STOCKHOLDERS AGREEMENT
This STOCKHOLDERS AGREEMENT dated as of February 25, 2000 by
and among Cosmair, Inc., a Delaware corporation ("Parent"), Crayon Acquisition
Corp., a Delaware corporation wholly owned by Parent ("Sub"), ▇▇▇▇▇▇, Inc., a
Delaware corporation (the "Company"), and the stockholders of the Company
signatory hereto (individually, a "Stockholder" and, collectively, the
"Stockholders").
WITNESSETH:
WHEREAS, concurrently herewith, Parent, Sub and the Company are
entering into an Agreement and Plan of Merger (as such agreement may hereafter
be amended from time to time, the "Merger Agreement") pursuant to which Sub will
be merged with and into the Company (the "Merger");
WHEREAS, in furtherance of the Merger, Parent and the Company desire
that as soon as practicable (and not later than eight business days) after the
execution and delivery of the Merger Agreement, Sub commence a cash tender offer
to purchase any and all outstanding shares of Class A Common Stock (as defined
in Section 1.1); and
WHEREAS, as an inducement and a condition to entering into the Merger
Agreement, Parent has required that the Company and Stockholders agree, and the
Company and Stockholders have agreed, to enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
premises, representations, warranties, covenants and agreements contained
herein, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. Definitions. For purposes of this Agreement:
1.1 "Class A Common Stock" shall mean the Class A Common
Stock, $.01 par value, of the Company.
1.2 "Class C Common Stock" shall mean the Class C Common
Stock, $.01 par value, of the Company.
1.3 "Company Common Stock" shall mean, collectively, the Class
A Common Stock and the Class C Common Stock.
1.4 "Person" shall mean an individual, corporation,
partnership, joint venture, association, trust, unincorporated organization,
limited liability company or other entity.
Other capitalized terms used and not defined herein have the respective
meanings ascribed to them in the Merger Agreement.
2. Tenders of Shares.
2.1 Tender Requirement. Promptly following receipt of written
notice from Parent and Sub that at least 565,857 shares of Class A Common Stock
have been validly tendered in (and not withdrawn from) the Offer and that Parent
and Sub are prepared to accept for payment and pay for all shares of Class A
Common Stock so tendered and not withdrawn, each Stockholder shall (provided
that the Offer has not been amended in a manner adverse to such Stockholder)
convert all of their shares of Class C Common Stock into shares of Class A
Common Stock and validly tender (and not withdraw) all of such Stockholder's
shares of Class A Common Stock pursuant to and in accordance with the terms of
the Offer. Each Stockholder hereby acknowledges and agrees that the obligation
of Parent or Sub to accept for payment and pay for Company Common Stock in the
Offer, including the Shares, is subject to the terms and conditions of the
Offer. Each Stockholder shall be entitled to receive the highest price paid by
Sub pursuant to the Offer, the Merger or otherwise.
2.2 Permission to Disclose. Each Stockholder hereby agrees to
permit Parent and Sub to publish and disclose in any documents filed with any
Governmental or Regulatory Authority in connection with the Offer and the
Merger, including, if Company Stockholders' Approval is required under
applicable law, the Proxy Statement (including all documents and schedules filed
with the SEC), Stockholder's identity and ownership of Company Common Stock and
the nature of Stockholder's commitments, arrangements and understandings under
this Agreement.
