fee in accordance with the merger agreement (as described in
Termination FeesElizabeth Arden Termination Fee beginning on page 90), (i) the receipt of such Elizabeth Arden Termination Fee will be the sole and exclusive remedy of Revlon, RCPC and Sub against Elizabeth Arden and
Elizabeth Ardens subsidiaries and any of their former, current or future officers, directors, partners, shareholders, managers, members or affiliates (referred to in this section as the
Elizabeth Arden related
parties
) for any loss suffered as a result of the failure of the merger to be consummated or failure to perform under the merger agreement, (ii) none of the Elizabeth Arden related parties will have any further liability or
obligation under the merger agreement or the transactions contemplated thereunder, (iii) such Elizabeth Arden Termination Fee will be liquidated damages for losses or damages suffered by the party receiving such termination fee or any other
person in connection with the termination of the merger agreement and (iv) none of Revlon, RCPC, Sub or any other person will be entitled to maintain any claim, action or proceeding against Elizabeth Arden related parties arising out of or in
connection with the merger agreement or any of the transactions contemplated thereby.
If Elizabeth Arden receives full payment of the
Revlon Termination Fee in accordance with the merger agreement (as described in Termination FeesRevlon Termination Fee beginning on page 90), (i) the receipt of such Revlon Termination Fee will be the sole and exclusive
remedy of Elizabeth Arden against Revlon, RCPC, Sub and their subsidiaries and any of their former, current or future officers, directors, partners, shareholders, managers, members or affiliates (referred to in this section as the
Revlon
related parties
) for any loss suffered as a result of the failure of the merger to be consummated or failure to perform under the merger agreement, (ii) none of the Revlon related parties will have any further liability or
obligation under the merger agreement or the transactions contemplated thereunder, (iii) such Revlon Termination Fee will be liquidated damages for losses or damages suffered by the party receiving such termination fee or any other person in
connection with the termination of the merger agreement and (iv) none of Elizabeth Arden or any other person will be entitled to maintain any claim, action or proceeding against the Revlon related parties arising out of or in connection with
the merger agreement or any of the transactions contemplated thereby.
No Elizabeth Arden related party will have any rights or
claims against any of the debt financing sources and no such debt financing sources will have any rights or claims against any Elizabeth Arden related party in connection with the merger agreement, the debt financing or the transactions contemplated
thereby. No debt financing sources will be subject to any special, consequential, punitive or indirect damages or damage of a tortious nature.
The parties are entitled to seek an injunction, specific performance and other equitable relief to prevent breaches of the merger agreement
and to enforce specifically the terms and provisions of the merger agreement in addition to any other remedy to which they are entitled at law or in equity. In no event will Elizabeth Arden or any other person be entitled to enforce specifically
Revlons, RCPCs and Subs obligations to consummate the merger unless:
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the marketing period (as described under Closing; Effective Time of the MergerMarketing Period beginning on page 66) has expired and the conditions to the obligations of each party, and the
conditions to the obligations of Revlon, RCPC and Sub, to consummate the merger (other than those conditions that by their nature are to be satisfied or waived on the date of the closing, provided such conditions are capable of being satisfied at
the closing of the merger) have been satisfied or waived;
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Revlon and RCPC have received the full amount of debt financing or the full amount of the debt financing will be available to Revlon and RCPC at the closing of the merger subject only to consummation of the closing of
the merger; and
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Elizabeth Arden has irrevocably and unconditionally confirmed that if specific performance is granted and the debt financing is funded, then the merger will occur.
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Under no circumstances will Elizabeth Arden be permitted or entitled to receive both a grant of specific performance and payment of the Revlon
Termination Fee.
Expenses
All fees and expenses incurred in connection with the merger agreement and the transactions contemplated therein will be paid by the party
incurring such fees and expenses, except that (i) Revlon, RCPC or Sub will pay the filing fees with respect to filings made pursuant to the HSR Act and all other antitrust laws and (ii) Revlon or RCPC will pay all the transfer taxes and
other similar taxes incurred in connection with the merger agreement and the transactions contemplated by the merger agreement, and will file all tax returns related thereto, regardless of who may be liable thereof under applicable legal
requirement.
Indemnification; Directors and Officers Insurance
Revlon, RCPC and Sub agree that all rights to exculpation and indemnification and advancement for acts or omissions occurring at or prior to
the effective time of the merger, whether asserted or claimed prior to, at or after the effective time of the merger (including any matters arising in connection with the transactions contemplated by the merger agreement), now existing in favor of
any Indemnitee as provided in the articles or certificates of incorporation or by-laws (or comparable organization documents) of Elizabeth Arden or any of Elizabeth Ardens subsidiaries or affiliates or in any agreement shall survive the merger
and continue in full force and effect with respect to such Indemnitee. Revlon and the surviving corporation (i) must indemnify, defend and hold harmless, and advance expenses to Indemnitees with respect to all acts or omissions by them, in
their capacities as such at any time prior to the effective time of the merger, to the fullest extent that is legally permitted and (b) may not amend any provisions of the articles of incorporation or by-laws of Elizabeth Arden or any of
Elizabeth Ardens subsidiaries that were in effect on the date of the merger agreement or any indemnification agreement of Elizabeth Arden or Elizabeth Ardens subsidiaries that has been made available to Revlon that was in effect on the
date of the merger agreement, in a manner that would adversely affect the rights of Indemnitees provided thereunder.
For a period
commencing as of the effective time of the merger and ending on its sixth anniversary, Revlon, the surviving corporation and its subsidiaries will (i) indemnify, defend and hold harmless each Indemnitee from and against any costs or expenses,
judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement in connection with any claim, action, suit, proceeding or investigation to the extent that it pertains to any actual or alleged action or omission by the
Indemnitee in its capacity as such or the merger agreement and any transactions contemplated thereby and (ii) pay expenses in advance of the final disposition of any claim, action, suit, proceeding or investigation of any Indemnitee upon the
receipt of an undertaking by such Indemnitee to repay such amount if it is determined that the Indemnitee is not entitled to be indemnified. Revlon and the surviving corporation shall not settle or consent to the entry of any judgment or seek
termination with respect to any claim, action, suit, proceeding or investigation for which indemnification may be sought unless such settlement, compromise, consent or termination includes an unconditional release of all Indemnitees from all
liability arising out of such claim, action, suit, proceeding or investigation.
Prior to the effective time of the merger, Elizabeth
Arden will (or if Elizabeth Arden is unable to, Revlon will cause the surviving corporation as of the effective time of the merger to) obtain and fully pay the premium for D&O Insurance for at least six years from and after the effective time of
the merger with respect to any claim related to any period of time at or prior to the effective time of the merger. The D&O Insurance must have terms that are no less favorable than the coverage provided under Elizabeth Ardens existing
policies, and its insurance carrier must have at least the same credit rating as Elizabeth Ardens current insurance carrier. The premium for such tail insurance is capped at 300% of the annual premium currently paid by Elizabeth
Arden. If Elizabeth
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Arden or the surviving corporation fails to obtain such tail insurance policy as of the effective time of the merger, (i) the surviving corporation is required to maintain, for a
period of six years from and after the effective time of the merger, the D&O Insurance in place as of the date of the merger agreement with Elizabeth Ardens current insurance carrier (or an insurance carrier with at least the same credit
rating) and on terms no less favorable than the coverage provided under Elizabeth Ardens existing policies as of the date of the merger or (ii) Revlon will provide, or cause the surviving corporation to provide, for a period of at least
six years after the effective time of the merger, the Indemnitees who are insured under Elizabeth Ardens D&O Insurance with comparable D&O Insurance that provides coverage for events occurring at or prior to the effective time of the
merger from an insurance carrier with at least the same credit rating as Elizabeth Ardens current insurance carrier and coverage that is no less favorable than Elizabeth Ardens existing policy (or, the best available coverage if
substantially equivalent insurance coverage is unavailable). Revlon and the surviving corporation are not required to pay an annual premium for such D&O Insurance that exceeds 300% of the annual premium currently paid by Elizabeth Arden for such
insurance.
The Indemnitees are third-party beneficiaries to the indemnification provisions described above and have the right to enforce
such provisions. Such indemnification provisions survive the consummation of the merger indefinitely and are binding, jointly and severally, on all the successors and assigns of Revlon, the surviving corporation and its subsidiaries.
Modification or Amendment
The merger agreement may be amended at any time prior to the effective time of the merger by a mutual written agreement of the parties to the
merger agreement, signed by each party to the merger agreement. Certain provisions (including those relating to termination fees, remedies, governing law, and waiver of jury trial) may not be amended in a manner that impacts or is otherwise adverse
in any respect to the debt financing sources without the prior written consent of such debt financing sources.
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THE SUPPORT AGREEMENTS
The following is a summary of the material terms and conditions of the support agreements entered into in connection with the merger
agreement. The description of the Support agreements in this section and elsewhere in this proxy statement is qualified in its entirety by reference to the complete text of each of the Nightingale Support Agreement and the Beattie Support Agreement,
which are attached to this proxy statement as
Annex C
and
Annex D
, respectively, and are incorporated by reference into this proxy statement. This summary does not purport to be complete and may not contain all of the information about
each of the Support agreements that is important to you. We encourage you to read each of the support agreements carefully and in its entirety.
In connection with the merger agreement, on June 16, 2016, Revlon, RCPC and Sub entered into the Nightingale Support Agreement with
Nightingale, and the Beattie Support Agreement with E. Scott Beattie, Elizabeth Ardens Chairman, President and Chief Executive Officer.
Pursuant to their respective Support Agreements, each of Nightingale and E. Scott Beattie (each a
Supporting
Shareholder
) have agreed to, among other things and subject to certain conditions, vote their respective shares of capital stock in Elizabeth Arden (i) in favor of the approval of the merger agreement, the merger and the approval
of any other matter that is required to be approved by Elizabeth Ardens shareholders in order to effect the transactions contemplated by the merger agreement (including any proposal to adjourn or postpone a meeting of Elizabeth Ardens
shareholders to a later date if there are not sufficient votes to approve the merger agreement on the date that the shareholders meeting is held) and (ii) against (a) any competing proposal or any agreement or arrangement
constituting or related to a competing proposal, (b) any action that would result in a liquidation, dissolution, recapitalization, extraordinary dividend or other significant corporation reorganization of Elizabeth Arden or (c) any action,
proposal or transaction or agreement involving Elizabeth Arden or any of Elizabeth Ardens subsidiaries that would reasonably be expected to prevent, interfere with or delay the consummation of the merger and the other transactions contemplated
by the merger agreement or that would otherwise be inconsistent with the merger and the other transactions contemplated by the merger agreement.
In furtherance of the foregoing, each Supporting Shareholder has irrevocably granted to, and appointed, until termination of such Supporting
Shareholders Support Agreement, Revlon (and each of Revlons officers) as such Supporting Shareholders proxy and attorney-in-fact to vote or grant a written consent in respect of all of such Supporting Shareholders shares of
capital stock subject to such Supporting Shareholders Support Agreement (or execute and deliver a proxy to vote or grant a written consent in respect of such shares), on the matters and in the manner discussed above. However, this grant of a
proxy is effective only if Elizabeth Arden has not received prior to the date of the shareholders meeting, a duly executed irrevocable proxy card of such Supporting Shareholder directing that the shares of capital stock of such Supporting
Shareholder subject to such Supporting Shareholders Support Agreement be voted in the manner discussed above.
As of the close
of business on the record date of August 4, 2016, (i) E. Scott Beattie and his affiliates held approximately 1,180,116 shares of Elizabeth Arden common stock, which represent approximately 3.9% of the total outstanding shares of Elizabeth Arden
common stock, and (ii) Nightingale held approximately 4,064,897 shares of Elizabeth Arden common stock and 50,000 shares of Elizabeth Arden preferred stock, which represent approximately 13.6% of the total outstanding shares of Elizabeth Arden
common stock and 100% of the outstanding shares of Elizabeth Arden preferred stock, respectively. As of the record date, based on the number of shares of Elizabeth Arden common stock, Elizabeth Arden preferred stock and Nightingale Warrants
outstanding, Nightingale held approximately 20% of outstanding voting power where Elizabeth Arden common stock and Elizabeth Arden preferred stock vote as a single class.
The shares subject to the Beattie Support Agreement are shares of Elizabeth Arden common stock beneficially owned by E. Scott Beattie and any
additional shares of capital stock of Elizabeth Arden that become beneficially owned by E. Scott Beattie after the date of the Beattie Support Agreement.
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The shares subject to the Nightingale Support Agreement are shares of Elizabeth Arden common
stock beneficially owned by Nightingale, shares of Elizabeth Arden preferred stock beneficially owned by Nightingale and any additional shares of capital stock of Elizabeth Arden that become beneficially owned by Nightingale after the date of the
Nightingale Support Agreement. With respect to the voting of Elizabeth Arden preferred stock, in the event that the Nightingale Support Agreement is terminated because the Board effects a Change of Recommendation (as described under The
Agreement and Plan of MergerObligation of the Board with respect to its Recommendation beginning on page 77), Nightingale has agreed to vote all Elizabeth Arden preferred stock in connection with any meeting of Elizabeth Ardens
shareholders at which holders of Elizabeth Arden preferred stock are entitled to vote in a separate class from holders of Elizabeth Arden common stock (including any adjournment or postponement thereof or any action by written consent in lieu of a
meeting of Elizabeth Ardens shareholders or otherwise requiring approval of the Elizabeth Ardens shareholders) in the same proportion as all total votes that are actually voted on the subject matter described above.
Each Supporting Shareholder has agreed to, and to direct and cause its representatives to, immediately cease any discussions or negotiations
with any persons that may be ongoing with respect to a competing proposal (as defined under The Agreement and Plan of MergerRestrictions on Solicitation of Competing Proposals beginning on page 75) and, until the earlier of the
effective time of the merger or the date, if any, on which the applicable Support Agreement is terminated, not, directly or indirectly (i) solicit, initiate, or knowingly facilitate or encourage any competing proposal, (ii) participate in
any negotiations regarding, or furnish to any person any information with respect to, any competing proposal, or (iii) engage in discussions with any person with respect to any competing proposal.
Each Supporting Shareholder has agreed not to, directly or indirectly, (i) transfer (which includes any sale, assignment, gift, pledge,
hypothecation or other disposition) or consent to, agree to permit any such transfer of, any or all of the shares subject to such Supporting Shareholders Support Agreement or any interest therein, or create any encumbrances that would prevent
the applicable Supporting Shareholder, from voting such shares in accordance with the Support Agreement, (ii) enter into any contract, option or other agreement, arrangement or understanding inconsistent with the terms of the Support Agreement
with respect to any transfer of such shares or any interest therein, (iii) grant or permit the grant of any proxy, power of attorney or other authorization in or with respect to such shares relating to the subject matter in the Support
Agreement, (iv) deposit or permit the deposit of such shares into a voting trust or enter into a voting agreement or arrangement with respect to such shares or (v) take or permit any other action that would reasonably be expected to in any
way restrict, limit or interfere with the performance of its obligations under, or transactions contemplated by, the Support Agreement.
Each of the Support Agreements terminates upon the earliest to occur of (i) the termination of the merger agreement in accordance with
its terms, (ii) the effective time of the merger, (iii) the date on which the Board effects a Change of Recommendation and (iv) the date of the entry, without the prior written consent of the applicable Supporting Shareholder, into
any amendment or modification of the merger agreement or any waiver of any of Elizabeth Ardens right under the merger agreement, in each case, that results in a decrease in, or change in the form of, the merger consideration. With respect to
the Nightingale Support Agreement, in the event that it is terminated because the Board effects a Change of Recommendation, provisions related to transfer restrictions and changes to shares shall survive with respect to Nightingales Elizabeth
Arden preferred stock.
95
THE PREFERRED STOCK REPURCHASE AND WARRANT CANCELLATION AGREEMENT
The following is a summary of the material terms and conditions of the Repurchase Agreement. The description of the Repurchase
Agreement in this section and elsewhere in this proxy statement is qualified in its entirety by reference to the complete text of the Repurchase Agreement, a copy of which is attached as
Annex E
and is incorporated by reference into this
proxy statement. This summary does not purport to be complete and may not contain all of the information about the Repurchase Agreement that is important to you. We encourage you to read the Repurchase Agreement carefully and in its entirety.
In connection with the merger agreement, on June 16, 2016, the Repurchase Agreement was entered into by and among Elizabeth
Arden, Revlon, RCPC, Sub and Nightingale. Pursuant to the Repurchase Agreement, Nightingale has agreed to sell and Elizabeth Arden has agreed to purchase the 50,000 shares of Elizabeth Arden preferred stock beneficially owned by Nightingale for a
cash purchase price equal to $1,100.00 per each share of Elizabeth Arden preferred stock beneficially owned by Nightingale (which represents 110% of the per share liquidation value) plus any accrued but unpaid dividends, which is the amount required
to be paid under the terms of Elizabeth Ardens Articles of Amendment to the Amended and Restated Articles of Incorporation for a repurchase of the Elizabeth Arden preferred stock in connection with a change of control transaction consummated
prior to August 19, 2016 (the
Preferred Stock Purchase Price
). The funds required to pay the Preferred Shares Purchase Price are to be provided by (or paid on behalf of) Revlon prior to the effective time of the
merger. Additionally, Nightingale approved the cancellation of the Nightingale Warrants for no additional consideration effective at the closing of the merger.
The Nightingale Warrants, that certain Shareholders Agreement by and between Elizabeth Arden and Nightingale, dated as of August 19, 2014
(the
Shareholders Agreement
), and any other agreement between Elizabeth Arden or any of Elizabeth Ardens subsidiaries, on the one hand, and Nightingale Onshore or Nightingale Offshore or any of their affiliates, on
the other hand, (other than the Nightingale Agreement) will irrevocably terminate and be of no further force and effect upon date of the closing of the transactions contemplated by the merger agreement. However, any agreements for the benefit of the
directors of Elizabeth Arden who were appointed by Nightingale pursuant to the Shareholders Agreement will remain in effect in accordance with their terms.
Nightingale irrevocably waived any and all consent or approval rights it possesses, if any, under the Shareholders Agreement with respect to
Elizabeth Ardens entry into, and consummation of transactions contemplated by, the merger agreement.
The closing of the
transactions contemplated by the Repurchase Agreement shall occur at the closing of the merger agreement and will be effective immediately prior to the merger. At the closing of the transactions contemplated by the Repurchase Agreement, (i) the
parties will enter into a termination of the Nightingale Warrants and Shareholders Agreement to be mutually agreed upon, (ii) Nightingale will certify that each of Nightingale Onshore and Nightingale Offshore is not a foreign person
within the meaning of Section 1445 of the Code and (iii) Elizabeth Arden will pay Nightingale the Preferred Stock Purchase Price.
The Repurchase Agreement will terminate in its entirety upon the termination of the merger agreement in accordance with its terms or by the
mutual written agreement of the parties to the Repurchase Agreement.
96
MARKET PRICE AND DIVIDEND DATA
Elizabeth Arden common stock is traded on NASDAQ under the symbol
RDEN
. As of the close of business on July 5, 2016,
the latest practicable trading day before the filing of this proxy statement, there were 29,949,317 shares of Elizabeth Arden common stock outstanding and entitled to vote, held by approximately 295 holders of record of Elizabeth Arden common
stock.
The following table presents the high and low sale prices of Elizabeth Arden common stock for the period indicated in published
financial sources, and no dividends were declared per share of Elizabeth Arden common stock during such periods:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
High
|
|
|
Low
|
|
Fiscal 2015
|
|
|
9/30/14
|
|
|
$
|
21.82
|
|
|
$
|
14.65
|
|
|
|
|
12/31/14
|
|
|
$
|
21.67
|
|
|
$
|
14.50
|
|
|
|
|
3/31/15
|
|
|
$
|
21.55
|
|
|
$
|
14.48
|
|
|
|
|
6/30/15
|
|
|
$
|
16.19
|
|
|
$
|
13.20
|
|
Fiscal 2016
|
|
|
9/30/2015
|
|
|
$
|
14.31
|
|
|
$
|
9.10
|
|
|
|
|
12/31/2015
|
|
|
$
|
13.49
|
|
|
$
|
9.17
|
|
|
|
|
3/31/2016
|
|
|
$
|
9.91
|
|
|
$
|
5.02
|
|
|
|
|
6/30/2016
|
|
|
$
|
13.97
|
|
|
$
|
7.30
|
|
The following table presents the closing per share sales price of Elizabeth Arden common stock, as reported on
NASDAQ on June 16, 2016 the last full trading day before the public announcement of the merger, and on July 7. 2016, the last full trading day before the filing of this proxy statement:
|
|
|
|
|
Date
|
|
Closing per
Share Price
|
|
June 16, 2016
|
|
$
|
9.31
|
|
July 7, 2016
|
|
$
|
13.82
|
|
You are encouraged to obtain current market prices of Elizabeth Arden common stock in connection with voting
your shares. Following the merger, there will be no further market for Elizabeth Arden common stock, and Elizabeth Arden common stock will be delisted from NASDAQ and deregistered under the Exchange Act.
Elizabeth Arden has not declared any cash dividends on Elizabeth Arden common stock since Elizabeth Arden became a beauty products company in
1995, and Elizabeth Arden currently has no plans to declare dividends on Elizabeth Arden common stock in the foreseeable future. Any future determination by the Board to pay dividends on Elizabeth Arden common stock will be made only after
considering Elizabeth Ardens financial condition, results of operations, capital requirements and other relevant factors. Elizabeth Ardens revolving credit facility, the second lien facility and the indenture relating to the 7 3/8%
senior notes due 2021 restrict Elizabeth Ardens ability to pay cash dividends based upon its ability to satisfy certain financial covenants, including having a certain amount of borrowing capacity and satisfying a fixed charge coverage ratio
after the payment of the dividends. In addition, no cash dividend may be declared or paid on Elizabeth Arden common stock or other classes of stock over which the Elizabeth Arden preferred stock has preference unless full cumulative dividends have
been or contemporaneously are declared and paid in cash on the Elizabeth Arden preferred stock.
97
STOCK OWNERSHIP
We have listed below, as of August 4, 2016 (except as otherwise indicated), the beneficial ownership of Elizabeth Arden common stock by
(i) each of our directors, (ii) each of our named executive officers, (iii) all of our directors and executive officers as a group and (iv) each person known by Elizabeth Arden to be the beneficial owner of more than
5% of the number of outstanding shares of Elizabeth Arden common stock. The table is based on information we received from the directors, executive officers and filings made with the SEC as of August 4, 2016. We are not aware of any other beneficial
owner of more than 5% of the number of outstanding shares of Elizabeth Arden common stock as of August 4, 2016. Unless otherwise indicated, each of our directors and named executive officers has (i) the same business address as
Elizabeth Arden and (ii) sole investment and voting power over all of the shares that he or she beneficially owns. All share numbers have been rounded to the nearest whole number.
|
|
|
|
|
|
|
|
|
Name and Address of Beneficial Owner
|
|
Amount and Nature
of Beneficial Ownership
(1)
|
|
|
Percentage
of Class
|
|
E. Scott Beattie(2)
|
|
|
1,930,416
|
|
|
|
6.3
|
%
|
M. Steven Langman(3)
|
|
|
4,705
|
|
|
|
*
|
|
Fred Berens(4)
|
|
|
826,005
|
|
|
|
2.7
|
%
|
Franz-Ferdinand Buerstedde(5)
|
|
|
4,705
|
|
|
|
*
|
|
Maura J. Clark(6)
|
|
|
52,205
|
|
|
|
*
|
|
William M. Tatham(7)
|
|
|
56,540
|
|
|
|
*
|
|
Edward D. Shirley(8)
|
|
|
4,705
|
|
|
|
*
|
|
Eric Lauzat(9)
|
|
|
51,199
|
|
|
|
*
|
|
Rod R. Little(10)
|
|
|
45,856
|
|
|
|
*
|
|
Pierre Pirard(11)
|
|
|
127,211
|
|
|
|
*
|
|
Rhône Capital L.L.C. and Affiliates(12)
|
|
|
6,537,164
|
|
|
|
20.2
|
%
|
NWQ Investment Management Company LLC(13)
|
|
|
2,590,623
|
|
|
|
8.6
|
%
|
M&G Investment Management Limited and M&G Investment Funds 1(14)
|
|
|
3,050,564
|
|
|
|
10.2
|
%
|
The Vanguard Group(15)
|
|
|
1,687,694
|
|
|
|
5.6
|
%
|
All directors and current executive officers as a group (13 persons)(16)
|
|
|
3,253,303
|
|
|
|
10.5
|
%
|
*
|
Less than one percent of the class.
|
(1)
|
Includes, where applicable, shares of common stock issuable upon the vesting of restricted stock units, stock options and/or warrants that are scheduled to vest or that may be exercised within 60 days after July 5,
2016, except as otherwise noted below.
|
(2)
|
Includes (i) 996,087 shares of common stock, (ii) 184,029 shares of common stock held in a family trust for which Mr. Beatties spouse is the trustee, (iii) 125,533 restricted stock units that are scheduled to vest
in August 2016, and (iv) 624,767 shares of common stock issuable upon the exercise of stock options. Of these shares of common stock, 993,339 shares are held by brokers in margin accounts, regardless of whether loans are outstanding.
|
(3)
|
Mr. Langman has an understanding with entities affiliated with Rhône Capital L.L.C. pursuant to which he holds his reported securities for the benefit of entities affiliated with Rhône Capital L.L.C. As such,
Mr. Langman disclaims beneficial ownership of these securities.
|
(4)
|
Includes (i) 788,405 shares of common stock, (ii) 100 shares of common stock held in a custodial account for one of Mr. Berens children, and (iii) 37,500 shares of common stock issuable upon the exercise of stock
options. Of these shares of common stock, no shares are held by brokers in margin accounts.
|
(5)
|
Mr. Buerstedde has an understanding with entities affiliated with Rhône Capital L.L.C. pursuant to which he holds his reported securities for the benefit of entities affiliated with Rhône Capital L.L.C. As
such, Mr. Buerstedde disclaims beneficial ownership of these securities.
|
98
(6)
|
Includes (i) 14,705 shares of common stock and (ii) 37,500 shares of common stock issuable upon the exercise of stock options.
|
(7)
|
Includes (i) 13,535 shares of common stock owned individually by Mr. Tatham, (ii) 4,555 shares of common stock owned by Mr. Tathams spouse, (iii) 950 shares of common stock owned by a family holding company of
which Mr. Tatham is president and director, and (iv) 37,500 shares of common stock issuable upon the exercise of stock options. Mr. Tatham disclaims beneficial ownership as to the shares of common stock owned by his spouse and the family holding
company.
|
(8)
|
Includes 4,705 shares of common stock.
|
(9)
|
Includes (i) 5,200 shares of common stock, (ii) 17,666 restricted stock units that are scheduled to vest in August 2016, and (iii) 28,333 shares of common stock issuable upon the exercise of stock options.
|
(10)
|
Includes (i) 2,857 shares of common stock, (ii) 16,799 restricted stock units that are scheduled to vest in August 2016, and (iii) 26,200 shares of common stock issuable upon the exercise of stock options.
|
(11)
|
Includes (i) 40,212 shares of common stock, (ii) 23,800 restricted stock units that are scheduled to vest in August 2016, and (iii) 63,199 shares of common stock issuable upon the exercise of stock options.
|
(12)
|
Includes (i) 4,064,087 shares of common stock, (ii) 2,452,267 shares of common stock issuable upon the exercise of warrants held by entities affiliated with Rhône Capital L.L.C. (
Rhône
Capital
), (iii) grants of Restricted Stock Units covering 11,400 shares of common stock, which are scheduled to vest in December 2018, to persons who are managing directors of Rhône Group L.L.C. and, at the time of grant,
directors of Elizabeth Arden, and (iv) 9,410 shares of common stock issued to persons who are managing directors of Rhône Group L.L.C. and, at the time of grant, directors of Elizabeth Arden, as reported in public filings available on or prior
to July 5, 2015. With respect to items (iii) and (iv), these persons each have an understanding with entities affiliated with Rhône Capital pursuant to which they each hold reported securities for the benefit of entities affiliated with
Rhône Capital L.L.C.
|
(13)
|
Based on Amendment No. 11 to Schedule 13G dated June 30, 2016, filed by NWQ Investment Management Company, LLC, which reflects sole dispositive power with respect to 2,590,623 shares of common stock and sole voting
power with respect to 2,590,445 shares of common stock. The address of NWQ Investment Management Company, LLC is 2049 Century Park East, 16th Floor, Los Angeles, CA 90067.
|
(14)
|
Based on Amendment No. 10 to Schedule 13G dated December 31, 2015, filed by M&G Investment Management Limited and M&G Investment Funds (1), which reflects shared voting and dispositive power held by each of
M&G Investment Management Limited and M&G Investment Funds 1 with respect to 3,050,564 shares of common stock. The address of M&G Investment Management Limited and M&G Investment Funds 1 is Governors House, Laurence Pountney
Hill, London EC4R 0HH, United Kingdom.
|
(15)
|
Based on Schedule 13G filing dated December 31, 2015, filed by The Vanguard Group which reflects (i) sole voting power with respect to 31,738 shares of common stock; (ii) sole dispositive power with respect to
1,657,456 shares of common stock; and (iii) shared dispositive power with respect to 30,238 shares of common stock. The address of The Vanguard Group is 100 Vanguard Boulevard, Malvern, PA 19355.
|
(16)
|
Includes (i) 2,116,806 shares of common stock and (ii) 204,965 restricted stock units that are scheduled to vest in August 2016, and (iii) 931,532 shares of common stock issuable upon exercise of stock options. Of these
shares of common stock, 993,339 shares are held by brokers in margin accounts, regardless of whether loans are outstanding.
|
99
THIS PROXY STATEMENT DOES NOT
CONSTITUTE THE SOLICITATION OF A PROXY IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM OR FROM WHOM IT IS UNLAWFUL TO MAKE SUCH PROXY SOLICITATION IN THAT JURISDICTION. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE
IN THIS PROXY STATEMENT TO VOTE YOUR SHARES AT THE SPECIAL MEETING. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS PROXY STATEMENT. THIS PROXY STATEMENT IS DATED AUGUST 5, 2016. YOU
SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROXY STATEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THAT DATE, AND THE MAILING OF THIS PROXY STATEMENT TO SHAREHOLDERS SHALL NOT CREATE ANY IMPLICATION TO THE CONTRARY.
103
Annex A
EXECUTION VERSION
AGREEMENT
AND PLAN OF MERGER
by and among
REVLON, INC.,
REVLON CONSUMER
PRODUCTS CORPORATION,
RR TRANSACTION CORP.
and
ELIZABETH ARDEN, INC.
Dated as of June 16, 2016
TABLE OF CONTENTS
|
|
|
|
|
|
|
ARTICLE I DEFINITIONS
|
|
|
A-1
|
|
|
|
|
Section 1.1
|
|
Definitions
|
|
|
A-1
|
|
|
|
ARTICLE II THE OFFER AND THE MERGER
|
|
|
A-2
|
|
|
|
|
Section 2.1
|
|
The Merger
|
|
|
A-2
|
|
Section 2.2
|
|
Closing
|
|
|
A-2
|
|
Section 2.3
|
|
Effective Time
|
|
|
A-2
|
|
Section 2.4
|
|
Surviving Corporation Articles of Incorporation and By-laws
|
|
|
A-2
|
|
Section 2.5
|
|
Surviving Corporation Board of Directors
|
|
|
A-2
|
|
Section 2.6
|
|
Officers
|
|
|
A-3
|
|
|
|
ARTICLE III EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF
CERTIFICATES
|
|
|
A-3
|
|
|
|
|
Section 3.1
|
|
Effect of the Merger on Securities
|
|
|
A-3
|
|
Section 3.2
|
|
Exchange of Certificates
|
|
|
A-3
|
|
Section 3.3
|
|
Stock Options and Restricted Stock Units
|
|
|
A-5
|
|
Section 3.4
|
|
Series A Serial Preferred Stock and Nightingale Warrants
|
|
|
A-6
|
|
Section 3.5
|
|
Debt Offer
|
|
|
A-6
|
|
Section 3.6
|
|
Lost Certificates
|
|
|
A-6
|
|
Section 3.7
|
|
Transfers; No Further Ownership Rights
|
|
|
A-6
|
|
Section 3.8
|
|
Withholding Rights
|
|
|
A-7
|
|
|
|
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY
|
|
|
A-7
|
|
|
|
|
Section 4.1
|
|
Organization and Qualification; Subsidiaries
|
|
|
A-7
|
|
Section 4.2
|
|
Articles of Incorporation and By-Laws
|
|
|
A-7
|
|
Section 4.3
|
|
Capitalization
|
|
|
A-8
|
|
Section 4.4
|
|
Authority Relative to Agreement
|
|
|
A-9
|
|
Section 4.5
|
|
No Conflict; Required Filings and Consents
|
|
|
A-9
|
|
Section 4.6
|
|
Company Products
|
|
|
A-10
|
|
Section 4.7
|
|
Permits and Licenses; Compliance with Legal Requirements
|
|
|
A-10
|
|
Section 4.8
|
|
Company SEC Documents
|
|
|
A-11
|
|
Section 4.9
|
|
Disclosure Controls and Procedures
|
|
|
A-11
|
|
Section 4.10
|
|
Absence of Certain Changes or Events
|
|
|
A-12
|
|
Section 4.11
|
|
No Undisclosed Liabilities
|
|
|
A-12
|
|
Section 4.12
|
|
Inventory
|
|
|
A-12
|
|
Section 4.13
|
|
Product Returns, Allowances, Etc
|
|
|
A-12
|
|
Section 4.14
|
|
Absence of Litigation
|
|
|
A-12
|
|
Section 4.15
|
|
Employee Benefit Plans
|
|
|
A-13
|
|
Section 4.16
|
|
Labor Matters
|
|
|
A-14
|
|
Section 4.17
|
|
Intellectual Property
|
|
|
A-14
|
|
Section 4.18
|
|
Taxes
|
|
|
A-15
|
|
Section 4.19
|
|
Material Contracts
|
|
|
A-16
|
|
Section 4.20
|
|
Opinion of Financial Advisor
|
|
|
A-17
|
|
Section 4.21
|
|
Brokers
|
|
|
A-17
|
|
Section 4.22
|
|
Real Property
|
|
|
A-17
|
|
Section 4.23
|
|
Insurance
|
|
|
A-18
|
|
Section 4.24
|
|
Environmental
|
|
|
A-18
|
|
Section 4.25
|
|
Takeover Statutes
|
|
|
A-19
|
|
Section 4.26
|
|
Company Affiliate Transactions
|
|
|
A-19
|
|
Section 4.27
|
|
Business Relationships
|
|
|
A-19
|
|
Section 4.28
|
|
Foreign Asset Control Regulations; Anti-Corruption and Anti-Bribery Laws
|
|
|
A-19
|
|
A-i
|
|
|
|
|
|
|
Section 4.29
|
|
Vote Required
|
|
|
A-20
|
|
Section 4.30
|
|
Information Supplied
|
|
|
A-20
|
|
Section 4.31
|
|
No Other Representations or Warranties
|
|
|
A-20
|
|
|
|
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION SUB
|
|
|
A-21
|
|
|
|
|
Section 5.1
|
|
Organization and Qualification; Subsidiaries
|
|
|
A-21
|
|
Section 5.2
|
|
Certificate of Incorporation, By-Laws, and Other Organizational Documents
|
|
|
A-21
|
|
Section 5.3
|
|
Authority Relative to Agreement
|
|
|
A-21
|
|
Section 5.4
|
|
No Conflict; Required Filings and Consents
|
|
|
A-21
|
|
Section 5.5
|
|
Absence of Litigation
|
|
|
A-22
|
|
Section 5.6
|
|
Financing
|
|
|
A-22
|
|
Section 5.7
|
|
Capitalization of Acquisition Sub
|
|
|
A-23
|
|
Section 5.8
|
|
Brokers
|
|
|
A-23
|
|
Section 5.9
|
|
Parent Ownership of Company Securities; FBCA Section 607.0901
|
|
|
A-23
|
|
Section 5.10
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Information Supplied
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A-24
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Section 5.11
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Acknowledgement of Disclaimer of Other Representations and Warranties
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A-24
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ARTICLE VI COVENANTS AND AGREEMENTS
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A-24
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Section 6.1
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Conduct of Business by the Company Pending the Merger
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A-24
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Section 6.2
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Appropriate Action; Consents; Filings
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A-27
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Section 6.3
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Access to Information; Confidentiality
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A-28
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Section 6.4
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Stockholder Meeting; Proxy Statement
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A-29
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Section 6.5
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Solicitation; Change of Recommendation
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A-31
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Section 6.6
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Directors and Officers Indemnification and Insurance
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A-35
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Section 6.7
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Notification of Certain Matters
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A-36
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Section 6.8
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Public Announcements
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A-37
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Section 6.9
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Employee Matters
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A-37
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Section 6.10
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Financing
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A-39
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Section 6.11
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Financing Cooperation
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A-40
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Section 6.12
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Acquisition Sub
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A-43
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Section 6.13
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No Control of the Companys Business
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A-43
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Section 6.14
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Rule 16b-3
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A-43
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Section 6.15
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Stockholder Litigation
|
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A-43
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Section 6.16
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Stock Exchange De-listing
|
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A-43
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Section 6.17
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State Takeover Laws
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A-43
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Section 6.18
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Treatment of Certain Indebtedness
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A-43
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ARTICLE VII CONDITIONS TO THE MERGER
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A-45
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Section 7.1
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Conditions to the Obligations of Each Party
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A-45
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Section 7.2
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Conditions to the Obligations of Parent and Acquisition Sub
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A-45
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Section 7.3
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Conditions to the Obligations of the Company
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A-46
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Section 7.4
|
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Frustration of Closing Conditions
|
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A-46
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ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER
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A-46
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Section 8.1
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Termination
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A-46
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Section 8.2
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Effect of Termination
|
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A-47
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Section 8.3
|
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Termination Fees
|
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A-48
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Section 8.4
|
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Exclusive Remedy
|
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A-48
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Section 8.5
|
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Expenses; Transfer Taxes
|
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A-49
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ARTICLE IX GENERAL PROVISIONS
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A-50
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Section 9.1
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Non-Survival of Representations, Warranties and Agreements
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A-50
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Section 9.2
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Notices
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A-50
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A-ii
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Section 9.3
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Interpretation; Certain Definitions
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A-51
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Section 9.4
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Amendment
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A-51
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Section 9.5
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Waiver
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A-51
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Section 9.6
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Severability
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A-52
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Section 9.7
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Assignment
|
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A-52
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Section 9.8
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Entire Agreement; No Third-Party Beneficiaries
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A-52
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Section 9.9
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Governing Law
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A-52
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Section 9.10
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Specific Performance
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A-53
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Section 9.11
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Consent to Jurisdiction
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A-53
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Section 9.12
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Counterparts
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A-54
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Section 9.13
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WAIVER OF JURY TRIAL
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A-54
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Appendix A
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A-57
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A-iii
THIS AGREEMENT AND PLAN OF MERGER, dated as of June 16, 2016 (this
Agreement
),
is made by and among Revlon, Inc., a Delaware corporation (
Ultimate Parent
), Revlon Consumer Products Corporation, a Delaware corporation and wholly-owned subsidiary of Ultimate Parent (
Operating Parent
and,
collectively with Ultimate Parent,
Parent
), RR Transaction Corp., a Florida corporation and a wholly owned direct subsidiary of Operating Parent (
Acquisition Sub
), and Elizabeth Arden, Inc., a Florida
corporation (the
Company
).
WITNESSETH
WHEREAS, the respective boards of directors of Parent and Acquisition Sub have each unanimously (i) determined that it is in the best
interests of their respective stockholders for Parent to acquire the Company on the terms and subject to the conditions set forth herein, (ii) approved and declared advisable the merger of Acquisition Sub with and into the Company (the
Merger
) upon the terms and subject to the conditions set forth in this Agreement and in accordance with the Florida Business Corporation Act (the
FBCA
) and (iii) adopted this Agreement and approved the
execution, delivery and performance of this Agreement by Parent and Acquisition Sub and the consummation of the transactions contemplated hereby, including the Merger;
WHEREAS, the Company Board, at a meeting duly called and held prior to the execution of this Agreement, duly and unanimously, by all those
directors in attendance, (i) determined that this Agreement and the transactions contemplated hereby, including the Merger, are fair, advisable and in the best interest of the Company and its shareholders, (ii) approved and adopted this
Agreement and the transactions contemplated hereby, including the Merger, upon the terms and subject to the conditions set forth in this Agreement and in accordance with the FBCA, and (iii) determined to recommend that the shareholders of the
Company approve this Agreement and the Merger on the terms and subject to the conditions of this Agreement;
WHEREAS, on or prior to the
date hereof, the Company, Nightingale Onshore Holdings L.P. and Nightingale Offshore Holdings L.P. have executed and delivered a Preferred Stock Repurchase and Warrant Cancellation Agreement (the
Nightingale Agreement
) pursuant to
which each of Nightingale Onshore Holdings L.P. and Nightingale Offshore Holdings L.P. (collectively,
Nightingale
) agreed to (x) require the Company to repurchase each share of Series A Serial Preferred Stock held by Nightingale
on the terms set forth in the Nightingale Agreement (the
Series A Serial Preferred Stock Transactions
) and (y) consent to the cancellation by the Company of the Nightingale Warrants, in each case on the Closing Date; and
WHEREAS, on or prior to the date hereof, and as a condition and inducement to the willingness of Parent and Acquisition Sub to enter into this
Agreement and to consummate the transaction contemplated hereby, Nightingale and certain other stockholders of the Company have each executed and delivered to Parent and Acquisition Sub a support agreement pursuant to which such persons have agreed,
among other things, to vote such shares in favor of the Merger (each, a
Voting Agreement
).
