Exhibit 10.36
$200,000,000
JAFRA COSMETICS INTERNATIONAL
10 3/4% SENIOR SUBORDINATED NOTES DUE 2011
PURCHASE AGREEMENT
May 2, 2003
Credit Suisse First Boston LLC
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
c/o Credit Suisse First Boston LLC
Eleven Madison Avenue
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. Jafra Cosmetics International, Inc. ("JAFRA US"), a
company incorporated under the laws of Delaware, and Distribuidora Comercial
Jafra, S.A. de C.V. ("JAFRA MEXICO"), a company established under the laws of
Mexico (each, an "ISSUER", and together, the "ISSUERS"), propose, subject to the
terms and conditions stated herein, to severally issue and sell to the several
initial purchasers named in Schedule A hereto (the "PURCHASERS")
U.S.$200,000,000 principal amount of their 10 3/4% Senior Subordinated Notes Due
2011 (the "OFFERED SECURITIES") to be issued under an Indenture to be dated as
of May 20, 2003 (together with the first supplement thereto, the "INDENTURE"),
among Jafra US, Jafra Mexico, the initial Guarantors (as hereafter defined) and
U.S. Bank National Association, as Trustee (the "TRUSTEE"). CDRJ Investments
(Lux) S.A., a Luxemburg Company ("CDRJ"), the Issuers and the Parent (as defined
below) are herein collectively referred to as the "COMPANY". On the Closing Date
(as defined below) each Issuer will be a direct or indirect, wholly-owned
subsidiary of Parent.
In connection with the issuance and sale of the Offered Securities, on the
Closing Date, (i) Jafra Mexico will acquire low-vote preferred stock of Jafra
Cosmetics International, S.A. de C.V. ("JCISA") from JCISA and the shareholders
of JCISA, (ii) Jafra Mexico will acquire the assets and liabilities comprising
the Mexican distribution business of the Company from Distribuidora Venus S.A.
de C.V., a wholly-owned subsidiary of JCISA, and (iii) Jafra Worldwide Holdings
(Lux), S.ar.L. (the "PARENT") will acquire all the assets and liabilities of
CDRJ North Atlantic (Lux) S.ar.L., including, directly or indirectly, all of the
capital stock of each of Jafra US, Jafra Mexico, JCISA and each of the other
Guarantors (other than the Parent). The foregoing transactions described in (i)
through (iii) are hereinafter referred to as the "REORGANIZATION".
The Parent will fully and unconditionally guarantee the Offered Securities
on a senior subordinated basis on the terms provided in the Indenture (the
"PARENT GUARANTEE"). Jafra US's obligations with respect to the Offered
Securities will also be guaranteed by Jafra Mexico (the "JAFRA MEXICO CROSS
GUARANTEE") and by each subsequently acquired or organized U.S. subsidiary of
Jafra US, subject to certain exceptions set forth in the Indenture. Jafra
Mexico's obligations with respect to the Offered Securities will also be
guaranteed by Jafra US (the "U.S. ISSUER CROSS GUARANTEE"), and by JCISA and
each existing and subsequently acquired or organized subsidiary of Jafra Mexico
and JCISA (together with the U.S. subsidiary guarantees, the "SUBSIDIARY
GUARANTEES"). The Parent Guarantee, the Jafra Mexico Cross Guarantee, the U.S.
Issuer Cross Guarantee and the Subsidiary Guarantees are herein referred to
collectively as the "GUARANTEES, and the guarantors on such Guarantees, the
"GUARANTORS".
The Offered Securities will be offered and sold to the Purchasers without
being registered under the Securities Act of 1933 (the "SECURITIES ACT"), in
reliance upon an exemption therefrom. Holders of the Offered Securities
(including the Purchasers and their direct and indirect transferees) will be
entitled to the benefits of a Registration Rights Agreement (the "REGISTRATION
RIGHTS AGREEMENT"), pursuant to which the Issuers and the Guarantors will agree
to use reasonable best efforts to file with the Securities and Exchange
Commission (the "COMMISSION") (i) a registration statement under the Securities
Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") registering an issue of senior
subordinated notes of each of Jafra US and Jafra Mexico (the "EXCHANGE
SECURITIES"), which will be identical in all material respects to the Offered
Securities (except that the Exchange Securities will not contain terms with
respect to transfer restrictions or with respect to additional interest) and
(ii) under certain circumstances, a shelf registration statement pursuant to
Rule 415 under the Securities Act (the "SHELF REGISTRATION STATEMENT").