3. Voting of Company Common Stock. Each Stockholder hereby agrees
that, during the period commencing on the date hereof and continuing until the
first to occur of the Effective Time or termination of this Agreement in
accordance with Section 7, at any meeting of the holders of Company Common
Stock, however called, or in connection with any written consent of the holders
of Company Common Stock, such Stockholder shall vote (or cause to be voted) the
number of shares of Company Common Stock set forth opposite such Stockholder's
name on Schedule 1 hereto (the "Existing Shares") and any shares of Company
Common Stock acquired by such Stockholder after the date hereof (collectively
with the Existing Shares, the "Shares"): (i) in favor of the Merger, the
execution and delivery by the Company of the Merger Agreement and the approval
of the terms thereof and each of the other actions contemplated by the Merger
Agreement and this Agreement and any actions required in furtherance thereof and
hereof; (ii) against any action, any failure to act, or agreement that would
result in a breach in any respect of any covenant, representation or warranty or
any other obligation or agreement of the Company under the Merger Agreement or
this Agreement; and (iii) except as otherwise agreed to in writing in advance by
Parent, against the following actions (other than the Merger and the
transactions contemplated by the Merger Agreement): (A) any extraordinary
corporate transaction, such as a merger, consolidation or other business
combination involving the Company or its Subsidiaries; (B) a sale, lease or
transfer of a material amount of assets of the Company or its Subsidiaries, or a
reorganization, recapitalization, dissolution or liquidation of the Company or
its Subsidiaries; (C) (1) any change in a majority of the persons who constitute
the board of directors of the Company; (2) any change in the present
capitalization of the Company or any of its Subsidiaries or any amendment of the
Company's or any Subsidiary's Certificate of Incorporation or Bylaws (or
comparable organizational documents); (3) any other material change in the
Company's or any Subsidiary's corporate structure or business; or (4) any other
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action involving the Company or its Subsidiaries which is intended, or could
reasonably be expected, to impede, interfere with, delay, postpone, or adversely
affect the Merger and the transactions contemplated by this Agreement and the
Merger Agreement. Each Stockholder agrees that it shall not enter into any
agreement or understanding with any person or entity the effect of which would
be to violate the provisions and agreements contained in this Section 3.
4. Other Covenants, Representations and Warranties. Each
Stockholder hereby represents and warrants to Parent with respect to such
Stockholder as follows:
4.1. Ownership of Shares. Stockholder is the record or
beneficial owner of the number of Shares set forth opposite Stockholder's name
on Schedule I hereto. On the date hereof, the Existing Shares set forth opposite
Stockholder's name on Schedule I hereto constitute all of the Shares owned of
record and beneficially by Stockholder. Stockholder has sole voting power and
sole power to issue instructions with respect to the matters set forth in this
Agreement and the Proxy (as defined in Section 8), sole power of disposition,
sole power of conversion, sole power to demand appraisal rights and sole power
to agree to all of the matters set forth in this Agreement and Proxy, in each
case with respect to all of the Existing Shares set forth opposite Stockholder's
name on Schedule I hereto, with no limitations, qualifications or restrictions
on such rights, subject to applicable securities laws and the terms of this
Agreement and the Proxy.
4.2 Power; Binding Agreement. Stockholder has the legal
capacity, power and authority to enter into and perform all of Stockholder's
obligations under this Agreement and the Proxy. The execution, delivery and
performance of this Agreement and the Proxy do not and will not violate any
other agreement to which Stockholder is a party including, without limitation,
any voting agreement, stockholders agreement or voting trust. This Agreement and
the Proxy have been duly and validly executed and delivered by Stockholder and
constitute valid and binding agreements of Stockholder, enforceable against
Stockholder in accordance with their terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law). There is no beneficiary or holder of a voting
trust certificate or other interest of any trust of which Stockholder is trustee
whose consent is required for the execution and delivery of this Agreement, the
Proxy or the consummation by the Stockholder of the transactions contemplated
hereby and thereby.
4.3 No Conflicts. Except for filings under the Exchange Act,
the HSR Act and any applicable state antitrust laws (i) no filing with, and no
permit, authorization, consent or approval of, any state or federal public body
or authority or any other person is necessary for the execution of this
Agreement and the Proxy by Stockholder and the consummation by Stockholder of
the transactions contemplated hereby and thereby and (ii) none of the execution
and delivery of this Agreement and the Proxy by Stockholder, the consummation by
Stockholder of the transactions contemplated hereby and thereby or compliance by
Stockholder with any of the provisions hereof or thereof shall (A) conflict with
or result in any breach of any organizational documents applicable to
Stockholder, (B) result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default (or give rise to any third
party right of termination, cancellation, material modification or acceleration)
under any of the terms, conditions or provisions of any note, bond, mortgage,
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indenture, license, contract, commitment, arrangement, understanding, agreement
or other instrument or obligation of any kind to which Stockholder is a party or
by which Stockholder or any of Stockholder's properties or assets may be bound,
or (C) violate any order, writ, injunction, decree, judgment, order, statute,
rule or regulation applicable to Stockholder or any of Stockholder's properties
or assets.