NOW, THEREFORE, in
consideration of the foregoing and the mutual representations, warranties and covenants and subject to the conditions herein contained, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1
Definitions
. Defined terms used in this Agreement have the meanings ascribed to them by definition in
this Agreement or in
Appendix
A
.
A-1
ARTICLE II
THE OFFER AND THE MERGER
Section 2.1
The Merger
. Upon the terms and subject to the conditions of this Agreement, and in accordance with the FBCA, at the
Effective Time, Acquisition Sub shall be merged with and into the Company, whereupon the separate existence of Acquisition Sub shall cease, and the Company shall continue under the name Elizabeth Arden, Inc. as the surviving corporation
(the
Surviving Corporation
) and shall continue to be governed by the laws of the State of Florida.
Section 2.2
Closing
. The closing of the Merger (the
Closing
) will take place at 10:00 A.M. New York time on the third (3rd) Business Day following the satisfaction or waiver of all the conditions (other than any condition that by
its nature cannot be satisfied until the Closing, but subject to satisfaction or waiver of any such condition) set forth in
Article VII
hereof, at the offices of Milbank, Tweed, Hadley & McCloy LLP, 28 Liberty Street, New York, New
York 10005, unless another time, date or place is agreed to in writing by the parties hereto (the date of the Closing being the
Closing Date
);
provided
,
however
, that, notwithstanding the satisfaction or waiver of
the conditions set forth in
Article VII
, if the Marketing Period has not ended at the time of the satisfaction or waiver of such conditions, the Closing shall occur instead on the earlier to occur of (a) a Business Day during the Marketing
Period specified by Parent on no less than three (3) Business Days written notice to the Company and (b) three (3) Business Days after the final day of the Marketing Period (subject in each case to the satisfaction or waiver of the conditions
set forth in
Article VII
(other than any condition that by its nature cannot be satisfied until the Closing, but subject to the satisfaction or waiver of any such condition) as of the date determined pursuant to this proviso), or such
other date, time, or place as agreed to in writing by the parties hereto.
Section 2.3
Effective Time
.
(a) Concurrently with the Closing, the Company, Parent and Acquisition Sub shall cause the Merger to be consummated by filing
articles of merger (the
Articles of Merger
) with respect to the Merger to be executed and filed with the Department of State of the State of Florida (the
Department of State
) as provided under the FBCA. The
Merger shall become effective on the date and time at which the Articles of Merger has been duly filed with the Department of State or at such later date and time as is agreed between the parties and specified in the Articles of Merger (such date
and time being hereinafter referred to as the
Effective Time
).
(b) From and after the Effective Time,
the Surviving Corporation shall possess all properties, rights, privileges, powers and franchises of the Company and Acquisition Sub, and all of the claims, obligations, liabilities, debts and duties of the Company and Acquisition Sub shall become
the claims, obligations, liabilities, debts and duties of the Surviving Corporation.
Section 2.4
Surviving Corporation Articles of
Incorporation and By-laws
. Subject to
Section
6.6
of this Agreement, at the Effective Time, the articles of incorporation and the by-laws of the Surviving Corporation shall be amended to be in the form of the
articles of incorporation and by-laws of Acquisition Sub, except that the name of the Surviving Corporation shall be Elizabeth Arden, Inc., until thereafter amended in accordance with applicable Legal Requirements and the applicable
provisions of such articles of incorporation and by-laws.
Section 2.5
Surviving Corporation Board of
Directors
. Subject to applicable Legal Requirements, each of the parties hereto shall take all necessary action to ensure that the board of directors of the Surviving Corporation effective as of, and immediately following, the Effective
Time shall consist of the members of the board of directors of Acquisition Sub immediately prior to the Effective Time, each to hold office in accordance with the articles of incorporation and by-laws of the Surviving Corporation until their
respective successors shall have been duly elected, designated or qualified, or until their earlier death, resignation or removal in accordance with the articles of incorporation and by-laws of the Surviving Corporation.
A-2
Section 2.6
Officers
. From and after the Effective Time, the officers of the
Company at the Effective Time, or such other persons as Parent shall select prior to the Effective Time in its sole discretion, shall be the officers of the Surviving Corporation, until their respective successors are duly elected or appointed and
qualified in accordance with applicable Legal Requirements.
ARTICLE III
EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF CERTIFICATES
Section 3.1
Effect of the Merger on Securities
. At the Effective Time, by virtue of the Merger and without any action on
the part of the Company, Acquisition Sub or the holders of any securities of the Company or Acquisition Sub:
(a)
Cancellation of Company Securities
. Each share of Common Stock held by the Company as treasury stock or held by Parent or Acquisition Sub immediately prior to the Effective Time shall automatically be canceled and retired and shall cease
to exist, and no consideration or payment shall be delivered in exchange therefor or in respect thereof.
(b)
Conversion of Company Securities
. Except as otherwise provided in this Agreement, each share of Common Stock
issued and outstanding immediately prior to the Effective Time (other than shares canceled pursuant to
Section
3.1(a)
hereof) shall be converted into the right to receive $14.00 in cash, without interest, less any required
withholding Taxes (the
Merger Consideration
), subject to
Section 3.1(d)
. The holders of certificates or book-entry shares which immediately prior to the Effective Time represented such Common Stock (respectively, the
Certificates
and
Book-Entry Shares
) shall cease to have any rights with respect to such Common Stock other than the right to receive the Merger Consideration in accordance with
Section
3.2
of this Agreement.
(c)
Conversion of Acquisition Sub Capital Stock
. At
the Effective Time, by virtue of the Merger and without any action on the part of the holder thereof, each share of common stock, par value $0.01 per share, of Acquisition Sub issued and outstanding immediately prior to the Effective Time shall
be converted into and become one (1) validly issued, fully paid and nonassessable share of common stock, par value $0.01 per share, of the Surviving Corporation and constitute the only outstanding shares of capital stock of the Surviving
Corporation.
(d)
Adjustments
. Without limiting the other provisions of this Agreement and other than as
contemplated by this Agreement, if at any time during the period between the date of this Agreement and the Effective Time, any change in the number of outstanding shares of Common Stock shall occur as a result of a reclassification,
recapitalization, stock split (including a reverse stock split), or combination, exchange or readjustment of shares, or any stock dividend or stock distribution with a record date during such period (other than cash dividends paid on the Series A
Serial Preferred Stock pursuant to
Section 6.1(c)
of this Agreement), the Merger Consideration shall be equitably adjusted to reflect such change to provide Parent and the holders of Common Stock the same economic benefit as contemplated
by this Agreement prior to any such event;
provided
that the Company may not effect such change except as permitted by this Agreement.
Section 3.2
Exchange of Certificates
.
(a)
Designation of Paying Agent; Deposit of Exchange Fund
. Prior to the Effective Time, Parent shall designate a
national bank or trust company as paying agent (the
Paying Agent
), the identity and the terms of appointment of which shall be reasonably acceptable to the Company, for the payment of the Merger Consideration as provided in
Section
3.1(b)
. Parent shall pay the fees and expenses of the Paying Agent. At or before the filing of the Articles of Merger with the Department of State, Parent shall deposit, or cause to be deposited with the Paying
Agent, cash constituting an amount equal to the Total Common Merger Consideration (all cash deposited with the Paying Agent, the
Exchange Fund
). In the event the Exchange
A-3
Fund shall be insufficient for the Paying Agent to promptly pay the cash amounts contemplated by
Section
3.1(b)
, Parent shall promptly deposit, or cause to be deposited,
additional funds with the Paying Agent in an amount which is equal to the deficiency in the amount required to make such payment. The Paying Agent shall cause the Exchange Fund to be (i) held for the benefit of the holders of Common Stock
and (ii) applied promptly to making the payments pursuant to
Section
3.2(c)
hereof. The Exchange Fund shall not be used for any purpose other than to fund payments pursuant to
Section
3.2(c)
, except as expressly provided for in this Agreement.
(b) As promptly as
practicable following the Effective Time and in any event not later than the third (3rd) Business Day thereafter, the Surviving Corporation shall cause the Paying Agent to mail to each holder of record of a Certificate or Book-Entry Shares that
immediately prior to the Effective Time represented outstanding shares of Common Stock (i) a letter of transmittal in customary form, which shall specify that delivery shall be effected, and risk of loss and title to the Certificates or
Book-Entry Shares, as applicable, shall pass, only upon proper delivery of the Certificates (or affidavits of loss in lieu thereof) or Book-Entry Shares to the Paying Agent and which shall be in the form and have such other provisions as Parent and
the Company may reasonably specify and/or (ii) instructions for use in effecting the surrender of the Certificates or Book-Entry Shares in exchange for the Merger Consideration into which the number of shares of Common Stock previously
represented by such Certificate or Book-Entry Shares shall have been converted pursuant to this Agreement (which instructions shall be in the form and have such other provisions as Parent and the Company may reasonably specify).
(c) Upon surrender of a Certificate (or Affidavit of Loss in lieu thereof) or Book-Entry Shares for cancellation to the Paying
Agent, together with a letter of transmittal duly completed and validly executed in accordance with the instructions thereto, and such other documents as may be required pursuant to the instructions, the holder of such Certificate or Book-Entry
Shares shall be entitled to receive in exchange therefor an amount in cash equal to the product obtained by multiplying (x) the aggregate number of Common Stock represented by such Certificate or Book-Entry Shares that were converted into the
right to receive the Merger Consideration pursuant to
Section 3.1(b)
, by (y) the Merger Consideration (less any applicable withholding taxes payable in respect thereof), and such Certificate or Book-Entry Shares, as applicable, so
surrendered shall forthwith be cancelled. Notwithstanding the foregoing, no holder of Book-Entry Shares shall be required to deliver a Certificate or an executed letter of transmittal to the Paying Agent to receive the Merger Consideration that
such holder is entitled to receive pursuant to
Section
3.1(b)
;
provided
that such holder of Book-Entry Shares has delivered, or the Company shall possess, information sufficient to effect payment to such holder of
the Merger Consideration that such holder is entitled to receive pursuant to
Section 3.1(b)
. Each registered holder of one or more Book-Entry Shares shall automatically, subject to the proviso in the immediately preceding sentence, upon the
Effective Time be entitled to receive in exchange therefor an amount in cash equal to the product obtained by multiplying (x) the aggregate number of Common Stock represented by such holders Book-Entry Shares that were converted into the right
to receive the Merger Consideration pursuant to
Section 3.1(b)
by (y) the Merger Consideration (less any applicable withholding taxes payable in respect thereof), and the Book-Entry Shares shall forthwith be cancelled. The Paying Agent
shall accept such Certificates (or affidavits of loss in lieu thereof) or Book-Entry Shares upon compliance with such reasonable terms and conditions as the Paying Agent may impose to effect an orderly exchange thereof in accordance with normal
exchange practices. No interest shall be paid or accrued for the benefit of holders of the Certificates or Book-Entry Shares on the Merger Consideration payable upon the surrender of the Certificates or Book-Entry Shares. If payment of all
or any portion of the Merger Consideration in respect of cancelled Common Stock is to be made to a person other than the person in whose name surrendered Certificates or Book-Entry Shares are registered, it will be a condition to such payment that
the Certificates or Book-Entry Shares, as applicable, so surrendered will be properly endorsed or otherwise be in proper form for transfer and that the person requesting such payment shall have paid any transfer and other Taxes required by reason of
such payment in a name other than that of the registered holder of the Certificates or Book Entry Shares surrendered or shall have established to the satisfaction of the Paying Agent that such Tax is not applicable.
A-4
(d)
Termination of Exchange Fund
. Any portion of the Exchange Fund
which remains undistributed to the holders of the Certificates or Book-Entry Shares for twelve (12) months after the Effective Time shall be delivered to Parent, or its designee, upon demand, and any such holders prior to the Merger who have
not theretofore complied with this
Article
III
shall thereafter look only to Parent, or such designee, as general creditor thereof for payment of their claims for cash, without interest, to which such holders may be
entitled.
(e)
No Liability
. None of Parent, Acquisition Sub, the Company, the Surviving Corporation or the
Paying Agent shall be liable to any person in respect of any Merger Consideration properly delivered to a public official pursuant to any applicable abandoned property, escheat or similar Legal Requirement.
(f)
Investment of Exchange Fund
. The Paying Agent shall invest any cash included in the Exchange Fund as directed
by Parent or, after the Effective Time, the Surviving Corporation;
provided
that (i) no such investment shall relieve Parent or the Paying Agent from making the payments required by this
Article
III
, (ii) to the
extent that there are any losses with respect to any investments of the Exchange Fund, Parent shall, in accordance with
Section 3.2(a)
, promptly deposit, or cause to be deposited, additional funds with the Paying Agent for the benefit of the
holders of Common Stock in the amount of such losses, (iii) no such investment shall have maturities that could prevent or delay payments to be made pursuant to this Agreement, and (iv) such investments shall be in short-term obligations
of the United States of America with maturities of no more than thirty (30) days or guaranteed by the United States of America and backed by the full faith and credit of the United States of America or in commercial paper obligations rated A-l or
P-l or better by Moodys Investors Service, Inc. or Standard & Poors Corporation, respectively. Any interest or income produced by such investments will become a part of the Exchange Fund.
Section 3.3
Stock Options and Restricted Stock Units.
(a)
Treatment of Options
. As of the Effective Time, each Company Option that is outstanding and unexercised immediately
prior to the Effective Time (whether vested or unvested) shall be canceled by virtue of the Merger and without any action on the part of any holder of any Company Option, in consideration for the right to receive at or as promptly as practicable
following the Effective Time a cash payment, if any, with respect thereto equal to the product of (i) the number of shares of Common Stock subject to such Company Option immediately prior to the Effective Time and (ii) the excess, if any,
of the Merger Consideration over the exercise price per share of Common Stock subject to such Company Option immediately prior to the Effective Time, less any required withholding Taxes and without interest (the
Option Cash
Payment
). As of the Effective Time, all Company Options (whether vested or unvested) shall no longer be outstanding and shall automatically cease to exist, and each holder of a Company Option shall cease to have any rights with respect
thereto, except the right to receive the Option Cash Payment, if any. For the avoidance of doubt, if the exercise price per share of Common Stock subject to any Company Option equals or exceeds the Merger Consideration, then the holder of such
Company Option shall receive no consideration in respect thereof. Prior to the Effective Time, the Company shall take all actions necessary to effectuate this
Section
3.3(a)
.
(b)
Treatment of Restricted Share Units
. As of the Effective Time, each Restricted Share Unit outstanding immediately
prior to the Effective Time shall become fully vested and be converted into the right to receive at or as promptly as practicable following the Effective Time an amount in cash equal to the Merger Consideration, less any required withholding Taxes
and without interest (the
Restricted Unit Payment
). As of the Effective Time, all Restricted Share Units shall no longer be outstanding and shall automatically cease to exist, and each holder thereof shall cease to have any rights
with respect thereto, except the right to receive the Restricted Unit Payment. Notwithstanding anything herein to the contrary, all amounts payable in respect of a Restricted Share Unit shall be paid in accordance with the terms of the applicable
Company Plan and award agreement, except as may be (i) necessary to avoid the imposition of any additional Taxes or penalties in respect thereof pursuant to Section 409A of the Code, or (ii) required under a payment election made by an individual
award holder in respect of the applicable Restricted Share Unit. For purposes of the foregoing, each outstanding award of Restricted Share Units that is subject to a performance-based vesting requirement shall become fully vested and converted as
provided above based
A-5
upon the number of units at the target level of performance applicable to such award. Prior to the Effective Time, the Company shall take all actions necessary to effectuate this
Section 3.3(b)
.
(c) At or prior to the Closing, Parent shall deposit, or cause to be deposited, with the Company or
the Surviving Corporation, as applicable cash in the amount necessary to make the payments required under
Section
3.3(a)
and
Section 3.3(b)
. Parent shall cause the Surviving Corporation to make the payments
required under
Section
3.3(a)
and
Section 3.3(b)
at, or as promptly as practicable following, the Effective Time.
Section 3.4
Series A Serial Preferred Stock and Nightingale Warrants
. At the Closing and immediately prior to the Effective
Time, the Company shall (i) consummate the Series A Serial Preferred Stock Transactions and (ii) take all action necessary to cause the immediate cancellation of any outstanding Nightingale Warrants without payment of any consideration to the
holders of such Nightingale Warrants. At or prior to the Closing, Parent shall deposit, or cause to be deposited, with the Company, or pay on behalf of the Company, cash in the amount necessary to make the payments required pursuant to the
Series A Serial Preferred Stock Transactions.
Section 3.5
Debt Offer
. At the Closing, the Company shall (a) accept for
payment (with funds to be advanced or contributed by Parent) all Notes validly tendered and not withdrawn on or prior to the date of Closing pursuant to the Debt Offer, subject to the satisfaction or waiver of all conditions to the Debt Offer; and
(b) if Parent has not delivered to the Company a written request to commence the Debt Offer and Consent Solicitation pursuant to the first sentence of
Section 6.18(a)
(and has not itself commenced the Debt Offer and the Consent Solicitation),
or withdraws such request after it is given, or the Debt Offer is not consummated because a condition thereto has not been satisfied (provided that Parent has provided the documentation contemplated by
Section 6.18(b)
), (A) mail or cause to
be mailed a notice of redemption (the
Notice of Redemption
) to the holders of the Notes in accordance with Sections 3.03 and 3.07(c) of the Notes Indenture and Section 5(c) of the Notes, (B) irrevocably deposit (with funds to be
advanced or contributed by Parent) the Indenture Discharge Amount in trust with the Indenture Trustee pursuant to Section 11.01 of the Notes Indenture, (C) deliver to the Indenture Trustee irrevocable instructions to apply such deposited funds
toward the payment of the redemption price for the Notes on the redemption date specified in the Notice of Redemption in accordance with Section 11.02 of the Notes Indenture, (D) deliver to the Indenture Trustee the officers certificate and
opinion of counsel (which opinion shall be provided by Parent) specified in Section 12.04 of the Notes Indenture, and (E) request in writing that the Indenture Trustee acknowledge in writing the discharge of the Notes and the Notes Indenture with
respect to the Notes (the
Acknowledgment
);
provided
, that any failure of the Indenture Trustee to provide the Acknowledgment shall not constitute a breach by the Company of this
Section 3.5
.
Section 3.6
Lost Certificates
. If any Certificate shall have been lost, stolen or destroyed, then upon the making of an
Affidavit of Loss of that fact by the person claiming such Certificate to be lost, stolen or destroyed and, if required by the Surviving Corporation or the Paying Agent in their respective reasonable discretion, the posting by such person of a bond,
in such reasonable amount as the Surviving Corporation or the Paying Agent may direct, as indemnity against any claim that may be made against it with respect to such Certificate, the Paying Agent will issue in exchange for such lost, stolen or
destroyed Certificate the Merger Consideration to which the holder thereof is entitled pursuant to this
Article
III
.
Section 3.7
Transfers; No Further Ownership Rights
. From and after the Effective Time, the stock transfer books of the
Company will be closed and there shall be no registration of transfers on the stock transfer books of the Company of shares of Common Stock that were outstanding immediately prior to the Effective Time, and the holders of Certificates and Book-Entry
Shares will cease to have any rights with respect to any Common Stock, except as otherwise provided for in this Agreement or by applicable Legal Requirements. If Certificates are presented to the Surviving Corporation for transfer following the
Effective Time, they shall be canceled against delivery of the Merger Consideration, as provided for in this
Article
III
, for each share of Common Stock formerly represented by such Certificates. All cash paid upon the
surrender of Certificates or Book-Entry Shares in accordance with the terms of this
Article
III
shall be deemed to have been paid in full
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satisfaction of all rights pertaining to the shares of Common Stock formerly represented by such Certificates or Book-Entry Shares, subject, however, to Parent and the Surviving
Corporations obligation to pay any dividends or make any other distributions with a record date prior to the Effective Time which may have been authorized by the Company and which remain unpaid at the Effective Time.
Section 3.8
Withholding Rights
. Notwithstanding anything to the contrary contained herein, each of Parent, Acquisition Sub,
the Surviving Corporation and the Paying Agent shall be entitled to deduct and withhold from any amounts payable to the holders of Common Stock, Company Options and Restricted Share Units pursuant to this Agreement such amounts as it is required to
deduct and withhold with respect to the making of such payment under the Code, or any provision of state, local or non-U.S. tax Legal Requirements. To the extent that amounts are so deducted and withheld by or on behalf of Parent,
Acquisition Sub, the Surviving Corporation or the Paying Agent and paid over to the appropriate Governmental Authority, such deducted, withheld and paid over amounts shall be treated for all purposes of this Agreement as having been paid to the
person in respect of which such deduction and withholding was made.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except (i) as disclosed in any Company SEC Documents (including all exhibits and schedules thereto) filed with or furnished to the SEC on
or after June 30, 2013 and publicly available on the SECs Electronic Data Gathering, Analysis and Retrieval System as of the third (3rd) Business Day prior to the date hereof (excluding disclosures, statements or other information contained in
the Forward-Looking Statements or Risk Factors sections thereof that are predictive, cautionary or forward looking in nature) or (ii) as disclosed in the corresponding section of the separate disclosure letter which has
been delivered by the Company to Parent prior to the execution of this Agreement (the
Company Disclosure Letter
) (it being agreed that disclosure of any item in any section or subsection of the Company Disclosure Letter shall be
deemed disclosure with respect to any other section or subsection to which the relevance of such item is reasonably apparent on its face), the Company hereby represents and warrants to Parent as follows:
Section 4.1
Organization and Qualification; Subsidiaries
. Each of the Company and its subsidiaries (i) is a corporation or legal
entity duly organized or formed, validly existing and in good standing, under the laws of its jurisdiction of organization or formation, (ii) has the requisite corporate, partnership or limited liability company power and authority to own, lease and
operate its properties and to carry on its business as it is now being conducted, and (iii) is duly qualified or licensed as a foreign corporation to do business, and is in good standing, in each jurisdiction in which the character of the properties
owned, leased or operated by it or the nature of its business makes such qualification or licensing necessary, except, with respect to clause (i) only as it relates to the Companys subsidiaries and clauses (ii) and (iii), for any such failures
to have such power or authority or to be so qualified or licensed or in good standing, as would not have, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
Section 4.2
Articles of Incorporation and By-Laws
. The Company has made available to Parent a complete and correct copy of the
Company Articles of Incorporation and the By-laws, each as amended to date, of the Company. The Company Articles of Incorporation and the By-laws and the equivalent organizational documents of each of the Companys subsidiaries are in full
force and effect. None of the Companys subsidiaries is in violation of any provision of its respective articles or certificate of incorporation or by-laws (or equivalent organizational documents) except as would not have, and would not
reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. The Company is not in violation of any provision of the Company Articles of Incorporation or the By-laws except as would not, and would not
reasonably be expected to, result in material liability to Parent or the Company from and after the Closing or prevent or materially impede the consummation of the transactions contemplated by this Agreement.
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Section 4.3
Capitalization
.
(a) The authorized capital stock of the Company consists of 50,000,000 shares of Common Stock and 50,000 shares of
the Companys preferred stock, par value $0.01 per share (the
Preferred Stock
). As of June 9, 2016 (i) 29,949,317 shares of Common Stock were issued and outstanding, (ii) 50,000 shares of Preferred Stock were issued
and outstanding, (iii) 2,452,267 Nightingale Warrants exercisable for 2,452,267 shares of Common Stock were outstanding and (iv) 4,841,308 shares of Common Stock were held in treasury. As of the date hereof, there were 2,682,539 shares of
Common Stock authorized and reserved for future issuance under the Company Plan related to outstanding Stock Option and Restricted Share Unit grants, including 1,904,367 for outstanding Company Options and 778,172 outstanding Restricted Share Units.
Except as set forth above, as of the date hereof, no shares of capital stock of, or other equity or voting interests in, the Company, or options, warrants or other rights to acquire any such stock or securities were issued, reserved for issuance or
outstanding. From and after June 9, 2016 until and including the date hereof, no shares of capital stock of, or other equity or voting interests in, the Company have been issued except pursuant to the exercise of Company Options outstanding as of
June 9, 2016, or the settlement of Restricted Share Units outstanding as of June 9, 2016, and no options, warrants or other rights to acquire any such stock or securities have been issued. All outstanding shares of capital stock of the Company are,
and all shares that may be issued pursuant to the Company Plans will be, when issued in accordance with the terms thereof, duly authorized, validly issued, fully paid and non-assessable and not subject to preemptive rights. None of the
Companys subsidiaries owns any shares of Common Stock.
(b) Section 4.3(b) of the Company Disclosure Letter sets
forth a true and complete list, as of the close of business on June 9, 2016, of (i) (A) each outstanding Company Option and (B) each outstanding Restricted Share Unit (each, an
Equity Award
); (ii) the name of the
Equity Award holder; (iii) the number of shares of Common Stock underlying each Equity Award; (iv) the date on which each Equity Award was granted; (v) the exercise price of each Equity Award, in the case of Equity Awards that are
Company Options; and (vi) the expiration date of each Equity Award, in the case of Equity Awards that are Company Options.
(c) Except as set forth in
Section
4.3(a)
, there are no outstanding subscriptions, options, warrants,
puts, calls, convertible, or equity-linked securities or other similar rights, agreements, commitments or contracts of any kind to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound
obligating the Company or any of its subsidiaries to issue, deliver, repurchase, transfer or sell, or cause to be issued, delivered, repurchased, transferred or sold, additional shares of capital stock of, or other equity or voting interests in, or
securities convertible into, or exchangeable or exercisable for, or the value of which are determined based on the value of, shares of capital stock of, or other equity or voting interests in, the Company or any of its subsidiaries or obligating the
Company or any of its subsidiaries to issue, grant, extend or enter into any such security, option, warrant, put, call, right, agreement, commitment or contract. There are no voting trusts, Stockholder agreements, proxies, or other agreements
in effect with respect to the voting or transfer of the shares of any of the Company or any of its subsidiaries to which the Company or any of its subsidiaries is a party.
(d) There are no bonds, debentures, notes, or other Indebtedness of the Company having the right to vote (or convertible into,
or exchangeable for, securities having the right to vote) on any matters on which holders of Common Stock or common stock of any of the Companys subsidiaries may vote.
(e) All significant subsidiaries of the Company, as such term is defined in Section 1-02 of
Regulation S-X under the Exchange Act, and all entities listed on Exhibit 21 to the Companys annual report on Form 10-K for its fiscal year ended 2015, and their respective jurisdictions of organization are listed in
Section 4.3(e) of the Company Disclosure Letter. All the outstanding shares of capital stock of, or other equity interests in, each significant subsidiary have been validly issued and are fully paid and nonassessable and are owned, directly or
indirectly, by the Company free and clear of all Liens other than Permitted Liens. None of the Company or any of its subsidiaries own, directly or indirectly, any equity interests in any person other than the Companys subsidiaries.
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Section 4.4
Authority Relative to Agreement
.
(a) The Company has all necessary corporate power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the Merger and the other transactions contemplated hereby subject to, in the case of the consummation of the Merger, the adoption and approval of this Agreement and the transactions contemplated hereby at the
Stockholder Meeting (at which a quorum is present) by the affirmative vote of a majority of the Total Votes entitled to be cast at such meeting (and the affirmative vote of a majority of all votes entitled to be cast by the holders of the Series A
Serial Preferred Stock and the holders of Common Stock, voting as separate classes) (the
Company Stockholder Approval
) and the receipt of Nightingales consent pursuant to Section 1.3 of the Shareholders Agreement. Assuming
the accuracy of the representations set forth in
Section
5.9
, the execution and delivery of this Agreement by the Company and the consummation by the Company of the Merger and the other transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action, and no other corporate proceedings on the part of the Company or its stockholders are necessary to authorize the execution and delivery of this Agreement or to consummate the Merger
and the other transactions contemplated hereby (other than, with respect to the Merger, the receipt of the Company Stockholder Approval, and the filing of the Articles of Merger with the Department of State). This Agreement has been duly and
validly executed and delivered by the Company and, assuming the due authorization, execution and delivery by Parent and Acquisition Sub and the accuracy of the representations set forth in
Section
5.9
, this Agreement
constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms (except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and other similar Legal Requirement of general applicability relating to or affecting creditors rights, and by general equitable principles).
(b) The Company Board, at a meeting duly called and held prior to the execution of this Agreement, duly and unanimously, by all
those directors in attendance, (i) determined that this Agreement and the Merger and the other transactions contemplated hereby are fair to, and in the best interests of, the stockholders of the Company, (ii) approved and declared advisable this
Agreement, the Merger and the other transactions contemplated hereby, (iii) resolved to recommend adoption by the stockholders of the Company of this Agreement, the Merger and the transactions contemplated hereby on the terms and subject to the
conditions of this Agreement (such recommendation, the
Company Recommendation
) and (iv) took all other actions necessary to exempt the Voting Agreements, the Nightingale Agreement and, to the extent required, this Agreement and
the transactions contemplated hereby, from any fair price, moratorium, control share acquisition, interested shareholder, business combination, affiliated transaction or other
similar Legal Requirement, including Sections 607.0901 and 607.0902 of the FBCA, which resolutions, as of the date hereof, have not been subsequently withdrawn or modified in a manner adverse to Parent or Acquisition Sub. The Company has made
available to Parent prior to the date hereof a true, complete and correct copy of the final version of the resolutions by which the Company Board took the actions described in the prior sentence.
Section 4.5
No Conflict; Required Filings and Consents
.
(a) None of the execution and delivery of this Agreement by the Company, the consummation by the Company of the Merger or any
of the transactions contemplated by this Agreement, or the Companys compliance with any of the provisions of this Agreement will (with or without notice or lapse of time, or both), (i) assuming the accuracy of the representations and
warranties contained in
Section 5.9
, conflict with or violate the Company Articles of Incorporation or the By-laws or the equivalent organizational documents of the Companys subsidiaries, (ii) assuming receipt of the Company
Stockholder Approval and the consents, approvals and authorizations specified in
Section
4.5(b)
have been received and the waiting periods referred to therein have expired, and any condition precedent to such consent,
approval, authorization, or waiver has been satisfied, conflict with or violate any Legal Requirements applicable to the Company or any of its subsidiaries or by which any property or asset of the Company or any of its subsidiaries is bound or
affected, (iii) result in any breach of, or constitute a default (with or without notice
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or lapse of time, or both) under, or give rise in others any right of termination, amendment, acceleration or cancellation under any Company Material Contract or (iv) result in the creation of a
Lien, other than any Permitted Lien, upon any of the properties or assets of the Company or any of its subsidiaries pursuant to or under, any note, bond, mortgage, indenture, credit agreement or Company Material Contract to which the Company or any
of its subsidiaries is a party or by which the Company or any of its subsidiaries or any property or asset of the Company or any of its subsidiaries is bound or affected, other than, in the case of clauses (ii) through (iv), any such violation,
breach, conflict, default, termination, cancellation, acceleration or Lien that would not have, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(b) None of the execution and delivery of this Agreement by the Company, the consummation by the Company of the Merger or any
of the transactions contemplated by this Agreement, or the Companys compliance with any of the provisions of this Agreement will require (with or without notice or lapse of time, or both) any consent, approval, authorization, waiver or permit
of, or filing with or notification to, any Governmental Authority, except for (i) any such consent or approval set forth on Section 4.5(b) of the Company Disclosure Letter, (ii) applicable requirements under any international, federal or state
securities laws (including compliance with any applicable requirements of the Exchange Act, the Securities Act or Blue Sky Laws), (iii) applicable requirements under the HSR Act and other Antitrust Approvals, (iv) the filing of the
Articles of Merger under the FBCA and (v) applicable requirements of the rules of the NASDAQ, and except where failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not have, and
would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
Section 4.6
Company
Products
.
(a) Since June 30, 2013, neither the Company nor any of its subsidiaries has had any liability in
excess of $100,000 (excluding from such dollar threshold any amounts covered by any insurance policy of the Company or any of its subsidiaries) in connection with any individual claim or series of related claims, arising out of any injury to
individuals or property as a result of the ownership, possession, or use of any product sold or manufactured by or on behalf of the Company or any of its subsidiaries (each such product, a
Company Product
).
(b) Except as would not have, and would not reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect, since June 30, 2013, (i) all Company Products have been labeled, promoted, distributed, manufactured, sold and/or marketed in compliance with all requirements under applicable Legal Requirements and (ii) to the
Companys knowledge, neither the Company nor its subsidiaries has committed any act or failed to commit any act that would reasonably be expected to result in, and there has been no occurrence that would reasonably be expected to give rise to
or form the basis of, any product liability or product defect.
(c) Since June 30, 2013, neither the Company nor its
subsidiaries has been required by any Governmental Authority, or was required under applicable Legal Requirements, to make any recall or withdrawal of any Company Product.
(d) Except as would not have, and would not reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect, since June 30, 2013, the Company has not received any written inspection requests, inspection reports or other written correspondence from any Governmental Authority that asserts or alleges that the operation of the Company
or any of its subsidiaries is or was not or may not be in compliance with any applicable Legal Requirements.
Section 4.7
Permits
and Licenses; Compliance with Legal Requirements
.
(a) Each of the Company and its subsidiaries is in
possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals and orders necessary for the Company or any of its subsidiaries to own, lease and operate the properties of
the Company and its subsidiaries or to carry on its business as it is now being conducted (the
Company Permits
), and no
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suspension or cancellation of any of the Company Permits is pending or, to the knowledge of the Company, threatened, except where the failure to have, or the suspension or cancellation of, any of
the Company Permits would not have, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. None of the Company or any of its subsidiaries is, and since June 30, 2013 has not been, in
conflict with, or in default or violation of, (i) any Legal Requirements applicable to the Company or any of its subsidiaries or by which any property or asset of the Company or any of its subsidiaries is bound or affected or (ii) any of
the Company Permits, except in each case for any such conflicts, defaults or violations that would not have, individually or in the aggregate, a Company Material Adverse Effect.
(b) Except where the failure to do so would not have, and would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, the Company and its subsidiaries maintain policies and procedures regarding data security and privacy that are in compliance with all applicable Legal Requirements, the Payment Card Industry Data
Security Standards and their obligations to customers. Since June 30, 2013, to the knowledge of the Company, there have been no security breaches relating to violations of any security policy regarding or any unauthorized access of any data or
information of the Companys Information Systems that have had, or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Except where the failure to do so would not have, and would not
reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, the use and dissemination by the Company and its subsidiaries of any and all data and information concerning individuals is in compliance with all
its/their privacy policies, Legal Requirements and the Payment Card Industry Data Security Standards.
Section 4.8
Company SEC
Documents
.
(a) Since June 30, 2013, the Company has filed with the SEC all material forms, documents and
reports required to be filed or furnished prior to the date hereof by it with the SEC (the
Company SEC Documents
). As of their respective dates, or, if amended or superseded by a filing prior to the date of this Agreement, as of
the date of such amendment or superseding filing, the Company SEC Documents complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the applicable rules and regulations promulgated
thereunder, and none of the Company SEC Documents at the time it was filed contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. Since June 30, 2013, no executive officer of the Company has failed to make the certifications required by him or her under Sections 302, 404 or 906 of the Sarbanes-Oxley
Act, with respect to any Company SEC Document, except as disclosed in certifications filed with the Company SEC Documents.
(b) The consolidated financial statements (including all related notes and schedules) of the Company included in the Company
SEC Documents fairly present in all material respects the consolidated financial position of the Company and its consolidated subsidiaries as at the respective dates thereof and their consolidated results of operations and consolidated cash flows
for the respective periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments, to the absence of notes and to any other adjustments described therein, including in any notes thereto) in conformity with
GAAP applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes thereto and, in the case of unaudited statements, as permitted by Form 10-Q of the SEC). The books and records of the Company and its
subsidiaries have been, and are being, maintained in all material respects in accordance with GAAP (to the extent applicable) and all other applicable accounting requirements and Legal Requirements. The Companys and its subsidiaries
revenue recognition and accounting for sales policies and practices fairly represent the actual sales and revenue of the Company and its subsidiaries for the periods indicated in the financial statements included in the Company SEC Documents.
Section 4.9
Disclosure Controls and Procedures
. The Company has established and maintains disclosure controls and procedures and
internal control over financial reporting (as such terms are defined in paragraphs (e)
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and (f), respectively, of
Rule 13a-15
under the Exchange Act) as required by Rule 13a-15 under the Exchange Act. The Companys disclosure
controls and procedures are designed to provide reasonable assurances that information required to be disclosed in the Companys periodic reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within
the time specified in the rules and forms of the SEC. Since June 30, 2013, to the Companys knowledge, the Company has not identified (a) any material weakness in the design or operation of internal control over financial reporting which
is reasonably likely to adversely affect the Companys ability to record, process, summarize and report financial information or (b) any fraud or allegation of fraud, whether or not material, that involves management or other employees who
have a significant role in the Companys internal control over financial reporting.
Section 4.10
Absence of Certain Changes or
Events
. From June 30, 2015 through the date of this Agreement, (i) except for the negotiation, execution and delivery of this Agreement, the businesses of the Company and its subsidiaries have been conducted in the ordinary course
of business consistent with past practice in all material respects and (ii) there has not been any event, development, occurrence, state of facts, circumstance, condition, effect or change that has had, or would reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect.
Section 4.11
No Undisclosed Liabilities
. Except
(a) to the extent disclosed, reflected, accrued or reserved against in the consolidated, unaudited balance sheet of the Company and its subsidiaries as of March 31, 2016 (including the notes thereto), (b) for liabilities or obligations
incurred in the ordinary course of business consistent with past practice since the date of such financial statements and (c) liabilities that are incurred in connection with the transactions contemplated by this Agreement, neither the Company nor
any of its subsidiaries has any liabilities or obligations of any nature, whether or not accrued, contingent or otherwise, that would have, or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
None of the Company nor any of its subsidiaries is a party to, or has any commitment to become a party to, any joint venture, off-balance sheet partnership or any similar contract or arrangement (including any contract or arrangement relating to any
transaction or relationship between or among the Company and any of its subsidiaries, on the one hand, and any unconsolidated Affiliate of any of them, including any structured finance, special purpose or limited purpose entity or person, on the
other hand), or any off-balance sheet arrangements (as defined in Item 303(a) of Regulation S-K under the Exchange Act), where the result, purpose or effect of such contract or arrangement is to avoid disclosure of any material
transaction involving, or material liabilities of, the Company or any of its subsidiaries in any Company SEC Document.
Section 4.12
Inventory
.
(a) The Inventory of the Company and its subsidiaries consists of manufactured and purchased
components and finished goods, and non-saleable marketing and promotional items, all of which are of a quality that is usable or saleable consistent with the Companys ordinary course of business, subject to established accounting reserves for
obsolescence and similar matters.
(b) All items included in the Inventory of the Company and its subsidiaries are the
property of the Company or its subsidiaries, as the case may be, free and clear of any Lien other than Permitted Liens.
(c) Since June 30, 2015, neither the Company nor any of its subsidiaries has engaged in any practice which had or has the
effect of, or is designed or intended to have the effect of, fraudulently increasing or accelerating the Companys or any of its subsidiaries sales or accounts receivable.
Section 4.13
Product Returns, Allowances, Etc
. Since June 30, 2015, the aggregate rate of Company Product returns,
discounts and allowances, has not differed in any manner materially more adverse to the Company or its subsidiaries, taken as a whole, as compared to the same year-to-date periods for the fiscal years ended June 30, 2014 and June 30, 2015.
Section 4.14
Absence of Litigation
. As of the date of this Agreement, there is no claim, charge, action, proceeding or
investigation pending or, to the knowledge of the Company, threatened against the Company or
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any of its subsidiaries, or any of their respective properties or assets at law, in equity or at the administrative level, and there are no Orders, before any arbitrator or Governmental
Authority, in each case as would have, or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
Section 4.15
Employee Benefit Plans
(a) Section 4.15(a) of the Company Disclosure Letter sets forth a true and complete list of each material Company Benefit
Plan, other than Company Benefit Plans which both (i) do not provide pension benefits and (ii) are not subject to or covered by the Legal Requirements of the United States or any political subdivision thereof. The Company has made available to
Parent and Acquisition Sub true and complete copies of (i) each material Company Benefit Plan (including all amendments thereto), whether or not such Company Benefit Plan is intended to be qualified under Section 401(a) of the Code; and
(ii) with respect to each material Company Benefit Plan, to the extent applicable, (A) the most recent annual report on Form 5500 and all schedules thereto filed with respect to such Company Benefit Plan; (B) the most recent
summary plan description and summary of material modifications, if applicable; (C) each current trust agreement, insurance contract or policy, group annuity contract and any other funding arrangement relating to such Company Benefit Plan;
(D) the most recent actuarial report, financial statement or valuation report; and (E) a current IRS opinion or favorable determination letter.