Each Issuer and the Parent hereby agrees with the several Purchasers as
follows:
2. Representations and Warranties of the Company. Each Issuer, CDRJ and
the Parent, jointly and severally, represents and warrants to, and agrees with,
the several Purchasers that:
(a) A preliminary offering circular and an offering circular
relating to the Offered Securities to be offered by the Purchasers have
been prepared by the Company. Such preliminary offering circular (the
"PRELIMINARY OFFERING CIRCULAR") and offering circular, as supplemented as
of the date of this Agreement, are hereinafter collectively referred to as
the "OFFERING CIRCULAR". On the date of this Agreement and on the Closing
Date, the Offering Circular does not and will not include 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 were
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made, not misleading. The preceding sentence does not apply to statements
in or omissions from the Offering Circular based upon written information
furnished to the Issuers by any Purchaser through Credit Suisse First
Boston LLC ("CSFB") specifically for use therein, it being understood and
agreed that the only such information is that described as such in Section
7(b) hereof. The Offering Circular, as of its date and as of the Closing
Date, contains, or will contain, all of the information that, if requested
by a prospective purchaser of the Offered Securities, would be required to
be provided to such prospective purchaser pursuant to Rule 144A(d)(4)
under the Securities Act.
(b) The Offered Securities have been duly authorized by each of the
Issuers. When the Offered Securities are delivered and paid for pursuant
to this Agreement and the Indenture on the Closing Date, the Offered
Securities will have been duly executed, authenticated, issued and
delivered and will conform to the description thereof contained in the
Offering Circular and will constitute valid and legally binding
obligations of the Issuers and the Guarantors, entitled to the benefits
provided in the Indenture and enforceable in accordance with their terms,
subject to (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of
equity (regardless of whether enforcement is considered in a proceeding in
equity or at law) and the discretion of the court before which any
proceeding therefor may be brought.
(c) Jafra US has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware;
Jafra Mexico has been duly incorporated and is an existing corporation
under the laws of Mexico; and each of CDRJ and the Parent has been duly
incorporated and is an existing corporation under the laws of Luxembourg;
each with corporate power and authority to own its properties and conduct
its business as described in the Offering Circular; and each of Jafra US
and Jafra Mexico is duly qualified to do business as a foreign corporation
in good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification, except in such jurisdictions in which the failure to so
qualify would not reasonably be expected to have a material adverse effect
on the business, properties, results of operations or condition (financial
and other) of CDRJ and, following the Reorganization, Parent and, its
subsidiaries taken as a whole (a "MATERIAL ADVERSE EFFECT").
(d) Each subsidiary of CDRJ has been duly incorporated or organized
and is an existing corporation or other entity under the laws of the
jurisdiction of its incorporation, with corporate power and authority to
own its properties and conduct its business as described in the Offering
Circular (except as would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect), and each subsidiary of
CDRJ is duly qualified to do business as a
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foreign corporation in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification; all of the issued and outstanding capital stock of each
subsidiary of CDRJ has been duly authorized and validly issued and is
fully paid and nonassessable; and the capital stock of each subsidiary
owned by CDRJ is, directly or through subsidiaries, owned free from liens,
encumbrances and defects, except for such liens, encumbrances or defects
as (i) would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect or (ii) may arise pursuant to the
Senior Secured Credit Facilities (as defined below) in connection with the
transactions contemplated thereunder.