4.4 No Encumbrances. Except pursuant to this Agreement and
the Proxy, Stockholder's Shares and the certificates representing such Shares
are now, and at all times during the term hereof will be, held by Stockholder,
or by a nominee or custodian for the benefit of Stockholder, free and clear of
all liens, hypothecations, claims, security interests, proxies, voting trusts or
agreements, understandings or arrangements or any other encumbrances whatsoever,
except for any such encumbrances or proxies arising hereunder. The transfer by
Stockholder of the Shares to Sub in the Offer shall pass to and unconditionally
vest in Sub good and valid title to the Shares so transferred by Stockholder
free and clear of all claims, liens, restrictions, security interests, pledges,
hypothecations, limitations and encumbrances whatsoever.
4.5 No Solicitation. Until the earlier of the Effective Time
or termination of this Agreement in accordance with its terms, Stockholder (a)
shall not, in Stockholder's capacity as such, initiate, solicit or encourage,
directly or indirectly, any inquiries or the making or implementation of any
proposal or offer (including, without limitation, any proposal or offer to the
stockholders of the Company) with respect to any transaction relating to the
Company or any of its Subsidiaries that constitutes an Alternative Proposal, or
engage in any negotiations concerning, or provide any confidential information
or data to, or have any discussions with, any Person relating to an Alternative
Proposal (excluding Parent and its affiliates and the transactions contemplated
by the Merger Agreement), or otherwise facilitate any effort or attempt to make
or implement an Alternative Proposal; (b) shall immediately cease and cause to
be terminated any existing activities, discussions or negotiations with any
Person with respect to any of the foregoing; and (c) shall promptly inform
Parent if any such inquiry or proposal or offer is received by, any such
information is requested from, or any such negotiations or discussions are
sought to be initiated or continued with Stockholder, and will identify the
party making such inquiry, proposal, offer or request and, if an offer has been
received, will describe the material terms thereof.
4.6 Restriction on Conversion and Transfer, Proxies and
Non-Interference. Beginning on the date hereof and ending on the earlier of the
Effective Time or termination of this Agreement, except as required to comply
with the provisions of this Agreement or the Proxy, Stockholder shall not (i)
directly or indirectly, convert into Class A Common Stock, offer for sale, sell,
transfer, tender, pledge, encumber, assign or otherwise dispose of, or enter
into any contract, option or other arrangement or understanding with respect to
or consent to the conversion into Class A Common Stock, offer for sale, sale,
transfer, tender, pledge, encumbrance, assignment or other disposition of, any
or all of Stockholder's Shares or any interest therein; (ii) grant any proxies
or powers of attorney, deposit any Shares into a voting trust or enter into a
voting agreement with respect to any Shares; or (iii) take any action that would
make any representation or warranty of Stockholder contained herein untrue or
incorrect or have the effect of preventing or disabling Stockholder from
performing Stockholder's obligations under this Agreement or the Proxy.
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4.7 Waiver of Appraisal Rights. Stockholder hereby waives any
rights of appraisal or rights to dissent from the Merger that Stockholder may
have.
4.8 Reliance by Parent. Stockholder understands and
acknowledges that Parent is entering into, and causing Sub to enter into, the
Merger Agreement in reliance upon Stockholder's execution and delivery of this
Agreement and the Proxy.
4.9 Further Assurances. From time to time, at Parent's
request and without further consideration, Stockholder shall execute and deliver
such additional documents and take all such further lawful action as may be
reasonably necessary or desirable to consummate and make effective the
transactions contemplated by this Agreement and the Proxy.
4.10 No Finder's Fees; No Payments to Stockholders. Other
than existing financial advisory and investment banking arrangements and
agreements entered into by the Company, no broker, investment banker, financial
adviser or other person is entitled to any broker's, finder's, financial
adviser's or other similar fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of Stockholder.