(b) Other than Company Benefit Plans which are not subject to or covered by the Legal Requirements of the United States or any
political subdivision thereof, each Company Benefit Plan has been operated and administered in accordance with its terms and all Legal Requirements, including ERISA and the Code, except for instances of non-compliance that would not, individually or
in the aggregate, reasonably be expected to result in a Company Material Adverse Effect. There are no actions, suits, audits or investigations by any Governmental Authority, termination proceedings or other claims (except routine claims for benefits
payable under the Company Benefit Plans in the ordinary course of business) pending or, to the knowledge of the Company, threatened, against or involving any Company Benefit Plan or asserting any rights to or claims for benefits under any Company
Benefit Plan, other than any such investigations, proceedings, or claims that would not have, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(c) None of the Company, any of its subsidiaries, nor any ERISA Affiliate maintains, sponsors, contributes to, is required to
contribute to, or has any actual or contingent liability with respect to any (i) Multiemployer Plan, (ii) plan or arrangement subject to Title IV or Section 302 of ERISA, or (iii) plan that has two or more contributing sponsors, at least
two of whom are not under common control, within the meaning of Section 4063 of ERISA.
(d) None of the Company, any
of its subsidiaries, nor any ERISA Affiliate has any liability under Title IV or Section 302 of ERISA, contingent or otherwise, that has not been satisfied in full, and no condition exists that presents a risk to the Company, any of
its subsidiaries or any ERISA Affiliate of incurring any such liability.
(e) Each Company Benefit Plan intended to be
qualified under Section 401(a) of the Code has either received a favorable determination letter from the IRS or is entitled rely on a favorable opinion letter issued by the IRS with respect to the applicable form of prototype plan, and, to the
knowledge of the Company, nothing has occurred since the date of such determination or opinion letter that would reasonably be expected to adversely affect such qualification.
(f) Except as required by the terms of this Agreement or applicable Legal Requirement, as expressly permitted under the Company
Disclosure Letter, or as set forth on Section 4.15(f) of the Company Disclosure Letter, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (either alone or together with any other
event, condition or circumstance (including any termination of employment or service)): (i) entitle any current or former employee, officer, director or individual service provider of the Company or any of its subsidiaries to any payment or
benefit (or result in the funding of any such payment or benefit); (ii) increase the amount of any
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compensation, equity award or other benefits otherwise payable by the Company or any of its subsidiaries; (iii) result in the acceleration of the time of payment, funding or vesting of any
compensation, equity award or other benefits under any Company Benefit Plan; or (iv) result in any excess parachute payment (within the meaning of Section 280G of the Code) becoming due to any current or former employee,
officer, director, or individual service provider of the Company or any of its subsidiaries.
(g) Neither the Company nor
any of its subsidiaries is a party to, or is otherwise obligated under, any plan, policy, agreement or arrangement that provides for the gross-up or reimbursement of Taxes imposed under Section 409A, 457A, or 4999 of the Code (or any
corresponding provisions of state or local Legal Requirement).
(h) No Company Benefit Plan provides health insurance
benefits to current or former employees or individual service providers of the Company or any of its subsidiaries beyond their retirement or other termination of service, other than as required by Section 4980B of the Code or other Legal
Requirements, or pursuant to individual separation arrangements for periods that do not exceed six (6) months.
(i) Except
as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, with respect to all Company Benefit Plans subject to or covered by the Legal Requirements of a country (or political subdivision of a
country) other than the United States, such Company Benefit Plans have been maintained in accordance with all applicable requirements (including those of the applicable plan or arrangement and those of applicable Legal Requirements) and in good
standing with all applicable regulatory authorities. The present value of the accrued benefit liabilities (whether or not vested) under each such Company Benefit Plan (or, if less, the value of the accrued benefit liabilities attributable to the
Company or its subsidiaries under such Company Benefit Plan), determined as of the end of the Companys most recently ended fiscal year on the basis of actuarial assumptions, each of which is reasonable, did not exceed the current value of the
assets of such Company Benefit Plan (or, if less, the value of the assets attributable to the Company or its subsidiaries under such Company Benefit Plan) allocable to such benefit liabilities, except as reflected in the financial statements
included in the Company SEC Documents or as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 4.16
Labor Matters
. There are no collective bargaining or other similar labor agreements or arrangements to which the
Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound. As of the date of this Agreement, none of the employees or individual service providers of the Company or any of its subsidiaries is
represented by any union with respect to their employment by or service with the Company or such subsidiary. There is no union organization activity involving any of the employees or individual service providers of the Company or its
subsidiaries pending or, to the knowledge of the Company, threatened. There is not, nor at any time since June 30, 2012 has there been, any labor strike, slowdown or lockout, or, to the knowledge of the Company, threat thereof, by or with
respect to any employee or individual service provider of the Company or any of its subsidiaries. Except as would not have, individually or in the aggregate, a Company Material Adverse Effect: (i) there is no unfair labor practice,
labor dispute (other than routine individual grievances in the ordinary course of business), charge or claim before an administrative agency or labor arbitration proceeding pending, or to the knowledge of the Company, threatened against the Company
or any of its subsidiaries; and (ii) the Company and its subsidiaries are in compliance with all applicable Legal Requirements with respect to employment, employment practices, discrimination, terms and conditions of employment, wages and
hours, unfair labor practices, employee and individual service provider classification, and the WARN Act (and any similar state or local statute or Legal Requirement), and have not received any written notice to the contrary.
Section 4.17
Intellectual Property
.
(a) Section 4.17 of the Company Disclosure Letter sets forth a complete and accurate list of all trademark registrations,
active domain names, patents, and applications for registration of any of the foregoing, that are owned by the Company or its subsidiaries, and in each case are material to the business
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of the Company and its subsidiaries, taken as a whole. Except as, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse
Effect: (i) the Company or one of its subsidiaries own all right, title and interest in and to all of the Intellectual Property Rights owned by the Company or its subsidiaries, free and clear of any Liens, except Permitted Liens; (ii) the Company or
one of its subsidiaries own or have the right to use in the manner currently used by the Company and its subsidiaries all Intellectual Property Rights necessary to conduct the business of the Company and its subsidiaries as currently conducted (such
Intellectual Property Rights owned by the Company or its subsidiaries, the
Company Intellectual Property Rights
); (iii) the Company Intellectual Property Rights are subsisting and, to the knowledge of the Company, valid and in
full force and effect; (iv) no Company Intellectual Property Rights are subject to any outstanding judgment, ruling, order, writ, decree, stipulation, injunction or determination by or with any Governmental Authority restricting the use of such
Intellectual Property Rights; and (v) neither the Company nor any of its subsidiaries has received, in the past three (3) years, any written charge, complaint, claim, demand or notice challenging the validity, ownership or enforceability of any of
the Company Intellectual Property Rights.
(b) Except as, individually or in the aggregate, has not had and would not
reasonably be expected to have a Company Material Adverse Effect, (i) to the knowledge of the Company, the conduct of the business of the Company and its subsidiaries does not infringe upon, misappropriate or otherwise violate any Intellectual
Property Rights of any other person; (ii) neither the Company nor any of its subsidiaries has received, in the past three (3) years, any written charge, complaint, claim, demand or notice alleging any such infringement, misappropriation or other
violation that has not been settled or otherwise fully resolved; and (iii) to the knowledge of the Company, no person has infringed, misappropriated or otherwise violated any Company Intellectual Property Rights in the past three (3) years.
(c) Except as, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material
Adverse Effect, the Company and its subsidiaries have taken commercially reasonable measures to protect the confidentiality of its trade secrets and confidential information.
Section 4.18
Taxes
. (i) Except as would not have, and would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, (x) the Company and each of its subsidiaries timely filed (taking into account any extension of time within which to file) all Tax Returns required to be filed by any of them, and all such Tax
Returns are true, correct and complete, and (y) the Company and each of its subsidiaries has timely paid all Taxes that are required to be paid by any of them (including any Taxes required to be withheld from amounts owing to any employee,
creditor or third-party or for which appropriate reserves have been reflected in the financial statements included in the Company SEC Documents); (ii) as of the date of this Agreement no material audits, examinations, investigations or other
proceedings in respect of any Taxes are pending or threatened in writing with respect to the Company or any of its subsidiaries; (iii) there are no material Liens for Taxes on any of the assets of the Company or any of its subsidiaries other
than Permitted Liens; (iv) as of the date of this Agreement, except with respect to the federal income Tax Returns of the Company for the years ending June 30, 2010, June 30, 2011, and June 30, 2012, neither the Company nor any of its
subsidiaries has waived any statute of limitations with respect to material Taxes or agreed to any extension of time with respect to a material Tax assessment or deficiency other than pursuant to extensions of time to file Tax Returns (or to pay
Taxes, to the extent such extensions extend the time to pay Taxes) obtained in the ordinary course of business consistent with past practice; (v) neither the Company nor any of its subsidiaries has constituted a distributing
corporation or a controlled corporation (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock intended to qualify for tax-free treatment under Section 355 of the Code (or any similar
provision of state, local or non-U.S. Legal Requirement) in the two (2) years prior to the date of this Agreement; (vi) as of the date of this Agreement, no material claim has been made in writing during the past three (3) years by a
Governmental Authority in a jurisdiction where the Company or any of its subsidiaries does not file Tax Returns that it is or may be subject to taxation by such jurisdiction; (vii) neither the Company nor any of its subsidiaries has entered into any
reportable transaction (other than a loss transaction) within the meaning of Treasury Regulation Section 1.6011-4(b) (or any similar provision of state, local or non-U.S. Legal Requirement); (viii) as of the
date of this Agreement, the federal income Tax
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Returns of the Company and each of its subsidiaries have been examined by the IRS (or the applicable statute of limitations for the assessment of Taxes for such periods have expired) for all
periods through and including June 30, 2009; (ix) neither the Company nor any of its subsidiaries has any material liability for the Taxes of another person (pursuant Treasury Regulation Section 1.1502-6 (or any similar provision of
state, local or non-U.S. Legal Requirement) or otherwise) by reason of (A) being a member of an affiliated, consolidated, combined or unitary group (other than a group of which the Company or any of its subsidiaries is the common parent)
or otherwise as a transferee or successor, in each case, on or prior to the date of this Agreement or (B) being party to any tax sharing or tax indemnification agreement or other similar agreement (other than customary Tax indemnification
provisions in commercial contracts entered into in the ordinary course of business and not primarily related to Taxes) entered into on or prior to the date of this Agreement; and (x) as of the date of this Agreement, all material deficiencies
asserted or assessments made by any taxing authority with respect to the Company or any of its subsidiaries have been fully paid, settled or withdrawn. For purposes of this
Section 4.18
, any reference to the Company or any of its
subsidiaries shall be deemed to include any person that merged with or was liquidated or converted into the Company or such subsidiary, as applicable.
Section 4.19
Material Contracts
.
(a) For purposes of this Agreement, a Company Material Contract shall mean any of the following to which the
Company or any of its subsidiaries is a party:
(i) material contract (as such term is defined in
item 601(b)(10) of Regulation S-K of the SEC);
(ii) contract or instrument relating to Indebtedness for borrowed
money or third-party financial guarantee with a principal amount in excess of $5,000,000;
(iii) contract, agreement or
arrangement, other than contracts, agreements, arrangements and purchase orders entered into in the ordinary course of business (which shall include those contracts, agreements, arrangements and purchase orders with customers for the sale of
inventory and related to the purchase of finished goods or raw materials), under which the Company or any of its subsidiaries is (A) subject to restrictions on the right of such person to compete with any person anywhere in the world in any material
respect in connection with the marketing and sale of beauty and cosmetic products to retailers, (B) prevented from entering into any territory, market or geographic region, (C) grants most favored nation status to another person or
includes a take or pay provision or (D) grants a right of exclusivity to any third party supplier, distributor or licensee, in each case of (A), (B), (C) or (D) that is material to the Company and its subsidiaries, taken as a whole;
(iv) contract or agreement relating to the formation, creation, ownership, operation, management or control of any partnership,
joint venture, alliance or revenue or earnings sharing arrangement that is material to the Company and its subsidiaries taken as a whole;
(v) contract entered into since June 30, 2014 providing for the disposition or acquisition of any assets, business or
securities of any person (other than the Company) for an aggregate consideration in excess of $5,000,000, other than purchase orders related to the purchase of finished goods or raw materials or sale of inventory in the ordinary course of business;
(vi) contract with any of the (A) ten (10) largest customers of the Company and its subsidiaries (each, a
Major
Customer
), as measured by the dollar value of goods or services sold since June 30, 2015 through the date of this Agreement, (B) ten (10) largest third-party manufacturers of the Company or its subsidiaries, (each, a
Major
Manufacturer
), as measured by the dollar value of goods or services purchased since June 30, 2015 through the date of this Agreement, or (C) Companys material fragrance oil suppliers, in each case, other than contracts and
purchase orders related to the purchase of finished goods or raw materials or sale of inventory in the ordinary course of business;
(vii) license (inbound and outbound), sublicense, development agreement, or other contract, agreement or arrangement under
which the Company or any of its subsidiaries grants or receives the right to use any Intellectual Property Rights (other than licenses for readily available commercial software and licenses that
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under their current terms will expire on or prior to December 31, 2016) that (A) involve the payment or receipt of amounts by the Company or any of its subsidiaries of more than $5,000,000 in any
twelve month period or (B) (x) relate to product endorsements, sponsorships or other promotional arrangements (including celebrity product endorsements or sponsorships) and (y) involve the payment of amounts by the Company or any of its subsidiaries
of more than $5,000,000 in any twelve month period (collectively, the
License and Endorsement Agreements
), in each case, other than purchase orders related to the purchase of finished goods or raw materials or sale of inventory in
the ordinary course of business;
(viii) contract providing for the Company or any of its subsidiaries to purchase all of
its requirements for, or all of a third partys output of, any product or service, or providing for the Company or any of its subsidiaries to sell all of its output of, or supply all of a third partys requirements for, any product or
service;
(ix) any interest rate, currency or commodity swap, exchange commodity option or hedging contract, agreement,
instrument or other arrangement with a remaining term in excess of ninety (90) days that is material to the Company and its subsidiaries, taken as a whole, or pursuant to which a termination payment in excess of $5,000,000 would be payable by or to
the Company or any of its subsidiaries were such hedge to be liquidated on the date of this Agreement; or
(x) written
license, sublicense or other written contract, agreement or arrangement relating or pertaining to Red Door Spa that is material to the Company and its subsidiaries as a whole, taken as a whole, or, to the knowledge of the Company, material to Red
Door Spa.
(b) Each Company Material Contract has been made available to Parent as of the date hereof. Neither the Company
nor any subsidiary of the Company is in breach of or default under the terms of any Company Material Contract where such breach or default would have, or would reasonably be expected to have, individually or in the aggregate, a Company Material
Adverse Effect. To the knowledge of the Company, no other party to any Company Material Contract is in breach of or default under the terms of any Company Material Contract where such breach or default would have, or would reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse Effect. Each Company Material Contract is a valid and binding obligation of the Company and, to the knowledge of the Company, is in full force and effect, except as
would not have, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect;
provided
that (i) such enforcement may be subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar Legal Requirements, now or hereafter in effect, relating to creditors rights generally and (ii) equitable remedies of specific performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.
Section 4.20
Opinion of
Financial Advisor
. The Company Board has received the written opinion of Centerview Partners LLC, dated June 16, 2016 that, as of the date of such opinion, and subject to the various assumptions made, procedures followed, matters considered
and qualifications and limitations set forth therein, the Merger Consideration to be paid to the holders of shares of outstanding Common Stock (other than shares of Common Stock held by the Company as treasury stock or held by Parent, Acquisition
Sub or any affiliate of the Company immediately prior to the Effective Time) pursuant to this Agreement is fair, from a financial point of view, to such holders (the
Fairness Opinion
).
Section 4.21
Brokers
. No broker, finder or investment banker other than Centerview Partners LLC is entitled to any brokerage,
finders or other fee or commission in connection with the Merger based upon arrangements made by or on behalf of the Company.
Section 4.22
Real Property
.
(a) None of the Company or any of its subsidiaries owns any real property.
(b) Each material lease, sublease or other agreement under which the Company uses or occupies or has the right to use or occupy
any real property (collectively, the
Company Leases
), has been made available
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to Parent as of the date hereof, except for non-U.S. Company Leases. Each Company Lease is not subject to any Lien that is not a Permitted Lien, is in full force and effect and neither the
Company nor any of its subsidiaries is in breach of or default under, or has received written notice of any breach of or default under, any Company Lease, and to the knowledge of the Company, no event has occurred that with notice or lapse of time
or both would constitute a breach or default thereunder by any other party thereto, except, in each case, for such breaches or defaults that has not had a Company Material Adverse Effect.
Section 4.23
Insurance
. Except as has not had, individually or in the aggregate, a Company Material Adverse Effect, all
material policies of insurance maintained by the Company or any of its subsidiaries are in full force and effect, no notice of cancellation has been received with respect to such policies (other than in connection with ordinary renewals) and there
is no existing default or event which, with the giving of notice of lapse of time or both, would constitute a default, by any insured thereunder. As of the date hereof, (i) there is no material claim by the Company or any of its subsidiaries
pending under any such policies as to which coverage has been denied or disputed in writing by the applicable insurer, and (ii) to the Companys knowledge, neither the Company nor any of its subsidiaries has received either any written
notice of any violation of, or non-compliance with, any insurance policy or any written notice that could reasonably be expected to be followed by a written notice of cancellation or non-renewal of any insurance policy. All premiums due and payable
under all such policies have been paid and the Company or a subsidiary of the Company, as applicable, is in compliance with the terms and conditions of such policies other than non-compliance which would not have, and would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse Effect.
Section 4.24
Environmental
. Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect:
(a) The Company and its subsidiaries are in compliance with all applicable Environmental Laws, which compliance includes the
possession and maintenance of, and compliance with, all Company Permits required under applicable Environmental Laws for the operation of the business of the Company and its subsidiaries as presently conducted;
(b) As of the date of this Agreement, none of the Company or any of its subsidiaries has received any written communication
alleging that the Company is in violation of, or has any liability under, any Environmental Law;
(c) None of the Company
or any of its subsidiaries has transported, produced, processed, manufactured, generated, used, treated, handled, stored, released or disposed of any Hazardous Substances, except in compliance with applicable Environmental Law in a manner that would
not reasonably be expected to require any cleanups or other remediation activities pursuant to any Environmental Law;
(d)
None of the Company or any of its subsidiaries has received any written communication alleging that the Company or any of its subsidiaries has exposed any employee or any third-party to Hazardous Substances in violation of any Environmental Law that
remains unresolved or, to the Companys knowledge, in a manner that caused or allegedly caused personal injury;
(e)
As of the date of this Agreement, none of the Company or any of its subsidiaries is a party to or is the subject of any pending claim, action, Order, proceeding or, to the Companys knowledge, any pending investigation, or, to the
Companys knowledge, any threatened claim, action, Order, proceeding or investigation before any arbitrator or Governmental Authority alleging any liability under or noncompliance with any Environmental Law or seeking to impose any financial
responsibility for any investigation, cleanup, removal, containment or any other remediation or compliance under any Environmental Law;
(f) No cleanups or other remediation activities are being conducted, or are being proposed to be conducted, either by the
Company or any of its subsidiaries or at any property currently or, to the Companys knowledge, formerly owned or leased by the Company or any of its subsidiaries for the purpose of treating, abating, removing, containing or otherwise
addressing Hazardous Substances; and
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(g) The representations and warranties in this
Section
4.24
are the sole and exclusive representations and warranties of the Company with respect to environmental matters, including matters relating to Environmental Law or Hazardous Substances.
Section 4.25
Takeover Statutes
.
The Company Board, at a meeting duly called and held prior to the execution of this Agreement,
duly and unanimously, by all those directors in attendance, approved this Agreement, the Merger and the other transactions contemplated hereby and has taken all actions necessary (assuming the representations and warranties contained in
Section
5.9
are accurate) so that no Takeover Statutes shall be applicable to the execution, delivery or performance of this Agreement, the consummation of the Merger and the other transactions contemplated by this Agreement. The Company is not party to
a stockholder rights agreement, poison pill or similar agreement or plan.
Section 4.26
Company Affiliate
Transactions
. No present or former director, officer, stockholder, partner, member, employee or affiliate (other than subsidiaries of the Company) of the Company or any of its subsidiaries, nor any of such persons affiliates or
immediate family members (each of the foregoing a
Related Party
) is a party to any contract with or binding upon the Company or its subsidiaries (other than employment agreements) or any of their respective properties or assets or
has any material interest in any property used by the Company or its subsidiaries or has engaged in any transaction with any of the foregoing since June 30, 2013, in either case that would be required to be disclosed under Item 404 of
Regulation S-K under the Securities Act (a
Company Affiliate Transaction
) that has not been so disclosed. Any Company Affiliate Transaction as of the time it was entered into and as of the time of any amendment or renewal
thereof contained such terms, provisions and conditions as were at least as favorable to the Company or any of its subsidiaries as would have been obtainable by the Company in a similar transaction with an unaffiliated third-party. To the knowledge
of the Company, no Related Party of the Company or any of its subsidiaries owns, directly or indirectly, on an individual or joint basis, any interest in, or serves as an officer or director or in another similar capacity of, any supplier or other
independent contractor of the Company or any of its subsidiaries, or any organization which has a contract with the Company or any of its subsidiaries.
Section 4.27
Business
Relationships
. None of the Company or any of its subsidiaries has received any notice in
writing from any Major Customer, Major Manufacturer, material fragrance oil supplier or party to any License and Endorsement Agreement indicating that such person intends to terminate its relationship with the Company or any of the Companys
subsidiaries, except to the extent such termination would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
Section 4.28
Foreign Asset Control Regulations; Anti-Corruption and Anti-Bribery Laws
.
(a) The Company and its subsidiaries and their respective Affiliates, directors, officers and employees have complied in all
respects with the U.S. Foreign Corrupt Practices Act of 1977, as amended (15 U.S.C. §§ 78dd-1
et seq
.) and any other applicable foreign or domestic anticorruption or antibribery laws (collectively, the
Fraud and
Bribery Laws
). None of the Company or any of its subsidiaries or any of their respective Affiliates, directors, officers, or, to the knowledge of the Company, its agents, employees or other representatives (in each case acting on the
Companys or any of its subsidiaries behalf and in their capacities as such) has directly or indirectly (i) used any corporate funds to make or provide any unlawful contributions, gifts, entertainment or other unlawful expenses
relating to political activity, (ii) offered, promised, paid or delivered any fee, commission or other sum of money or item of value, however characterized, to any finder, agent or other party acting on behalf of or under the auspices of a
governmental or political employee or official or governmental or political entity, political agency, department, enterprise or instrumentality that was illegal under any applicable Legal Requirement, (iii) made any payment to any customer or
supplier, or to any officer, director, partner, employee or agent of any such customer or supplier, for the unlawful sharing of fees to any such customer or supplier or any such officer, director, partner, employee or agent for the unlawful rebating
of charges, (iv) engaged in any other unlawful reciprocal practice, or made any other unlawful payment or given any other unlawful consideration to any
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such customer or supplier or any such officer, director, partner, employee or agent or (v) paid, offered or promised to make or offer any bribe, payoff, influence payment, kickback, unlawful
rebate, or other similar unlawful payment of any nature, or receive any unlawful kickback or bribe.
(b) Without limiting
the generality of
Section 4.7
, neither the Company nor any of its subsidiaries is operating, or since June 30, 2013 has operated, in material violation of (i) any applicable U.S. and international economic and trade sanctions, including, but
not limited to, the Trading with the Enemy Act, the International Emergency Economic Powers Act, the Comprehensive Iran Sanctions, Accountability and Divestment Act, the Sudan Accountability and Divestment Act, any applicable sanctions regulations
administered and enforced by the U.S. Department of State, the U.S. Department of Treasury (including the Office of Foreign Assets Control (
OFAC
)) or any enabling legislation, executive orders, rules and regulations relating
thereto, (ii) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act) Act of 2001, (iii) any applicable Legal Requirements concerning the exportation of any products,
technology, technical data and services, including but not limited to, where applicable, the Export Administration Act, the Arms Export Control Act, and all executive orders, rules and regulations administered by the U.S. Department of Commerce, the
U.S. Department of State and the U.S. Department of Treasury, (iv) any applicable antiboycott Legal Requirements, including but not limited to the Export Administration Act and the Ribicoff Amendment to the 1976 Tax Reform Act, and any applicable
executive orders, rules and regulations administered by the U.S. Department of Commerce and the IRS, or (v) any applicable Legal Requirements, executive orders, rules and regulations administered by the Bureau of Customs and Border Protection of the
U.S. Department of Homeland Security. To the Companys knowledge, none of the Company or any of its subsidiaries is a person that is a target of U.S. or international economic and trade sanctions or engages in any dealings or transactions with
any such person.
(c) Since June 30, 2013, none of the Company or any of its subsidiaries has received written notice that
it is the subject of any bribery, improper contribution or anti-kickback investigation by any Governmental Authority and, to the Companys knowledge, no such investigation is pending or threatened.
Section 4.29
Vote Required
. The affirmative vote of a majority of the Total Votes entitled to be cast at the
Stockholders Meeting (and the affirmative vote of a majority of all votes entitled to be cast by the holders of the Series A Serial Preferred Stock and the holders of Common Stock, voting as separate classes) is the only vote of the holders of
any class or series of the Companys capital stock necessary to approve this Agreement, approve the Merger or consummate any of the other transactions contemplated by this Agreement.
Section 4.30
Information Supplied
. The Proxy Statement will not, on the date it is first mailed to the stockholders of the
Company, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not
misleading, and will not, at the time of the Stockholders Meeting, omit to state any material fact necessary to correct any statement in any earlier communication with respect to the solicitation of proxies for the Stockholders Meeting
which shall have become false or misleading in any material respect. The Proxy Statement will comply with the requirements of the Exchange Act and the rules and regulations thereunder. Notwithstanding the foregoing, the Company makes no
representation or warranty with respect to any information supplied by, or on behalf of, the Parent or Acquisition Sub for inclusion or incorporation by reference in any of the foregoing documents or any statements or omissions based upon such
information.
Section 4.31
No Other Representations or Warranties
. Except for the representations and warranties
contained in this
Article
IV
or in the certificate referenced in
Section 7.2(c)
, neither the Company nor any other person on behalf of the Company makes any express or implied representation or warranty with respect
to the Company or with respect to any other information provided to Parent or Acquisition Sub in connection with the transactions contemplated hereby, including the accuracy, completeness or currency thereof.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION SUB
Parent and Acquisition Sub hereby jointly and severally represent and warrant to the Company as follows:
Section 5.1
Organization and Qualification; Subsidiaries
. Each of Ultimate Parent, Operating Parent and Acquisition Sub (i)
is a corporation or legal entity duly organized or formed, validly existing and in good standing, under the laws of its jurisdiction of organization or formation, (ii) has the requisite corporate power and authority and all necessary governmental
approvals to own, lease and operate its properties and to carry on its business as it is now being conducted, except where the failure to have such power or authority or such governmental approvals would not have, and would not reasonably be
expected to have, individually or in the aggregate, a Parent Material Adverse Effect. Each of Ultimate Parent, Operating Parent and Acquisition Sub is duly qualified or licensed as a foreign corporation to do business, and is in good standing,
in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing necessary, except for such failures to be so qualified or licensed and in good standing
that would not have, and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
Section 5.2
Certificate of Incorporation, By-Laws, and Other Organizational Documents
. Parent has made available to the Company
a complete and correct copy of the certificate of incorporation, By-laws (or equivalent organizational documents), and other organizational documents, agreements or arrangements, each as amended to date, of each of Ultimate Parent, Operating Parent
and Acquisition Sub (collectively,
Parent Organizational Documents
). The Parent Organizational Documents are in full force and effect. None of Ultimate Parent, Operating Parent, Acquisition Sub or, to the knowledge of Parent, the
other parties thereto are in violation of any provision of the Parent Organizational Documents, as applicable, except as would not have, individually or in the aggregate, a Parent Material Adverse Effect.
Section 5.3
Authority Relative to Agreement
. Each of Ultimate Parent, Operating Parent and Acquisition Sub has all necessary
power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the Merger and the other transactions contemplated hereby. The execution and delivery of this Agreement by Ultimate Parent, Operating
Parent and Acquisition Sub and the consummation by Ultimate Parent, Operating Parent and Acquisition Sub of the Merger and the other transactions contemplated hereby have been duly and validly authorized by all necessary corporate action of Ultimate
Parent, Operating Parent and Acquisition Sub and no other corporate proceedings on the part of Ultimate Parent, Operating Parent or Acquisition Sub or their respective stockholders are necessary to authorize the execution and delivery of this
Agreement or to consummate the Merger and the other transactions contemplated hereby (other than, with respect to the Merger, (x) the adoption of this Agreement by Operating Parent in its capacity as the sole stockholder of Acquisition Sub,
which adoption shall occur immediately following the execution of this Agreement, and (y) the filing of the Articles of Merger with the Department of State). This Agreement has been duly and validly executed and delivered by Ultimate Parent,
Operating Parent and Acquisition Sub and, assuming the due authorization, execution and delivery by the Company, this Agreement constitutes a legal, valid and binding obligation of Ultimate Parent, Operating Parent and Acquisition Sub, enforceable
against Ultimate Parent, Operating Parent and Acquisition Sub in accordance with its terms (except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar Legal Requirements
of general applicability relating to or affecting creditors rights, and by general equitable principles).
Section 5.4
No
Conflict; Required Filings and Consents
.
(a) The execution and delivery of this Agreement by Ultimate
Parent, Operating Parent and Acquisition Sub does not, and the performance of this Agreement by Ultimate Parent, Operating Parent and Acquisition Sub will not, (i) conflict with or violate the certificate of incorporation or By-laws (or
equivalent
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organizational documents) of (A) Ultimate Parent, (B) Operating Parent or (C) Acquisition Sub, (ii) assuming the consents, approvals and authorizations specified in
Section
5.4(b)
have been received and the waiting periods referred to therein have expired, and any condition precedent to such consent, approval, authorization, or waiver has been satisfied, conflict with or violate any
Legal Requirements applicable to Parent or Acquisition Sub or by which any property or asset of Parent or Acquisition Sub is bound or affected or (iii) result in any breach of or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any right of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien on any property or asset of Parent or Acquisition Sub pursuant to, any note,
bond, mortgage, indenture or credit agreement, or any other contract, agreement, lease, license, permit, franchise or other instrument or obligation to which Parent or Acquisition Sub is a party or by which Parent or Acquisition Sub or any property
or asset of Parent or Acquisition Sub is bound or affected, other than, in the case of clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults or other occurrences of the type referred to above which would not have, and
would not reasonably be expected to have a Parent Material Adverse Effect.
(b) The execution and delivery of this
Agreement by Ultimate Parent, Operating Parent and Acquisition Sub do not, and the consummation by Ultimate Parent, Operating Parent and Acquisition Sub of the transactions contemplated by this Agreement will not, require any consent, approval,
authorization, waiver or permit of, or filing with or notification to, any Governmental Authority, except for applicable requirements of the Exchange Act, the Securities Act, Blue Sky Laws, the HSR Act and other Antitrust Approvals, filing and
recordation of appropriate merger documents as required by the FBCA and the rules of the NASDAQ or other stock exchange, if applicable, and except where failure to obtain such consents, approvals, authorizations or permits, or to make such filings
or notifications, would not have, and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
Section 5.5
Absence of Litigation
. As of the date hereof, there is no claim, action, proceeding, or investigation pending
or, to the knowledge of Parent, threatened against either Parent or Acquisition Sub or any of their respective properties or assets at law or in equity, and there are no Orders before any arbitrator or Governmental Authority, in each case as would
have, or would reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
Section 5.6
Financing
.
(a) Parent has delivered to the Company a true, complete and correct copy of (i) an
executed debt financing commitment letter, dated as of the date of this Agreement (as amended, modified, supplemented, replaced or extended from time to time after the date of this Agreement in compliance with
Section
6.10
,
the
Commitment Letter
), from the lenders (including any lenders who become party thereto by joinder) party thereto (collectively, the
Lenders
), pursuant to which the Lenders have agreed, subject to the terms and
conditions thereof, to provide the debt amounts set forth therein (the debt financing contemplated by the Commitment Letter, together with any permitted Alternative Debt Financing, is collectively referred to in this Agreement as the
Debt
Financing
) and (ii) the fee letter referred to in the Commitment Letter (redacted in a customary manner, which redacted terms would not decrease the amount of or increase the conditionality of the Debt Financing) (the
Fee
Letter
), each as amended, modified, supplemented, replaced or extended from time to time after the date of this Agreement in compliance with
Section
6.10
. Except as set forth in the Commitment Letter or the Fee
Letter delivered to the Company, as of the date of this Agreement, there are no conditions precedent to the obligations of the Lenders to provide the Debt Financing or any contingencies that would permit the Lenders to reduce the total amount of the
Debt Financing. There are no other agreements, side letters or arrangements relating to the Debt Financing to which Parent or any of its subsidiaries is a party as of the date of this Agreement (other than customary engagement letters and fee
discount letter). As of the date of this Agreement, no event has occurred which, with or without notice, lapse of time or both, would constitute a default, event of default or breach on the part of Parent or Acquisition Sub or, to the knowledge
of Parent, any other party thereto, under the Commitment Letter or the Fee Letter, in each case, that would adversely affect or delay in any material
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respect the availability of the Debt Financing at Closing. Assuming no breach by the Company of its representations and/or obligations hereunder, in either case, such that the closing
conditions set forth in
Sections 7.2(a)
or
7.2(b)
would fail to be satisfied, neither Parent nor Acquisition Sub has any reason to believe that it will be unable to satisfy on a timely basis any condition to closing to be satisfied by
it in the Commitment Letter or the Fee Letter on or prior to the Closing Date.
(b) Parent has paid in full any and all
commitment fees or other fees required to be paid pursuant to the terms of the Commitment Letter and Fee Letter on or before the date of this Agreement, and will pay in full any such amounts due on or before the Closing Date. The Commitment Letter
and Fee Letter have not been modified, altered or amended on or prior to the date of this Agreement. None of the commitments under the Commitment Letter have been withdrawn, terminated or rescinded prior to the date of this Agreement. The Commitment
Letter and Fee Letter are in full force and effect as of the date of this Agreement and are legal, valid and binding obligations of Parent (or the Affiliate of such Parent party thereto), enforceable against such Parent (or the Affiliate of such
Parent party thereto) and, to the knowledge of Parent, each other party thereto, in each case, in accordance with their terms, except to the extent that enforceability may be limited by the applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws from time to time in effect affecting generally the enforcement of creditors rights and remedies and principles of equity.
(c) The proceeds of the Debt Financing, if funded, together with available cash of Parent and its subsidiaries, will constitute
sufficient funds for the satisfaction of all of Parents and Acquisition Subs obligations under this Agreement on the Closing Date, including the payment of the Total Common Merger Consideration and all other amounts to be paid on the
Closing Date pursuant to
Section
3.2
,
Section
3.3
and
Section 3.4
and the payment of all associated costs and expenses of the Merger (including any repayment, redemption or refinancing of
the Notes and any other Indebtedness of the Company required in connection therewith). Without limitation to
Section 8.3(b)
and
Section 8.4(b)
, the obligations of Parent and Acquisition Sub under this Agreement are not subject to
any conditions regarding the ability of Parent, Acquisition Sub or any of their respective Affiliates, or any other person, to obtain financing for the consummation of the Merger and the other transactions contemplated by this Agreement.
Section 5.7
Capitalization of Acquisition Sub
. As of the date of this Agreement, the authorized share capital of
Acquisition Sub consists of 1,000 shares, par value $0.001 per share, all of which are validly issued and outstanding. All of the issued and outstanding share capital of Acquisition Sub is, and at the Effective Time will be, owned by
Operating Parent. Acquisition Sub does not have outstanding any option, warrant, right or other agreement pursuant to which any person other than Parent may acquire any equity interest of Acquisition Sub. Acquisition Sub was formed solely
for the purpose of engaging in the transactions contemplated hereby, and it has not conducted any business prior to the date hereof and has no, and prior to the Effective Time will have no, assets, liabilities or obligations of any nature other than
those incident to its formation and pursuant to this Agreement and the Merger and the other transactions contemplated by this Agreement.
Section 5.8
Brokers
. No broker, finder or investment banker is entitled to any brokerage, finders or other fee or
commission payable by the Company or any of its subsidiaries in connection with the Merger based upon arrangements made by or on behalf of Parent.
Section 5.9
Parent Ownership of Company Securities; FBCA Section
607.0901
. None of Parent or any of its
subsidiaries is the beneficial owner (as defined in Section 607.0901 of the FBCA) of any shares of Common Stock or other securities of the Company or any options, warrants or other rights to acquire Common Stock or other securities
of, or any other economic interest (through derivative securities or otherwise) in, the Company. Neither Parent nor any of its affiliates or associates (each as defined in Section 607.0901 of the FBCA) is, or has been at any
time with the last three (3) years, an interested shareholder as defined in Section 607.0901 of the FBCA. Neither Parent nor any of its subsidiaries has taken, or authorized or permitted any its Representatives to take, any action
that would cause Parent or any of its affiliates or associates (each as defined in Section 607.0901 of the FBCA) thereof to be deemed an interested shareholder as defined in Section 607.0901 of the FBCA
or otherwise render Section 607.0901 of the FBCA inapplicable to the Merger.
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Section 5.10
Information Supplied
. The information supplied by Parent and
Acquisition Sub for inclusion in the Proxy Statement will not, on the date it is first mailed to the stockholders of the Company, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading, and will not, at the time of the Stockholders Meeting, omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of proxies for the Stockholders Meeting which shall have become false or misleading in any material respect. Notwithstanding the foregoing, Parent and Acquisition Sub make
no representation or warranty with respect to any information supplied by or on behalf of the Company for inclusion or incorporation by reference in any of the foregoing documents or any statements or omissions based upon such information.
Section 5.11
Acknowledgement of Disclaimer of Other Representations and Warranties
. Parent and Acquisition Sub each
acknowledge and agree that, except for the representations and warranties expressly set forth in Article IV this Agreement or in the certificate referenced in
Section 7.2(c)
, neither the Company nor any of its subsidiaries, nor any of their
respective Representatives, nor any other person on behalf of the Company, makes any other express or implied representation or warranty with respect to the Company or any of its subsidiaries or their respective businesses or with respect to any
other information made available to Parent or Acquisition Sub in connection with the transactions contemplated by this Agreement, and Parent and Acquisition Sub are not relying on any representation or warranty except for those expressly set forth
in this Agreement or any certificate delivered pursuant to
Section 7.2(c)
. Each of Parent and Acquisition Sub acknowledges that it has conducted, to its satisfaction, its own independent investigation of the condition, operations and business
of the Company and its subsidiaries and, in making its determination to proceed with the transactions contemplated by this Agreement, including the Merger, each of Parent and Acquisition Sub has relied on the results of its own independent
investigation.