(e) The Indenture has been duly authorized by each Issuer; and when
the Offered Securities are delivered and paid for pursuant to this
Agreement on the Closing Date, the Indenture will have been duly executed
and delivered by the Issuers and will conform to the description thereof
contained in the Offering Circular in all material respects and the
Indenture will constitute the valid and legally binding obligation of the
Issuers, enforceable 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 equity principles (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(f) On the Closing Date, the Guarantee of the Offered Securities by
each Guarantor will have been duly authorized by such Guarantor and will
conform to the description thereof contained in the Offering Circular in
all material respects. When the Offered Securities have been issued,
executed and authenticated in accordance with the Indenture and delivered
to and paid for by the Purchasers in accordance with the terms of this
Agreement, the Guarantee of each Guarantor will constitute a valid and
legally binding obligation of such Guarantor, enforceable 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 generally and to general equity
principles (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(g) This Agreement has been duly authorized, executed and delivered
by CDRJ, each Issuer and the Parent.
(h) On the Closing Date, the Registration Rights Agreement will have
been duly authorized, executed and delivered by each Issuer and Guarantor,
and upon such execution and delivery, will constitute valid and legally
binding obligations of each Issuer and Guarantor, enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting
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creditors' rights and to general equity principles (regardless of whether
enforcement is considered in a proceeding in equity or at law). On the
Closing Date, the Registration Rights Agreement will conform as to legal
matters to the description thereof in the Offering Circular in all
material respects.
(i) Except as described in the Offering Circular, there are no
contracts, agreements or understandings between CDRJ or any Issuer or
Guarantor and any person that would give rise to a valid claim against any
Issuer or any Purchaser for any brokerage commission, finder's fee or
other like payment in connection with the transactions contemplated in
this Agreement, and any such payment by any Issuer or Guarantor will not
have a Material Adverse Effect.
(j) Except for (i) such consents, approvals, authorizations, orders
or filings as may be required to be obtained or made under the Securities
Act, the Exchange Act (as defined below), the Trust Indenture Act of 1939,
as amended (the "TRUST INDENTURE ACT") and applicable state securities
laws as provided in the Registration Rights Agreement, (ii) such consents,
approvals, authorizations, orders or filings as have been made or
obtained, or (iii) as disclosed in the Offering Circular, no consent,
approval, authorization, or order of, or filing with, any governmental
agency or body or any court is required to be made or obtained by any of
the Issuers or the Guarantors for the consummation of the transactions
contemplated by this Agreement, the Registration Rights Agreement and the
Offering Circular in connection with the issuance and sale of the Offered
Securities by the Issuers.
(k) The execution, delivery and performance of the Indenture, the
Guarantees, this Agreement and the Registration Rights Agreement and the
issuance and sale of the Offered Securities and compliance with the terms
and provisions thereof will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any statute
binding upon or any rule, regulation or order of any governmental agency
or body or any court, domestic or foreign, having jurisdiction over CDRJ,
the Parent or any Issuer or any subsidiary of any of the foregoing or any
of their properties, or any agreement or instrument to which any such
Person is a party or by which any such Person is bound or to which any of
the properties of any such Person is subject, or the charter, bylaws or
equivalent constituent documents of any such Person, except for such
breaches, violations and defaults (other than with respect to the charter
of any Issuer or its subsidiaries) as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, and
on the Closing Date each Issuer and Guarantor will have full corporate
power and authority to authorize and to issue and sell (in the case of the
Issuers) or to guarantee (in the case of the Guarantors) the Offered
Securities as contemplated by this Agreement.
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(l) Except as disclosed in the Offering Circular, on the Closing
Date after giving effect to the transactions contemplated by the Offering
Circular, including the Reorganization, Parent and its subsidiaries,
including the Issuers, will have good and marketable title to all real
properties and good and valid title to all other properties and assets
owned by them or necessary to conduct the businesses operated by them as
described in the Offering Circular, in each case free from liens,
encumbrances and defects not permitted by the Indenture, except for such
failures to have such title and such liens, encumbrances and defects as
(i) would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect or (ii) may arise pursuant to the
Senior Secured Credit Facilities; and except as disclosed in the Offering
Circular, Parent and its subsidiaries, including the Issuers, will hold
any leased real or personal property under valid and enforceable leases,
except for such failures to be so valid or enforceable as would not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(m) On the Closing Date after giving effect to the transactions
contemplated by the Offering Circular, including the Reorganization,
Parent and its subsidiaries, including the Issuers, will possess adequate
certificates, authorizations or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by them
or to which they have succeeded, pursuant to the Reorganization except as
would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, and have not received any notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit that would be reasonably expected to
have, individually or in the aggregate, a Material Adverse Effect.