Except as set forth on Schedule 4.10, there are no payments due or to become due
to the Stockholder or any of the Stockholder's Subsidiaries or affiliates from
the Company or any of its Subsidiaries in connection with or as a result of the
consummation of the transactions contemplated by the Merger Agreement or this
Agreement or otherwise.
5. Stop Transfer; Changes in Shares. Each Stockholder agrees
with, and covenants to, Parent that beginning on the date hereof and ending on
the date of termination of the Agreement, such Stockholder shall not request
that the Company, and the Company hereby agrees with, and covenants to, Parent
that beginning on the date hereof and ending on the date of termination of this
Agreement it will not, register the transfer (book-entry or otherwise) of any
certificate or uncertificated interest representing any of such Stockholder's
Shares, unless such transfer is made in compliance with this Agreement. In the
event of a dividend or distribution, or any change in the Company Common Stock
by reason of any dividend, split-up, recapitalization, combination, exchange of
shares or the like, the term "Shares" shall be deemed to refer to and include
the Shares as well as all such dividends and distributions and any shares into
which or for which any or all of the Shares may be changed or exchanged.
6. Conduct as a Director. Notwithstanding anything in this
Agreement to the contrary, the covenants and agreements set forth herein shall
not prevent any of the Stockholders' designees serving on the Company's Board of
Directors from taking any action, subject to the applicable provisions of the
Merger Agreement, while acting in such designee's capacity as a director of the
Company; provided that such action shall not in any manner affect Stockholder's
obligations under this Agreement or the Proxy.
7. Termination. This Agreement shall terminate, and the
transactions contemplated hereby shall be abandoned, automatically upon the
termination of the Merger Agreement in accordance with its terms. In addition,
any Stockholder may terminate this Agreement at any time if the Effective Time
shall not have occurred on or prior to July 31, 2000.
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8. Irrevocable Proxy. Each Stockholder acknowledges that,
concurrently with the execution of this Agreement, Stockholder has executed and
delivered to Parent an Irrevocable Proxy in the form attached as Exhibit A
hereto (the "Proxy").
9. Miscellaneous.
9.1 Entire Agreement. This Agreement, the Proxy and the
Merger Agreement constitute the entire agreement among the parties with respect
to the subject matter hereof and supersede all other prior agreements and
understandings, both written and oral, among any of the parties with respect to
the subject matter hereof.
9.2 Certain Events. Each Stockholder agrees that this
Agreement and the Proxy and the obligations hereunder and thereunder shall
attach to such Stockholder's Shares and shall be binding upon any person or
entity to which legal or beneficial ownership of such Shares shall pass, whether
by operation of law or otherwise, including, without limitation, such
Stockholder's heirs, guardians, administrators or successors. Notwithstanding
any transfer of Shares, the transferor shall remain liable for the performance
of all obligations of the transferor under this Agreement.
9.3 Assignment. This Agreement shall not be assigned without
the prior written consent of the other parties hereto and no rights, or any
direct or indirect interest herein, shall be transferable hereunder without the
prior written consent of the other parties hereto; provided that Parent and Sub
may assign or transfer their rights hereunder to any wholly-owned subsidiary of
Parent, or any corporation that owns all of the outstanding stock of Parent,
directly or indirectly, which assignment shall not relieve Parent or Sub of any
of their respective obligations hereunder.
9.4 Amendments, Waivers, Etc. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified or terminated,
except upon the execution and delivery of a written agreement executed by the
parties to be bound thereby.
9.5 Notices. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given if
delivered personally or by facsimile transmission or mail (first class postage
prepaid) to the parties at the following addresses or facsimile numbers:
If to Stockholders: At the addresses set forth on Schedule
1 hereto
with a copy to: Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq. and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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If to the Company: ▇▇▇▇▇▇, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq. and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to Parent or Sub: Cosmair, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
9.6 Severability. Whenever possible, each provision or portion
of any provision of this Agreement and the Proxy will be interpreted in such
manner as to be effective and valid under applicable law but if any provision or
portion of any provision of this Agreement or the Proxy is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Agreement and the Proxy will be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision or portion
of any provision had never been contained herein.
9.7 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specified terms or was
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
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enforce specifically the terms and provisions hereof in any court of competent
jurisdiction, this being in addition to any other remedy to which they are
entitled at law or in equity.