ARTICLE VI
COVENANTS AND AGREEMENTS
Section 6.1
Conduct of Business by the Company Pending the Merger
. The Company covenants and agrees that, between the date
of this Agreement and the Effective Time or the date, if any, on which this Agreement is terminated pursuant to
Section
8.1
, except (i) as required by applicable Legal Requirement, (ii) as consented to in writing
by Parent, which consent shall not unreasonably be withheld, conditioned or delayed, (iii) as may be expressly required by or expressly contemplated pursuant to this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure
Letter, the Company shall, and shall cause its subsidiaries to, cause the business of the Company and its subsidiaries to be conducted only in, and to cause such entities to not take any action except in, the ordinary course of business and in a
manner consistent with past practice. The Company shall, and shall cause its subsidiaries to, use their commercially reasonable efforts to preserve intact the Companys and its subsidiaries business organization and reputation, to keep
available the services of their key managers, key officers, and key employees, and to maintain existing relations and goodwill with Governmental Authorities, material customers, material suppliers, material creditors, material lessors, material
licensors other than those being terminated in accordance with their terms and other persons (including any brand ambassadors) having significant business relationships with the Company and to pay their trade payables in the ordinary course of
business. Without limitation to the foregoing, the Company agrees with Parent that, except (1) as required by applicable Legal Requirement, (2) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed
or conditioned), (3) as may be expressly required by or expressly contemplated pursuant to this Agreement or (4) as set forth in Section 6.1 of the Company Disclosure Letter, the Company shall not, and shall not permit its
subsidiaries to:
(a) amend or otherwise change, or permit any of its subsidiaries to amend or otherwise change, the
Company Articles of Incorporation or By-laws of the Company or such similar applicable organizational documents of any of the Companys subsidiaries;
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(b) split, combine, subdivide, reclassify, purchase, redeem or otherwise acquire,
issue, sell, pledge, dispose, encumber or grant any shares of its or its subsidiaries capital stock, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of its or its subsidiaries capital
stock, except for any such transaction by a wholly owned subsidiary which remains a wholly owned subsidiary after consummation of such transaction;
provided
,
however
, that (i) the Company may issue shares upon exercise of any
Company Option or the settlement of any Restricted Share Unit, in each case, outstanding as of the date hereof, and (ii) the Company may acquire shares of capital stock in connection with tax withholdings and exercise price settlements upon the
exercise of Company Options or the settlement of Restricted Share Units, in each case, existing on the date hereof;
(c)
declare, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to the Companys or any of its subsidiaries capital stock, other than (i) dividends or other
distributions paid by any subsidiary of the Company to the Company or any wholly-owned subsidiary of the Company and (ii) cash dividends paid upon the Series A Serial Preferred Stock (it being agreed that dividends shall not be paid upon the
Series A Serial Preferred Stock other than in cash);
(d) except as required pursuant to any Company Benefit Plan in effect
as of the date hereof and set forth in Section 4.15(a) of the Company Disclosure Letter: (i) increase the compensation or other benefits payable or to become payable to directors, executive officers, employees or individual service
providers of the Company or any of its subsidiaries; (ii) grant any severance or termination pay to, or enter into any employment, retention, change of control or severance agreement or arrangement with any director, executive officer, employee or
individual service provider of the Company or any of its subsidiaries; (iii) establish, adopt, enter into, amend or terminate any Company Benefit Plan or other plan, trust, fund, policy, agreement, program or arrangement for the benefit of any
current or former directors, officers, employees or individual service providers, or any of their respective beneficiaries, except for renewals or amendments in the ordinary course of business consistent with past practice that do not materially
increase the cost to the Company or its subsidiaries or Parent; (iv) adopt, enter into, amend or terminate any collective bargaining agreement or other arrangement relating to union or organized employees; (v) hire any employees; or (vi) adopt,
enter into, grant, or establish any incentive compensation or any program for incentive compensation (whether an annual incentive, a long-term incentive, or otherwise).
(e) grant, confer or award options, convertible securities, restricted stock, restricted stock units or other rights to acquire
any of its or its subsidiaries capital stock or take any action not otherwise contemplated by this Agreement to accelerate the vesting of or cause to be exercisable any otherwise unvested or unexercisable option or other equity or equity-based
award (except as otherwise provided by the terms of any unexercisable options or other equity awards outstanding on the date hereof);
(f) acquire or permit its subsidiaries to acquire (including by merger, consolidation, or acquisition of stock or assets) any
entity, business or material portion of the assets of any person except for (i) inventory in the ordinary course of business consistent with past practices and (ii) licenses in the ordinary course of business consistent with past practices requiring
an upfront payment or similar payment in an amount not in excess of $2,000,000 and/or guaranteed minimum royalty or similar payments by the Company or any of its subsidiaries for any twelve (12) month period in an amount not in excess of $1,000,000;
(g) enter into new lines of business outside of the existing business;
(h) create, incur, guarantee or assume or otherwise become liable for or modify in any material respect (or permit its
subsidiaries to create, incur, guarantee or assume or otherwise become liable for or modify in any material respect) the terms of any Indebtedness, including any Company Indebtedness, other than (i) guarantees by the Company of Indebtedness of its
wholly-owned subsidiaries and (ii) Indebtedness of a subsidiary of the Company payable to the Company or a wholly-owned subsidiary of the Company;
(i) modify or amend in any respect materially adverse to the Company or any of its subsidiaries, waive or grant any material
release or relinquish any material rights under, or terminate, any Company Material Contract or Company Lease other than the expiration or renewal of any Company Material Contract or
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Company Lease in accordance with its terms, or enter into any contract, agreement, or arrangement that would have been a Company Material Contract or Company Lease if entered into prior to the
date hereof;
(j) make any material change to its methods of accounting in effect at June 30, 2015 (as disclosed in the
Companys most recent annual report on Form 10-K), except (i) as required by GAAP, Regulation S-X of the Exchange Act or a Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board
or any similar organization), or (ii) as required by a change in applicable Legal Requirements;
(k) except for
transactions among the Company and its wholly owned subsidiaries or among the Companys wholly owned subsidiaries, sell, lease, license, transfer, exchange or swap, mortgage or otherwise encumber or subject to any Lien (other than Permitted
Liens) or otherwise dispose of any material portion of its properties or assets, other than dispositions by the Company and its subsidiaries in the ordinary course of business consistent with past practice in an amount not to exceed $2,000,000 in
the aggregate;
(l) make any investment (by contribution to capital, property transfer, purchase of securities or
otherwise) in, or loan or advance (other than travel and similar advances to its employees in the ordinary course of business consistent with past practice) to, any person other than (A) in the ordinary course of business consistent with past
practice in an amount not to exceed $1,000,000 in the aggregate or (B) in a direct or indirect wholly-owned subsidiary of the Company in the ordinary course of business consistent with past practice;
(m) except to the extent otherwise required by applicable Legal Requirements, (i) make any material Tax election other than in
the ordinary course of business consistent with past practice, (ii) revoke or change any material Tax election, (iii) change (or request any taxing authority to change) any material aspect of its method of Tax accounting or annual Tax accounting
period, (iv) file any amended Tax Return with respect to any material Tax, (v) incur any material Tax liability outside of the ordinary course of business, (vi) incur any material amount of gross income for U.S. federal income tax purposes as a
result of any intercompany transaction or a transaction in which cash is not a material portion of the consideration outside of the ordinary course of business, (vii) file any material Tax Return prepared in a manner inconsistent with past practice,
(viii) settle or compromise any audit or proceeding relating to a material amount of Taxes, (ix) enter into any material agreement principally relating to Taxes with respect to the Company or any subsidiaries, (x) waive or extend the statute of
limitations in respect of any material Taxes (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business), (xi) issue, increase or modify (or permit any of its subsidiaries to issue, increase or modify)
any intercompany Indebtedness (A) where a non-U.S. subsidiary is the borrower other than in the ordinary course of business or (B) where a non-U.S. subsidiary is a lender or guarantor and the Company or a U.S. subsidiary is the borrower, or (xii)
surrender any material claim for a refund of Taxes;
(n) [intentionally omitted]
(o) make or agree to make, or permit any of its subsidiaries to make or agree to make, capital expenditures totaling in the
aggregate more than $5,000,000 per fiscal quarter;
(p) adopt or enter into, or permit to be adopted or entered into, a
plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(q) release, withdraw, concur with the dismissal of, or settle any material claim, action, suit or proceeding involving the
Company or any of its subsidiaries, other than routine, immaterial matters (including the settlement of any insurance claims) in the ordinary course of business;
(r) settle, pay, discharge or satisfy any claim, action, suit, proceeding or investigation against or regarding the Company or
any of its subsidiaries, whether civil, criminal, administrative or investigative, other than matters that involve only the payment of monetary damages not in excess of $250,000 individually or $500,000 in the aggregate (excluding from such dollar
threshold any amounts covered by any insurance policy of the Company or any of its subsidiaries);
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(s) take, or omit to take (or permit any of its subsidiaries to take, or omit to
take), any action which would reasonably be expected to cause a default or event of default under any Company Indebtedness;
(t) enter into any agreement, understanding or arrangement with respect to the voting or registration of the shares of the
Companys or its subsidiaries capital stock;
(u) enter into, amend, modify, waive or terminate any Company
Affiliate Transaction; or
(v) authorize or enter into, or permit any of its subsidiaries to authorize or enter into, any
agreement or otherwise make any commitment to do any of the foregoing.
Section 6.2
Appropriate Action; Consents;
Filings
.
(a) Subject to
Section
6.5
, the parties hereto will cooperate with each other and use their respective reasonable best efforts to consummate and make effective the transactions contemplated hereby as soon as practicable and to cause the
conditions to the Merger set forth in
Article
VII
to be satisfied, including (i) the obtaining and maintaining of all necessary actions or nonactions, consents, clearances and approvals from Governmental Authorities
including the approvals set forth on Section 6.2 of the Company Disclosure Letter (the
Antitrust Approvals
) or other persons necessary in connection with the consummation of the transactions contemplated by this Agreement and the
making of all necessary registrations and filings (including filings with Governmental Authorities, if any) and the taking of all reasonable or customary steps as may be necessary to obtain an approval from, or to avoid an action or proceeding by,
any Governmental Authority or other persons necessary in connection with the consummation of the transactions contemplated by this Agreement and (ii) the execution and delivery of any additional instruments necessary to consummate the Merger
and other transactions to be performed or consummated by such party in accordance with the terms of this Agreement and to carry out fully the purposes of this Agreement. Each of the parties hereto shall promptly (and in no event later than ten
(10) Business Days following the date that this Agreement is executed) make its respective filings required under the HSR Act, and thereafter promptly make any other filings required to obtain any other Antitrust Approvals with respect to the
transactions contemplated hereby.
(b) Parent and Acquisition Sub agree to take (and to cause their subsidiaries to take)
promptly any and all actions necessary to avoid or eliminate each and every impediment and obtain all Antitrust Approvals that may be required by any foreign or U.S. federal, state or local Governmental Authority so as to enable the parties to
close the transactions contemplated by this Agreement as promptly as practicable and in any event before the Outside Date. Such actions shall include (i) each of Parent and the Company complying substantially with any requests for additional
information or documentary material from any Governmental Authority under any Antitrust Laws; (ii) Parent proposing, negotiating, offering to commit and effect (and if such offer is accepted, committing to and effecting), by consent decree, hold
separate order or otherwise, the sale, divestiture, license or disposition of such assets or businesses of Parent or, effective as of the Effective Time, the Surviving Corporation, or their respective subsidiaries; (iii) Parent proposing,
negotiating, or offering to commit and effect (and if such offer is accepted, committing to and effecting) actions that limit its freedom of action with respect to, or its ability to retain, any of the businesses, services or assets of Parent, the
Surviving Corporation or their respective subsidiaries; and (iv) each of Parent and the Company taking any and all other actions reasonably necessary in order to ensure that the waiting period under the HSR Act has expired or been terminated and
that any other required Antitrust Approvals have been obtained and that no decree, judgment, injunction (preliminary or permanent), temporary restraining order or any other order in any suit or proceeding relating to any Antitrust Laws would
preclude consummation of the Merger by the Outside Date; for the avoidance of any doubt, such actions shall include all necessary actions to appeal that decree, judgment, injunction (preliminary or permanent), temporary restraining order with an
appellate court or other appellate Governmental Authority of competent jurisdiction unless and until a final, non-appealable order has been issued. To assist Parent in complying with its obligations set forth in this
Section
6.2
, and only if requested in writing by Parent, the Company and its subsidiaries and Affiliates agree to take, or cause to be taken, any action reasonably in furtherance of the foregoing, so long as such action is
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conditioned upon the Closing. Furthermore, and for the avoidance of doubt, none of Parents Affiliates (other than Parents subsidiaries) shall be required to take or agree to take any
action or actions in furtherance of this
Section 6.2(b)
.
(c) The Company shall give (or shall cause its
subsidiaries to give) any notices to third parties, and Parent shall use, and cause each of its subsidiaries to use, its reasonable best efforts to cooperate with the Company in its efforts, to obtain any third-party consents not covered by
paragraph (a) above that are necessary or proper to consummate the Merger;
provided
that the Company shall not be required to make any payments to a third-party to obtain any consent or approval of such third-party prior to the Closing,
and shall not agree to make any such payments without Parents prior written consent. Each of the parties hereto will furnish to the other such necessary information and reasonable assistance as the other may reasonably request in connection
with the preparation of any required governmental filings or submissions and will use its reasonable best efforts to cooperate in responding to any inquiry from a Governmental Authority, including immediately informing the other party of such
inquiry, consulting in advance before making any presentations or submissions to a Governmental Authority, and supplying each other with copies of all material correspondence, filings (other than the HSR Notification and Report Form) or substantive
communications between either party and any Governmental Authority with respect to this Agreement;
provided
that such materials may be redacted to remove references concerning the valuation of the Company and as necessary to address
reasonable attorney-client or other privilege concerns. Each party will give the other party the opportunity to attend any meetings, or to participate in any substantive communications with, a Government Authority to the extent permitted by such
Government Authority. Notwithstanding the foregoing, obtaining any third-party consents pursuant to this paragraph (c) shall not be considered a condition to the obligations of Parent and Acquisition Sub to consummate the Merger.
Section 6.3
Access to Information; Confidentiality
.
(a) From the date hereof to the Effective Time or the date, if any, on which this Agreement is terminated pursuant to
Section
8.1
, to the extent permitted by applicable Legal Requirements and notwithstanding anything to the contrary in the Confidentiality Agreement, upon reasonable notice, the Company will provide to Parent and its
officers, directors, employees, accountants, consultants, legal counsel, financial advisors, Debt Financing Sources, agents and other representatives (collectively,
Representatives
), subject to the other restrictions in this
Section 6.3
, reasonable access during normal business hours to the Companys employees, properties, books, contracts and records, Tax Returns and other information as Parent may reasonably request regarding the business, assets,
liabilities, employees, Taxes and other aspects of the Company (but not including access to perform physical or environmental examinations or to take samples of the soil, ground water, air or products without the prior written consent of the
Company);
provided
,
however
, that the Company may restrict or otherwise prohibit access to any documents or information to the extent that (i) in the reasonable good faith judgment of the Company, any contract or applicable Legal
Requirement requires the Company to restrict or otherwise prohibit access to such documents or information, (ii) access to such documents or information would give rise to a risk of waiving any attorney-client privilege, work product doctrine
or other applicable privilege applicable to such documents or information, or (iii) in the reasonable good faith judgment of the Company, such access would violate any obligations of the Company or any of its subsidiaries with respect to
confidentiality obligations to any third party. In the event that the Company does not provide access or information in reliance on the preceding sentence, it shall use its commercially reasonable efforts to communicate the applicable information to
Parent in a way that would not violate the foregoing restrictions, including by (A) using its commercially reasonable efforts to obtain the required consent of any third party necessary (in the Companys good faith judgment) to provide such
disclosure or (B) providing such information in redacted form as is necessary to preserve such a privilege or comply with such Legal Requirement, or otherwise make appropriate substitute disclosure arrangements, to the extent possible, that are
reasonably acceptable to Parent and the Company. Any investigation conducted pursuant to the access contemplated by this
Section
6.3
shall be conducted in a manner that does not unreasonably interfere with the conduct of
the
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business of the Company and its subsidiaries or create a risk of damage or destruction of any property or assets of the Company or any of its subsidiaries.
(b) The information provided pursuant to this
Section
6.3
shall be used solely for the purpose of the
Merger and the transactions contemplated hereby. The parties shall comply with, and shall cause their respective Representatives to comply with, all of their or their Affiliates respective obligations under the Confidentiality Agreement,
subject to
Section
6.3(a)
. Notwithstanding anything in the Confidentiality Agreement to the contrary, the parties agree that (i) a Partial Company Transaction that is entered into in accordance with
Section
6.5(e)
shall not be deemed an Alternative Transaction (as defined in the Confidentiality Agreement), (ii) the standstill provisions in Section 12 of Confidentiality Agreement applicable to Parent, Acquisition Sub and their respective Affiliates
shall not terminate upon the Companys entry into an agreement providing for a Partial Company Transaction in accordance with
Section 6.5(e)
and (iii) in the event that the Company enters into a Partial Company Transaction in accordance
with
Section 6.5(e)
, the standstill provisions set forth in Section 12 of the Confidentiality Agreement shall remain in effect until the later to occur of (A) the expiration of the period set forth in Section 12 of the Confidentiality
Agreement in accordance with the terms thereof and (B) the date that is six (6) months following the consummation of such Partial Company Transaction;
provided
that in no event shall such provisions terminate any later than June 30, 2017. The
provisions in the foregoing sentence shall automatically cease to apply with respect to any Partial Company Transaction (or any agreement with respect thereto) that, following the Companys entry into such agreement in accordance with
Section 6.5(e)
, is amended or modified in a manner that has the effect of materially reducing the purchase price payable with respect thereto.
Section 6.4
Stockholder Meeting; Proxy Statement
.
(a) As promptly as practicable following the date hereof (and in any event, but subject to Parents timely performance of
its obligations under
Section 6.4(b)
, within fifteen (15) Business Days of the date hereof or such later date as to which Parent consents in writing (such consent not to be unreasonably withheld, conditioned or delayed)), the Company shall
prepare and shall cause to be filed with the SEC in preliminary form a proxy statement on Schedule 14A relating to the Stockholders Meeting (together with any amendments thereof or supplements thereto, the
Proxy Statement
).
Except as expressly contemplated by
Section 6.5(e)
, the Proxy Statement shall include the Company Recommendation, the Fairness Opinion and any materials required to be provided to the stockholders of the Company pursuant to the FBCA. The
Company will cause the Proxy Statement, at the time of the mailing of the Proxy Statement or any amendments or supplements thereto, and at the time of the Stockholders Meeting, not to contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading;
provided
,
however
, that no representation or warranty
is made by the Company with respect to information supplied by Parent or Acquisition Sub for inclusion or incorporation by reference in the Proxy Statement. The Company shall cause the Proxy Statement to comply in all material respects with the
provisions of the Exchange Act and the rules and regulations promulgated thereunder and to satisfy all rules of NASDAQ. The Company shall promptly notify Parents counsel upon the receipt of any comments, whether written or oral, from the SEC
or the staff of the SEC, or any request from the SEC or the staff of the SEC for amendments or supplements to the Proxy Statement, and shall promptly provide Parents counsel with copies of all correspondence between the Company and its
Representatives, on the one hand, and the SEC or the staff of the SEC, on the other hand. The Company shall use its reasonable best efforts to respond as promptly as reasonably practicable to any comments of the SEC or the staff of the SEC with
respect to the Proxy Statement, and the Company shall consult with Parent and its counsel prior to submitting to the SEC or the staff of the SEC any response to any such comments. Prior to the filing of the Proxy Statement or the dissemination
thereof to the holders of Common Stock, or submitting to the SEC or the staff of the SEC any response to any comments of the SEC or the staff of the SEC with respect thereto, the Company shall provide Parent and its counsel a reasonable opportunity
to review and comment on such documents and responses, and the Company will consider, in good faith, incorporating any such comments of Parent and/or its counsel prior to such filing, dissemination or submission.
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(b) Parent shall provide to the Company in writing all information concerning
Parent and Acquisition Sub as is customarily included in a Proxy Statement prepared in connection with transactions of the type contemplated by this Agreement and as may be reasonably requested by the Company in connection with the Proxy Statement
and shall otherwise assist and cooperate with the Company in the preparation of the Proxy Statement and resolution of comments of the SEC or its staff related thereto. Parent will cause the information relating to Parent or Acquisition Sub supplied
by it for inclusion in the Proxy Statement, at the time of the mailing of the Proxy Statement or any amendments or supplements thereto, and at the time of the Stockholders Meeting, not to contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading;
provided
,
however
, that no representation or
warranty is made by Parent or Acquisition Sub with respect to information supplied by the Company or any of its subsidiaries or Affiliates for inclusion or incorporation by reference in the Proxy Statement. Parent will furnish to the Company in
writing the information relating to it and Acquisition Sub required by the Exchange Act to be set forth in the Proxy Statement promptly following written request therefor from the Company.
(c) As promptly as practicable after the Proxy Statement Clearance Date, the Company shall, in accordance with applicable Legal
Requirements (including the FBCA), its constituent documents (including the Company Articles of Incorporation and the By-laws) and the rules of NASDAQ (i) establish a record date for and give notice of a meeting of the stockholders of the Company,
for the purpose of voting upon the approval of this Agreement (the
Stockholders Meeting
), and (ii) mail to the holders of Common Stock as of the record date established for the Stockholders Meeting a Proxy Statement
(the date the Company elects to take such action or is required to take such action, the
Proxy Date
). The Company shall duly call, convene and hold the Stockholders Meeting as promptly as reasonably practicable after the
Proxy Date;
provided
,
however
, that in no event shall such meeting be held later than forty-five (45) days following the date the Proxy Statement is mailed to the stockholders of the Company other than in the case in which the Company
is required to allow reasonable additional time for the filing and mailing of any supplemental or amended disclosure which the SEC or its staff or a court of competent jurisdiction has instructed the Company is necessary under applicable Legal
Requirements or Order and for such supplemental or amended disclosure to be disseminated and reviewed by the holders of Common Stock prior to the Stockholders Meeting. Notwithstanding anything to the contrary contained in this Agreement, the
Company may, with or without the consent of Parent, adjourn or postpone the Stockholders Meeting only if (A) the Company has determined in good faith after consultation with its outside counsel that the failure of the Company to adjourn or
postpone the Stockholders Meeting would reasonably be expected to be a violation of applicable Legal Requirement, (B) as of the time for which the Stockholders Meeting is originally scheduled (as set forth in the Proxy Statement) there
are insufficient shares of Common Stock represented (either in person or by proxy) to constitute a quorum necessary to conduct the business of the Stockholders Meeting or insufficient proxies returned to obtain the Company Stockholder
Approval, and Parent requests such an adjournment or postponement, or (C) after consultation with Parent, to the extent reasonably necessary to allow reasonable additional time for the filing and/or mailing of any supplement or amendment to the
Proxy Statement that the Company has determined in good faith after consultation with its outside counsel is required under applicable Legal Requirement and for such supplement or amendment to the Proxy Statement to be disseminated to and reviewed
by the stockholders of the Company in advance of the Stockholders Meeting;
provided
,
however
, that, without the prior written consent of Parent, the Company may only adjourn or postpone the Stockholders meeting under this
Section 6.4(c)
for an aggregate period of no more than thirty (30) days after the day on which the Stockholders Meeting is originally scheduled (as set forth in the Proxy Statement);
provided
,
further
, that the Company
shall not be permitted in any circumstance to adjourn or postpone the Stockholders Meeting to a date that is on or after the date that is five (5) Business Days prior to the Outside Date. Once the Company has established a record date for the
Stockholders Meeting, the Company shall not change such record date or establish a different record date for the Stockholders Meeting without the prior written consent of Parent (which consent shall not be unreasonably withheld,
conditioned or delayed), unless required to do so by applicable Legal
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Requirements or the Companys constituent documents (including the Company Articles of Incorporation and the By-laws). The Company shall ensure that all proxies solicited in connection with
the Stockholders Meeting are solicited in compliance with all applicable Legal Requirements (including all applicable rules of NASDAQ and the FBCA) and, unless the Company Board shall have made a Change of Recommendation in accordance with
Section 6.5(e)
, the Company shall use its reasonable best efforts to solicit proxies from the holders of Common Stock for the adoption and approval of this Agreement. Notwithstanding any Change of Recommendation, unless this Agreement shall
have been terminated in accordance with its terms, the Company shall submit this Agreement to the holders of Common Stock as promptly as reasonably practicable for the purpose of obtaining the Company Stockholder Approval at the Stockholders
Meeting. The Company shall, upon the reasonable request of Parent, advise Parent in writing at least on a daily basis on each of the last ten (10) Business Days prior to the date of the Stockholders Meeting as to the aggregate tally of proxies
received by the Company with respect to the Company Stockholder Approval.
(d) If at any time prior to the Effective Time
any event or circumstance relating to the Company or any of its subsidiaries or its or their respective officers or directors is known by the Company which, pursuant to the Securities Act or Exchange Act, should be set forth in an amendment or a
supplement to the Proxy Statement, the Company shall promptly inform Parent. Each of Parent, Acquisition Sub and the Company agree to correct any information provided by it for use in the Proxy Statement which shall have become false or misleading.
Section 6.5
Solicitation; Change of Recommendation
.
(a) The Company agrees that it shall, and shall cause its subsidiaries and its and their Representatives to, and shall direct
its and their Affiliates to, immediately cease any discussions or negotiations with any persons that may be ongoing with respect to a Competing Proposal and, until the earlier of the Effective Time or the date, if any, on which this Agreement is
terminated pursuant to
Section
8.1
, not, directly or indirectly: (i) solicit, initiate, knowingly facilitate or encourage any Competing Proposal; (ii) participate in any negotiations regarding, or furnish to any
person any information with respect to, any Competing Proposal; (iii) engage in discussions with any person with respect to any Competing Proposal; (iv) approve or recommend any Competing Proposal; (v) enter into any letter of intent
or similar document or any agreement or commitment providing for any Competing Proposal; (vi) take any action to make the provisions of any fair price, moratorium, control share acquisition, business
combination or other similar Takeover Statute, or any restrictive provision of any applicable anti-takeover provision in the Company Articles of Incorporation or By-laws of the Company, inapplicable to any person other than Parent and its
Affiliates or to any transactions constituting or contemplated by a Competing Proposal; or (vii) adopt resolutions to do any of the foregoing or agree to do any of the foregoing. The Company shall take such action as is necessary to enforce,
and not, without Parents prior written consent, terminate, amend, modify or waive any standstill or similar provision in any confidentiality or other agreement with such person;
provided
that the Company hereby waives all standstill
provisions in Section 12 of the Confidentiality Agreement applicable to Parent, Acquisition Sub and their respective Affiliates;
provided
,
further
, that if the Company Board determines in good faith, after consultation with its
outside counsel, that taking such action to enforce or the failure to take such other action described above in this sentence would be inconsistent with the directors fiduciary duties under applicable Legal Requirements, the Company may, upon
delivery of advance written notice to Parent, waive any such standstill or similar provisions solely to the extent necessary to permit a third-party to make, on a confidential basis to the Company Board, a Competing Proposal, conditioned upon such
third-party agreeing that the Company shall not be prohibited from providing any information to Parent (including regarding any such Competing Proposal) in accordance with, and otherwise complying with, this
Section 6.5
.
(b) Notwithstanding the limitations set forth in
Section
6.5(a)
, if, at any time after the date
hereof and prior to the Companys receipt of the Company Stockholder Approval, (i) the Company or any of its subsidiaries or any of their respective Representatives receives an unsolicited written Competing Proposal
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that did not result from any breach of this
Section
6.5
and (ii) the Company Board determines in good faith after consultation with the Companys outside counsel
and financial advisors that such Competing Proposal constitutes or would reasonably be expected to result, after the taking of any of the actions referred to in either clause (x) or (y) below, in a Superior Proposal, the Company may take the
following actions: (x) furnish information to the third-party making such Competing Proposal (
provided
that the Company makes such information available to Parent substantially simultaneously to the extent such information was not
previously made available to Parent) and (y) engage in discussions or negotiations with the third-party with respect to the Competing Proposal, in each case of (x) and (y), if, and only if, prior to so furnishing such information, the
Company receives from the third-party an executed confidentiality agreement on terms no less favorable in the aggregate to the Company than the Confidentiality Agreement as of the date it was executed (an
Acceptable Confidentiality
Agreement
);
provided
,
however
, that promptly (but in no event more than thirty-six (36) hours) following the Company taking such actions as described in clauses (x) and (y) above, the Company shall provide notice to
Parent (orally and in writing) of such determination of the Company Board as provided for in clauses (i) or (ii) above. From and after the execution of this Agreement, the Company shall notify Parent (orally and in writing) promptly (but
in any event within thirty-six (36) hours) of the receipt by it, any of its subsidiaries or any of their respective Representatives of any Competing Proposal and (A) if it is in writing, deliver to Parent a copy of such Competing Proposal and
any related draft agreements and other written material setting forth the terms and conditions of such Competing Proposal or (B) if it is oral, provide to Parent a reasonably detailed summary of the material terms and conditions thereof including of
the identity of the person (and the identity of such persons beneficial owners) making such Competing Proposal. The Company shall keep Parent reasonably informed on a prompt and timely basis of the status and material details (including any
change to the price) of any such Competing Proposal and with respect to any material change to the terms of any such Competing Proposal within thirty-six (36) hours of such material change.
(c) Except as otherwise provided in
Section
6.5(d)
or
Section 6.5(e)
, neither the Company
Board nor any committee thereof may (i) withdraw or withhold, rescind, amend, modify or qualify in any manner adverse to Parent the Company Recommendation or make any public announcement inconsistent with the Company Recommendation, or publicly
propose to do any of the foregoing, (ii) fail to include the Company Recommendation in the Proxy Statement or any amendment thereof, (iii) approve, adopt, endorse, declare the advisability of or recommend any Competing Proposal or any inquiry
or proposal that would reasonably be expected to lead to a Competing Proposal, (iv) take any formal action or make any recommendation or public statement in connection with a tender offer or exchange offer (other than a recommendation against such
offer or a customary stop, look and listen communication or similar communication of the type contemplated by Rule 14d-9(f) under the Exchange Act, subject to
Section 6.5(d)
), (v) following the date any Competing
Proposal or any material modification thereto is first made public, sent or given to the stockholders of the Company, fail to issue a press release that expressly reaffirms the Company Recommendation within five (5) Business Days following
Parents written request to do so (any action described in clause (i), (ii), (iii), (iv) or (v) whether taken by the Company, the Company Board or any committee thereof, being referred to as a
Change of Recommendation
),
(vi) cause, authorize or permit the Company or any of its subsidiaries to execute or enter into any letter of intent, memorandum of understanding, agreement-in-principle, merger agreement, acquisition agreement or other similar agreement
related to or providing for any Competing Proposal (other than an Acceptable Confidentiality Agreement) or requiring the Company to abandon, terminate, delay or fail to consummate the transactions contemplated by, or otherwise breach, this Agreement
or (vii) publicly propose or announce an intention to take any of the foregoing actions.
(d) Nothing in this
Section
6.5
shall be deemed to prohibit the Company or its subsidiaries from complying with Rule 14e-2, Rule 14d-9 or Item 1012(a) of Regulation M-A promulgated under the Exchange Act (including making
any stop, look and listen communication or similar communication of the type contemplated by Rule 14d-9(f) thereunder) or to prohibit the Company from making any disclosure if the Company Board determines in good faith (after
consultation with its outside counsel) that failure to do so would be inconsistent with its fiduciary obligations under applicable Legal Requirements, nor shall any
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such action be deemed to constitute a breach of the Companys obligations under this Agreement;
provided
,
however
, that nothing in this
Section
6.5(d)
shall permit the Company to effect a Change of Recommendation (including in compliance with Rule 14e-2, Rule 14d-9 or Item 1012(a) of Regulation M-A promulgated under the Exchange Act or other applicable Legal Requirements)
without complying with
Section
6.5(e)
and, for the avoidance of doubt, any such disclosure that does not reaffirm the Company Recommendation (other than a stop, look and listen communication or similar
communication of the type contemplated by Rule 14d-9(f) under the Exchange Act) shall constitute a Change of Recommendation.
(e) Notwithstanding the foregoing or anything to the contrary set forth in this Agreement, at any time after the date hereof
and prior to the Companys receipt of the Company Stockholder Approval, the Company Board may: (i) make a Change of Recommendation in response to (A) the Company receiving an unsolicited, written Competing Proposal that did not result from any
breach of this
Section
6.5
that the Company Board has concluded in good faith after consultation with the Companys outside counsel and financial advisors constitutes a Superior Proposal, or (B) an Intervening Event,
in each case, if the Company Board has concluded in good faith after consultation with the Companys outside counsel and financial advisors that the failure of the Company Board to make such Change of Recommendation would be inconsistent with
the directors fiduciary duties under applicable Legal Requirements); or (ii) cause the Company to terminate this Agreement in accordance with
Section
8.1(i)
, pay, simultaneously with and as a condition precedent to
such termination (provided Parent provides wiring instructions for such payment), the Company Termination Fee and enter into a binding written agreement (a
Superior Proposal Agreement
) with respect to an unsolicited, written
Competing Proposal received not resulting from any breach of this
Section 6.5
that the Company Board has concluded in good faith after consultation with the Companys outside counsel and financial advisors constitutes a Superior
Proposal;
provided
,
however
, that prior to taking the action set forth in clause (i) or (ii) above, as applicable, (x) the Company (A) shall have complied with this
Section
6.5
in all material respects
and (B) first provided prior written notice to Parent in advance of its intention to take such action (a
Company Board Notice
) which notice shall specify (1) in the case of such an action taken in connection with a Superior
Proposal, the terms and conditions of any such Superior Proposal (including the final draft of the Superior Proposal Agreement, if applicable) and the identity of the person (and the identity of such persons beneficial owners) making such
Competing Proposal or (2) in the case of such an action taken in connection with an Intervening Event, all available information with respect to such Intervening Event, and (y) for a period of five (5) Business Days following Parents receipt
of the Company Board Notice, Parent shall be entitled to deliver to the Company one or more proposals for amendments to this Agreement and the Company shall negotiate with Parent in good faith with respect thereto, and, after such five (5) Business
Day period, the Company Board determines in good faith, after consultation with the Companys outside counsel and financial advisors, taking into account all amendments or revisions to this Agreement proposed by Parent, that the Competing
Proposal remains a Superior Proposal, or, in the case of a Company Board Notice that is related to an Intervening Event, that the failure to make such Change of Recommendation continues to be inconsistent with the Company Boards fiduciary
duties under applicable Legal Requirements. Any subsequent modification to the material terms and conditions of such Competing Proposal (including any revision to price), or any change to the material facts and circumstances relating to such
Intervening Event, as applicable, shall require the Company to deliver to Parent a new Company Board Notice and again comply with the requirements of this
Section 6.5(e)
with respect to such revised Competing Proposal or Intervening Event,
except that the period referred to in clause (y) above shall be deemed to be the longer of (I) three (3) Business Days and (II) the period remaining under the notice period under clause (y) above immediately prior to the delivery of such additional
notice pursuant to this sentence. For the avoidance of doubt, the Company may simultaneously give notice of its intention both to make a Change of Recommendation and to terminate this Agreement to enter into a Superior Proposal Agreement and
the notice and negotiation periods set forth in this
Section
6.5(e)
for such actions may pass simultaneously.
(f) As used in this Agreement,
Competing Proposal
shall mean any inquiry, bona fide proposal for (other than
a proposal or offer by Parent or any of its subsidiaries), or expression by any person or group (as defined for purposes of Section 13(d) of the Exchange Act) for: (i) any merger, consolidation, share
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exchange, business combination, issuance of securities, direct or indirect acquisition of securities, recapitalization, tender offer, exchange offer or other similar transaction in which
(x) a person or group (as defined in the Exchange Act and the rules promulgated thereunder) of persons directly or indirectly acquires, or if consummated in accordance with its terms would acquire, beneficial or record ownership of
securities representing more than 20% of the outstanding shares of any class of voting securities of the Company or more than 20% of the aggregate voting power of the Company; or (y) the Company issues securities representing more
than 20% of the issued and outstanding shares of any class of voting securities of the Company or more than 20% of the aggregate voting power of the Company; or (ii) any direct or indirect sale, lease, exchange, transfer, acquisition or
disposition of any assets or business of the Company and of the subsidiaries of the Company (whether in a single transaction or a series of related transactions) (A) that constitutes or accounts for more than 20% of the consolidated net
revenues of the Company, or (B) for a price that is more than 20% of the enterprise value of the Company giving effect to the amount of the Merger Consideration; or (iii) any liquidation or dissolution of the Company.
(g) As used in this Agreement,
Superior Proposal
shall mean a bona fide unsolicited written Competing
Proposal (with all percentages in the definition of Competing Proposal increased to 70%) on terms that the Company Board determines in good faith, after consultation with the Companys outside counsel and financial advisors, would be more
favorable to the stockholders of the Company than the transactions contemplated by this Agreement, taking into account all factors the Company Board acting in good faith considers to be appropriate, including (i) any proposal by Parent in
writing to amend or modify the terms hereof, (ii) the identity of the person (and the identity of such persons beneficial owners) making such Competing Proposal, and (iii) the consideration, terms, conditions, timing, likelihood of
consummation, financing terms and legal, financial, and regulatory aspects of such Competing Proposal.
(h) In the event
that (i) this Agreement is amended to provide for a Partial Company Transaction with Parent or any of its subsidiaries, including in connection with an exercise of Parents right to propose amendments to this Agreement in accordance with
Section 6.5(e)
(a
Partial Company Parent Transaction
), or (ii) this Agreement is terminated and Parent or any of its subsidiaries, on the one hand, and the Company or any of its subsidiaries, on the other hand, enter into
an agreement that provides for a Partial Company Parent Transaction, in either case at any time following delivery of a Company Board Notice in connection with a Competing Proposal related to a Partial Company Transaction, then, notwithstanding
Section 12 of the Confidentiality Agreement, so long as this Agreement is not terminated pursuant to
Section 8.1(i)
(
Superior Proposal
), Parent and any of its subsidiaries shall have the right, but not the obligation, to, and the
Company shall take such actions as are reasonably necessary or appropriate to allow Parent and any of its subsidiaries to (including by terminating or waiving any standstill or similar provision in any confidentiality or other agreement), (x)
commence, conduct and consummate a tender offer to acquire Common Stock or (y) otherwise offer to, agree to and consummate a transaction to acquire the Company, in each case on terms determined by Parent provided that (A) the per share price shall
be no less than (I) the Merger Consideration minus (II) the amount of any dividends or other distributions declared or paid with respect to the Common Stock from and after the date hereof, if any, (B) the consummation of such tender offer or other
transaction shall be conditioned on the consummation of the Partial Company Parent Transaction, and (C) Parent and the Company shall use their commercially reasonable efforts to ensure that such tender offer or other transaction does not materially
delay or impede the consummation of the Partial Company Parent Transaction. Notwithstanding anything contained in this
Section 6.5(h)
, Parent acknowledges that the Company Board may make any recommendation (or take any similar position) with
respect to any such proposed tender offer or other transaction as the Company Board determines in its sole discretion. For the avoidance of doubt, this
Section 6.5(h)
does not modify or limit in any way the rights of Parent and
obligations of the Company set forth in
Section 6.5(e)
, with respect to a proposed Partial Company Transaction or otherwise, including with respect to Parents right to propose amendments to this Agreement in connection with a Competing
Proposal and the notice requirements and related time periods set forth therein.
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Section 6.6
Directors
and Officers
Indemnification
and Insurance
.
(a) Parent and Acquisition Sub agree that all rights to exculpation and indemnification and
advancement for acts or omissions occurring at or prior to the Effective Time, whether asserted or claimed prior to, at or after the Effective Time (including any matters arising in connection with the transactions contemplated by this Agreement),
now existing in favor of any Indemnitee as provided in the articles or certificates of incorporation or By-laws (or comparable organization documents) of the Company or any of its subsidiaries or Affiliates or in any agreement shall survive the
Merger and shall continue in full force and effect with respect to such Indemnitee. Parent and the Surviving Corporation shall (and Parent shall cause the Surviving Corporation to) (i) indemnify, defend and hold harmless, and advance
expenses to, Indemnitees with respect to all acts or omissions by them, in their capacities as such at any time prior to the Effective Time, to the fullest extent permitted by Legal Requirements and (ii) not amend, repeal or otherwise modify
any provisions of the Company Articles of Incorporation or By-laws (or equivalent organizational documents) of the Company or any of its subsidiaries as in effect on the date of this Agreement and any indemnification agreement of the Company or its
subsidiaries or other applicable contract that has been made available to Parent as in effect on the date of this Agreement in any manner that would adversely affect the rights thereunder of any Indemnitees.
(b) Without limiting the provisions of
Section
6.6(a)
, during the period commencing as of the
Effective Time and ending on the sixth anniversary of the Effective Time, Parent, the Surviving Corporation and its subsidiaries will: (i) indemnify, defend and hold harmless each Indemnitee against and from any costs or expenses (including
reasonable attorneys fees), judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or
investigative, to the extent such claim, action, suit, proceeding or investigation arises out of or pertains to: (A) any action or omission or alleged action or omission in such Indemnitees capacity as a director, officer or employee of
the Company or any of its subsidiaries or Affiliates; or (B) the Merger, this Agreement and any transactions contemplated hereby; and (ii) pay in advance of the final disposition of any such claim, action, suit, proceeding or investigation
the expenses (including reasonable attorneys fees) of any Indemnitee upon receipt of an undertaking by or on behalf of such Indemnitee to repay such amount if it shall ultimately be determined that such Indemnitee is not entitled to be
indemnified. Notwithstanding anything to the contrary contained in this
Section
6.6(b)
or elsewhere in this Agreement, neither Parent nor the Surviving Corporation shall (and Parent shall cause the Surviving Corporation not
to) settle or compromise or consent to the entry of any judgment or otherwise seek termination with respect to any claim, action, suit, proceeding or investigation for which indemnification may be sought under this
Section
6.6(b)
unless such settlement, compromise, consent or termination includes an unconditional release of all Indemnitees from all liability arising out of such claim, action, suit, proceeding or investigation.