(n) No labor dispute with the employees of the Parent, the Issuers
or any of their respective subsidiaries exists or, to the knowledge of
Parent or the Issuers, is imminent, that would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
(o) Except as disclosed in the Offering Circular, CDRJ and its
subsidiaries (and on the Closing Date following the consummation of the
Reorganization, Parent and its subsidiaries), including Jafra US and Jafra
Mexico, (i) own, possess or can acquire on reasonable terms, adequate
trademarks, trade names, know-how, patents, copyrights, technology and
processes (collectively, "INTELLECTUAL PROPERTY RIGHTS") necessary to
conduct the business now operated by them or presently employed by them or
to which they have succeeded pursuant to the Reorganization, except as
would not reasonably be expected to have a Material Adverse Effect and
(ii) have not received any notice of infringement of or conflict with the
asserted rights of others with respect to any intellectual property, that
would individually or in the aggregate reasonably be expected to have a
Material Adverse Effect.
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(p) Neither CDRJ nor any of its subsidiaries (nor, on the Closing
Date following consummation of the Reorganization, Parent or any of its
subsidiaries), including Jafra US and Jafra Mexico, (i) is in violation of
any statute, or any rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign, relating to
the use, disposal or release of hazardous or toxic substances or relating
to the protection or restoration of the environment or human exposure to
hazardous or toxic substances (collectively, "ENVIRONMENTAL LAWS"), (ii)
owns or operates any real property contaminated with any substance that is
subject to any environmental laws, (iii) is liable for any off-site
disposal or contamination pursuant to any environmental laws, or (iv) is
subject to any claim relating to any environmental laws, which violation
(as referred to in (i)), contamination (as referred to in (ii)), liability
(as referred to in (iii)) or claim (as referred to in (iv)) would
individually or in the aggregate reasonably be expected to have a Material
Adverse Effect.
(q) There are no pending actions, suits or proceedings against or
affecting CDRJ or any of its subsidiaries, including Jafra US and Jafra
Mexico, or Parent or any of their respective properties that would
individually or in the aggregate reasonably be expected to have a Material
Adverse Effect, or would reasonably be expected to materially and
adversely affect the ability of any Issuer or Guarantor to perform its
obligations under the Indenture, the Registration Rights Agreement or
under this Agreement.
(r) The historical consolidated financial statements, together with
the related notes, included in the Offering Circular present fairly in all
material respects the financial position of each of CDRJ and its
consolidated subsidiaries, JCISA and its consolidated subsidiaries and
Jafra US and its consolidated subsidiaries, as of the dates shown and
their results of operations and cash flows for the periods shown, and such
financial statements have been prepared in conformity with generally
accepted accounting principles in the United States applied on a
consistent basis throughout the periods covered thereby, and the
assumptions used in preparing the pro forma financial data included in the
Offering Circular provide a reasonable basis for presenting the estimated
effects of the transactions or events described therein; and the related
pro forma adjustments give appropriate effect to those assumptions, and
the pro forma columns therein reflect the proper application of those
adjustments to the corresponding historical financial statement amounts.
(s) Except as disclosed in the Offering Circular, since the date of
the latest audited financial statements included in the Offering Circular
there has been no material adverse change in, nor any development or event
that would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, and, except as disclosed in or
contemplated by the Offering Circular, there has
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been no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(t) None of the Issuers or any Guarantor is an open-end investment
company, unit investment trust or face-amount certificate company that is
required to be registered under Section 8 of the United States Investment
Company Act of 1940 (the "INVESTMENT COMPANY ACT"); and none of CDRJ, the
Parent, the Issuers or any Guarantor is and, after giving effect to the
offering and sale of the Offered Securities and the application of the
proceeds thereof as described in the Offering Circular, will be an
"investment company" as defined in the Investment Company Act.