9.8 Remedies Cumulative. All rights, powers and remedies
provided under this Agreement or the Proxy or otherwise available in respect
hereof at law or in equity shall be cumulative and not alternative, and the
exercise of any thereof by any party shall not preclude the simultaneous or
later exercise of any other such right, power or remedy by such party.
9.9 No Waiver. The failure of any party hereto to exercise
any right, power or remedy provided under this Agreement or the Proxy or
otherwise available in respect hereof at law or in equity, or to insist upon
compliance by any other party hereto with its obligations hereunder or
thereunder, and any custom or practice of the parties at variance with the terms
hereof or thereof, shall not constitute a waiver by such party of its right to
exercise any such or other right, power or remedy or to demand such compliance.
9.10 No Third Party Beneficiaries. This Agreement is not
intended to be for the benefit of, and shall not be enforceable by, any person
or entity who or which is not a party hereto.
9.11 Governing Law. This Agreement and the Proxy shall be
governed by and construed in accordance with the laws of the State of Delaware,
without giving effect to the principles of conflicts of law thereof.
9.12 Consent to Jurisdiction. Any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated by this
Agreement may be brought against any of the parties in any federal court located
in the State of Delaware or any Delaware state court, and each of the parties
hereto hereby consents to the exclusive jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and waives any objection to venue laid therein. Process in any such suit, action
or proceeding may be served on any party anywhere in the world, whether within
or without the State of Delaware. Without limiting the generality of the
foregoing, each party hereto agrees that service of process upon such party at
the address referred to in Section 9.5, together with written notice of such
service to such party, shall be deemed effective service of process upon such
party.
9.13 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.
9.14 Counterparts; Effectiveness. This Agreement may be
executed in counterparts, each of which shall be deemed to be an original, but
all of which, taken together, shall constitute one and the same Agreement.
Notwithstanding the foregoing, this Agreement shall not be effective as to any
Stockholder until executed by all Stockholders.
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IN WITNESS WHEREOF, this Agreement has been signed by each
party hereto as of the date first above written.
COSMAIR, INC.
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Executive Vice President,
Chief Administrative Officer
CRAYON ACQUISITION CORP.
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Executive Vice President,
Chief Administrative Officer
▇▇▇▇▇▇, INC.
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
v Title: Chief Executive Officer
DNL PARTNERS LIMITED PARTNERSHIP
By: DNL Group, L.L.C.
General Partner
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Manager
/s/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇
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/s/Abbey ▇. ▇▇▇▇▇▇
Abbey ▇. ▇▇▇▇▇▇
/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
/s/▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇
/s/▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
/s/▇▇▇▇ ▇. Sabre
▇▇▇▇ ▇. Sabre
/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/▇. ▇▇▇▇▇▇▇ Stonehouse
▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
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/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
NORTHWEST CAPITAL INC.
By: /s/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK,
as trustee and in other fiduciary capacities
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇-
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
M&A INVESTMENTS, INC.