(c) Prior to the Effective Time, the Company shall or, if the Company is unable to, Parent shall cause the Surviving
Corporation as of the Effective Time to, obtain and fully pay the premium for the non-cancellable extension of the directors and officers liability coverage of the Companys existing directors and officers insurance
policies and the Companys existing fiduciary liability insurance policies (collectively, the
D&O Insurance
), for a claims reporting or discovery period of at least six (6) years from and after the Effective Time with
respect to any claim related to any period of time at or prior to the Effective Time from an insurance carrier with the same or better credit rating as the Companys current insurance carrier with respect to D&O Insurance with terms,
conditions, retentions and limits of liability that are no less favorable than the coverage provided under the Companys existing policies;
provided
that the premium for such tail insurance shall not exceed 300% of the
annual premium currently paid by the Company (in which case Parent shall cause the Surviving Corporation to obtain as much comparable insurance as available for 300% of the annual premium currently paid by the Company). If the Company or the
Surviving Corporation for any reason fail to obtain such tail insurance policies as of the Effective Time, (i) the Surviving Corporation shall continue to maintain in effect, for a period of at least six (6) years from and after the
Effective Time, the D&O Insurance in place as of the date hereof with the Companys
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current insurance carrier or with an insurance carrier with the same or better credit rating as the Companys current insurance carrier with respect to D&O Insurance with terms,
conditions, retentions and limits of liability that are no less favorable than the coverage provided under the Companys existing policies as of the date hereof, or (ii) Parent will provide, or cause the Surviving Corporation to provide,
for a period of not less than six (6) years after the Effective Time, the Indemnitees who are insured under the Companys D&O Insurance with comparable D&O Insurance that provides coverage for events occurring at or prior to the
Effective Time from an insurance carrier with the same or better credit rating as the Companys current insurance carrier, that is no less favorable than the existing policy of the Company or, if substantially equivalent insurance coverage is
unavailable, the best available coverage;
provided
,
however
, that Parent and the Surviving Corporation shall not be required to pay an annual premium for the D&O Insurance in excess of 300% of the annual premium currently paid
by the Company for such insurance;
provided
further
, that if the annual premiums of such insurance coverage exceed such amount, Parent or the Surviving Corporation shall be obligated to obtain a policy with the greatest coverage
available, with respect to matters occurring at or prior to the Effective Time, for a cost not exceeding such amount.
(d)
The Indemnitees to whom this
Section
6.6
applies shall be third-party beneficiaries of this
Section
6.6
. The provisions of this
Section
6.6
are intended to be for the
benefit of each Indemnitee and his or her successors, heirs or representatives. Parent shall pay all reasonable expenses, including reasonable attorneys fees, that may be incurred by any Indemnitee in enforcing the indemnity and other
obligations provided in this
Section
6.6
.
(e) The rights of each Indemnitee under this
Section
6.6
shall be in addition to any rights such person may have under the certificate of incorporation or by-laws of the Company, the Surviving Corporation or any of its subsidiaries, or under any applicable Legal
Requirements or insurance policy or under any agreement of any Indemnitee with the Company or any of its subsidiaries.
(f)
Notwithstanding anything contained in
Section
9.1
or
Section
9.6
hereof to the contrary, this
Section
6.6
shall survive the consummation of the Merger indefinitely and
shall be binding, jointly and severally, on all successors and assigns of Parent, the Surviving Corporation and its subsidiaries, and shall be enforceable by the Indemnitees and their successors, heirs or representatives. In the event that
Parent or the Surviving Corporation or any of its successors or assigns consolidates with or merges into any other person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or transfers or conveys all
or a majority of its properties and assets to any person, then, and in each such case, proper provision shall be made so that the successors and assigns of Parent or the Surviving Corporation, as applicable, shall succeed to the obligations set
forth in this
Section
6.6
.
Section 6.7
Notification of Certain Matters
.
The Company shall
promptly (and in any event within two (2) Business Days) notify Parent, and Parent shall promptly (and in any event within two (2) Business Days) notify the Company, of (a) any notice or other communication received by such party from
any Governmental Authority in connection with this Agreement, the Merger or the transactions contemplated hereby, or from any person alleging that the consent of such person is or may be required in connection with the Merger or the transactions
contemplated hereby, if the subject matter of such communication or the failure of such party to obtain such consent could be material to the Company, the Surviving Corporation or Parent, (b) any actions, suits, claims, investigations or
proceedings commenced or, to such partys knowledge, threatened against, relating to or involving or otherwise affecting such party or any of its subsidiaries which relate to this Agreement, the Merger or the transactions contemplated hereby
and (c) the discovery by such party of any fact, circumstance or event, the occurrence or non-occurrence of which could reasonably be expected, individually or taken together with all other existing facts, events and circumstances known to such
party, to cause or result in any of the conditions of the obligations of such party to consummate the Merger not to be satisfied or the satisfaction of which to be materially delayed. The delivery of any notice pursuant to this
Section
6.7
shall not limit or otherwise affect the remedies available hereunder to the party receiving such notice or the representations or warranties or covenants of the parties or the conditions to the obligations of
the parties hereunder.
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Section 6.8
Public Announcements
.
Parent and the Company shall consult
with each other before issuing any press release or otherwise making any public statements with respect to this Agreement or the Merger and shall not issue any such press release or make any such public statement without the prior written consent of
the other (which consent shall not be unreasonably withheld or delayed), except as may be required by Legal Requirements, court process or any listing agreement with or rules of the NYSE, NASDAQ or other stock exchange on which securities of
Ultimate Parent or the Company is listed;
provided
that Parent and the Company may make any public statement in response to specific questions by the press, analysts, investors or those attending industry conferences or financial analyst
conference calls, so long as such statement is substantially similar to previous press releases, public disclosures or public statements made jointly by Parent and the Company (or individually, if approved by the other party); and
provided
,
further
, that Parent and Acquisition Sub may make public statements regarding any Competing Proposal that has been made public or in response to public statements of any person (other than research analysts and proxy advisory firms)
recommending or encouraging stockholders of the Company not to adopt and approve this Agreement, the Merger and the transactions contemplated hereby, after consulting with the Company and considering in good faith any comments provided by the
Company with respect to such public statements to the extent permitted by Legal Requirements, court process or any listing agreement with or rules of the NYSE, NASDAQ or other stock exchange on which securities of Ultimate Parent or the Company is
listed. Notwithstanding the foregoing, but subject to
Section 6.5
, the restrictions set forth in this
Section 6.8
shall not apply to any public statement made or proposed to be made by the Company or Parent in connection with or
following a Change of Recommendation.
Section 6.9
Employee Matters
.
(a) For the period commencing on the Closing Date until the second anniversary thereof (or, if earlier, the date of termination
of the applicable Company Employee (as defined below)), Parent shall provide or shall cause one of its subsidiaries, including the Surviving Corporation or any of its subsidiaries, to provide to each employee of the Company and any of its
subsidiaries who continues his or her employment with Parent or any of its subsidiaries, including the Surviving Corporation and any of its subsidiaries (collectively,
Company Employees
), following the Closing Date, with: (i) base
salary that is not less than the base salary as in effect immediately prior to the Effective Time, (ii) target annual and long-term incentive compensation opportunities that are not less favorable than that in effect immediately prior to the
Effective Time (provided that cash compensation may be substituted for equity compensation for purposes of long-term incentive compensation), and (iii) employee benefits (excluding, for this purpose, any defined benefit or supplemental pension plan
(whether or not tax-qualified), and post-termination health, life or other welfare benefits, in each case, except as required by a Company Benefit Plan or by applicable Legal Requirements) that are, in the aggregate, not less favorable than the
employee benefits provided to such Company Employee as of the Effective Time;
provided
that a change in employee benefits shall not be deemed to violate this clause (iii) if such change results from a change in the applicable program for all
similarly-situated employees of Parent and its subsidiaries in the applicable jurisdiction so long as (A) Parent and its subsidiaries continue to offer benefits to employees (including Company Employees) that include medical, dental, vision,
disability and life insurance, and a matching program comparable to the Companys 401(k) Plan or, as applicable, a Company subsidiarys existing defined contribution plan, and (B) the aggregate employee benefits provided to the employee
are not less favorable than the aggregate employee benefits provided to similarly-situated employees of Parent and its subsidiaries in the applicable jurisdiction. Without limiting the generality of the foregoing, the Surviving Corporation
shall (x) honor or cause to be honored the Elizabeth Arden, Inc. Severance Policy in accordance with its terms (in effect on the date hereof, and as it may be amended in accordance with the terms of this Agreement and the Company Disclosure Letter)
and (y) with respect to any Company Employee who does not participate in the Elizabeth Arden, Inc. Severance Policy and whose employment with the Surviving Corporation and its Affiliates terminates prior to the second anniversary of the Closing
Date, honor or cause to be honored any severance policy or program applicable to such Company Employee as of the date of this Agreement (as set forth in the plans or descriptions of plans in Section 4.15(a) of the Company Disclosure Letter,
including the Elizabeth Arden, Inc. Non-Executive Severance Policy, in each case as in effect on the date of this
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Agreement, and as it may be amended in accordance with the terms of this Agreement and the Company Disclosure Letter), including by taking into account service and compensation following the
Effective Time. Parent shall honor or cause the Surviving Corporation to honor any fiscal year 2017 bonus program and any long-term incentive awards, in each case implemented or granted by the Company in accordance with the terms of this
Agreement and the Company Disclosure Letter.
(b) For purposes of eligibility and vesting under the Company Benefit Plans
and the Employee Benefit Plans of Parent, the Surviving Corporation and the Surviving Corporations subsidiaries providing benefits to any Company Employees after the Closing (the
New Plans
), and for purposes of accrual of
vacation and other paid time off and severance benefits under New Plans, each Company Employee shall be credited with his or her years of service with the Company or its subsidiaries, as the case may be, before the Closing, to the same extent as
such Company Employee was entitled, before the Closing, to credit for such service under any similar Company Benefit Plan;
provided
that the foregoing service credit shall not apply with respect to benefit accrual under any defined benefit
pension plan or to the extent that its application would result in a duplication of benefits. In addition, and without limiting the generality of the foregoing: (i) each Company Employee shall be immediately eligible to participate, without any
waiting time, in any and all New Plans to the extent coverage under such New Plan replaces coverage under a comparable Company Benefit Plan in which such Company Employee participated immediately before the replacement; and (ii) for purposes of
each such New Plan providing medical, dental, pharmaceutical and/or vision benefits to any Company Employee, Parent shall use commercially reasonable efforts to cause all pre-existing condition exclusions, evidence of insurability requirements and
actively-at-work requirements of such New Plan to be waived for such Company Employee and his or her covered dependents, and Parent shall use commercially reasonable efforts to cause any eligible expenses incurred by such Company Employee and his or
her covered dependents under the applicable Company Benefit Plan during the portion of the plan year of such New Plan ending on the date such Company Employees participation in such New Plan begins to be taken into account under such New Plan
for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to such Company Employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in accordance with such
New Plan.
(c) Following the date of this Agreement, no new offering periods shall be commenced for purposes of the
Companys 2011 Employee Stock Purchase Plan.
(d) Parent and the Company shall each provide, and shall cause each of
their respective subsidiaries to provide, and shall use their respective reasonable best efforts to cause each of their respective representatives, including legal, human resources and regulatory, to provide, all cooperation reasonably requested by
any other party hereto in connection with satisfying legal obligations, including all notifications and consultations and other processes necessary to effectuate the transactions contemplated hereby, which shall include any required notifications
and consultations and other processes with respect to any works council, economic committee, union or similar body. Prior to the Effective Time, except as necessary to comply with any applicable Legal Requirement, neither the Company nor any of
its Affiliates will, without the prior written consent of Parent, enter or offer to enter into any agreement with any works council, economic committee, union or similar body which would have the effect of making any changes in the terms and
conditions of employment or pension benefits of any of the Company Employees.
(e) Parent and the Company (and their
respective subsidiaries) shall reasonably cooperate and use good faith efforts in all matters reasonably necessary to effect the transactions contemplated by this
Section 6.9
.
(f) Without limiting the generality of
Section
9.8
, the provisions of this
Section
6.9
are solely for the benefit of the parties to this Agreement, and no Continuing Employee or any other employee or service provider of Parent, the Company, the Surviving Corporation, or any of their respective
subsidiaries or Affiliates (including any beneficiary or dependent thereof) shall be regarded for any purpose as a third-party beneficiary of this Agreement, and no provision of this
Section
6.9
shall create such rights in
any such persons. Nothing herein shall (i) guarantee employment for any period of time or preclude the ability of Parent, the Company, the Surviving Corporation, or any of their respective subsidiaries or Affiliates to terminate the
employment or service of any Continuing Employee or other employee or service provider at
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any time and for any reason or without reason; (ii) require Parent, the Company, the Surviving Corporation, or any of their respective subsidiaries or Affiliates to continue any Company
Benefit Plans, or other compensation or benefit plans, programs, policies, agreements or arrangements, or prevent the amendment, modification or termination thereof; (iii) amend any Company Benefit Plans or other compensation or benefit plans,
programs, policies, agreements or arrangements; or (iv) except as specifically provided in this
Section 6.9
, require Parent, the Surviving Corporation or any of their respective subsidiaries or Affiliates to provide any Company Employee with
any particular level of compensation or benefits.
Section 6.10
Financing
.
(a) Each of Parent and Acquisition Sub shall, subject to the terms and conditions of this Agreement, use its commercially
reasonable efforts to obtain the proceeds of the Debt Financing at Closing on the terms and conditions described in the Commitment Letter and Fee Letter, including using commercially reasonable efforts to (i) maintain in effect the Commitment
Letter and Fee Letter, in each case as in effect on the date of this Agreement (subject to the last sentence of this
Section 6.10(a)
), in accordance with their terms, (ii) negotiate definitive agreements with respect to the Debt
Financing (the
Definitive Agreements
) consistent with the terms and conditions contained therein (including, as necessary, the flex provisions contained in the Fee Letter) (or if available, on other terms that are
acceptable to Parent and would not (x) adversely affect the ability of Parent and Acquisition Sub to consummate the transactions contemplated hereby, (y) reduce the aggregate amount of the Debt Financing below the amount required to consummate the
Merger and the other transactions contemplated by this Agreement and to pay fees and expenses and (z) add any new (or adversely modify any existing) condition to the consummation of the Debt Financing as compared to those in the Commitment Letter
and Fee Letter as in effect of the date of this Agreement in a manner that would reasonably be expected to prevent, impede or materially delay the consummation of the Merger and the other transactions contemplated by this Agreement and
(iii) satisfy (or, if deemed advisable by Parent, obtain the waiver of) on a timely basis all conditions in the Commitment Letter, Fee Letter and the Definitive Agreements and otherwise comply with all of its obligations thereunder. In the
event that all conditions contained in the Commitment Letter have been satisfied or waived and Parent is required to consummate the Closing pursuant to
Section
2.2
, Parent shall use commercially reasonable efforts to cause
each Lender to fund its respective committed portion of the Debt Financing required to consummate the transactions contemplated by this Agreement and to pay related fees and expenses on the Closing Date;
provided
,
however
that nothing
contained in this
Section 6.10
shall require either Parent or Acquisition Sub to bring any enforcement action or proceeding against any Debt Financing Source to enforce its respective rights under the commitment to procure Debt Financing
pursuant to the applicable Commitment Letter and Fee Letter. Neither Parent nor Acquisition Sub shall, without the prior written consent of the Company, permit any amendment or modification to, or any waiver of any provision (including any
remedy) under, or replace (it being understood that any Alternative Debt Financing shall not be deemed a replacement for purposes of this sentence), the Commitment Letter or Fee Letter if such amendment, modification, or waiver or replacement
(w) adds new (or adversely modifies any existing) conditions to the consummation of the Debt Financing as compared to those in the Commitment Letter and Fee Letter as in effect on the date of this Agreement in a manner that would reasonably be
expected to prevent, impede or materially delay the consummation of the Merger and the other transactions contemplated by this Agreement, (x) adversely affects the ability of Parent or Acquisition Sub to enforce their rights against other parties to
the Commitment Letter, Fee Letter or the Definitive Agreements as so amended, replaced, supplemented or otherwise modified, relative to the ability of Parent to enforce its rights against such other parties to the Commitment Letter and Fee Letter as
in effect on the date hereof or in the Definitive Agreements, (y) reduces the aggregate amount of the Debt Financing below the amount required to consummate the Merger and the other transactions contemplated by this Agreement and to pay related
fees and expenses, or (z) would otherwise reasonably be expected to prevent, impede or materially delay the consummation of the Merger and the other transactions contemplated by this Agreement;
provided
that for the avoidance of doubt no
consent from the Company shall be required for: (A) any amendment, replacement, supplement or modification of the Commitment Letter that is limited to adding lenders, lead arrangers, bookrunners, syndication agents or similar entities that have
not executed the Commitment Letter as of the date of this Agreement (including in replacement of a Lender), (B) implementation or exercise of any flex
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provisions provided in the Fee Letter as in effect as of the date hereof, or (C) any amendment, replacement, supplement or modification to the Commitment Letter or Definitive Agreements so
long as such action would not be prohibited by the foregoing clauses (w)-(z).
(b) In the event that any portion of
the Debt Financing becomes unavailable, regardless of the reason therefor (other than a breach by the Company of this Agreement which prevents or renders impracticable the consummation of the Debt Financing) each of Parent and Acquisition Sub will
(1) use its commercially reasonable efforts to obtain alternative debt financing from the same or other source (the
Alternative Debt Financing
) (in an amount sufficient, when taken together with available cash on hand, and
any then-available Debt Financing pursuant to any then-existing Commitment Letter, to consummate the transactions contemplated by this Agreement) on terms not less favorable in the aggregate to Parent than those contained in the Commitment Letter
and the Fee Letter that the alternative financing would replace (taking into account any flex provisions) and (2) promptly notify the Company of such unavailability and the reason therefor. Notwithstanding anything to the contrary, nothing in
this
Section 6.10
shall require Parent to pay any material fees in excess of those contemplated by the Fee Letter.
(c) For purposes of the foregoing
Sections
6.10(a)
and
(b)
, (i) the term
Commitment Letter
shall be deemed to include any commitment letter (or similar agreement) with respect to any alternative debt financing arranged in compliance herewith (and any Commitment Letters remaining in effect at the time
in question), (ii) the term
Fee Letter
shall be deemed to include any fee letter (or similar agreement) with respect to any alternative debt financing arranged in compliance with this
Section
6.10
,
and (iii) the term
Lenders
shall be deemed to include any lenders providing the alternative debt financing arranged in compliance herewith. Parent and Acquisition Sub shall provide the Company with prompt notice of any breach
or default by any party to any Commitment Letters or the Definitive Agreements of which Parent or Acquisition Sub gains knowledge and termination or repudiation by any party to any Commitment Letters or the Definitive Agreements or any provision
thereof;
provided
,
however
, that in no event will Parent or Acquisition Sub be under any obligation to disclose any information that is subject to attorney-client or similar privilege if Parent or Acquisition Sub shall have used its
commercially reasonable efforts to disclose such information in a way that would not waive such privilege.
Section 6.11
Financing
Cooperation
.
(a) At all times from and after the date hereof to and through the Closing Date, at the sole
expense of Parent, the Company shall, and shall cause its subsidiaries to, and shall use commercially reasonable efforts to cause the respective officers, employees, consultants and advisors, including legal and accounting advisors, of the Company
and its subsidiaries to, use their respective commercially reasonable efforts to provide to Parent such cooperation as may be reasonably requested by Parent in connection with obtaining the Debt Financing, including:
(i) making senior management and advisors of the Company and its subsidiaries available to assist in preparation for and
participate in a reasonable number of meetings, presentations, road shows, drafting sessions and due diligence sessions with the Debt Financing Sources and other proposed lenders, legal counsel, underwriters, initial purchasers, placement agents and
potential investors, and in sessions with rating agencies, subject to customary confidentiality provisions;
(ii) assisting
Parent with Parents preparation of pro forma financial information and pro forma financial statements and materials for rating agency presentations, offering documents, private placement memoranda, registration statements, bank information
memoranda, prospectuses, business projections and similar documents used in connection with the Debt Financing (the
Offering Materials
) and providing customary estimates and other forward-looking financial information regarding
the future performance of the business of the Company and its subsidiaries to the extent reasonably requested by the Debt Financing Sources, and providing customary authorization and management representation letters in connection therewith;
provided
, that any such Offering Materials need not be issued by the Company or any of its subsidiaries prior to the Closing;
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(iii) using commercially reasonable efforts to cause its independent accountants
to provide assistance and cooperation to Parent, including participating in a reasonable number of drafting sessions and accounting due diligence sessions providing consents to Parent to use their audit reports relating to the Company and providing
drafts of any customary comfort letters prior to the commencement of any road show, which such accountants would be prepared to issue at the time of pricing and at closing of any offering or private placement of the Debt Financing (in
the form of debt securities) pursuant to Rule 144A under the Securities Act;
(iv) assisting in the preparation of and
executing and delivering definitive financing documents, including interest hedging arrangements, pledge and security documents, and certificates and other documents and back-up for legal opinions, in each case as applicable and to the extent
reasonably requested by Parent, and otherwise reasonably facilitating the pledging of collateral;
provided
, that no obligation of the Company or any of its Subsidiaries shall be effective prior to the Closing;
(v) requesting and cooperating in obtaining customary lien terminations relating to any Indebtedness of the Company and its
subsidiaries, to be effective no earlier than the Closing;
(vi) providing reasonable access during business hours by
Parent and any Debt Financing Sources, and their respective officers, employees, consultants and advisors (including legal, valuation, and accounting advisors) to the books and records, properties, officers, directors, agents and representatives of
the Company and its subsidiaries, subject to customary confidentiality provisions;
(vii) furnishing to Parent and the Debt
Financing Sources all financial and other pertinent information regarding the Company and its subsidiaries as may be necessary in connection with any Debt Financing or otherwise reasonably requested by Parent promptly following such request to
consummate the Debt Financing, including (A) all historical financial statements and historical financial data regarding the Company and its subsidiaries, in each case (1) prepared in accordance with GAAP and (2) that is required by Regulation
S-X under the Securities Act and other accounting rules and regulations of the SEC) for inclusion in a registration statement to be filed with the SEC with respect to debt securities of Parent (as of and for the periods required thereby) (other than
pursuant to Rule 3-09, Rule 3-10 or Rule 3-16 of Regulation S-X), or (B) such information regarding the Company and its subsidiaries (1) that is otherwise customarily included in private placement memoranda relating to
offerings under Rule 144A of the Securities Act or bank information memoranda, as applicable, in each case of the type contemplated by the Debt Financing, and (2) as is otherwise necessary in order to receive customary comfort
(including as to negative assurance comfort and change period) from the Companys independent accountants in connection with offerings of debt securities (all such information described in this clause (vii) together with any
replacements or restatements thereof and any supplements thereto if any such information would cease to be Compliant and, if necessary, consent of the Companys auditors to make customary use of applicable information in connection with the
Debt Financing, the
Required Financial Information
);
(viii) taking all actions reasonably requested to
(A) permit the prospective lenders involved in the Debt Financing to evaluate the Companys and its subsidiaries assets, cash management and accounting systems, policies and procedures relating thereto, including inventory appraisals and
field audits, for the purpose of establishing collateral arrangements and (B) establish bank and other accounts and blocked account contracts and lock box arrangements in connection with the foregoing, subject to customary confidentiality provisions
and provided that no right of any Lender or obligation of the Company or any of its subsidiaries thereunder shall be effective until the Closing;
(ix) providing at least three (3) Business Days prior to the Closing all documentation and other information about the
Company and its subsidiaries required by applicable know your customer and anti-money laundering rules and regulations including the USA Patriot Act to the extent requested at least ten (10) Business Days prior to the anticipated
Closing; and
(x) subject to the occurrence of the Closing, taking all corporate actions necessary to permit consummation
of the Debt Financing;
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provided
, in each case under this
clause (a)
, that nothing herein shall require
(1) such cooperation to the extent it would unreasonably interfere with the business or operations of the Company or its subsidiaries, or (2) the taking of any action that would conflict with or violate (x) the Company Articles of
Incorporation or By-laws, in each case that are not contingent upon the Effective Time or (y) any applicable Legal Requirement. The Company hereby consents to the use of its and its subsidiaries logos as may be reasonably necessary in
connection with the Debt Financing.
(b) Notwithstanding anything in this
Section
6.11
to the
contrary, neither the Company nor any of its subsidiaries shall be required to (i) prior to the Closing bear any out-of-pocket cost or expense or pay any fee in connection with the Debt Financing (provided that if any such fees or expenses are
incurred, Parent shall promptly reimburse such fees and expenses upon request), (ii) incur any liability (or cause their respective directors, officers or employees to incur any liability) under the Debt Financing prior to the Closing; (iii)
deliver any legal opinions by its counsel or (iv) enter into any agreement or commitment that would be effective prior to the Closing (other than such customary management representation letters and authorization letters referred to in
clause (a)(ii)
above). Notwithstanding anything to the contrary, nothing in this Agreement shall prevent prior to the Closing Date (A) any escrow arrangements in connection with an offering of high yield debt securities as part of the
Debt Financing or (B) the Debt Offer and Consent Solicitation in furtherance of the terms of
Section 6.18
. Parent shall indemnify and hold harmless the Company, its subsidiaries, and its and their respective officers, directors,
employees, consultants, agents, advisors and representatives from and against any and all losses, damages, claims, costs or expenses suffered or incurred by any of them in connection with the Debt Financing and any information utilized in connection
therewith (other than any information provided in writing by the Company or any of its subsidiaries specifically for use therein), in each case other than to the extent any of the foregoing arises from the bad faith, gross negligence or willful
misconduct of the Company or any of its subsidiaries or their respective Affiliates, officers, directors or employees.
(c)
The Company shall deliver to Acquisition Sub on or prior to the Closing Date, payoff letters with respect to (i) the Third Amended and Restated Credit Agreement, dated as of January 21, 2011 (the
Credit Agreement
), by and among
the Company, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (as amended, supplemented, or otherwise modified from time to time) and (ii) the Credit Agreement (Second Lien), dated as of June 12, 2012 (the
Second Lien Credit Agreement
), between the Company and JPMorgan Chase Bank, N.A. (as amended, supplemented, or otherwise modified from time to time), which payoff letters shall substantially provide (subject to customary
exceptions) (x) that in each case, upon receipt of the payoff amount set forth in the applicable payoff letter, the respective Indebtedness incurred thereunder and related instruments shall be automatically terminated and (y) that all
Liens (and guarantees), if any, in connection therewith relating to the assets and properties of the Company or any of its subsidiaries securing such Indebtedness, shall be, upon the payment of the amount set forth in the payoff letter (and, if
applicable, providing for letters of credit or cash collateral) be automatically released and terminated).
(d) The Company
will use its commercially reasonable efforts to, and will cause its subsidiaries to use commercially reasonable efforts to, upon the reasonable request of Parent, update any information provided by the Company regarding the Company and its
subsidiaries (to the extent it is available) included in any offering document to be used in connection with the Debt Financing to the extent that such information would, when taken as a whole in the absence of such an update, contain untrue
statements of material fact or omit to state any material fact necessary in order to make the statements contained therein not misleading. In addition, if, in connection with a marketing effort contemplated by the Commitment Letter, Parent
reasonably requests the Company to file a Current Report on Form 8-K pursuant to the Exchange Act that contains material non-public information with respect to the Company, which Parent reasonably desires to include in a customary offering
memorandum for the Debt Financing, then the Company shall discuss in good faith whether the Company shall file a Current Report on Form 8-K or similar document containing such material non-public information.
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Section 6.12
Acquisition Sub
.
Parent will take all actions necessary to
(a) cause Acquisition Sub to perform its obligations under this Agreement and to consummate the Merger on the terms and conditions set forth in this Agreement and (b) ensure that, prior to the Closing, Acquisition Sub shall not conduct any
business or make any investments other than as specifically contemplated by this Agreement, or incur or guarantee any Indebtedness.
Section 6.13
No Control of the Company
s Business
.
Nothing contained in this Agreement is intended to
give Parent, directly or indirectly, the right to control or direct the Companys or its subsidiaries operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and
conditions of this Agreement, complete control and supervision over its and its subsidiaries operations.
Section 6.14
Rule
16b-3
. Prior to the Effective Time, the Company shall take all actions necessary or appropriate to ensure that the dispositions of equity securities of the Company (including derivative securities) pursuant to
the transactions contemplated by this Agreement by any officer or director of the Company who is subject to Section 16 of the Exchange Act are exempt under Rule 16b-3 promulgated under the Exchange Act.
Section 6.15
Stockholder Litigation
. Prior to the earlier of the Effective Time or the termination of this Agreement, the
Company shall control the defense of any litigation brought by stockholders of the Company against the Company and/or its directors relating to the transactions contemplated by this Agreement, including the Merger;
provided
,
however
,
that the Company (i) shall promptly provide Parent with copies of all proceedings and correspondence relating to such litigation, (ii) shall give Parent the opportunity to participate with the Company regarding the defense or settlement of
any such litigation, (iii) shall give due consideration to Parents advice with respect to such litigation and (iv) shall not compromise, settle, come to an arrangement regarding or agree to compromise, settle or come to an
arrangement regarding any litigation arising or resulting from the transactions contemplated by this Agreement (other than any settlement solely for monetary damages paid entirely from proceeds of insurance, except for any applicable deductible), or
consent to the same without the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed.
Section 6.16
Stock Exchange De-listing
. Prior to the Closing Date, the Company shall cooperate with Parent and use
reasonable best efforts to take, or cause to be taken, all actions, and do or cause to be done all things, reasonably necessary, proper or advisable on its part under applicable Legal Requirements and rules and policies of the NASDAQ to cause the
delisting of the Company and of the Common Stock from the NASDAQ as promptly as practicable after the Effective Time and the deregistration of the Common Stock under the Exchange Act as promptly as practicable after such delisting.
Section 6.17
State Takeover Laws
. If any control share acquisition, fair price, business
combination or other anti-takeover Legal Requirements becomes or is deemed to be applicable to this Agreement or any transaction contemplated by this Agreement, then Parent, the Company and their respective boards of directors or managers, as
applicable, shall take all reasonable action necessary so that the Merger and the other transactions contemplated hereby may be consummated as promptly as practicable on the terms contemplated herein and otherwise act to eliminate if possible, and
otherwise to minimize, the effects of such statute or regulation on the Merger and the other transactions contemplated hereby.
Section
6.18
Treatment of Certain Indebtedness
.
(a) As soon as reasonably practicable after the receipt by the Company
of any written request by Parent to do so, but in no event later than five (5) Business Days following receipt of such written request (provided that Parent has provided the documentation contemplated by
Section 6.18(b)
), the Company shall
use its commercially reasonable efforts to take the following actions on such terms and conditions that are consistent with the requirements of the Notes Indenture and the Notes and otherwise reasonably specified, from time to time, by Parent: (i)
make an offer to purchase with respect to all of the outstanding aggregate principal amount of the Notes (the
Debt Offer
) and (ii) commence a related consent solicitation (the
Consent Solicitation
) to amend the
Notes Indenture to remove the negative covenants and default
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provisions therefrom that are required to be removed to effect the Merger. On the Closing Date, the Company shall accept for purchase (with funds to be advanced or contributed by Parent) each
Note validly tendered and not withdrawn pursuant to the Debt Offer, subject to the satisfaction or waiver of all conditions to the Debt Offer. Upon Parents written request, the Company shall withdraw and terminate, amend or extend, or cause to
be withdrawn and terminated, amended or extended, any Debt Offer and Consent Solicitation. For the avoidance of doubt, it is understood and agreed that the price to be paid in connection with the Debt Offer, conditionality, ability to terminate,
amend or extend the Debt Offer, and the form and substance of the amendments to the Notes and the Notes Indenture to take effect on the Closing Date, and the decision by Parent to terminate or extend the Debt Offer, shall be within Parents
sole discretion. None of the Notes shall be required to be repurchased prior to the Closing Date. To the extent Parent does not deliver to the Company a written request pursuant to the first sentence of this
Section 6.18(a)
(and has not
itself commenced the Debt Offer and the Consent Solicitation), or withdraws such request after it is given, or the Debt Offer will not be consummated because a condition thereto will not be satisfied or waived on or prior to the Closing, then at
least three (3) Business Days prior to the Closing Date, the Company and Parent shall determine the amount (the
Indenture Discharge Amount
) that will be required to be irrevocably deposited in trust with the Indenture Trustee to
effect the discharge of the Notes Indenture and the Notes pursuant to Section 11.01 of the Notes Indenture, assuming the mailing of the Notice of Redemption on the Closing Date (the
Optional Redemption
, and together with the
transactions described in clauses (i) and (ii) above, the
Notes Refinancing
). Notwithstanding the foregoing, (x) the closing of any Notes Refinancing shall be conditioned on the occurrence of the Closing and funded (including all
reasonable and documented out-of-pocket expenses related thereto) by amounts provided, advanced or contribution by Parent or Acquisition Sub, and (y) the Company and its subsidiaries shall not be required to take any action in violation of Legal
Requirements or the Notes Indenture or the Notes in connection with the Notes Refinancing. The Company shall, and shall cause its Representatives and advisors to, use their respective commercially reasonable efforts to provide all cooperation
reasonably requested by Parent in connection with the Notes Refinancing, including entering into, upon the closing of the Consent Solicitation (or on such earlier date as may be provided in the Debt Offer and Consent Solicitation materials) and
receipt of the requisite consents of noteholders, one or more supplemental indentures (to be effective upon the execution thereof, with the operative provisions thereof to take effect from and after the date of the initial acceptance by the Company
of Notes for purchase in the Debt Offer) reflecting the amendments to the Notes Indenture approved in such Consent Solicitation, and using its commercially reasonable efforts to cause the Indenture Trustee, as trustee under the Notes Indenture, to
promptly enter into such supplemental indenture or supplemental indentures. Such cooperation shall be subject to the same limitations, restrictions and conditions set forth in
Section 6.11
with respect to the Debt Financing cooperation.
(b) Parent shall prepare all necessary and appropriate documentation (including, if applicable, all mailings to the holders of
the Notes) in connection with the Notes Refinancing, in form and substance reasonably satisfactory to the Company and Parent. Parent and the Company shall reasonably cooperate with each other in the preparation of the Debt Offer Documents and such
other related documentation, which shall be subject to the prior review of, and comment by, the Company. If at any time prior to the completion of the Notes Refinancing any information should be discovered by the Company or Parent that should be set
forth in an amendment or supplement to Debt Offer Documents and such other related documentation, so that such documentation shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of circumstances under which they are made, not misleading, the party that discovers such information shall promptly notify the other party, and an appropriate amendment or supplement
prepared by Parent (subject to the review of, and comment by, the Company) describing such information shall be disseminated by or on behalf of the Company to the holders of the Notes.
(c) In connection with the Debt Offer, Parent may select one or more dealer managers, information agents, depositaries and
other agents reasonably satisfactory to the Company to provide assistance in connection therewith. The Company shall, and shall cause its subsidiaries to, use their commercially reasonable efforts to cooperate with such parties so selected,
including entering into customary agreements
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with such parties in order to effectuate the Debt Offer and the Consent Solicitation;
provided
, that such cooperation shall be subject to the same limitations, restrictions and conditions
set forth in
Section 6.11
with respect to the Debt Financing cooperation.
(d) Parent shall pay the fees and
out-of-pocket expenses of any dealer manager, information agent, depositary or other agent retained in connection with the Debt Offer (which agents shall be selected by Parent and reasonably satisfactory to the Company) upon the incurrence of such
fees and out-of-pocket expenses, and Parent further agrees to reimburse the Company for all of the reasonable and documented out-of-pocket costs, fees and expenses incurred by the Company in connection with the Debt Offer (including any action taken
to enforce Parents reimbursement obligation hereunder), including fees of outside counsel, accountants and advisors. Parent shall indemnify and hold harmless the Company, its subsidiaries and its and their respective officers, directors,
employees, consultants, agents, advisors and representatives from and against any and all losses, damages, claims, costs or expenses suffered or incurred by any of them in connection with the Debt Offer and any information utilized in connection
therewith (other than any information provided in writing by the Company or any of its subsidiaries specifically for use therein), in each case other than to the extent any of the foregoing arises from the gross negligence or willful misconduct of
the Company or any of its subsidiaries or any of their respective officers, directors, employees, agents or representatives.
ARTICLE
VII
CONDITIONS TO THE MERGER
Section 7.1
Conditions to the Obligations of Each Party
. The respective obligations of each party hereto to consummate the
Merger are subject to the satisfaction (or mutual waiver by each of Parent and Company, if permissible under applicable Legal Requirements) on or prior to the Closing Date of the following conditions:
(a)
Stockholder Approval
. The Company Stockholder Approval shall have been obtained.
(b)
Antitrust
. All Antitrust Approvals shall have been received (including the expiration or termination of any
waiting period under the HSR Act applicable to the consummation of the Merger).
(c)
No Injunctions or
Restraints
. No court or other Governmental Authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any Legal Requirement or Order which is then in effect and has the effect of making the Merger
illegal or otherwise prohibiting the consummation of the Merger.
Section 7.2
Conditions to the Obligations of Parent and
Acquisition Sub
. The obligations of Parent and Acquisition Sub to consummate the Merger are further subject to the satisfaction (or waiver, if permissible under applicable Legal Requirements, by Parent) on or prior to the Closing Date of the
following conditions:
(a)
Representations and Warranties
. The representations and warranties of the Company
(i) set forth in
Section 4.10(ii)
shall be true and correct both when made and at and as of the Closing Date, as if made at and as of such time, (ii) set forth in
Section 4.3(a)
and
Section 4.3(c)
shall be true and correct both
when made and at and as of the Closing Date, as if made at and as of such time (other than such representations and warranties that by their terms address matters only as of another specified date, which shall be true and correct in all respects
only as of such date), except for any
de minimis
inaccuracy, (iii) set forth in
Section 4.1
,
Section 4.2
,
Section 4.3(b)
,
Section 4.3(d)
,
Section 4.4
,
Section 4.21
and
Section 4.25
shall be
true and correct in all material respects both when made and at and as of the Closing Date, as if made at and as of such time (other than such representations and warranties that by their terms address matters only as of another specified date,
which shall be true and correct in all respects only as of such date), and (iv) set forth in this Agreement other than those Sections specifically identified in
clause (i)
,
(ii)
or
(iii)
of this
Section
7.2(a)
shall be true and correct (without giving effect to any limitation as to materiality or Company Material Adverse Effect set forth therein) both when made and at and as of the Closing Date, as if made at and as of such time
(other than such representations and warranties that by their terms address matters only
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as of another specified date, which shall be true and correct in all respects only as of such date), except where the failure of such representations and warranties to not be so true and correct
does not have, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(b)
Performance of Obligations of the Company
. The Company shall have performed or complied in all material
respects with its obligations, agreements and covenants required to be performed or complied with by it under this Agreement at or prior to the Closing.
(c)
Officers Certificate
. The Company shall have delivered to Parent a certificate dated as of the Closing
Date signed on behalf of the Company by the Chief Executive Officer and Chief Financial Officer thereof to the effect that the conditions set forth in
Section 7.2(a)
and
Section 7.2(b)
have been satisfied.
(d)
No Company Material Adverse Effect
. Since the date of this Agreement, there shall have occurred no changes,
events, circumstances, effects, developments, occurrences or state of facts that, individually or in the aggregate, have had or would reasonably be expected to have a Company Material Adverse Effect.
Section 7.3
Conditions to the Obligations of the Company
. The obligations of the Company to consummate the Merger are
further subject to the satisfaction (or waiver, if permissible under applicable Legal Requirements, by the Company) on or prior to the Closing Date of the following conditions:
(a)
Representations and Warranties
. The representations and warranties of Parent and Acquisition Sub set forth in this
Agreement shall be true and correct (without giving effect to any limitation as to materiality or Parent Material Adverse Effect set forth therein) both when made and at and as of the Closing Date, as if made at and as of
such time (other than such representations and warranties that by their terms address matters only as of another specified date, which shall be true and correct in all respects only as of such date), except where the failure of such representations
and warranties to not be so true and correct does not have, and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
(b)
Performance of Obligations of Parent and Acquisition Sub
. Each of Parent and Acquisition Sub shall have
performed or complied in all material respects with its obligations, agreements and covenants required to be performed or complied with by it under this Agreement at or prior to the Closing.
(c)
Officers Certificate
. Parent shall have delivered to the Company a certificate dated as of the Closing
Date signed on behalf of the Company by an executive officer thereof to the effect that the conditions set forth in
Section 7.3(a)
and
Section 7.3(b)
have been satisfied.