By: /s/Abbey ▇. ▇▇▇▇▇▇-
Name: Abbey ▇. ▇▇▇▇▇▇
Title:
NII HEALTH CARE CORPORATION
By: /s/Abbey ▇. ▇▇▇▇▇▇
Name: Abbey ▇. ▇▇▇▇▇▇
Title:
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C.B. EQUITIES CAPITAL CORP. LLC
By: /s/Abbey ▇. ▇▇▇▇▇▇
Name: Abbey ▇. ▇▇▇▇▇▇
Title: Portfolio Manager
OXFORD CAPITAL MANAGEMENT LLC
By: /s/Abbey ▇. ▇▇▇▇▇▇
Name: Abbey ▇. ▇▇▇▇▇▇
Title: Portfolio Manager
C.B. EQUITIES RETIREMENT TRUST
By: /s/Abbey ▇. ▇▇▇▇▇▇
Name: Abbey ▇. ▇▇▇▇▇▇
Title: Portfolio Manager
12
Schedule I
--------------------------------------- ------------------- --------------------
Existing Class A Existing Class C
Name Shares (a) Shares
---- ------ ------
--------------------------------------- ------------------- --------------------
DNL Partners Limited Partnership 0 3,015,463
--------------------------------------- ------------------- --------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇ 32,835 (b) 0
--------------------------------------- ------------------- --------------------
Abbey ▇. ▇▇▇▇▇▇ 143,335 (c) 11,540
--------------------------------------- ------------------- --------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 26,335 (d) 11,540
--------------------------------------- ------------------- --------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 36,135 (e) 0
--------------------------------------- ------------------- --------------------
▇▇▇▇▇ ▇▇▇▇▇ 23,500 (f) 341,100
--------------------------------------- ------------------- --------------------
▇▇▇▇ ▇▇▇▇ 26,335 (g) 46,139
--------------------------------------- ------------------- --------------------
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 22,835 (h) 11,540
--------------------------------------- ------------------- --------------------
▇▇▇▇ ▇. Sabre 38,336 (i) 23,069
--------------------------------------- ------------------- --------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 52,170 (j) 0
--------------------------------------- ------------------- --------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 149,467 0
--------------------------------------- ------------------- --------------------
▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 0 159,180
--------------------------------------- ------------------- --------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 18,000 0
--------------------------------------- ------------------- --------------------
▇▇▇▇▇▇ ▇▇▇▇▇ 0 29,677
--------------------------------------- ------------------- --------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 0 11,540
--------------------------------------- ------------------- --------------------
▇▇▇▇▇ ▇▇▇▇▇ 0 118,713
--------------------------------------- ------------------- --------------------
Northwest Capital Inc. 0 159,180
--------------------------------------- ------------------- --------------------
▇▇▇▇▇▇ Guaranty Trust Company
of New York 0 1,187,482
--------------------------------------- ------------------- --------------------
M&A Investments, Inc. 1,359,690 0
--------------------------------------- ------------------- --------------------
NII Health Care Corporation 372,000 0
--------------------------------------- =================== ====================
C.B. Equities Capital Corp. LLC 262,500 0
--------------------------------------- =================== ====================
Oxford Capital Management LLC 212,500 0
--------------------------------------- =================== ====================
C.B. Equities Retirement Trust 100,000 0
--------------------------------------- =================== ====================
TOTAL 2,875,973 5,126,163
--------------------------------------- ------------------- --------------------
(a) The Directors have received restricted share grants in each of the last
three years which vest one-third each year on the anniversary date of
the grant. Vested shares may be voted and transferred; unvested shares
may be voted but may not be transferred; all unvested shares will vest
when the Director leaves office in connection with the transactions
contemplated by this Agreement. The notes below set forth the number of
vested Class A Shares held by each Director; the remainder are
unvested.
(b) 6,849 vested.
(c) 109,182 vested.
(d) 5,182 vested.
(e) 29,982 vested.
(f) 5,000 vested.
(g) 5,182 vested.
(h) 5,182 vested.
13
(i) 9,182 vested.
(j) 22,619 vested.
For purposes of Section 9.5, the address for each Stockholder
is as follows:
DNL Partners Limited Partnership
c/o MCG Global, LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇
c/o Bathgate, ▇▇▇▇▇▇▇ & Wolf
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Abbey ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
de Passe Entertainment
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
14
▇▇▇▇ ▇. Sabre
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
c/o MCG Global, LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
MCG Global, LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Northwest Capital Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Guaranty Trust Company of New York
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
15
M&A Investments, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
NII Health Care Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
C.B. Equities Capital Corp. LLC
Oxford Capital Management LLC
C.B. Equities Retirement Trust
c/o Abbey ▇. ▇▇▇▇▇▇, Portfolio Manager
▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
16
Schedule 4.10
1. Subscription and Registration Rights Agreement among the Company and
each of ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III, each dated as of August
15, 1996, which relate to the stock securing the Promissory Notes
described in Section 4.11(b) of this Company Disclosure Letter.
2. The Promissory Notes of ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III, payable to
the Company, each dated as of August 15, 1996. See Section 4.11(b) of
this Company Disclosure Letter.
3. 1996 Non-Employee Directors Equity Incentive Program, as amended and
restated November 20, 1998.
4. 1996 Long-Term Incentive Plan.
5. Amended and Restated Employment Agreement by and among the Company and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, dated as of November 1, 1999.
6. Noncompetition Agreement by and between the Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
dated November 1, 1999.
7. Employment Agreement by and between the Company's wholly-owned
subsidiary, ▇▇▇▇▇▇ Products Company ("CPC"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
dated as of May 9, 1997, as amended March 18, 1999.
8. Settlement Agreement by and between CPC, AM Cosmetics Corp. and AM
Products Company, dated as of February 25, 2000.
9. Separation Agreement and General Release by and among ▇▇▇▇▇ ▇. ▇▇▇▇▇
and CPC, dated as of September 16, 1998. The Company is currently
making severance payments to be completed by March 31, 2000.
10. CPC Retirement Plan with Diversified Investment Advisors, effective as
of October 31, 1955, with amendments.
11. Diversified Investment Advisors Pension Services Agreement for ▇▇▇▇▇▇▇
Products Co., Inc., Account No.: QK61442, effective as of September 1,
1998.
12. ▇▇▇▇▇▇ Group Health Benefit Plan with USI Administrators, effective
January 1, 2000, includes Administrative Services Contract with ▇▇▇▇▇,
Hill & Mercer and a Utilization Review Services Agreement with
Intracorp.
13. ▇▇▇▇▇▇ Group Health Plan- Eye Care Plan of America, Group No.: CARPC,
effective as of March 11, 1998.
17
14. Cigna Healthcare Group Services Agreements, effective as of October 1
1999.:
o Cigna HealthCare Group of Florida, Inc. Agreement No. J012-01 and
JX10-01
o Cigna HealthCare Group of Georgia, Inc. Agreement No. 1112-01 and
2070-01
o Cigna HealthCare Group of Illinois, Inc. Agreement No. 0903-01
and H371-01
o Cigna HealthCare Mid-Atlantic, Inc. Agreement No. BB10-01 and
H373-01
o Cigna HealthCare Group of New Jersey, Inc. Agreement No. 1582-20
and 6449-20
o Cigna HealthCare Group of New York, Inc. Agreement No. 1582-60
and 6449-60
o Cigna HealthCare Group of St. Louis, Inc. Agreement No. 1449-01
and 6197-01
o Cigna HealthCare Group of Tennessee, Inc. Agreement No. 1730 and
6083-01
15. ▇▇▇▇▇▇▇ Group Health Plan- Prudential Dental Plan Contract, Group
Contract No.: G-77691, effective as of September 1, 1998.
16. Flexible Benefit Plan, effective as of April 1, 1997.
17. Stop Loss (Excessive Loss Coverage) Agreement with Elite Underwriters
Agency, effective January 1, 2000.
18. Savannah Business Group Membership Agreement, effective as of January
1985.
19. Colonial Cancer & Accident Plans (Supplemental Benefits), effective
January 1, 2000.
20. Supplemental Cigna Accident Policy, No. OK817053, effective January 1,
1998.
21. Cigna Group Insurance Group Universal Life Insurance (Supplemental),
Employer No. 2403220.
22. The Standard Insurance Company, basic life insurance policies and
short/long term disability (for ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇).
23. Atlantic Mutual Workers' Compensation Insurance.
24. ▇. ▇▇▇▇▇ is being provided post-retirement health care benefits. See
Item 32 of Section 4.13(a) of this Company Disclosure Letter.
25. Rights of Indemnification and Insurance pursuant to Section 7.06 of the
Merger Agreement.
26. Payment for Company Common Stock pursuant to Section 3.01(c) of the
Merger Agreement.
18
27. Payment for Company Stock Options pursuant to Section 3.01(e) of the
Merger Agreement.
28. Reimbursement to ▇▇▇▇▇▇▇ ▇▇▇▇▇ for $25,000 in legal fees paid to
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP.
29. Management Assistance Agreement between ▇▇▇▇▇▇ Products Company and MCG
Global, LLC, dated September 1, 1999. No payments will be made under
the Management Assistance Agreement between the date hereof and the
Control Date, except for the accrued monthly fees and reimbursement of
expenses, which reimbursement of expenses is not expected to exceed
$50,000.