Section 7.4
Frustration of Closing Conditions
. None of the Company, Parent or Acquisition Sub may rely on the failure of
any condition set forth in
Sections 7.1
,
7.2
or
7.3
, as the case may be, to be satisfied if such failure was caused by such partys failure to use the efforts to consummate the Merger and the other transactions contemplated
hereby required under this Agreement, including as required by and subject to
Section 6.2
.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1
Termination
. Notwithstanding anything contained in this Agreement to the contrary, this Agreement may be
terminated and abandoned at any time, as follows:
(a) by mutual written consent of each of Parent, Acquisition Sub and the
Company;
(b) by either the Company or Parent, if the Merger has not been consummated on or before the date that is six (6)
months from the date of this Agreement (the
Outside Date
);
provided
that the right to terminate this Agreement under this
Section 8.1(b)
shall not be available to any party if the failure of the Merger to be so
consummated on or before the Outside Date was primarily due to the failure of such party to perform any of its obligations under this Agreement;
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(c) by either the Company or Parent, if any court or Governmental Authority of
competent jurisdiction shall have issued an Order or taken any other action permanently restraining, enjoining or otherwise prohibiting consummation of the Merger, and such Order or other action shall have become final and non-appealable;
provided
that the right to terminate this Agreement under this
Section
8.1(c)
shall not be available to a party if the issuance of such final, non-appealable Order was primarily due to the failure of such party, and
in the case of Parent including the failure of Acquisition Sub, to perform any of its obligations under this Agreement, including the obligations set forth in
Section 6.2(b)
;
(d) by either the Company or Parent, if the Stockholders Meeting (including any adjournments or postponements thereof)
shall have been held and concluded without the Company Stockholder Approval having been obtained;
(e) by Parent, if the
Company shall have breached or failed to perform any of its representations, warranties, covenants or other agreements set forth in this Agreement, which breach or failure to perform (i) would result in a failure of conditions set forth in
Section 7.2(a)
or
7.2(b)
and (ii) cannot be cured on or before the Outside Date or, if curable before the Outside Date, is not cured by the Company within thirty (30) days of receipt by the Company of written notice of such
breach or failure;
provided
that Parent shall not have the right to terminate this Agreement pursuant to this
Section
8.1(e)
if Parent or Acquisition Sub is then in breach of any of its covenants, agreements,
representations or warranties contained in this Agreement such that the conditions set forth in
Section 7.3(a)
or
7.3(b)
would not be satisfied;
(f) by Parent, at any time prior to receipt of the Company Stockholder Approval, if the Company Board shall have effected a
Change of Recommendation (whether or not in compliance with
Section
6.5
);
(g) by Parent, if the
Company shall have breached in any material respect any of its obligations under
Section 6.5
;
(h) by the Company,
if Parent or Acquisition Sub shall have breached or failed to perform any of its representations or warranties, covenants or other agreements set forth in this Agreement, which breach or failure to perform (i) would result in a failure of the
conditions set forth in
Section 7.3(a)
or
7.3(b)
and (ii) cannot be cured on or before the Outside Date or, if curable in such time frame, is not cured by Parent within thirty (30) days of receipt by Parent of written notice
of such breach or failure;
provided
that the Company shall not have the right to terminate this Agreement pursuant to this
Section
8.1(h)
if the Company is then in breach of any of its covenants, agreements,
representations or warranties contained in this Agreement such that the conditions set forth in
Section 7.2(a)
or
7.2(b)
would not be satisfied;
(i) by the Company, in accordance with
Section
6.5(e)
; or
(j) by the Company, if (i) all of the conditions set forth in
Sections
7.1
and
7.2
have
been satisfied or waived (other than those conditions that by their nature are to be satisfied or waived at the Closing;
provided
that such conditions are reasonably capable of being satisfied at the Closing), (ii) the Company has irrevocably
confirmed in a written notice delivered to Parent after the end of the Marketing Period that the conditions to Closing set forth in
Section 7.3
(other than those conditions that by their nature are to be satisfied at the Closing but that are
expected to be satisfied at the Closing) have been satisfied or the Company has confirmed by written notice to Parent that it is willing to waive any unsatisfied conditions in
Section 7.3
and, in either case, that the Company stands, and will
stand, ready, willing and able to consummate the Merger and (iii) Parent and Acquisition Sub fail to consummate the Merger within five (5) Business Days after the delivery of such written notice and the Company stood ready, willing and able to
consummate the Merger through the end of such five (5) Business Day period;
provided
,
further
, that the Company shall not have the right to terminate this Agreement pursuant to this
Section 8.1(j)
if the Company is in material
breach of this Agreement.
Section 8.2
Effect of Termination
. If this Agreement is terminated pursuant to
Section
8.1
, this Agreement shall become void and of no effect without liability of any party (or any direct or indirect stockholder, Affiliate or Representative of such party or any lender or other provider of Debt
Financing to Parent) to the other party
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hereto, except (i) the provisions of
Section
6.3(b)
,
Section 6.5(h)
,
Section
6.11(b)
, this
Section
8.2
,
Section
8.3
,
Section 8.4
,
Section 8.5
,
Section
9.10(b)
and
Article
IX
shall survive any termination hereof pursuant to
Section
8.1
and (ii) in the event of any liability arising out of or the result of, fraud or any willful breach of any covenant, agreement, representation or warranty, the aggrieved party shall be entitled to all rights and remedies available at law or in
equity, subject to
Sections
8.4
and
9.10(b)
.
Section 8.3
Termination Fees.
(a)
Company Termination Fee
. If:
(i) (x) prior to the termination of this Agreement, any Competing Proposal (for purposes of this subsection, substituting 50%
for the 20% thresholds set forth in the definition of Competing Proposal) is made directly to the stockholders of the Company or otherwise becomes publicly known, or any person publicly announces an intention (whether or not conditional and
whether or not withdrawn) to make a Competing Proposal or communicates a Competing Proposal to the Company (or any officer or director thereof); and (y) this Agreement is terminated by Parent or the Company pursuant to
Section
8.1(b)
(
Outside Date
) or
Section 8.1(d)
(
Company Stockholder Approval
) or by Parent pursuant to
Section
8.1(e)
(
Company Breach
) or
Section 8.1(g)
(
Breach of
Section 6.5
) and (z) within twelve (12) months after termination of this Agreement, the Company or any of its subsidiaries consummates any Competing Proposal or enters into a letter of intent, agreement in
principle, acquisition agreement or other definitive agreement with respect to any Competing Proposal or a transaction in respect of any Competing Proposal that is subsequently consummated; or
(ii) (x) this Agreement is terminated by Parent pursuant to
Section
8.1(f)
(
Change of
Recommendation
) or (y) this Agreement is terminated by the Company or Parent pursuant to any other provision of
Section 8.1
(other than
Section 8.1(j)
) and, at the time of such termination, (A) the Company Stockholder Approval
shall not have been obtained and (B) Parent would have been permitted to terminate this Agreement pursuant to
Section 8.1(f)
(
Change in Recommendation
); or
(iii) this Agreement is terminated by the Company pursuant to
Section
8.1(i)
(
Superior
Proposal
);
then, in any such event, the Company shall pay to Parent a fee payable in cash equal to $14,000,000 (the
Company
Termination Fee
), and neither the Company nor any other person shall have any further liability to Parent or any other person with respect to this Agreement or the transactions contemplated hereby, such payment to be made (x) in the
case of
Section
8.3(a)(i)
, when a transaction in respect of such Competing Proposal is consummated; (y) in the case of
Section
8.3(a)(ii)
, no later than two (2) Business Days after the
termination of this Agreement; or (z) in the case of
Section
8.3(a)(iii)
, upon the termination of this Agreement; it being understood that in no event shall the Company be required to pay the fee referred to in this
Section
8.3(a)
on more than one occasion.
(b)
Parent Termination Fee
. If this
Agreement is terminated by the Company pursuant to
Section
8.1(j)
, and Parent and Acquisition Sub have failed to consummate the Merger by the required date as a result of the full amount of the Debt Financing failing to be
funded or prospectively funded at the Closing (other than as a result of willful breach by Parent or Acquisition Sub of
Section 6.10
hereof), then Parent shall pay to the Company a fee payable in cash equal to $40,000,000 (the
Parent
Termination Fee
), and notwithstanding anything herein to the contrary neither Parent nor any other person (including the Debt Financing Sources) shall have any further liability to the Company or any other person with respect to this
Agreement or the transactions contemplated hereby, such payment to be made no later than two (2) Business Days after the termination of this Agreement; it being understood that in no event shall Parent be required to pay the fee referred to in
this
Section
8.3(b)
on more than one occasion.
Section 8.4
Exclusive Remedy
.
(a)
Exclusive Remedy of Parent
. In the event that Parent or
its designee shall receive full payment of the Company Termination Fee pursuant to the terms of this Agreement: (i) the receipt of the Company Termination Fee shall be the sole and exclusive remedy of Parent and Acquisition Sub against the Company
and its subsidiaries and any of their respective former, current or future officers, directors, partners,
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stockholders, managers, members or Affiliates (collectively, the
Company Related Parties
) for any loss suffered as a result of the failure of the Merger to be consummated or
for a breach or failure to perform hereunder or otherwise, upon payment of such amount(s), (ii) none of the Company Related Parties shall have any further liability or obligation (whether at law, in equity, in contract, in tort or otherwise)
relating to or arising out of this Agreement or the transactions contemplated by this Agreement, (iii) the Company Termination Fee shall be deemed to be liquidated damages for any and all losses or damages suffered or incurred by Parent, Acquisition
Sub, any of their respective Affiliates or any other person in connection with this Agreement (and the termination hereof), the transactions contemplated hereby (and the abandonment thereof) or any matter forming the basis for such termination, and
(iv) none of Parent, Acquisition Sub, any of their respective Affiliates or any other person shall be entitled to bring or maintain any claim, action or proceeding (whether at law, in equity, in contract, in tort or otherwise) against the Company
Related Parties arising out of or in connection with this Agreement, any of the transactions contemplated hereby or any matters forming the basis for such termination;
provided
,
however
, that nothing in this
Section 8.4(a)
shall
limit the rights of Parent and Acquisition Sub under
Section 9.10
.
(b)
Exclusive Remedy of the Company
. In
the event that the Company or its designee shall receive full payment of the Parent Termination Fee pursuant to the terms of this Agreement: (i) the receipt of the Parent Termination Fee shall be the sole and exclusive remedy of the Company against
Parent and Acquisition Sub and their respective subsidiaries, Affiliates, the Debt Financing Sources, and any of their respective former, current or future officers, directors, partners, stockholders, managers, members or other Representatives
(collectively, the
Parent Related Parties
) for any loss suffered as a result of the failure of the Merger to be consummated or for a breach or failure to perform hereunder or otherwise, upon payment of such amount(s), (ii) none of
the Parent Related Parties shall have any further liability or obligation (whether at law, in equity, in contract, in tort or otherwise) relating to or arising out of this Agreement or the transactions contemplated by this Agreement, (iii) the
Parent Termination Fee shall be deemed to be liquidated damages for any and all losses or damages suffered or incurred by the Company, any of its subsidiaries or Affiliates or any other person in connection with this Agreement (and the termination
hereof), the transactions contemplated hereby (and the abandonment thereof) or any matter forming the basis for such termination, and (iv) none of the Company, any of its subsidiaries or Affiliates or any other person shall be entitled to bring or
maintain any claim, action or proceeding (whether at law, in equity, in contract, in tort or otherwise) against the Parent Related Parties, arising out of or in connection with this Agreement, any of the transactions contemplated hereby or any
matters forming the basis for such termination;
provided
,
however
, that nothing in this
Section 8.4(b)
shall limit the rights of the Company under
Section 9.10(b)
.
(c) Notwithstanding anything to the contrary contained herein, no Company Related Party shall have any rights or claims against
any Debt Financing Source in connection with this Agreement, the Debt Financing or the transactions contemplated hereby or thereby, and no Debt Financing Source shall have any rights or claims against any Seller Related Party in connection with this
Agreement, the Debt Financing or the transactions contemplated hereby or thereby, whether at law or equity, in contract, in tort or otherwise;
provided
that, following consummation of the Merger, the foregoing will not limit the rights of the
parties to the Debt Financing under any commitment letter related thereto. No Debt Financing Source shall be subject to any special, consequential, punitive or indirect damages or damages of a tortious nature.
Section 8.5
Expenses; Transfer Taxes
.
(a) All fees, costs and expenses (including all legal, accounting, broker, finder or investment banker fees) incurred in
connection with this Agreement and the transactions contemplated hereby are to be paid by the party incurring such fees, costs and expenses, except that the filing fees in respect to filings made pursuant to the HSR Act and all other Antitrust Laws
shall be paid by Parent or Acquisition Sub.
(b) Parent shall pay all documentary, sales, use, real property transfer,
registration, value added, transfer, stamp, recording and similar Taxes, fees, and costs together with any interest thereon, penalties, fines, costs, fees, additions to tax or additional amounts with respect thereto incurred in connection with this
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Agreement and the transactions contemplated hereby, and shall file all Tax Returns related thereto, regardless of who may be liable therefor under applicable Legal Requirements.
ARTICLE IX
GENERAL
PROVISIONS
Section 9.1
Non-Survival of Representations, Warranties and Agreements
. The representations,
warranties, covenants and agreements in this Agreement and any certificate delivered pursuant hereto by any person shall terminate at the Effective Time or, except as provided in
Section
8.2
, upon the termination of this
Agreement pursuant to
Section
8.1
, as the case may be, except that this
Section
9.1
shall not limit any covenant or agreement of the parties which by its terms contemplates performance after the
Effective Time or after termination of this Agreement, including those contained in
Section 6.6
and
Section 6.9
.
Section
9.2
Notices
. Any notice required to be given hereunder shall be sufficient if in writing, and sent by facsimile transmission or e-mail of a .pdf attachment (
provided
that any notice received by facsimile or e-mail transmission
or otherwise at the addressees location on any Business Day after 7:00 p.m. (addressees local time) shall be deemed to have been received at 8:00 a.m. (addressees local time) on the next Business Day), by reliable
overnight delivery service (with proof of service), hand delivery or certified or registered mail (return receipt requested and first-class postage prepaid), addressed as follows (or at such other address for a party as shall be specified in a
notice given in accordance with this
Section
9.2
):
if to Ultimate Parent, Operating Parent or Acquisition Sub:
c/o Revlon, Inc.
One New
York Plaza, 49th Floor
New York, New York 10004
E-mail: Michael.Sheehan@revlon.com
|
|
|
|
|
|
|
|
|
Mitra.Hormozi@revlon.com
|
|
|
Attention:
|
|
Michael T. Sheehan
|
|
|
|
|
Mitra Hormozi
|
with copies to (which shall not constitute notice):
Milbank, Tweed, Hadley & McCloy LLP
28 Liberty Street
New York, New
York 10005
Fax: (212) 530-5219
|
|
|
|
|
|
|
E-mail:
|
|
dzeltner@milbank.com
|
|
|
|
|
sgolenbock@milbank.com
|
|
|
Attention:
|
|
David E. Zeltner
|
|
|
|
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Scott W. Golenbock
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if to the Company:
|
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|
|
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c/o Elizabeth Arden, Inc.
880 Southwest
145th Avenue, Suite #200
Pembroke Pines, Florida 33027
Fax:
(954) 364-6920
Attention: Oscar Marina, Executive Vice President and General Counsel
|
A-50
with copies to (which shall not constitute notice):
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Weil, Gotshal & Manges LLP
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767 Fifth Avenue
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New York, New York 10153
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Fax:
|
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(212) 310-8007
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E-mail:
|
|
michael.aiello@weil.com
|
|
|
|
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howard.chatzinoff@weil.com
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Attention:
|
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Michael J. Aiello
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Howard Chatzinoff
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Section 9.3
Interpretation; Certain Definitions
.
The parties have participated jointly in the
negotiation and drafting of this Agreement. Consequently, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement. When a reference is made in this Agreement to an Article, Section, Annex or Exhibit, such reference shall be to an Article or Section of,
or an Annex or Exhibit to, this Agreement, unless otherwise indicated. The table of contents and headings for this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever
the words include, includes or including are used in this Agreement, they shall be deemed to be followed by the words without limitation. The words hereof, herein and
hereunder and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The words made available to Parent and words of similar import
refer to information posted to the electronic data room for Project Rouge and maintained by the Company for purposes of the transactions contemplated by this Agreement or otherwise delivered to Parent or a Representative of Parent (including by
e-mail or by specific identification of filing or exhibit to a filing available on the SECs Electronic Data-Gathering, Analysis and Retrieval system) no later than 5:30 p.m. New York Time on June 13, 2016. All terms defined in this
Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the
plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any statute defined or referred to herein or in any agreement or instrument that is referred to herein means such statute, as from time to
time amended, modified or supplemented, including (in the case of statutes) by succession of comparable successor statutes. References to a person are also to its permitted successors and assigns. All references to dollars or
$ refer to currency of the United States of America. For the purposes of applying a reference to a monetary sum expressed in dollars or $ to an amount paid in a currency other than currency of the United States of
America, such monetary sum shall be converted at an exchange rate equal to the mid-point closing rate for converting dollars or $ into such other currency on the applicable date as quoted by Bloomberg. References to
wholly owned subsidiaries of the Company shall include any subsidiary of which the Company owns, directly or indirectly, all of the equity interests.
Section 9.4
Amendment
. This Agreement may be amended by mutual agreement of the parties hereto by action taken by or on
behalf of, or authorized by, their respective board of directors at any time prior to the Effective Time. This Agreement may not be amended except by an instrument in writing signed by the parties hereto. Notwithstanding anything to the
contrary contained herein,
Section 8.3(b)
,
Section 8.4(b)
,
Section 8.4(c)
,
Section 9.8
,
Section 9.9
,
Section 9.10(b)
,
Section
9.11(c)
and
Section
9.13
and
this
Section 9.4
(and any other provision of this Agreement to the extent an amendment, supplement, waiver or other modification of such provision would modify the substance of such Sections) may not be amended, supplement, waived or
otherwise modified in any manner that impacts or is otherwise adverse in any respect to the Debt Financing Sources without the prior written consent of the Debt Financing Sources.
Section 9.5
Waiver
. At any time prior to the Effective Time, subject to applicable Legal Requirement, any party hereto may
(a) extend the time for the performance of any obligation or other act of any other party hereto,
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(b) waive any inaccuracy in the representations and warranties of the other party contained herein or in any document delivered pursuant hereto and (c) waive compliance by any other
party with any agreement or condition contained herein. Any such extension or waiver shall only be valid if set forth in an instrument in writing signed by the party or parties to be bound thereby. Notwithstanding the foregoing, no failure
or delay by the Company, Parent or Acquisition Sub in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise of any other right hereunder. Any
agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party.
Section 9.6
Severability
. If any term or other provision of this Agreement is invalid, illegal or incapable of being
enforced by any Legal Requirement, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Merger is not affected in any manner
materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in order that the Merger be consummated as originally contemplated to the fullest extent possible.
Section 9.7
Assignment
. Neither this Agreement nor any rights, interests or obligations hereunder shall be assigned by any
of the parties hereto (whether by operation of a Legal Requirement or otherwise) without the prior written consent of the other parties hereto, except that the Agreement may be assigned by Parent or Acquisition Sub to an Affiliate of such party or
any source of financing for the transactions contemplated by this Agreement;
provided
that the party making such assignment shall not be released from its obligations hereunder. For the avoidance of doubt, the shares of Acquisition Sub
may be transferred to any person of which Parent is directly or indirectly a wholly owned subsidiary or any direct or indirect wholly owned subsidiary of such person;
provided
that such transfer shall not release Parent or Acquisition Sub
from their obligations hereunder. Subject to the preceding sentence, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.
Section 9.8
Entire Agreement; No Third-Party Beneficiaries
. This Agreement (including the annexes, exhibits and schedules
hereto) and the Confidentiality Agreement constitute the entire agreement, and supersede all other prior agreements and understandings, both written and oral, between the parties, or any of them, with respect to the subject matter hereof and thereof
and except for (a) the provisions of
Section
6.6
hereof and (b) as to any Debt Financing Source, the provisions of
Section 8.3(b)
,
Section 8.4(b)
,
Section 8.4(c)
,
Section 9.4
,
Section 9.9
,
Section 9.10(b)
,
Section
9.11(c)
,
Section
9.13
and this
Section 9.8
(which shall expressly inure to the benefit of the Debt Financing Sources and the Debt
Financing Sources shall be entitled to rely on and enforce the provisions of such Sections), is not intended to and shall not confer upon any person other than the parties hereto any rights or remedies hereunder. The representations and
warranties in this Agreement are the product of negotiations among the parties hereto and are for the sole benefit of the parties hereto. Any inaccuracies in such representations and warranties are subject to waiver by the parties hereto in
accordance with
Section
9.5
without notice or liability to any other person. The representations and warranties in this Agreement may represent an allocation among the parties hereto of risks associated with particular
matters regardless of the knowledge of any of the parties hereto. Accordingly, persons other than the parties hereto may not rely upon the representations and warranties in this Agreement as characterizations of actual facts or circumstances as
of the date of this Agreement or as of any other date.
Section 9.9
Governing Law
. This Agreement shall be governed by,
and construed in accordance with the laws of the State of Delaware, without giving effect to any choice or conflict of laws provision or rule (whether of the State of Delaware or any other jurisdiction);
provided
,
however
, that
the laws of the State of Florida shall govern any matters pertaining to the internal corporate governance of the Company, including, the interpretation of the Company Boards fiduciary duties to the stockholders of the Company in connection
with this Agreement and the Merger.
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Section 9.10
Specific Performance
.
(a) The parties agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy,
would occur in the event that the parties hereto do not perform the provisions of this Agreement (including failing to take such actions as are required of it hereunder to consummate this Agreement) in accordance with its specified terms or
otherwise breach such provisions. Subject to
Section 9.10(b)
, the parties acknowledge and agree that the parties shall be entitled to an injunction, specific performance and other equitable relief to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof, in addition to any other remedy to which they are entitled at law or in equity. Subject to
Section 9.10(b)
, each of the parties agrees that it will not oppose the granting of an
injunction, specific performance or other equitable relief on the basis that any other party has an adequate remedy at law or that any award of specific performance is not an appropriate remedy for any reason at law or in equity. If, prior to
the Outside Date, any party brings a legal proceeding to enforce the terms and provisions hereof, the Outside Date may, to the extent determined to be appropriate by the court of competent jurisdiction presiding over such legal proceeding, be
extended by any time period established by such court.
(b) Notwithstanding anything herein to the contrary, in no event
shall the Company or any other person be entitled to enforce or seek to enforce specifically Parents and Acquisition Subs obligations to consummate the Merger unless:
(i) with respect to the Merger and the payment of the Merger Consideration, the Marketing Period has expired and all the
conditions set forth in
Section 7.1
and
Section 7.2
(other than those conditions that by their nature are to be satisfied at the Closing, each of which shall be capable of being satisfied at the Closing) have been satisfied (and remain
satisfied) or waived;
(ii) Parent (either directly or through its subsidiaries) has received the full amount of the Debt
Financing and/or Parent (either directly or through its subsidiaries) has entered into Definitive Agreements in accordance with
Section 6.10(a)
and the full amount of the Debt Financing will be available to Parent (either directly or through
its subsidiaries) at the Closing (in each case, other than as a result of willful breach by Parent or Acquisition Sub of
Section 6.10
hereof), subject only to consummation of the Closing; and
(iii) the Company has irrevocably and unconditionally confirmed that if specific performance is granted and the Debt Financing
is funded, then the Closing will occur (and the Company has not revoked such confirmation).
For the avoidance of doubt, and
notwithstanding anything to the contrary in this Agreement, under no circumstances shall the Company be permitted or entitled to receive both a grant of specific performance and payment of the Parent Termination Fee.
Section 9.11
Consent to Jurisdiction
.
(a) Each of Parent, Acquisition Sub and the Company hereby irrevocably submits to the exclusive jurisdiction of the Delaware
Court of Chancery (or, if (but only if) the Delaware Court of Chancery shall be unavailable, any other court of the State of Delaware or any federal court sitting in the State of Delaware), for the purpose of any action or proceeding arising out of
or relating to this Agreement and each of the parties hereto hereby irrevocably agrees that all claims in respect to such action or proceeding may be heard and determined in any such court.
(b) Each of the parties hereto (a) irrevocably consents to the service of the summons and complaint and any other process
in any action or proceeding relating to the transactions contemplated by this Agreement, on behalf of itself or its property, by personal delivery of copies of such process to such party and nothing in this
Section
9.11
shall affect the right of any party to serve legal process in any other manner permitted by applicable law, (b) consents to submit itself to the exclusive personal jurisdiction of the Delaware Court of Chancery, any other court of the State of
Delaware and any federal court sitting in the State of Delaware in
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the event any dispute arises out of this Agreement or the transactions contemplated by this Agreement and (c) agrees that it will not attempt to deny or defeat in any manner such personal
jurisdiction by motion or other request for leave from any such court. Each of Parent, Acquisition Sub and the Company agrees that a final judgment in any action or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
(c) Notwithstanding anything herein to the contrary, the
Company Related Parties and each of the other parties hereto hereby irrevocably and unconditionally (i) submits, for itself and its property, to the exclusive jurisdiction of any New York State court or Federal court of the United States of
America sitting in New York County, and any appellate court from any thereof, in any action brought against any Debt Financing Source in connection with the Debt Financing, this Agreement or any of the transactions contemplated by this Agreement, or
for recognition or enforcement of any judgment, and agrees that all claims in respect of any such action or proceeding shall be heard and determined in such New York State court or, to the extent permitted by law, in such Federal court,
(ii) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding against any Debt Financing Source arising out of or relating to
the Debt Financing, this Agreement or any transaction contemplated by this Agreement in any New York State court or in any such Federal court, (iii) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court and (iv) agrees that a final judgment in any such suit, action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Each of the parties hereto agrees that service of process, summons, notice or document by registered mail addressed to you or us at the addresses set forth above shall be effective service of process for any suit, action
or proceeding brought in any such court.
Section 9.12
Counterparts
. This Agreement may be executed and delivered
(including by facsimile transmission or by e-mail of a .pdf attachment) in two (2) or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed and delivered shall be deemed to be an original
but all of which taken together shall constitute one and the same agreement.
Section 9.13
WAIVER OF JURY TRIAL
. EACH
OF PARENT, ACQUISITION SUB AND EACH COMPANY RELATED PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE ACTIONS OF PARENT, ACQUISITION SUB OR THE COMPANY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF OR IN ANY ACTION RELATING TO THE DEBT FINANCING OR INVOLVING ANY LENDER OR OTHER PROVIDER THEREOF, INCLUDING IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM AGAINST ANY DEBT FINANCING SOURCE. EACH PARTY (A) MAKES THIS WAIVER VOLUNTARILY AND (B) ACKNOWLEDGES THAT SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
CONTAINED IN THIS
SECTION
9.13
.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Ultimate Parent, Operating Parent, Acquisition Sub and the Company have
caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.
|
|
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REVLON, INC.
|
|
|
By:
|
|
/s/ Fabian T. Garcia
|
Name:
|
|
Fabian T. Garcia
|
Title:
|
|
President and Chief Executive Officer
|
|
REVLON CONSUMER PRODUCTS CORPORATION
|
|
|
By:
|
|
/s/ Fabian T. Garcia
|
Name:
|
|
Fabian T. Garcia
|
Title:
|
|
President and Chief Executive Officer
|
|
RR TRANSACTION CORP.
|
|
|
By:
|
|
/s/ Michael T. Sheehan
|
Name:
|
|
Michael T. Sheehan
|
Title:
|
|
Vice President and Secretary
|
[A
GREEMENT
AND
P
LAN
OF
M
ERGER
]
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|
|
|
ELIZABETH ARDEN, INC.
|
|
|
By:
|
|
/s/ E. Scott Beattie
|
Name:
|
|
E. Scott Beattie
|
Title:
|
|
Chairman and CEO
|
[A
GREEMENT
AND
P
LAN
OF
M
ERGER
]
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Appendix A
As used in the Agreement, the following terms shall have the following meanings:
Acceptable Confidentiality Agreement
shall have the meaning set forth in
Section
6.5(b)
.
Acquisition Sub
shall have the meaning set forth in the Preamble.
Affidavit of Loss
shall mean an affidavit of loss in a form reasonably satisfactory to the Surviving Corporation and Paying
Agent.
Affiliate
shall mean, with respect to any person (other than Nightingale or any of its affiliates), any other
person (other than Nightingale or any of its affiliates) that directly or indirectly controls, is controlled by or is under common control with, such first person. For the purposes of this definition, control (including, with correlative
meanings, the terms controlling, controlled by and under common control with), when used with respect to any person, means the power to direct or cause the direction of the management or policies of such person,
directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.
Agreement
shall
have the meaning set forth in the Preamble.
Alternative Debt Financing
shall have the meaning set forth in
Section
6.10(b)
.
Antitrust Approvals
shall have the meaning set forth in
Section
6.2(a)
.
Antitrust Laws
shall mean the HSR Act and any other applicable U.S. or
foreign competition, antitrust, merger control or foreign investment Legal Requirements.
Articles of Merger
shall have
the meaning set forth in
Section
2.3(a)
.
Blue Sky Laws
shall mean state securities or
blue sky Legal Requirements.
Book-Entry Shares
shall have the meaning set forth in
Section
3.1(b)
.
Business Day
shall mean any day other than a Saturday, Sunday or a day on
which all banking institutions in New York, New York are authorized or obligated by Legal Requirements or executive order to close.
By-laws
shall mean the by-laws of the Company.
Certificates
shall have the meaning set forth in
Section
3.1(b)
.
Change of Recommendation
shall have the meaning set forth in
Section
6.5(c)
.
Closing
shall have the meaning set forth in
Section
2.2
.
Closing Date
shall have the meaning set forth in
Section
2.2
.
Code
shall mean the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.
Commitment Letter
shall have the meaning set forth in
Section
5.6(a)
.
Common Stock
shall mean the common stock, par value $0.01 per share, of the Company.
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Company
shall have the meaning set forth in the Preamble.
Company Articles of Incorporation
shall mean the Amended and Restated Articles of Incorporation of the Company, as amended
by the Articles of Amendment to the Amended and Restated Articles of Incorporation of the Company, dated August 19, 2014.
Company Affiliate Transaction
shall have the meaning set forth in
Section 4.26
.
Company Benefit Plan
shall mean each employee pension benefit plan (as defined in Section 3(2) of ERISA),
each employee welfare benefit plan (as defined in Section 3(1) of ERISA) (in each case, whether or not such plan is subject to ERISA), and each other plan, program, agreement, arrangement or policy relating to stock options, stock
purchases, compensation, equity incentive awards, deferred compensation, bonus, severance, retention, employment, change of control, paid time off, health or medical insurance, life insurance, vision or dental insurance, fringe benefits,
supplemental benefits or other employee benefits, in each case entered into, sponsored by, or maintained or contributed to, or required to be maintained or contributed to, by the Company or any of its subsidiaries, or with respect to which the
Company or any of its subsidiaries has any actual or contingent liability (but in all cases excluding any such plan or arrangement maintained and operated by a Governmental Authority).
Company Board
shall mean the board of directors of the Company.
Company Board Notice
shall have the meaning set forth in
Section 6.5(e)
.
Company Disclosure Letter
shall have the meaning set forth in
Article IV
.
Company Employees
shall have the meaning set forth in
Section
6.9(a)
.
Company Indebtedness
shall mean, without duplication, (a) any and all indebtedness, liabilities and obligations of the
Company and its subsidiaries under or relating to the Notes, the Notes Indenture, the Credit Agreement and the Second Lien Credit Agreement, and (b) all other Indebtedness of the Company and its subsidiaries.
Company Intellectual Property Rights
shall have the meaning set forth in
Section
4.17(a)
.
Company Leases
shall have the meaning set forth in
Section
4.22(b)
.
Company Material Adverse Effect
shall mean any Effect that (a) would reasonably be expected to prevent or materially impair
the ability of the Company or any of its subsidiaries to consummate the Merger and the other transactions contemplated by this Agreement, or (b) has a material adverse effect on the business, results of operations or financial condition of the
Company and its subsidiaries taken as a whole;
provided
, that in the case of the foregoing clause (b), no Effect to the extent resulting from or arising out of any of the following shall constitute or be taken into account in determining
whether there has been a Company Material Adverse Effect: (i) changes in general economic or political conditions or financial, credit or securities markets in general (including changes in interest or exchange rates) in any country or region
in which the Company or any of its subsidiaries conducts business; (ii) any Effects that affect the industries in which the Company or any of the Companys subsidiaries operate; (iii) any changes in Legal Requirements applicable to
the Company or any of the Companys subsidiaries or any of their respective properties or assets or changes in GAAP, or any changes in interpretations of the foregoing; (iv) acts of war, armed hostilities, sabotage or terrorism, or any
escalation or worsening of any acts of war, armed hostilities, sabotage or terrorism; (v) the negotiation, announcement or existence of, or any action taken that is required or expressly contemplated by this Agreement and the transactions
contemplated hereby (including the impact thereof on relationships, contractual or otherwise, with customers, suppliers, vendors, lenders, employees, investors, or venture partners) or any action taken by the
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Company at the written request of or with the written consent of Parent; (vi) any changes in the credit rating of the Company or any of its subsidiaries, the market price or trading volume
of shares of Common Stock or any failure to meet internal or published projections, forecasts or revenue or earnings predictions for any period, it being understood that any underlying event causing such changes or failures in whole or in part may
be taken into account in determining whether a Company Material Adverse Effect has occurred; (vii) any litigation arising from allegations of a breach of fiduciary duty relating to this Agreement or the transactions contemplated by this
Agreement; or (viii) any weather-related events, earthquakes, floods, hurricanes, tropical storms, fires or other natural disasters or any national, international or regional calamity, in each case of clauses (i), (ii), (iii), (iv) or (viii),
to the extent such Effects, escalation or worsening do not have a materially disproportionate adverse impact on the Company and its subsidiaries relative to other companies operating in the geographic markets or segments of the industry in which the
Company and its subsidiaries operate.
Company Material Contract
shall have the meaning set forth in
Section
4.19(a)
.
Company Option
shall mean each outstanding option to purchase shares of
Common Stock granted under any of the Company Plans.
Company Plans
shall mean the Companys 2004 Stock
Incentive Plan, the Companys 2004 Non-Employee Director Stock Option Plan, the Companys 2010 Stock Award and Incentive Plan, and the Companys 2014 Non-Employee Director Stock Award Plan, in each case, as amended, supplemented,
and/or restated from time to time.
Company Permits
shall have the meaning set forth in
Section
4.7(a)
.
Company Product
shall have the meaning set forth in
Section
4.6(a)
.
Company Recommendation
shall have the meaning set forth in
Section
4.4(b)
.
Company Related Parties
shall have the meaning set forth in
Section
8.4(a)
.
Company SEC Documents
shall have the meaning set forth in
Section
4.8(a)
.
Company Stockholder Approval
shall have the meaning set forth in
Section
4.4(a)
.
Company Termination Fee
shall have the meaning set forth in
Section
8.3(a)
.
Competing Proposal
shall have the meaning set forth in
Section
6.5(f)
.
Compliant
shall mean, with respect to the Required Financial Information, that (i) such Required Financial Information does
not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make such Required Financial Information not materially misleading under the circumstances, and (ii) the historical financial statements of
the Company included in such Required Financial Information shall comply in all material respects with the requirements of Regulations S-X for an offering under the Securities Act pursuant to a registration statement on Form S-1 in connection
with the registration of debt securities of Parent of the type contemplated by the Debt Financing (other than Rule 3-09, Rule 3-10 or Rule 3-16 of Regulation S-X), and are sufficient to permit the Companys independent
accountants to issue customary comfort letters (for high yield debt securities issued in a private placement under Rule 144A), in order to consummate any offering of debt securities on any day during the Marketing Period.
Confidentiality Agreement
shall mean the Confidentiality Agreement, dated as of February 16, 2016, by and between Elizabeth
Arden, Inc. and MacAndrews & Forbes Incorporated.
Consent Solicitation
shall have the meaning set forth in
Section
6.18(a)
.
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control
(including the terms controlled by and under common
control with) means the possession, directly or indirectly, or as trustee or executor, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, as trustee or
executor, by contract or credit arrangement or otherwise.
Credit Agreement
shall have the meaning set forth in
Section 6.11(c)
.
D&O Insurance
shall have the meaning set forth in
Section
6.6(c)
.
Debt Financing
shall have the meaning set forth in
Section
5.6(a)
.
Debt Financing Sources
shall mean the entities that have committed to
provide, purchase or arrange all or any part of the Debt Financing, the Alternative Debt Financing or other financings in connection with the transactions contemplated hereby and the parties to any joinder agreements, indentures or credit agreements
entered into pursuant thereto or relating thereto, together with their respective Affiliates, and their respective Affiliates officers, directors, employees, agents, equity holders and representatives and their respective successors and
assigns.
Debt Offer
shall have the meaning set forth in
Section
6.18(a)
.
Debt Offer Documents
shall mean any and all documentation relating to the Debt Offer, including any and all amendments and
supplements thereto.
Definitive Agreements
shall have the meaning set forth in
Section
6.10(a)
.
Department of State
shall have the meaning set forth in
Section
2.3(a)
.
Effect
means each of an event, occurrence, state of facts, circumstance,
condition, effect or change or development.
Effective Time
shall have the meaning set forth in
Section
2.3(a)
.
Employee Benefit Plan
shall mean employee benefit plans as
defined in Section 3(3) of ERISA.
Environmental Law
shall mean means any and all Legal Requirements enacted prior
to the Closing Date and in effect on the Closing Date that regulate the protection or clean-up of the environment or exposure to Hazardous Substances.
Equity Award
shall have the meaning set forth in
Section
4.3(b)
.
ERISA
shall mean the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations
promulgated thereunder.
ERISA Affiliate
shall mean any entity, trade or business that is, or was at the relevant time,
a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes or included the Company or any of its subsidiaries, or that is, or was at the relevant time, a member of
the same controlled group as the Company or any of its subsidiaries pursuant to Section 4001(a)(14) of ERISA.
Exchange Act
shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
Exchange Fund
shall have the meaning set forth in
Section
3.2(a)
.
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Fairness Opinion
shall have the meaning set forth in
Section 4.20
.
FBCA
shall have the meaning set forth in the Recitals.
Fee Letter
shall have the meaning set forth in
Section
5.6(a)
.
Fraud and Bribery Laws
shall have the meaning set forth in
Section 4.28(a)
.
GAAP
shall mean the United States generally accepted accounting principles.
Governmental Authority
shall mean any United States (federal, state or local) or foreign government, or any governmental,
regulatory, judicial or administrative authority, agency or commission.
Hazardous Substance
shall mean any substance,
material or waste that is defined, characterized or regulated under any Environmental Law as hazardous, pollutant, contaminant, toxic or words of similar meaning and regulatory effect, including
petroleum, polychlorinated biphenyls and asbestos.
HSR Act
shall mean the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the rules and regulations promulgated thereunder.
Indebtedness
shall mean, without
duplication, (a) all indebtedness for borrowed money, whether direct or indirect; (b) all liabilities secured by any mortgage, pledge, security interest, lien, charge or other encumbrance existing on property owned or acquired and subject thereto;
(c) all guarantees, endorsements and other contingent obligations in respect of indebtedness of others; (d) the deferred portion or installments of purchase price, and any amounts reserved for the payment of a contingent purchase price, in
connection with the acquisition of any business; (e) obligations to reimburse issuers of any letters of credit; (f) any obligation evidenced by bonds, debentures, notes or similar instruments; and (g) capital lease obligations.
Indemnitee
shall mean any individual who, on or prior to the Effective Time, was an officer, director or employee of the
Company or served on behalf of the Company as an officer, director or employee of any of the Companys subsidiaries or Affiliates or any of their predecessors in all of their capacities (including as stockholder, controlling or otherwise) and
the heirs, executors, trustees, fiduciaries and administrators of such officer, director or employee.
Indenture Discharge
Amount
shall have the meaning set forth in
Section 6.18(a).
Indenture Trustee
shall mean the person
acting as trustee under the Notes Indenture, which as of the date hereof is U.S. Bank National Association.
Intellectual
Property Rights
shall mean all worldwide intellectual property rights, whether registered or not, including patents, trademarks, trade names, service marks, and registrations and applications for all of them and goodwill connected with
such trademarks, trade names and service marks, domain names, websites, internet addresses and applications therefor, trade dress, logos and designs and goodwill connected with the foregoing, copyrights, trade secrets, and any similar, corresponding
or equivalent rights to any of the foregoing anywhere in the world, including, software, source code, moral rights and publicity rights.
Intervening Event
shall mean an event, development or change in circumstances that first arises or occurs after the date of
this Agreement and is material to the Company and its subsidiaries taken as a whole, which (a) was neither known to the Company or the Company Board, nor reasonably foreseeable, on the date of this Agreement, and (b) does not relate to or arise out
of (i) any Competing Proposal or the transactions contemplated by this Agreement; (ii) changes in the price or trading volume of Common Stock (except that the underlying cause of any such change, only to the extent such underlying cause otherwise
falls within the definition of
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Intervening Event, may be considered in evaluating whether an Intervening Event has occurred); (iii) the Antitrust Approvals or any action taken by Acquisition Sub or Parent or any of
their subsidiaries or Affiliates in accordance with
Section 6.2
or the consequences of any such action; (iv) any event development or change in circumstances generally affecting the industries in which the Company or any of the Companys
subsidiaries operate (except to the extent such event, development or change in circumstances would reasonably be expected to have a materially disproportionate effect on the Company and its subsidiaries relative to other similarly situated
participants in the segments of the industry in which it operates); (v) any change or adverse conditions in the securities markets, including those relating to debt financing; (vi) the Company or any of its subsidiaries exceeding, or failing to
meet, internal or published projections, forecasts, estimates or predictions in respect of revenues, earnings or other financial or operating metrics for any period; or (vii) any Effect on the business, results of operations or financial condition
of Parent or any of its subsidiaries or Affiliates.
Inventory
shall mean all raw materials, work-in-process and finished goods inventories of ingredients, components and products, including, without limitation all packaging materials and product formulations, that are owned, leased, used by or otherwise
available to the Company for sale in connection with the operation of the Companys business.
IRS
shall mean the
Internal Revenue Service.
knowledge
shall mean the actual knowledge after due inquiry of the following officers and
employees of the Company and Parent, as applicable: (i) for the Company: E. Scott Beattie, Rod Little, Oscar Marina, Lita Cunningham and Marcey Becker; and (ii) for Parent: Fabian Garcia, Juan Figuereo and Mitra Hormozi.
Leased Real Property
shall mean the real property subject to the Company Leases and such other real property in respect of
which the Company has leases, subleases or other agreements in place, pursuant to which the Company uses or occupies or has the right to use or occupy such real property.
Legal Requirement
shall mean any federal, state, local, municipal, foreign or other law, statute, constitution, principle
of common law, resolution, ordinance, code (including the Code), edict, decree, order, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any
Governmental Authority or the NASDAQ.
Lender
shall have the meaning set forth in
Section
5.6(a)
.
License and Endorsement Agreements
shall have the meaning set forth in
Section 4.19(a)(vii)
.
Lien
shall mean liens, claims, mortgages, deeds of trust, encumbrances, encroachments,
easements, covenants, restrictions, title defects, conditions, pledges, options or other third-party rights, security interests or charges of any kind.
Major Customer
shall have the meaning set forth in
Section
4.19(a)(vi)
.
Major Manufacturer
shall have the meaning set forth in
Section
4.19(a)(vi)
.
Marketing Period
shall mean the first period of twenty-two (22) consecutive calendar days commenced on the date on
which the Required Financial Information is delivered to Parent (i) throughout and at the end of which Parent shall have the Required Financial Information and such Required Financial Information shall be Compliant and (ii) nothing has occurred
and no condition exists that would cause any of the conditions set forth in
Section 7.1
and
Section 7.2
(other than conditions that by their nature cannot be satisfied until the Closing) to fail to be satisfied assuming the Closing
Date was to be scheduled for any time during such twenty-two (22) consecutive calendar day period provided that such twenty-two (22) consecutive calendar day period shall (a) not be required to be consecutive to the extent it would include July
1, 2016 through and including July 4, 2016
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(which dates shall not count for purposes of the twenty-two (22) day period), (b) either end on or prior to August 19, 2016 or shall not commence prior to September 6, 2016 and (c) not be
required to be consecutive to the extent it would include November 24, 2016 through and including November 27, 2016 (which dates shall not count for purposes of the twenty-two (22) day period). Notwithstanding anything in this definition to the
contrary, the Marketing Period shall not commence or be deemed to have commenced if, after the date hereof and prior to the completion of such twenty-two (22) consecutive calendar day period: (A) the Company or any of its subsidiaries has
publicly announced its intention to, or determines that it must, restate in any material respect any historical financial statements or any such restatement is under active consideration, in which case, the Marketing Period shall not commence unless
and until such restatement has been completed and the applicable Required Financial Information has been amended and updated; (B) the Companys independent accountants shall have withdrawn any audit opinion with respect to any financial
statements contained in the Required Financial Information, in which case the Marketing Period shall not be deemed to commence unless and until a new audit opinion is issued with respect to such financial statements for the applicable periods by the
Companys independent accountants; (C) any Required Financial Information would not be Compliant at any time during such twenty-two (22) consecutive calendar day period (it being understood that if any Required Financial Information
provided at the commencement of the Marketing Period ceases to be Compliant (it being understood that the Required Financial Information may be updated during such period in order to ensure such Required Financial Information remains Compliant
throughout such period) during such twenty-two (22) consecutive calendar day period, then the Marketing Period shall be deemed not to have commenced until such Required Financial Information is Compliant), or otherwise would not include any
Required Financial Information as defined; or (D) the Company or any of its subsidiaries shall have failed to file any periodic or current report required to be filed with the SEC by the date required under the Exchange Act (to the extent the
failure to timely file such report materially and adversely impacts the marketing efforts relating to the Debt Financing), in which case the Marketing Period will not be deemed to commence unless and until all such reports have been filed. If the
Company in good faith reasonably believes that it has delivered the Required Financial Information and the Required Financial Information is Compliant, it may deliver to Parent written notice to that effect (stating when it believes it completed the
applicable delivery), in which case the Required Financial Information shall be deemed to have been delivered on the date of such delivery specified in such notice, unless Parent in good faith reasonably believes that the Company has not completed
delivery of the Required Financial Information or the Required Financial Information is not Compliant and, within five (5) Business Days after its receipt of such notice from the Company, Parent delivers a written notice to the Company to that
effect (stating with specificity the Required Financial Information that has not been delivered or is not Compliant). Notwithstanding the foregoing, the Marketing Period shall end on such earlier date as the Debt Financing has been consummated.
Merger
shall have the meaning set forth in the Recitals.
Merger Consideration
shall have the meaning set forth in
Section
3.1(b)
.
Multiemployer Plan
shall mean any multiemployer plan within the meaning of Section 3(37)
or 4001(a)(3) of ERISA.
NASDAQ
shall mean the NASDAQ stock market.
New Plans
shall have the meaning set forth in
Section
6.9(b)
.
Nightingale
shall have the meaning set forth in the Recitals.
Nightingale Warrants
shall mean warrants for the purchase of up to 2,452,267 shares of Common Stock at an exercise price of
$20.39.
Notes
shall mean the Companys 7.375% Senior Notes due 2021.
A-63
Notes Indenture
shall mean the Indenture governing the Notes, dated as of
January 21, 2011 (as supplemented from time to time), by and among the Company and U.S. Bank National Association, as trustee.
Notes Refinancing
shall have the meaning set forth in
Section
6.18(a)
.
Notice of Redemption
shall have the meaning set forth in
Section 3.5
.
NYSE
means the New York Stock Exchange.
OFAC
shall have the meaning set forth in
Section 4.28(b)
.
Operating Parent
shall have the meaning set forth in the Preamble.
Option Cash Payment
shall have the meaning set forth in
Section
3.3(a)
.
Optional Redemption
shall have the meaning set forth in
Section
6.18(a)
.
Order
shall mean any decree, order, judgment, injunction, temporary restraining order or other order in any suit or
proceeding by or with any Governmental Authority.
Outside Date
shall have the meaning set forth in
Section
8.1(b)
.
Parent
shall have the meaning set forth in the Preamble.
Parent Material Adverse Effect
shall mean any change, effect or circumstance that would reasonably be expected to prevent
or materially impair the ability of Parent to consummate the Merger and the other transactions contemplated by this Agreement.
Parent Organizational Documents
shall have the meaning set forth in
Section
5.2
.
Parent Related Parties
shall have the meaning set forth in
Section 8.4(b)
.
Parent Termination Fee
shall have the meaning set forth in
Section
8.3(b)
.
Partial Company Parent Transaction
shall have the meaning set forth in
Section 6.5(h)
.
Partial Company Transaction
shall mean any transaction providing for the sale, lease, exchange, transfer, acquisition or
disposition of less than all of the assets and business of the Company and of the subsidiaries of the Company, but for a sufficient amount of the assets and business of the Company and of its subsidiaries of the Company to constitute a Superior
Proposal.
Paying Agent
shall have the meaning set forth in
Section
3.2(a)
.
Payment Card Industry Data Security Standards
shall mean the Payment Card Industry Data Security Standards promulgated by
the PCI Security Standards Council.
Permitted Lien
shall mean (i) any Lien for Taxes not yet due and payable or
being contested in good faith through appropriate proceedings, and for which adequate reserves have been established in accordance with GAAP, (ii) Liens securing Indebtedness set forth in Section 4.3(d) of the Company Disclosure Letter,
(iii) with respect to Owned Real Property or Leased Real Property, easements or claims of easements, boundary line disputes, overlaps, encroachments, rights of parties in possession, and title to any portion of the premises lying within the
right of way or boundary of any public road or private road, in each case that do not materially
A-64
interfere with the business of the Company and its subsidiaries as presently conducted, (iv) Liens imposed or promulgated by Legal Requirements with respect to real property and
improvements, including zoning regulations, that do not materially interfere with the Companys business as presently conducted, (v) Liens disclosed on existing title reports or existing surveys provided to Parent prior to the date hereof,
(vi) mechanics, carriers, workmens, repairmens and similar Liens incurred in the ordinary course of business, (vii) licenses, covenants and other rights to Intellectual Property Rights (excluding exclusive licenses,
covenants and other rights that impair, in any material respect, the ownership or use of such Intellectual Property Rights) and (viii) Liens incurred in the ordinary course of business consistent with past practice since the date of the most
recent consolidated balance sheet of the Company.
person
shall mean an individual, a corporation, a limited liability
company, a partnership, an association, a trust or any other entity or organization, including a Governmental Authority.
Preferred Stock
shall have the meaning set forth in
Section
4.3(a)
.
Proxy Date
shall have the meaning set forth in
Section 6.4(c)
.
Proxy Statement
shall have the meaning set forth in
Section 6.4(a)
.
Proxy Statement Clearance Date
shall mean the date on which the SEC has, orally or in writing, confirmed that it has no
further comments on the Proxy Statement, including the first date following the tenth (10th) day following the filing of the preliminary Proxy Statement if the SEC has not informed the Company that it intends to review the Proxy Statement.
Red Door Spa
means Elizabeth Arden Salon-Holdings, Inc., a Delaware corporation, and each of its direct and indirect
subsidiaries and affiliated beauty salons and spas.
Related Party
shall have the meaning set forth in
Section
4.26
.
Representatives
shall have the meaning set forth in
Section
6.3(a)
.
Required Financial Information
shall have the meaning set forth in
Section 6.11(a)(vii)
.
Restricted Share Unit
shall mean each outstanding award of a right under any of the Company Plans (other than restricted
shares of Common Stock) entitling the holder thereof to shares of Common Stock or cash equal to the value of shares of Common Stock.
Restricted Unit Payment
shall have the meaning set forth in
Section
3.3(b)
.
Sarbanes-Oxley Act
shall mean the Sarbanes-Oxley Act of 2002, as amended.
SEC
shall mean the Securities and Exchange Commission.
Second Lien Credit Agreement
shall have the meaning set forth in
Section 6.11(c)
.
Securities Act
shall mean the Securities Act of 1933, as amended.
Series A Serial Preferred Stock
shall mean the Series A Serial Preferred Stock, par value $0.01 per share, of the Company.
Series A Serial Preferred Stock Transactions
shall have the meaning set forth in the Recitals.
A-65
Shareholders Agreement
shall mean that certain Shareholders Agreement by and
among the Company, Nightingale Onshore Holdings L.P. and Nightingale Offshore Holdings L.P., dated as of August 19, 2014.
Stockholders Meeting
shall have the meaning set forth in
Section 6.4(c)
.
subsidiary
of any person, means any corporation, partnership, joint venture or other legal entity of which such person
(either above or through or together with any other subsidiary), owns, directly or indirectly, more than 50% of the stock or other equity interests, the holders of which are generally entitled to vote for the election of such entitys
board of directors or other governing body of such corporation or other legal entity.
Superior Proposal
shall have the
meaning set forth in
Section 6.5(g)
.
Superior Proposal Agreement
shall have the meaning set forth in
Section
6.5(e)
.
Surviving Corporation
shall have the meaning set forth in
Section
2.1
.
Takeover Statutes
means any anti-takeover statute or regulation or similar Legal Requirement, including any affiliate
transaction or control share acquisition, in each case under the FBCA (including (x) any transaction under, or a third-party becoming an interested shareholder under, 607.0901 of the FBCA, and (y) any transaction under 607.0902 of the
FBCA) or other applicable Legal Requirement of the State of Florida.
Tax
or
Taxes
shall mean any
and all taxes and other similar charges (together with any and all interest, penalties and additions to tax) imposed by any governmental or taxing authority including taxes or other similar charges on or with respect to income, franchises, windfall
or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, social security, workers compensation, unemployment compensation, or net worth; and taxes or other similar charges in the nature of excise,
withholding, ad valorem, stamp, transfer, value added, or gains taxes.
Tax Returns
shall mean returns, reports, claims
for refund and information statements, including any schedule or attachment thereto, with respect to Taxes filed or required to be filed with the IRS or any other governmental or taxing authority, domestic or foreign, including consolidated,
combined and unitary tax returns, including any amendment thereto.
Total Common Merger Consideration
shall mean the
product of (x) the number of shares of Common Stock issued and outstanding (other than those shares canceled or retired pursuant to
Section
3.1(a)
) immediately prior to the Effective Time and (y) the Merger
Consideration.
Total Vote
means, at any given time, the aggregate number of votes which may be cast by the holders of
Series A Serial Preferred Stock and the holders of shares of Common Stock, voting together as one class.
Ultimate
Parent
shall have the meaning set forth in the Preamble.
Voting Agreement
shall have the meaning set forth
in the Recitals.
WARN Act
shall mean the Worker Adjustment and Retraining Notification Act of 1988, as amended.
willful breach
shall mean, with respect to any agreement, a material breach that is a consequence of an act
intentionally taken or not taken by the breaching party with the knowledge that the taking of, or failure to take, respectively, such act would, or would be reasonably expected to, cause a breach of such agreement.
A-66
Annex B
Centerview Partners LLC
31 West 52nd Street
New York, NY 10019
June 16, 2016
The Board of
Directors
Elizabeth Arden, Inc.
2400 SW 145th Avenue
2nd Floor
Miramar, FL 33027
The Board of Directors:
You have requested our
opinion as to the fairness, from a financial point of view, to the holders of the outstanding shares of common stock, par value $0.01 per share (the Shares) (other than Excluded Shares, as defined below) of Elizabeth Arden, Inc., a
Florida
corporation (the Company), of the $14.00 per Share in cash, without interest, proposed to be paid to such holders pursuant to the Agreement and Plan of Merger by and among Revlon, Inc., a Delaware corporation
(Ultimate Parent), Revlon Consumer Products Corporation, a Delaware corporation and wholly owned subsidiary of Ultimate Parent (Operating Parent, and together with Ultimate Parent, Parent), RR Transaction Corp., a
Florida corporation and a wholly owned direct subsidiary of Operating Parent (Acquisition Sub) and the Company. The Agreement provides that Acquisition Sub shall be merged with and into the Company (the Merger and,
collectively, with the other transactions contemplated by the Agreement, the Transaction), as a result of which the Company will become a subsidiary of Parent and each issued and outstanding Share immediately prior to the effective time
of the Merger (other than (i) the Shares held by the Company as treasury stock and (ii) Shares held by Parent or Acquisition Sub (the Shares referred to in clauses (i) and (ii), together with any Shares held by any affiliate of the Company,
Excluded Shares) will be converted into the right to receive $14.00 in cash, without interest (the $14.00 per Share consideration to be paid in the Merger, the Merger Consideration). The terms and conditions of the
Transaction are more fully set forth in the Agreement.
We have acted as financial advisor to the Company in connection with, and have
participated in certain of the negotiations leading to, the Transaction. We will receive a fee for our services in connection with the Transaction, a portion of which is payable upon the rendering of this opinion and a substantial portion of which
is contingent upon the consummation of the Merger. In addition, the Company has agreed to reimburse certain of our expenses arising, and indemnify us against certain liabilities that may arise, out of our engagement. We are a securities firm engaged
directly and through affiliates and related persons in a number of investment banking, financial advisory and merchant banking activities. In the past two years, we have not (except for our current engagement) been engaged to provide financial
advisory or other services to the Company, and we have not received any compensation from the Company during such period. In the past two years, we have not been engaged to provide financial advisory or other services to Parent or Acquisition Sub,
and we have not received any compensation from Parent or Acquisition Sub during such period. We may provide financial advisory and other services to or with respect to the Company or Parent or their respective affiliates in the future, for which we
may receive compensation. Certain (i) of our and our affiliates directors, officers, members and employees, or family members of such persons, (ii) of our affiliates or related investment funds and (iii) investment funds or other persons in
which any of the foregoing may have financial interests or with which they may co-invest, may at any time acquire, hold, sell or trade, in debt, equity and other securities or financial instruments (including derivatives, bank loans or other
obligations) of, or investments in, the Company, Parent, or any of their respective affiliates, or any other party that may be involved in the Transaction.
In connection with this opinion, we have reviewed, among other things: (i) a draft of the Agreement dated June 16, 2016 (the Draft
Agreement); (ii) Annual Reports on Form 10-K of the Company for the years ended June 30, 2015, June 30, 2014 and June 30, 2013; (iii) certain interim reports to stockholders and Quarterly
B-1
The Board of Directors
Elizabeth Arden, Inc.
June 16, 2016
Page 2
Reports on Form 10-Q of the Company; (iv) certain publicly available research analyst reports for the Company; (v) certain other communications from the Company to its stockholders; and (vi)
certain internal information relating to the business, operations, earnings, cash flow, assets, liabilities and prospects of the Company, including certain financial forecasts, analyses and projections relating to the Company prepared by management
of the Company and furnished to us by the Company for purposes of our analysis (the Forecasts) (collectively, the Internal Data). We have also conducted discussions with members of the senior management and representatives of
the Company regarding their assessment of the Internal Data and the strategic rationale for the Transaction. In addition, we reviewed publicly available financial and stock market data, including valuation multiples, for the Company and compared
that data with similar data for certain other companies, the securities of which are publicly traded, in lines of business that we deemed relevant. We also compared certain of the proposed financial terms of the Transaction with the financial terms,
to the extent publicly available, of certain other transactions that we deemed relevant and conducted such other financial studies and analyses and took into account such other information as we deemed appropriate.
We have assumed, without independent verification or any responsibility therefor, the accuracy and completeness of the financial, legal,
regulatory, tax, accounting and other information supplied to, discussed with, or reviewed by us for purposes of this opinion and have, with your consent, relied upon such information as being complete and accurate. In that regard, we have assumed,
at your direction, that the Internal Data (including, without limitation, the Forecasts) has been reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of the Company as to the matters covered
thereby and we have relied, at your direction, on the Internal Data for purposes of our analysis and this opinion. We express no view or opinion as to the Internal Data or the assumptions on which it is based. In addition, at your direction, we have
not made any independent evaluation or appraisal of any of the assets or liabilities (contingent, derivative, off-balance-sheet or otherwise) of the Company, nor have we been furnished with any such evaluation or appraisal, and we have not been
asked to conduct, and did not conduct, a physical inspection of the properties or assets of the Company. We have assumed, at your direction, that the final executed Agreement will not differ in any respect material to our analysis or this opinion
from the Draft Agreement reviewed by us. We have also assumed, at your direction, that the Transaction will be consummated on the terms set forth in the Agreement and in accordance with all applicable laws and other relevant documents or
requirements, without delay or the waiver, modification or amendment of any term, condition or agreement, the effect of which would be material to our analysis or this opinion and that, in the course of obtaining the necessary governmental,
regulatory and other approvals, consents, releases and waivers for the Transaction, no delay, limitation, restriction, condition or other change will be imposed, the effect of which would be material to our analysis or this opinion. We have not
evaluated and do not express any opinion as to the solvency or fair value of the Company, or the ability of the Company to pay its obligations when they come due, or as to the impact of the Transaction on such matters, under any state, federal or
other laws relating to bankruptcy, insolvency or similar matters. We are not legal, regulatory, tax or accounting advisors, and we express no opinion as to any legal, regulatory, tax or accounting matters.
We express no view as to, and our opinion does not address, the Companys underlying business decision to proceed with or effect the
Transaction, or the relative merits of the Transaction as compared to any alternative business strategies or transactions that might be available to the Company or in which the Company might engage. This opinion is limited to and addresses only the
fairness, from a financial point of view, as of the date hereof, to the holders of the Shares (other than Excluded Shares) of the Consideration to be paid to such holders pursuant to the Agreement. We have not been asked to, nor do we express any
view on, and our opinion does not address, any other term or aspect of the Agreement or the Transaction, including, without limitation, the structure or form of the Transaction, or any other agreements or arrangements contemplated by the Agreement
or entered
B-2
The Board of Directors
Elizabeth Arden, Inc.
June 16, 2016
Page 3
into in connection with or otherwise contemplated by the Transaction, including, without limitation, the fairness of the Transaction or any other term or aspect of the Transaction to, or any
consideration to be received in connection therewith by, or the impact of the Transaction on, the holders of any other class of securities, creditors or other constituencies of the Company or any other party. In addition, we express no view or
opinion as to the fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to be paid or payable to any of the officers, directors or employees of the Company or any party, or class of such persons in
connection with the Transaction, whether relative to the Consideration to be paid to the holders of the Shares pursuant to the Agreement or otherwise. Our opinion is necessarily based on financial, economic, monetary, currency, market and other
conditions and circumstances as in effect on, and the information made available to us as of, the date hereof, and we do not have any obligation or responsibility to update, revise or reaffirm this opinion based on circumstances, developments or
events occurring after the date hereof. Our opinion does not constitute a recommendation to any stockholder of the Company or any other person as to how such stockholder or other person should vote with respect to the Merger or otherwise act with
respect to the Transaction or any other matter.
Our financial advisory services and the opinion expressed herein are provided for the
information and assistance of the Board of Directors of the Company (in their capacity as directors and not in any other capacity) in connection with and for purposes of its consideration of the Transaction. The issuance of this opinion was approved
by the Centerview Partners LLC Fairness Opinion Committee.
Based upon and subject to the foregoing, including the various assumptions
made, procedures followed, matters considered, and qualifications and limitations set forth herein, we are of the opinion, as of the date hereof, that the Consideration to be paid to the holders of Shares (other than Excluded Shares) pursuant to the
Agreement is fair, from a financial point of view, to such holders.
Very truly yours,
/s/ Centerview Partners LLC
CENTERVIEW PARTNERS LLC
B-3
Annex C
EXECUTION VERSION
SUPPORT AGREEMENT
SUPPORT AGREEMENT (this
Agreement
) dated as of June 16, 2016, by and among Revlon, Inc., a Delaware corporation
(
Ultimate Parent
), Revlon Consumer Products Corporation, a Delaware corporation and wholly-owned subsidiary of Ultimate Parent (
Operating Parent
and, collectively with Ultimate Parent,
Parent
), and RR Transaction Corp., a Florida corporation and a wholly-owned direct subsidiary of Operating Parent (
Acquisition Sub
), on the one hand, and Nightingale Onshore Holdings L.P., a Delaware limited
partnership, and Nightingale Offshore Holdings L.P., a Delaware limited partnership (collectively, the
Shareholders
and each a
Shareholder
), on the other hand.
WHEREAS, the Shareholders are shareholders of Elizabeth Arden, Inc., a Florida corporation (the
Company
);
WHEREAS, as of the date hereof, each Shareholder is the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of (a) the
shares of Common Stock of the Company set forth opposite such Shareholders name on
Schedule
A
hereto under the column Number of Shares of Common Stock Owned (the
Common Shares
) and (b)
the shares of Series A Serial Preferred Stock of the Company set forth opposite such Shareholders name on
Schedule A
hereto under the column Number of Shares of Series A Serial Preferred Stock Owned (the
Preferred
Shares
and, together with the Common Shares, the
Original Shares
);
WHEREAS, the
Subject
Shares
as used in this Agreement shall mean the Original Shares collectively with any additional shares of capital stock of the Company that become beneficially owned by such Shareholder after the date of this Agreement;
WHEREAS, contemporaneously with the execution and delivery of this Agreement, Parent, Acquisition Sub and the Company have entered into an
Agreement and Plan of Merger (as amended, supplemented, restated or otherwise modified from time to time, the
Merger Agreement
), providing for, among other things, upon the terms and subject to the conditions set forth in the
Merger Agreement, the merger of Acquisition Sub with and into the Company, with the Company continuing as the surviving corporation and a wholly-owned subsidiary of Parent in such merger (the
Merger
);
WHEREAS, in order to induce Parent and Acquisition Sub to enter into the Merger Agreement, the Shareholders have each agreed to enter into
this Agreement and abide by the covenants and obligations with respect to the Subject Shares set forth herein; and
WHEREAS, capitalized
terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Merger Agreement.
NOW,
THEREFORE, in consideration of the premises and for other good and valuable consideration given to each party hereto, the receipt of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:
ARTICLE I
AGREEMENT TO
VOTE
Section 1.1
Voting of Subject Shares; Irrevocable Proxy
.
(a) Each Shareholder agrees to vote (or cause the holder of record of the Subject Shares on any applicable record date to vote), in person or
by proxy, all Subject Shares in connection with any meeting of the
C-1
shareholders of the Company (including any adjournment or postponement thereof) or any action by written consent in lieu of a meeting of shareholders of the Company (i) in favor of the
approval of the Merger Agreement and the approval of any other matter that is required to be approved by the shareholders of the Company in order to effect the transactions contemplated by the Merger Agreement (including any proposal to adjourn or
postpone a meeting of the shareholders of the Company to a later date if there are not sufficient votes to approve the Merger Agreement on the date on which the meeting is held); and (ii) against (A) any Competing Proposal or any agreement
or arrangement constituting or related to an Competing Proposal, (B) any action that would result in a liquidation, dissolution, recapitalization, extraordinary dividend or other significant corporate reorganization of the Company; or
(C) any action, proposal, transaction or agreement involving the Company or any of its subsidiaries that would reasonably be expected to prevent, interfere with or delay the consummation of the Merger and the other transactions contemplated by
the Merger Agreement or that would otherwise be inconsistent with the Merger and the other transactions contemplated by the Merger Agreement, and in connection therewith, such Shareholder agrees to execute any documents that are necessary or
appropriate in order to effectuate the foregoing. Such Shareholder shall (or shall cause the holder of record of any Subject Shares on any applicable record date to) be present (in person or by proxy) at any meeting of shareholders of the
Company (including any adjournment or postponement thereof) called to approve the Merger Agreement or otherwise cause the Subject Shares to be counted as present thereat for purposes of establishing a quorum.
(b) In furtherance of the foregoing, each Shareholder hereby irrevocably grants to, and appoints, until the termination of this Agreement in
accordance with Section 2.1, Parent, each of Parents officers and any person or persons designated in writing by Parent, and each of them individually, as such Shareholders proxy and attorney-in-fact (with full power of substitution
and resubstitution), for and in the name, place and stead of such Shareholder, to vote or grant a written consent in respect of all of such Shareholders Subject Shares, or execute and deliver a proxy to vote or grant a written consent in
respect of such Subject Shares, on the matters and in the manner specified in
Section 1.1(a)
, provided that each Shareholders grant of the proxy contemplated by this
Section 1.1(b)
shall be effective if, and only if, the
Company has not received prior to the date of the meeting at which any of the matters described in
Section 1.1
(a) are to be considered, a duly executed irrevocable proxy card of such Shareholder directing that the Subject Shares of such
Shareholder be voted in the manner required by
Section 1.1(a)
. Each Shareholder hereby affirms that such irrevocable proxy is given in connection with, and in consideration of, the execution of the Merger Agreement by Parent, Acquisition
Sub and the Company, and that such irrevocable proxy is given to secure the performance of the duties of such Shareholder under this Agreement. Each Shareholder hereby further affirms that such proxy is irrevocable and is coupled with an
interest sufficient in law to support an irrevocable power and may under no circumstances be revoked. Such proxy is executed and intended to be irrevocable in accordance with the provisions of Section 607.0722(5) of the FBCA until the
termination of this Agreement in accordance with Section 2.1. Each Shareholder shall execute any further agreement or form reasonably necessary or appropriate to confirm and effectuate the grant of the proxy contemplated herein. Each
Shareholder hereby revokes (or causes to be revoked) any and all previous proxies, powers of attorney, instructions or other requests with respect to such Shareholders Subject Shares. Parent may terminate this proxy with respect to any
Shareholder at any time at its sole election by written notice provided to such Shareholder.
Section 1.2
No Transfers; No Inconsistent
Arrangements
. Except as provided hereunder, each Shareholder agrees not to, directly or indirectly, (i) transfer (which term shall include any sale, assignment, gift, pledge, hypothecation or other disposition), or consent to, agree to or
permit any such transfer of, any or all of the Subject Shares or any interest therein (except for a transfer for estate or tax planning purposes, for charitable purposes or as charitable gifts or donations where the transferee or third party agrees
in writing to be bound by the terms hereof), or create or permit to exist any Liens, proxies, voting trusts or agreements, options, rights, understandings or arrangements or any other encumbrances whatsoever on title, transfer, or exercise of any
rights of a shareholder in respect of the Subject Shares (collectively,
Encumbrances
) that would prevent such Shareholder from voting the Subject Shares in accordance with this Agreement or from complying with its other
obligations under this Agreement, other than any restrictions imposed by applicable law on any Subject Shares; (ii) enter into any contract, option or other agreement, arrangement or understanding inconsistent with the terms of this Agreement
with respect to any transfer of Subject Shares or any interest therein; (iii) grant or permit the
C-2
grant of any proxy, power of attorney or other authorization in or with respect to the Subject Shares relating to the subject matter hereof; (iv) deposit or permit the deposit of the Subject
Shares into a voting trust or enter into a voting agreement or arrangement with respect to the Subject Shares; or (v) take or permit any other action that would reasonably be expected to in any way restrict, limit or interfere with the
performance of its obligations hereunder or the transactions contemplated hereby (any of the actions set forth in clauses (i) through (v) above, and any conversion, exchange or other disposition of the Subject Shares in a transaction related to
an Competing Proposal being referred to in this Agreement as a
Transfer
). Any action taken in violation of the foregoing sentence shall be null and void
ab initio
. To the extent a Shareholders Subject Shares are
represented by certificates, such Shareholder shall make available to the Company such certificates in order for the Company to mark such certificates with legends required by the FBCA regarding the foregoing Transfer restrictions. If any
involuntary Transfer of any of the Subject Shares shall occur, the transferee (which term, as used herein, shall include the initial transferee and any and all subsequent transferees of the initial transferee) shall take and hold such Subject Shares
subject to all of the restrictions, liabilities and rights under this Agreement, which shall continue in full force and effect until the valid termination of this Agreement.
Section 1.3
Non-Solicitation
. Without limitation to Section 6.5 of the Merger Agreement, each Shareholder agrees to, and to
direct and cause its Representatives to, immediately cease any discussions or negotiations with any persons that may be ongoing with respect to a Competing Proposal and, until the earlier of the Effective Time or the date, if any, on which this
Agreement is terminated pursuant to Section 2.1, not, directly or indirectly: (i) solicit, initiate, or knowingly facilitate or encourage any Competing Proposal; (ii) participate in any negotiations regarding, or furnish to any person
any information with respect to, any Competing Proposal; or (iii) engage in discussions with any person with respect to any Competing Proposal.
Section 1.4
Capacity
. Each Shareholder is signing this Agreement solely in its capacity as a shareholder of the Company, and
nothing contained herein shall in any way limit or affect any of such Shareholders Representatives and Affiliates (or any future director or officer of the Company who may be affiliated or associated with any Shareholder or any of its
Affiliates) from complying with his fiduciary duties in his capacity as a director or officer of the Company or from otherwise taking any action or inaction in his capacity as a director or officer of the Company, and no such action or inaction
taken in compliance with such fiduciary duties in such capacity as a director shall be deemed to constitute a breach of this Agreement. Nothing in this Section 1.4 shall be construed to limit the obligations and agreements of the Company under
the Merger Agreement.
Section 1.5
Documentation and Information
. Each Shareholder (i) consents to and authorizes the
publication and disclosure by Parent, Acquisition Sub or the Company of such Shareholders identity and holding of Subject Shares, and the nature of its commitments, arrangements and understandings under this Agreement (including, for the
avoidance of doubt, the disclosure of this Agreement), in any press release, the Proxy Statement and any other disclosure document required in connection with the Merger Agreement, the Merger and any transactions contemplated by the Merger
Agreement, and (ii)
agrees to give to Parent as promptly as practicable any information related to the foregoing that Parent may reasonably require for the preparation of any such disclosure documents. Each Shareholder agrees to notify
Parent as promptly as practicable of any required corrections with respect to any written information supplied by such Shareholder specifically for use in any such disclosure document, if and to the extent such Shareholder becomes aware that any
such information shall have become false or misleading in any material respect.
Section 1.6
Changes to Subject Shares
. Each
Shareholder agrees that all shares of the Common Stock, Series A Serial Preferred Stock or other capital stock of the Company entitled to vote on the Merger Agreement and Merger, that such Shareholder purchases, acquires the right to vote or
otherwise acquires beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of after the execution of this Agreement, including shares issued upon the exercise of the Restricted Share Units or Company Options, shall be subject to
the terms of this Agreement and shall constitute Subject Shares for all purposes of this Agreement. In the event of any share dividend or distribution, or any change to the Subject Shares by reason of any share dividend or distribution,
split-up, recapitalization, combination, exchange of shares or any other similar transaction, the term Subject Shares as used in this Agreement shall be deemed to refer to and include the Subject Shares and all such share
C-3
dividends and distributions and any securities into which or for which any or all of the Subject Shares may be changed or exchanged or which are received in the relevant transaction. Each
Shareholder hereby agrees, while this Agreement is in effect, to notify Parent promptly in writing of the number and description of any additional Subject Shares of which such Shareholder acquires beneficial ownership or ownership of record.
Section 1.7
Shareholder Representations and Warranties
. Each Shareholder represents and warrants to Parent and Acquisition Sub,
severally but not jointly, as follows:
(a) Such Shareholder (i) is the sole owner of, and has, and at the time of the Shareholder
Meeting will have, good title to, such Shareholders Subject Shares, free and clear of any and all Encumbrances except for Encumbrances arising (A) hereunder or (B) from any restrictions on transfer imposed by applicable federal or
state securities laws; (ii) does not own, of record or beneficially, any shares of capital stock of the Company (or rights to acquire any such shares) other than the Subject Shares and shares underlying the Restricted Share Units or the Company
Options or Warrants; and (iii) has the sole right to vote and dispose of, and holds sole power to issue instructions with respect to, the matters set forth in this Agreement with no material limitations, qualifications or other restrictions on
such rights, subject to applicable federal or state securities laws and the terms of this Agreement. As of the date hereof, such Shareholder is the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of the Subject
Shares set forth opposite such Shareholders name on
Schedule A
hereto, and does not own any other shares of capital stock of the Company.
(b) This Agreement has been duly and validly executed and delivered by such Shareholder and, assuming this Agreement constitutes a valid and
binding obligation of each of Parent and Acquisition Sub, constitutes a legal, valid and binding agreement of such Shareholder enforceable against such Shareholder in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to or affecting creditors rights and to general equitable principles.
(c) The execution, delivery and performance by such Shareholder of this Agreement and the consummation of the transactions contemplated hereby
do not and will not (i) conflict with, or result in the breach or termination of or constitute a default (with or without the giving of notice or the lapse of time or both) under any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit or other instrument or obligation of any kind to which such Shareholder is a party or by which the Subject Shares are bound; or (ii) violate, or require any consent, approval, or notice under any provision of any judgment, order
or decree or other Legal Requirement applicable to such Shareholder or any of the Subject Shares.
(d) The execution and delivery of this
Agreement by such Shareholder does not, and the performance by such Shareholder of its obligations under this Agreement and the consummation by it of the transactions contemplated hereby will not, require such Shareholder to obtain any consent,
approval, authorization or permit of, or to make any filing with or notification to, any Governmental Authority, other than the filings of any reports (or amendments thereto) with the SEC.
(e) Such Shareholder understands and acknowledges that each of the parties to the Merger Agreement are entering into the Merger Agreement in
reliance upon the execution and delivery of this Agreement by such Shareholder and the representations, warranties and covenants of such Shareholder contained herein. Such Shareholder understands and acknowledges that the Merger Agreement governs
the terms of the Merger and the other transactions contemplated thereby.
Section 1.8
Parent Representations and
Warranties
. Parent represents and warrants to the Shareholders, severally but not jointly, that this Agreement has been duly and validly executed and delivered by Parent and, assuming this Agreement constitutes a valid and binding
obligation of the Shareholders, constitutes a legal, valid and binding agreement of Parent enforceable against Parent in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors rights and to general equitable principles.
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Section 1.9
Non-Survival of Representations and Warranties
. The representations and
warranties of the Shareholders contained herein shall not survive the closing of the transactions contemplated hereby and by the Merger Agreement.
Section 1.10
Proportional Vote
. In the event that this Agreement is terminated in accordance with clause (iii) of
Section
2.1
, then, notwithstanding such termination, each Shareholder agrees, until the earliest to occur of the events described in clauses (i), (ii) and (iv) of
Section 2.1
, (x) to vote (or cause the holder of record of the Preferred Shares on
any applicable record date to vote), in person or by proxy, all Preferred Shares in connection with any meeting of the shareholders of the Company at which the holders of the Preferred Shares are entitled to vote in a separate class from holders of
Common Stock (including any adjournment or postponement thereof or any action by written consent in lieu of a meeting of the shareholders or otherwise requiring approval of the shareholders of the Company) in the same proportion as all Total Votes
are actually voted on any matter to which the first sentence of
Section 1.1(a)
applies, (y) that
Section 1.1(b)
shall survive, but with references therein to
Section 1.1(a)
deemed to be references to this
Section
1.10
, and (z)
Section 1.2
and
Section 1.6
of this Agreement shall survive solely with respect to the Subject Shares that are Preferred Shares.
ARTICLE II
MISCELLANEOUS
Section
2.1
Termination
. Subject to
Section 1.10
, this Agreement shall terminate in its entirety upon the earliest to occur of (i) the termination of the Merger Agreement in accordance with its terms; (ii) the Effective Time;
(iii) the date on which the Company Board effects a Change of Recommendation; and (iv) the date of the entry, without the prior written consent of the Shareholders, into any amendment or modification of the Merger Agreement or any waiver of any of
the Companys rights under the Merger Agreement, in each case, which results in a decrease in, or a change in the form of, the Merger Consideration. The provisions of this Article II (
Miscellaneous
) shall survive any termination of this
Agreement. In the event of termination of this Agreement, this Agreement shall, subject to the immediately preceding sentence and
Section 1.10
, become void and of no effect with no liability on the part of any party hereto;
provided
,
however
, that the termination of this Agreement shall not prevent any party hereto from seeking any remedies (at law or in equity) against any other party hereto for such partys breach of any of the terms of this
Agreement occurring prior to such termination.
Section 2.2
Notices
. All notices and other communications hereunder shall be
in writing and shall be deemed duly given (a) on the date of delivery if delivered personally, or by facsimile or e-mail transmission, upon confirmation of receipt, (b) on the first Business Day following the date of dispatch if delivered
by a recognized next-day courier service, or (c) on the earlier of confirmed receipt or the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All
notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:
(i) if to any Shareholder, to the address set forth opposite such Shareholders name on Schedule A hereto;
and
(ii) if to
Parent and Acquisition Sub, in accordance with Section 9.2 of the Merger Agreement, or to such other persons, addresses or facsimile numbers as may be designated in writing to each other party hereto by the person entitled to receive such
communication as provided above.
Section 2.3
Amendments; Waivers; Extensions
.
(a) This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.
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(b) At any time prior to the Effective Time, the parties hereto may, to the extent permitted by
applicable law, (i) extend the time for the performance of any of the obligations or other acts of the other party, (ii) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant
hereto, and (iii) waive compliance with any of the agreements or conditions contained herein. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in a written instrument signed by a duly
authorized officer on behalf of such party. The failure of a party to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of those rights. No single or partial exercise of any right, remedy, power or
privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. Any waiver shall be effective only in the specific instance and for the specific purpose for which given
and shall not constitute a waiver to any subsequent or other exercise of any right, remedy, power or privilege hereunder.
Section 2.4
Expenses
. All costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such costs and expenses, whether or not the transactions contemplated by this Agreement or the Merger Agreement are consummated.
Section 2.5
Binding Effect; Benefit; Assignment
. Neither this Agreement nor any rights, interests or obligations hereunder
shall be assigned by any of the parties hereto (whether by operation of a Legal Requirement or otherwise) without the prior written consent of the other parties hereto, except that the Agreement may be assigned by Parent or Acquisition Sub to an
Affiliate of such party;
provided
that the party making such assignment shall not be released from its obligations hereunder. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and permitted assigns.
Section 2.6
Governing Law
. This Agreement
shall be governed by, and construed in accordance with the laws of the State of Delaware, without giving effect to any choice or conflict of laws provision or rule (whether of the State of Delaware or any other jurisdiction); provided, however, that
the laws of the State of Florida shall govern any matters pertaining to the internal corporate governance of the Company.
Section 2.7
Counterparts
. This Agreement may be executed in counterparts (including by electronic means), each of which shall be considered one and the same agreement and this Agreement shall become effective when a counterpart signed by each party shall
be delivered to the other party, it being understood that both parties need not sign the same counterpart. Delivery of an executed signature page of this Agreement by facsimile or other customary means of electronic transmission (e.g.,
pdf) shall be effective as delivery of a manually executed counterpart hereof.
Section 2.8
Venue; Waiver of Jury
Trial
.