30. Letter of Credit Reimbursement Agreement from the Company to ▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇, ▇▇, Abbey ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. Sabre,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, dated February 25, 2000, as
agreed and accepted by DNL Partners Partnership Limited.
19
EXHIBIT A
TO STOCKHOLDERS AGREEMENT
IRREVOCABLE PROXY
The undersigned stockholder of ▇▇▇▇▇▇, Inc., a Delaware
corporation (the "Company"), hereby irrevocably (to the fullest extent provided
by law, but subject to automatic termination and revocation as provided below)
appoints Crayon Acquisition Corp., a Delaware corporation ("Sub"), the attorney
and proxy of the undersigned, with full power of undersigned's rights with
respect to the shares of capital stock of the Company owned beneficially or of
record by the undersigned, which shares are listed on the final page of this
Proxy, and any and all other shares or securities of the Company issued or
issuable with respect thereof or otherwise acquired by stockholder on or after
the date hereof, until the termination date specified in the Stockholders
Agreement referred to below (the "Shares"). Upon the execution hereof, all prior
proxies given by the undersigned with respect to the Shares are hereby revoked
and no subsequent proxies will be given as to the matters covered hereby prior
to the date of termination of the Stockholders Agreement (the "Termination
Date"). This proxy is irrevocable (to the fullest extent provided by law, but
subject to automatic termination and revocation as provided below), coupled with
an interest, and is granted in connection with the Stockholders Agreement, dated
as of February __, 2000, among the Company, Cosmair, Inc., a Delaware
corporation ("Parent"), Sub and the Stockholders party thereto, including the
undersigned stockholder (the "Stockholders Agreement"; capitalized terms not
otherwise defined herein being used herein as therein defined), and is granted
in consideration of Parent and Sub entering into the Merger Agreement referred
to therein.
The attorney and proxy named above will be empowered at any
time prior to the Termination Date to exercise all voting and other rights with
respect to the Shares (including, without limitation, the power to execute and
deliver written consents with respect to the Shares) of the undersigned at every
annual, special or adjourned meeting of stockholders of the Company and in every
written consent in lieu of such a meeting, or otherwise: (i) in favor of the
Merger, the execution and delivery by the Company of the Merger Agreement and
the approval of the terms thereof and each of the other actions contemplated by
the Merger Agreement and the Stockholders Agreement and any actions required in
furtherance thereof; (ii) against any action, any failure to act, or agreement
that would result in a breach in any respect of any covenant, representation or
warranty or any other obligation or agreement of the Company under the Merger
Agreement or the Stockholders Agreement; and (iii) except as otherwise agreed to
in writing in advance by Parent, against the following actions (other than the
Merger and the transactions contemplated by the Merger Agreement): (A) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving the Company or its Subsidiaries; (B) a sale,
lease or transfer of a material amount of assets of the Company or its
Subsidiaries, or a reorganization, recapitalization, dissolution or liquidation
of the Company or its Subsidiaries; (C) (1) any change in a majority of the
persons who constitute the board of directors of the Company; (2) any change in
the present capitalization of the Company or any of its Subsidiaries or any
20
amendment of the Company's or any Subsidiary's Certificate of Incorporation or
Bylaws (or comparable organizational documents); (3) any other material change
in the Company's or any Subsidiary's corporate structure or business; or (4) any
other action involving the Company or its Subsidiaries which is intended, or
could reasonably be expected, to impede, interfere with, delay, postpone, or
adversely affect the Merger and the transactions contemplated by this Agreement
and the Merger Agreement.
The attorney and proxy named above may only exercise this
proxy to vote the Shares subject hereto in accordance with the preceding
paragraph, and may not exercise this proxy in respect of any other matter. The
undersigned stockholder may vote the Shares (or grant one or more proxies to
vote the Shares) on all other matters.
Any obligation of the undersigned hereunder shall be binding
upon the successors and assigns of the undersigned.
This proxy is irrevocable, but shall automatically terminate
and be revoked and be of no further force and effect on and after the
Termination Date.
Dated: February __, 2000 [STOCKHOLDER]
By: _____________________
Name:
Title:
Shares Owned: __________________
21