(a) Each party hereby submits to the nonexclusive jurisdiction of the Delaware Court of Chancery (or, if (but only if) the
Delaware Court of Chancery shall be unavailable, any other court of the State of Delaware or any federal court sitting in the State of Delaware), for the purpose of any action or proceeding arising out of or relating to this Agreement and each of
the parties hereto hereby irrevocably agrees that all claims in respect to such action or proceeding may be heard and determined in any such court.
(b) Each of the parties hereto (a) irrevocably consents to the service of the summons and complaint and any other process in any other
action or proceeding relating to the transactions contemplated by this Agreement, on behalf of itself or its property, by personal delivery of copies of such process to such party and nothing in this Section 2.8 shall affect the right of any
party to serve legal process in any other manner permitted by law, (b) consents to submit itself to the personal jurisdiction of the Delaware Court of Chancery, any other court of the State of Delaware and any federal court sitting in the State of
Delaware in the event any dispute arises out of this Agreement or the transactions contemplated by this Agreement and (c) agrees that it will not attempt to deny or
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defeat such personal jurisdiction by motion or other request for leave from any such court. Each party hereto agrees that a final judgment in any action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
(c) EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY PARTY HERETO IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF. EACH PARTY (A) MAKES THIS WAIVER VOLUNTARILY AND (B) ACKNOWLEDGES THAT SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS CONTAINED IN
THIS SECTION 2.8.
Section 2.9
Entire Agreement; Third Party Beneficiaries
. This Agreement (including the documents and
the instruments referred to herein) (a) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof and (b) is not intended
to, and does not, confer upon any person or entity other than the parties hereto any rights or remedies hereunder.
Section 2.10
Severability
. Any term or provision of this Agreement that is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability and shall not render invalid
or unenforceable the remaining terms and provisions of this Agreement or affect the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to
be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.
Section 2.11
Enforcement
. The
parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms on a timely basis or were otherwise breached. It is accordingly agreed that,
in the event of any breach or threatened breach by any other party of any covenant or obligation contained in this Agreement, the non-breach party shall be entitled (in addition to any other remedy that may be available to it, including monetary
damages) to seek and obtain (on behalf of themselves and the third-party beneficiaries of this Agreement) (a) a decree or order of specific performance to enforce the observance and performance of such covenant or obligation, and (b) an
injunction, restraining such breach or threatened breach. No party or any other person shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this
Section 2.11, and each party irrevocably waives any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument.
Section 2.12
Descriptive Headings
. The descriptive headings used herein are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation of this Agreement.
Section 2.13
Interpretation
. The parties have
participated jointly in the negotiation and drafting of this Agreement. Consequently, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no
presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement. When a reference is made in this Agreement to an Article, Section, Annex or Exhibit, such reference shall be
to an Article or Section of, or an Annex or Exhibit to, this Agreement, unless otherwise indicated. Whenever the words include, includes or including are used in this Agreement, they shall be deemed to be followed
by the words without limitation. The words hereof, herein and hereunder and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any statute
C-7
defined or referred to herein or any agreement or instrument that is referred to herein means such statute, agreement or instrument as from time to time amended, modified or supplemented,
including (in the case of statutes) by succession of comparable successor statutes. References to a person are also to its permitted successors and assigns.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized signatories as of the day and year first above written.
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REVLON, INC.
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By:
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/s/ Fabian T. Garcia
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Name:
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Fabian T. Garcia
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Title:
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President and Chief Executive Officer
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REVLON CONSUMER PRODUCTS CORPORATION
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By:
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/s/ Fabian T. Garcia
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Name:
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Fabian T. Garcia
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Title:
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President and Chief Executive Officer
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RR TRANSACTION CORP.
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By:
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/s/ Michael T. Sheehan
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Name:
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Michael T. Sheehan
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Title:
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Vice President and Secretary
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[S
UPPORT
A
GREEMENT
(N
IGHTINGALE
)]
C-9
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NIGHTINGALE ONSHORE HOLDINGS L.P.
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By:
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/s/ Franz-Ferdinand Buerstedde
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Name:
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Franz-Ferdinand Buerstedde
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Title:
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Authorized Signatory
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NIGHTINGALE OFFSHORE HOLDINGS L.P.
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By:
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/s/ Franz-Ferdinand Buerstedde
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Name:
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Franz-Ferdinand Buerstedde
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Title:
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Authorized Signatory
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[S
UPPORT
A
GREEMENT
(N
IGHTINGALE
)]
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SCHEDULE A
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Name of Shareholder
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Address
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Number of Shares
of
Common Stock
Owned
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Number of
Shares of Series
A Serial
Preferred Stock
Owned
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Nightingale Onshore Holdings L.P.
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630 Fifth Avenue, Suite 2710
New York, NY 10111
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4,064,897*
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21,996
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Nightingale Offshore Holdings L.P.
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630 Fifth Avenue, Suite 2710
New York, NY 10111
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4,064,897*
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28,004
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*
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Both Nightingale Onshore Holdings L.P. Nightingale Offshore Holdings L.P. may be deemed the beneficial owner of these securities. For the avoidance of doubt, the number of Shares of Common Stock owned by both
Nightingale Onshore Holdings L.P. and Nightingale Offshore Holdings L.P., taken together, is 4,064,897.
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C-11
Annex D
EXECUTION VERSION
SUPPORT AGREEMENT
SUPPORT AGREEMENT (this
Agreement
) dated as of June 16, 2016, by and among Revlon, Inc., a Delaware corporation
(
Ultimate Parent
), Revlon Consumer Products Corporation, a Delaware corporation and wholly-owned subsidiary of Ultimate Parent (
Operating Parent
and, collectively with Ultimate Parent,
Parent
), and RR Transaction Corp., a Florida corporation and a wholly-owned direct subsidiary of Operating Parent (
Acquisition Sub
), on the one hand, and E. Scott Beattie (the
Shareholder
), on
the other hand.
WHEREAS, the Shareholder is a shareholder of Elizabeth Arden, Inc., a Florida corporation (the
Company
);
WHEREAS, as of the date hereof, the Shareholder is the beneficial owner (as defined in Rule 13d-3 under
the Exchange Act) of the shares of Common Stock of the Company set forth on
Schedule
A
hereto (the
Original Shares
and, together with any additional shares of capital stock of the Company that become
beneficially owned by the Shareholder after the date of this Agreement, the
Subject Shares
);
WHEREAS,
contemporaneously with the execution and delivery of this Agreement, Parent, Acquisition Sub and the Company have entered into an Agreement and Plan of Merger (as amended, supplemented, restated or otherwise modified from time to time, the
Merger Agreement
), providing for, among other things, upon the terms and subject to the conditions set forth in the Merger Agreement, the merger of Acquisition Sub with and into the Company, with the Company continuing as the
surviving corporation and a wholly-owned subsidiary of Parent in such merger (the
Merger
);
WHEREAS, in order to induce
Parent and Acquisition Sub to enter into the Merger Agreement, the Shareholder has agreed to enter into this Agreement and abide by the covenants and obligations with respect to the Subject Shares set forth herein; and
WHEREAS, capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Merger
Agreement.
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration given to each party hereto, the
receipt of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:
ARTICLE I
AGREEMENT TO VOTE
Section 1.1
Voting of Subject Shares; Irrevocable Proxy
.
(a) The Shareholder agrees to vote (or cause the holder of record of the Subject Shares on any applicable record date to vote), in person or
by proxy, all Subject Shares in connection with any meeting of the shareholders of the Company (including any adjournment or postponement thereof) or any action by written consent in lieu of a meeting of shareholders of the Company (i) in favor
of the approval of the Merger Agreement and the approval of any other matter that is required to be approved by the shareholders of the Company in order to effect the transactions contemplated by the Merger Agreement (including any proposal to
adjourn or postpone a meeting of the shareholders of the Company to a later date if there are not sufficient votes to approve the Merger Agreement on the date on which the meeting is held); and (ii) against (A) any Competing Proposal or
any
D-1
agreement or arrangement constituting or related to an Competing Proposal, (B) any action that would result in a liquidation, dissolution, recapitalization, extraordinary dividend or other
significant corporate reorganization of the Company; or (C) any action, proposal, transaction or agreement involving the Company or any of its subsidiaries that would reasonably be expected to prevent, interfere with or delay the consummation
of the Merger and the other transactions contemplated by the Merger Agreement or that would otherwise be inconsistent with the Merger and the other transactions contemplated by the Merger Agreement, and in connection therewith, the Shareholder
agrees to execute any documents that are necessary or appropriate in order to effectuate the foregoing. The Shareholder shall (or shall cause the holder of record of any Subject Shares on any applicable record date to) be present (in person or
by proxy) at any meeting of shareholders of the Company (including any adjournment or postponement thereof) called to approve the Merger Agreement or otherwise cause the Subject Shares to be counted as present thereat for purposes of establishing a
quorum.
(b) In furtherance of the foregoing, the Shareholder hereby irrevocably grants to, and appoints, until the termination of this
Agreement in accordance with Section 2.1, Parent, each of Parents officers and any person or persons designated in writing by Parent, and each of them individually, as the Shareholders proxy and attorney-in-fact (with full power of
substitution and resubstitution), for and in the name, place and stead of the Shareholder, to vote or grant a written consent in respect of all of the Shareholders Subject Shares, or execute and deliver a proxy to vote or grant a written
consent in respect of such Subject Shares, on the matters and in the manner specified in
Section 1.1(a)
, provided
that the Shareholders grant of the proxy contemplated by this
Section 1.1(b)
shall be effective if, and
only if, the Company has not received prior to the date of the meeting at which any of the matters described in
Section 1.1(a)
are to be considered, a duly executed irrevocable proxy card of the Shareholder directing that the Subject Shares
of the Shareholder be voted in the manner required by
Section 1.1(a)
. The Shareholder hereby affirms that such irrevocable proxy is given in connection with, and in consideration of, the execution of the Merger Agreement by Parent,
Acquisition Sub and the Company, and that such irrevocable proxy is given to secure the performance of the duties of the Shareholder under this Agreement. The Shareholder hereby further affirms that such proxy is irrevocable and is coupled with an
interest sufficient in law to support an irrevocable power and may under no circumstances be revoked. Such proxy is executed and intended to be irrevocable in accordance with the provisions of Section 607.0722(5) of the FBCA until the
termination of this Agreement in accordance with Section 2.1. The Shareholder shall execute any further agreement or form reasonably necessary or appropriate to confirm and effectuate the grant of the proxy contemplated herein. The Shareholder
hereby revokes (or causes to be revoked) any and all previous proxies, powers of attorney, instructions or other requests with respect to the Shareholders Subject Shares. Parent may terminate this proxy with respect to the Shareholder at any
time at its sole election by written notice provided to the Shareholder.
Section 1.2
No Transfers; No Inconsistent
Arrangements
. Except as provided hereunder, the Shareholder agrees not to, directly or indirectly, (i) transfer (which term shall include any sale, assignment, gift, pledge, hypothecation or other disposition), or consent to, agree to
or permit any such transfer of, any or all of the Subject Shares or any interest therein (except for a transfer for estate or tax planning purposes, for charitable purposes or as charitable gifts or donations where the transferee or third party
agrees in writing to be bound by the terms hereof), or create or permit to exist any Liens, proxies, voting trusts or agreements, options, rights, understandings or arrangements or any other encumbrances whatsoever on title, transfer, or exercise of
any rights of a shareholder in respect of the Subject Shares (collectively,
Encumbrances
) that would prevent the Shareholder from voting the Subject Shares in accordance with this Agreement or from complying with the
Shareholders other obligations under this Agreement, other than any restrictions imposed by applicable law on any Subject Shares; (ii) enter into any contract, option or other agreement, arrangement or understanding inconsistent with the
terms of this Agreement with respect to any transfer of Subject Shares or any interest therein; (iii) grant or permit the grant of any proxy, power of attorney or other authorization in or with respect to the Subject Shares relating to the
subject matter hereof; (iv) deposit or permit the deposit of the Subject Shares into a voting trust or enter into a voting agreement or arrangement with respect to the Subject Shares; or (v) take or permit any other action that would
reasonably be expected to in any way restrict, limit or interfere with the performance of the Shareholders obligations hereunder or the transactions contemplated hereby (any of the
D-2
actions set forth in clauses (i) through (v) above, and any conversion, exchange or other disposition of the Subject Shares in a transaction related to an Competing Proposal being referred
to in this Agreement as a
Transfer
). Any action taken in violation of the foregoing sentence shall be null and void
ab initio
. To the extent the Shareholders Subject Shares are represented by certificates, the
Shareholder shall make available to the Company such certificates in order for the Company to mark such certificates with legends required by the FBCA regarding the foregoing Transfer restrictions. If any involuntary Transfer of any of the Subject
Shares shall occur, the transferee (which term, as used herein, shall include the initial transferee and any and all subsequent transferees of the initial transferee) shall take and hold such Subject Shares subject to all of the restrictions,
liabilities and rights under this Agreement, which shall continue in full force and effect until the valid termination of this Agreement.
Section 1.3
Non-Solicitation
. Without limitation to Section 6.5 of the Merger Agreement, the Shareholder agrees to
immediately cease any discussions or negotiations with any persons that may be ongoing with respect to a Competing Proposal and, until the earlier of the Effective Time or the date, if any, on which this Agreement is terminated pursuant to
Section 2.1, not, directly or indirectly: (i) solicit, initiate, or knowingly facilitate or encourage any Competing Proposal; (ii) participate in any negotiations regarding, or furnish to any person any information with respect to,
any Competing Proposal; or (iii) engage in discussions with any person with respect to any Competing Proposal.
Section 1.4
Capacity
. The Shareholder is signing this Agreement solely in the Shareholders capacity as a shareholder of the Company, and nothing contained herein shall in any way limit or affect the Shareholder from complying with his fiduciary
duties in his capacity as a director or officer of the Company or from otherwise taking any action or inaction in his capacity as a director or officer of the Company, and no such action or inaction taken in compliance with such fiduciary duties in
such capacity as a director shall be deemed to constitute a breach of this Agreement. Nothing in this Section 1.4 shall be construed to limit the obligations and agreements of the Company under the Merger Agreement.
Section 1.5
Documentation and Information
. The Shareholder (i) consents to and authorizes the publication and disclosure by
Parent, Acquisition Sub or the Company of the Shareholders identity and holding of Subject Shares, and the nature of the Shareholders commitments, arrangements and understandings under this Agreement (including, for the avoidance of
doubt, the disclosure of this Agreement), in any press release, the Proxy Statement and any other disclosure document required in connection with the Merger Agreement, the Merger and any transactions contemplated by the Merger Agreement, and
(ii) agrees to give to Parent as promptly as practicable any information related to the foregoing that Parent may reasonably require for the preparation of any such disclosure documents. The Shareholder agrees to notify Parent as promptly as
practicable of any required corrections with respect to any written information supplied by the Shareholder specifically for use in any such disclosure document, if and to the extent the Shareholder becomes aware that any such information shall have
become false or misleading in any material respect.
Section 1.6
Changes to Subject Shares
. The Shareholder agrees that all shares
of the Common Stock, Series A Serial Preferred Stock or other capital stock of the Company entitled to vote on the Merger Agreement and Merger, that the Shareholder purchases, acquires the right to vote or otherwise acquires beneficial ownership (as
defined in Rule 13d-3 under the Exchange Act) of after the execution of this Agreement, including shares issued upon the exercise of the Restricted Share Units or Company Options, shall be subject to the terms of this Agreement and shall
constitute Subject Shares for all purposes of this Agreement. In the event of any share dividend or distribution, or any change to the Subject Shares by reason of any share dividend or distribution, split-up, recapitalization,
combination, exchange of shares or any other similar transaction, the term Subject Shares as used in this Agreement shall be deemed to refer to and include the Subject Shares and all such share dividends and distributions and any
securities into which or for which any or all of the Subject Shares may be changed or exchanged or which are received in the relevant transaction. The Shareholder hereby agrees, while this Agreement is in effect, to notify Parent promptly in writing
of the number and description of any additional Subject Shares of which the Shareholder acquires beneficial ownership or ownership of record.
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Section 1.7
Shareholder Representations and Warranties
. The Shareholder represents
and warrants to Parent and Acquisition Sub as follows:
(a) The Shareholder (i) is the sole owner of, and has, and at the time of the
Shareholder Meeting will have, good title to, the Shareholders Subject Shares, free and clear of any and all Encumbrances except for Encumbrances (A) arising hereunder, (B) any restrictions on transfer imposed by applicable federal or
state securities laws or (C) set forth on Schedule 1.7(a) hereto; (ii) does not own, of record or beneficially, any shares of capital stock of the Company (or rights to acquire any such shares) other than the Subject Shares and shares
underlying the Restricted Share Units or the Company Options or Warrants; and (iii) has the sole right to vote and dispose of, and holds sole power to issue instructions with respect to, the matters set forth in this Agreement with no material
limitations, qualifications or other restrictions on such rights, subject to applicable federal or state securities laws and the terms of this Agreement. As of the date hereof, the Shareholder is the beneficial owner (within the meaning of
Rule 13d-3 under the Exchange Act) of the Subject Shares set forth opposite the Shareholders name on
Schedule A
hereto, and does not own any other shares of capital stock of the Company.
(b) This Agreement has been duly and validly executed and delivered by the Shareholder and, assuming this Agreement constitutes a valid and
binding obligation of each of Parent and Acquisition Sub, constitutes a legal, valid and binding agreement of the Shareholder enforceable against the Shareholder in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to or affecting creditors rights and to general equitable principles.
(c) The execution, delivery and performance by the Shareholder of this Agreement and the consummation of the transactions contemplated hereby
do not and will not (i) conflict with, or result in the breach or termination of or constitute a default (with or without the giving of notice or the lapse of time or both) under any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit or other instrument or obligation of any kind to which the Shareholder is a party or by which the Subject Shares are bound; or (ii) violate, or require any consent, approval, or notice under any provision of any judgment, order or
decree or other Legal Requirement applicable to the Shareholder or any of the Subject Shares.
(d) The execution and delivery of this
Agreement by the Shareholder does not, and the performance by the Shareholder of his obligations under this Agreement and the consummation by it of the transactions contemplated hereby will not, require the Shareholder to obtain any consent,
approval, authorization or permit of, or to make any filing with or notification to, any Governmental Authority, other than the filings of any reports (or amendments thereto) with the SEC.
(e) The Shareholder understands and acknowledges that each of the parties to the Merger Agreement are entering into the Merger Agreement in
reliance upon the execution and delivery of this Agreement by the Shareholder and the representations, warranties and covenants of the Shareholder contained herein. The Shareholder understands and acknowledges that the Merger Agreement governs the
terms of the Merger and the other transactions contemplated thereby.
Section 1.8
Parent Representations and Warranties
. Parent
represents and warrants to the Shareholder, severally but not jointly, that this Agreement has been duly and validly executed and delivered by Parent and, assuming this Agreement constitutes a valid and binding obligation of the Shareholder,
constitutes a legal, valid and binding agreement of Parent enforceable against Parent in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating
to or affecting creditors rights and to general equitable principles.
Section 1.9
Non-Survival of Representations and
Warranties
. The representations and warranties of the Shareholder contained herein shall not survive the closing of the transactions contemplated hereby and by the Merger Agreement.
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ARTICLE II
MISCELLANEOUS
Section
2.1
Termination
. This Agreement shall terminate in its entirety upon the earliest to occur of (i) the termination of the Merger Agreement in accordance with its terms; (ii) the Effective Time; (iii) the date on which the Company
Board effects a Change of Recommendation; and (iv) the date of the entry, without the prior written consent of the Shareholder, into any amendment or modification of the Merger Agreement or any waiver of any of the Companys rights under the
Merger Agreement, in each case, which results in a decrease in, or a change in the form of, the Merger Consideration. The provisions of this Article II (
Miscellaneous
) shall survive any termination of this Agreement. In the event of
termination of this Agreement, subject to the immediately preceding sentence, this Agreement shall become void and of no effect with no liability on the part of any party hereto;
provided
,
however
, that the termination of this
Agreement shall not prevent any party hereto from seeking any remedies (at law or in equity) against any other party hereto for such partys breach of any of the terms of this Agreement occurring prior to such termination.
Section 2.2
Notices
. All notices and other communications hereunder shall be in writing and shall be deemed duly given (a) on
the date of delivery if delivered personally, or by facsimile or e-mail transmission, upon confirmation of receipt, (b) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service, or
(c) on the earlier of confirmed receipt or the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth
below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:
(i) if to the Shareholder, to the address set forth opposite the Shareholders name on
Schedule
A
hereto;
and
(ii) if to Parent and Acquisition Sub, in accordance with Section 9.2 of the Merger Agreement, or to such other
persons, addresses or facsimile numbers as may be designated in writing to each other party hereto by the person entitled to receive such communication as provided above.
Section 2.3
Amendments; Waivers; Extensions
.
(a) This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.
(b) At any time prior to the Effective Time, the parties hereto may, to the extent permitted by applicable law, (i) extend the time for the
performance of any of the obligations or other acts of the other party, (ii) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto, and (iii) waive compliance with any of
the agreements or conditions contained herein. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in a written instrument signed by a duly authorized officer on behalf of such party. The
failure of a party to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of those rights. No single or partial exercise of any right, remedy, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege. Any waiver shall be effective only in the specific instance and for the specific purpose for which given and shall not constitute a waiver to any subsequent or
other exercise of any right, remedy, power or privilege hereunder.
Section 2.4
Expenses
. All costs and expenses incurred in
connection with this Agreement shall be paid by the party incurring such costs and expenses, whether or not the transactions contemplated by this Agreement or the Merger Agreement are consummated.
Section 2.5
Binding Effect; Benefit; Assignment
. Neither this Agreement nor any rights, interests or obligations hereunder shall
be assigned by any of the parties hereto (whether by operation of a Legal
D-5
Requirement or otherwise) without the prior written consent of the other parties hereto, except that the Agreement may be assigned by Parent or Acquisition Sub to an Affiliate of such party;
provided that the party making such assignment shall not be released from its obligations hereunder. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their
respective successors and permitted assigns.
Section 2.6
Governing Law
. This Agreement shall be governed by, and construed in
accordance with the laws of the State of Delaware, without giving effect to any choice or conflict of laws provision or rule (whether of the State of Delaware or any other jurisdiction); provided, however, that the laws of the State of Florida shall
govern any matters pertaining to the internal corporate governance of the Company.
Section 2.7
Counterparts
. This Agreement may be
executed in counterparts (including by electronic means), each of which shall be considered one and the same agreement and this Agreement shall become effective when a counterpart signed by each party shall be delivered to the other party, it being
understood that both parties need not sign the same counterpart. Delivery of an executed signature page of this Agreement by facsimile or other customary means of electronic transmission (e.g., pdf) shall be effective as delivery of a
manually executed counterpart hereof.
Section 2.8
Venue; Waiver of Jury Trial
.
(a) Each party hereby submits to the nonexclusive jurisdiction of the Delaware Court of Chancery (or, if (but only if) the Delaware Court of
Chancery shall be unavailable, any other court of the State of Delaware or any federal court sitting in the State of Delaware), for the purpose of any action or proceeding arising out of or relating to this Agreement and each of the parties hereto
hereby irrevocably agrees that all claims in respect to such action or proceeding may be heard and determined in any such court.
(b) Each
of the parties hereto (a) irrevocably consents to the service of the summons and complaint and any other process in any other action or proceeding relating to the transactions contemplated by this Agreement, on behalf of itself or its property,
by personal delivery of copies of such process to such party and nothing in this Section 2.8 shall affect the right of any party to serve legal process in any other manner permitted by law, (b) consents to submit itself to the personal
jurisdiction of the Delaware Court of Chancery, any other court of the State of Delaware and any federal court sitting in the State of Delaware in the event any dispute arises out of this Agreement or the transactions contemplated by this Agreement
and (c) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court. Each party hereto agrees that a final judgment in any action or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
(c) EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY PARTY HERETO IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF. EACH PARTY (A) MAKES THIS WAIVER VOLUNTARILY AND (B) ACKNOWLEDGES THAT SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS CONTAINED IN
THIS SECTION 2.8.
Section 2.9
Entire Agreement; Third Party Beneficiaries
. This Agreement (including the documents and the
instruments referred to herein) (a) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof and (b) is not intended to, and
does not, confer upon any person or entity other than the parties hereto any rights or remedies hereunder.
Section 2.10
Severability
. Any term or provision of this Agreement that is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability and
D-6
shall not render invalid or unenforceable the remaining terms and provisions of this Agreement or affect the validity or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.
Section 2.11
Enforcement
. The parties agree that irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms on a timely basis or were otherwise breached. It is accordingly agreed that, in the event of any breach or threatened breach by any other party of any covenant or obligation
contained in this Agreement, the non-breach party shall be entitled (in addition to any other remedy that may be available to it, including monetary damages) to seek and obtain (on behalf of themselves and the third-party beneficiaries of this
Agreement) (a) a decree or order of specific performance to enforce the observance and performance of such covenant or obligation, and (b) an injunction, restraining such breach or threatened breach. No party or any other person shall be
required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 2.11, and each party irrevocably waives any right it may have to require the obtaining,
furnishing or posting of any such bond or similar instrument.
Section 2.12
Descriptive Headings
. The descriptive headings
used herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement.
Section 2.13
Interpretation
. The parties have participated jointly in the negotiation and drafting of this Agreement. Consequently, in
the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of
the authorship of any provision of this Agreement. When a reference is made in this Agreement to an Article, Section, Annex or Exhibit, such reference shall be to an Article or Section of, or an Annex or Exhibit to, this Agreement, unless otherwise
indicated. Whenever the words include, includes or including are used in this Agreement, they shall be deemed to be followed by the words without limitation. The words hereof,
herein and hereunder and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The definitions contained in this Agreement are
applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any statute defined or referred to herein or any agreement or instrument that is referred to herein
means such statute, agreement or instrument as from time to time amended, modified or supplemented, including (in the case of statutes) by succession of comparable successor statutes. References to a person are also to its permitted successors and
assigns.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
D-7
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized signatories as of the day and year first above written.
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|
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REVLON, INC.
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By:
|
|
/s/ Fabian T. Garcia
|
|
|
Name: Fabian T. Garcia
|
|
|
Title: President and Chief Executive Officer
|
|
|
|
REVLON CONSUMER PRODUCTS CORPORATION
|
|
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By:
|
|
/s/ Fabian T. Garcia
|
|
|
Name: Fabian T. Garcia
|
|
|
Title: President and Chief Executive Officer
|
|
|
|
RR TRANSACTION CORP.
|
|
|
By:
|
|
/s/ Michael T. Sheehan
|
|
|
Name: Michael T. Sheehan
|
|
|
Title: Vice President and Secretary
|
[S
UPPORT
A
GREEMENT
(S. B
EATTIE
)]
D-8
|
|
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By:
|
|
/s/ Scott Beattie
|
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|
Name: Scott Beattie
|
|
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Title: Chairman and CEO
|
[S
UPPORT
A
GREEMENT
(S. B
EATTIE
)]
D-9
SCHEDULE A
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Name of
Shareholder
|
|
Address
|
|
Number of Shares of
Common Stock Owned
|
E. Scott Beattie
|
|
Elizabeth Arden, Inc.
880 Southwest 145th Avenue, Suite 200
Pembroke Pines, Florida 33027
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|
1,897,920
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D-10
Annex E
EXECUTION VERSION
PREFERRED STOCK REPURCHASE
AND WARRANT CANCELLATION AGREEMENT
PREFERRED STOCK REPURCHASE AND WARRANT CANCELLATION AGREEMENT (this
Agreement
) dated as of June 16, 2016, by and among
Elizabeth Arden, Inc., a Florida corporation (the
Company
), Revlon, Inc., a Delaware corporation (
Ultimate Parent
), Revlon Consumer Products Corporation, a Delaware corporation and wholly-owned subsidiary of
Ultimate Parent (
Operating Parent
and, collectively with Ultimate Parent,
Parent
), RR Transaction Corp., a Florida corporation and a wholly-owned direct subsidiary of Operating Parent (
Acquisition
Sub
), Nightingale Onshore Holdings L.P., a Delaware limited partnership (
Nightingale Onshore
), and Nightingale Offshore Holdings L.P., a Delaware limited partnership (
Nightingale Offshore
and, together
with Nightingale Onshore,
Nightingale
).
WHEREAS, contemporaneously with the execution and delivery of this Agreement,
Parent, Acquisition Sub and the Company have entered into an Agreement and Plan of Merger (as amended, supplemented, restated or otherwise modified from time to time, the
Merger Agreement
), providing for, among other things, the
merger of Acquisition Sub with and into the Company, with the Company continuing as the surviving corporation and wholly-owned subsidiary of Parent in such merger (the
Merger
);
WHEREAS, Nightingale is the beneficial owner in the aggregate of 50,000 shares of Series A Serial Preferred Stock of the Company, par
value $0.01 per share (the
Preferred Stock
), and warrants for the purchase of up to 2,452,267 shares of common stock, par value $0.01 per share, of the Company (the
Warrants
), and is party to that certain
Shareholders Agreement, dated as of August 19, 2014, with the Company (the
Shareholders Agreement
);
WHEREAS, in order
to induce Parent and Acquisition Sub to enter into the Merger Agreement, the Company and Nightingale have agreed to enter into this Agreement and abide by the covenants and obligations set forth herein; and
WHEREAS, capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Merger
Agreement.
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration given to each party hereto, the
receipt of which is hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:
ARTICLE I
REDEMPTION OF PREFERRED STOCK; CANCELLATION OF WARRANTS
Section 1.1
Redemption of Preferred Stock; Cancellation of Warrants
. On the Closing Date (whenever that may be), (a) Nightingale
shall irrevocably sell to the Company, and the Company shall purchase from Nightingale, all right, title and interest in and to the Preferred Stock, free and clear of any liens and encumbrances, for a cash purchase price equal to the amount payable
pursuant to Section 7(a)(ii) of the Articles of Amendment to the Amended and Restated Articles of Incorporation of the Company Designating Series A Serial Preferred Stock (the
Preferred Stock Designation
) for each share of
Preferred Stock in respect of a Change of Control Date (as defined in the Preferred Stock Designation) occurring on the Closing Date (the
Purchase Price
), and (b) the Warrants and the Shareholders Agreement and any other
agreement between the Company or any of its subsidiaries on the one hand and Nightingale or any of its affiliates on the other hand (other than this Agreement) shall irrevocably terminate and be of no further force or effect, excluding, for the
E-1
avoidance of doubt, the provisions of any such agreements which are intended to survive the agreements termination in accordance with the terms thereof, and, provided, that any agreements
for the benefit of the directors of the Company who were appointed by Nightingale pursuant to the Shareholders Agreement shall remain in effect in accordance with their terms. As long as this Agreement is in effect, the provisions of this Agreement
shall supersede and replace the notice procedures set forth in Section 7(b) of the Preferred Stock Designation. Nightingale hereby irrevocably waives any and all consent or approval rights it possesses, if any, under the Shareholders Agreement with
respect to the Companys entry into, and consummation of transactions contemplated by, the Merger Agreement.
Section 1.2
Closing
. The closing of the transactions contemplated by Section 1.1(a) (the
Nightingale Closing
) shall occur at the Closing, effective as of the Effective Time.
Section 1.3
Closing Deliverables
.
(a) At the Nightingale Closing, Nightingale shall deliver to the Company and Parent:
(i) a duly executed signature page of Nightingale to a termination of Warrants and Shareholders Agreement in a form to be
mutually agreed among the parties hereto; and
(ii) certificates complying with the provisions of Section 1445 of the
Internal Revenue Code of 1986, as amended (the
Code
), to the effect that each of Nightingale Onshore and Nightingale Offshore is not a foreign person within the meaning of Section 1445 of the Code.
(b) At the Nightingale Closing, the Company shall deliver to Nightingale:
(i) payment of immediately available funds in the amount of the Purchase Price by wire transfer to an account number specified
by Nightingale at least three days prior to the Nightingale Closing; and
(ii) a duly executed signature page of the
Company to a termination of Warrants and Shareholders Agreement in a form to be mutually agreed among the parties hereto.
Section 1.4
Further Assurances
. Nightingale hereby agrees to execute and deliver such further instruments of sale, transfer, conveyance, assignment, release termination and confirmation as the Company or Parent may reasonably request in order to
effect the purchase of the Preferred Stock by the Company and termination of the Warrants and the Shareholders Agreement as contemplated by this Agreement.
Section 1.5
Withholding
. The Company shall be entitled to deduct and withhold from the amounts payable under this Agreement such
amounts as are required to be deducted and withheld under the Code and any other applicable tax laws. Any such deducted and withheld amount shall be treated as though it had been paid to the person in respect of which such withholding was
required, provided that the Company timely pays over such deducted and withheld amount to the applicable taxing authority.
ARTICLE II
MISCELLANEOUS
Section 2.1
Termination
. This Agreement shall terminate in its entirety upon the termination of the Merger Agreement in accordance
with its terms or by the mutual written agreement of the parties hereto;
provided
,
however
, that the provisions of this Article II (
Miscellaneous
) shall survive any termination of this Agreement. In the event of termination
of this Agreement, this Agreement shall become void and of no effect with no liability on the part of any party hereto;
provided
,
however
, that the termination of this Agreement shall not prevent any party hereto from seeking any
remedies (at law or in equity) against any other party hereto for such partys breach of any of the terms of this Agreement occurring prior to such termination.
E-2
Section 2.2
Notices
. All notices and other communications hereunder shall be in
writing and shall be deemed duly given (a) on the date of delivery if delivered personally, or by facsimile or e-mail transmission, upon confirmation of receipt, (b) on the first Business Day following the date of dispatch if delivered by
a recognized next-day courier service, or (c) on the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set
forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:
(i) if to Nightingale to:
Nightingale Onshore Holdings L.P. and Nightingale Offshore Holdings L.P.
c/o Rhône Capital IV L.P.
630 5
th
Avenue, Suite 2710
Fax: +1.212.218.6789
E-mail: steiner@rhonegroup.com
Attention: M. Allison Steiner
and
(ii) if to the Company, Parent or Acquisition Sub, in accordance with Section 9.2 of the Merger Agreement, or to such
other persons, addresses or facsimile numbers as may be designated in writing to each other party hereto by the person entitled to receive such communication as provided above.
Section 2.3
Amendments; Waivers; Extensions
.
(a) This Agreement may not be amended, modified, altered or supplemented, except by an instrument in writing signed on behalf of each of the
parties hereto.
(b) At any time prior to the Effective Time, the parties hereto may, to the extent permitted by applicable law,
(i) extend the time for the performance of any of the obligations or other acts of the other party, (ii) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto, and
(iii) waive compliance with any of the agreements or conditions contained herein. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such
party. The failure of a party to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of those rights. No single or partial exercise of any right, remedy, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, remedy, power or privilege. Any waiver shall be effective only in the specific instance and for the specific purpose for which given and shall not constitute a waiver to any
subsequent or other exercise of any right, remedy, power or privilege hereunder.
Section 2.4
Expenses
. All costs and expenses
incurred in connection with this Agreement shall be paid by the party incurring such costs and expenses, whether or not the transactions contemplated by this Agreement or the Merger Agreement are consummated.
Section 2.5
Binding Effect; Benefit; Assignment
. Neither this Agreement nor any rights, interests or obligations hereunder shall
be assigned by any of the parties hereto (whether by operation of a Legal Requirement or otherwise) without the prior written consent of the other parties hereto, except that the Agreement may be assigned by Parent or Acquisition Sub to an Affiliate
of such party;
provided
that the party making such assignment shall not be released from its obligations hereunder. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the
parties and their respective successors and permitted assigns.
Section 2.6
Governing Law
. This Agreement shall be governed by, and
construed in accordance with the laws of the State of Delaware, without giving effect to any choice or conflict of laws provision or rule (whether of the State of Delaware or any other jurisdiction);
provided
,
however
, that the laws of
the State of Florida shall govern any matters pertaining to the internal corporate governance of the Company.
E-3
Section 2.7
Counterparts
. This Agreement may be executed in counterparts (including
by electronic means), each of which shall be considered one and the same agreement and this Agreement shall become effective when a counterpart signed by each party shall be delivered to the other party, it being understood that both parties need
not sign the same counterpart. Delivery of an executed signature page of this Agreement by facsimile or other customary means of electronic transmission (e.g., pdf) shall be effective as delivery of a manually executed counterpart
hereof.
Section 2.8
Venue; Waiver of Jury Trial
.
(a) Each party hereby submits to the nonexclusive jurisdiction of the Delaware Court of Chancery (or, if (but only if) the Delaware Court of
Chancery shall be unavailable, any other court of the State of Delaware or any federal court sitting in the State of Delaware), for the purpose of any action or proceeding arising out of or relating to this Agreement and each of the parties hereto
hereby irrevocably agrees that all claims in respect to such action or proceeding may be heard and determined in any such court.
(b) Each
of the parties hereto (a) irrevocably consents to the service of the summons and complaint and any other process in any other action or proceeding relating to the transactions contemplated by this Agreement, on behalf of itself or its property,
by personal delivery of copies of such process to such party and nothing in this Section 2.8 shall affect the right of any party to serve legal process in any other manner permitted by law, (b) consents to submit itself to the personal
jurisdiction of the Delaware Court of Chancery, any other court of the State of Delaware and any federal court sitting in the State of Delaware in the event any dispute arises out of this Agreement or the transactions contemplated by this Agreement
and (c) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court. Each party hereto agrees that a final judgment in any action or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
(c) EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY PARTY HERETO IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF. EACH PARTY (A) MAKES THIS WAIVER VOLUNTARILY AND (B) ACKNOWLEDGES THAT SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS CONTAINED
IN THIS SECTION 2.8.
Section 2.9
Entire Agreement; Third Party Beneficiaries
. This Agreement (including the documents
and the instruments referred to herein) (a) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof and (b) is not intended to, and
does not, confer upon any person or entity other than the parties hereto any rights or remedies hereunder.
Section 2.10
Severability
. Any term or provision of this Agreement that is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability and shall not render invalid
or unenforceable the remaining terms and provisions of this Agreement or affect the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to
be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.
Section 2.11
Enforcement
. The
parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms on a timely basis or were otherwise breached. It is accordingly agreed that,
in the event of any breach or threatened breach by any other party of any covenant or obligation contained in this Agreement, the non-breach party shall be entitled (in
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addition to any other remedy that may be available to it, including monetary damages) to seek and obtain (on behalf of themselves and the third-party beneficiaries of this Agreement) (a) a
decree or order of specific performance to enforce the observance and performance of such covenant or obligation, and (b) an Injunction, restraining such breach or threatened breach. No party or any other person shall be required to
obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 2.11, and each party irrevocably waives any right it may have to require the obtaining, furnishing
or posting of any such bond or similar instrument.
Section 2.12
Descriptive Headings
. The descriptive headings used herein
are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement.
Section 2.13
Interpretation
. The parties have participated jointly in the negotiation and drafting of this Agreement. Consequently, in
the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of
the authorship of any provision of this Agreement. When a reference is made in this Agreement to an Article, Section, Annex or Exhibit, such reference shall be to an Article or Section of, or an Annex or Exhibit to, this Agreement, unless otherwise
indicated. Whenever the words include, includes or including are used in this Agreement, they shall be deemed to be followed by the words without limitation. The words hereof,
herein and hereunder and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The definitions contained in this Agreement are
applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any statute defined or referred to herein or any agreement or instrument that is referred to herein
means such statute, agreement or instrument as from time to time amended, modified or supplemented, including (in the case of statutes) by succession of comparable successor statutes. References to a person are also to its permitted successors and
assigns.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized signatories as of the day and year first above written.
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ELIZABETH ARDEN, INC.
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By:
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/s/ E. Scott Beattie
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Name: E. Scott Beattie
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Title: Chairman and CEO
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[P
REFERRED
R
EDEMPTION
A
GREEMENT
]
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REVLON, INC.
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By:
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/s/ Fabian T. Garcia
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Name: Fabian T. Garcia
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Title: President and Chief Executive Officer
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REVLON CONSUMER PRODUCTS CORPORATION
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By:
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/s/ Fabian T. Garcia
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Name: Fabian T. Garcia
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Title: President and Chief Executive Officer
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RR TRANSACTION CORP.
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By:
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/s/ Michael T. Sheehan
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Name: Michael T. Sheehan
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Title: Vice President and Secretary
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[P
REFERRED
R
EDEMPTION
A
GREEMENT
]
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NIGHTINGALE ONSHORE HOLDINGS L.P.
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By:
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/s/ Franz-Ferdinand Buerstedde
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Name: Franz-Ferdinand Buerstedde
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Title: Authorized Signatory
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NIGHTINGALE OFFSHORE HOLDINGS L.P.
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By:
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/s/ Franz-Ferdinand Buerstedde
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Name: Franz-Ferdinand Buerstedde
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Title: Authorized Signatory
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[P
REFERRED
R
EDEMPTION
A
GREEMENT
]
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SIGN, DATE AND MAIL YOUR
PROXY TODAY,
UNLESS YOU HAVE VOTED BY INTERNET OR
TELEPHONE.