(u) No securities of the Issuers of the same class (within the
meaning of Rule 144A(d)(3) under the Securities Act) as the Offered
Securities are listed on any national securities exchange registered under
Section 6 of the Exchange Act or quoted in a U.S. automated interdealer
quotation system.
(v) Assuming the accuracy of the representations, warranties and
agreements of the initial Purchasers contained in Section 4 hereof, the
offer and sale of the Offered Securities by the Issuers and the offer of
the Guarantees by the Guarantors to the several Purchasers in the manner
contemplated by this Agreement will be exempt from the registration
requirements of the Securities Act by reason of Section 4(2) thereof and
Regulation S thereunder ("REGULATION S") and it is not necessary to
qualify the Indenture in respect of the Offered Securities under the
United States Trust Indenture Act.
(w) Neither the Company, nor any of its affiliates, nor any person
acting on its or their behalf (other than the Purchasers, as to whom the
Company makes no representation) (i) has, within the six-month period
prior to the date hereof, offered or sold in the United States or to any
U.S. person (as such terms are defined in Regulation S) the Offered
Securities or any security of the same class or series as the Offered
Securities or (ii) has offered or will offer or sell the Offered
Securities (A) in the United States by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c)
under the Securities Act or (B) with respect to any such securities sold
in reliance on Rule 903 of Regulation S, by means of any directed selling
efforts within the meaning of Rule 902(c) of Regulation S. The Issuers,
their affiliates and any person acting on their behalf (other than the
Purchasers, as to whom the Company makes no representation) have complied
and will comply with the offering restrictions requirement of Regulation
S. CDRJ, the Parent and the Issuers have not entered and will not enter
into any contractual arrangement with respect to the distribution of the
Offered Securities except for this Agreement prior to its termination.
(x) After giving effect to the transactions contemplated by the
Offering Circular, including the Reorganization, Jafra Mexico will have
acquired, or
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obtained the right to use, substantially all the fixed assets of
Distribuidora Venus S.A. de C.V. used to conduct the Mexican distribution
business, and from and after such time Jafra Mexico shall conduct such
Mexican distribution business substantially as such business was conducted
prior to such time.
(y) The statistical and market-related data included in the Offering
Circular are based on or derived from sources that the Company reasonably
believes to be reliable and accurate; and the Guarantors do not believe
such sources to be unreliable or inaccurate.
(z) There is no "substantial U.S. market interest" as defined in
Rule 902(j) of Regulation S in the Company's debt securities.
(aa) The Company (i) makes and keeps materially accurate books and
records and (ii) maintains internal accounting controls that provide
reasonable assurance that (A) transactions are executed in accordance with
management's authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain
accountability for its assets, (C) access to its assets is permitted only
in accordance with management's authorization and (D) the reported
accountability for its assets is compared with existing assets at
reasonable intervals.
(bb) The Indenture will on the Closing Date conform in all material
respects to the requirements of the Trust Indenture Act and the rules and
regulations of the Commission applicable to an indenture which is
qualified thereunder.
(cc) No Issuer, or any Guarantor is in violation of its respective
charter, by-laws or other organizational documents or in default in any
material respect in the performance of any obligation, agreement, covenant
or condition contained in any indenture, loan agreement, mortgage, lease
or other agreement or instrument, to which any Issuer is a party or by
which any Issuer or their respective property is bound, except, in each
case, as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
(dd) Neither CDRJ nor Parent nor any of their respective
subsidiaries nor any agent thereof acting on their behalf has taken, and
none of them will take, any action that would cause this Agreement or the
issuance or sale of the Offered Securities to violate Regulation T,
Regulation U or Regulation X of the Board of Governors of the Federal
Reserve System.
(ee) No "nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the Securities
Act (i) has imposed (or has informed CDRJ, JCISA or any Issuer that it is
considering imposing) any condition (financial or otherwise) on CDRJ,
JCISA or an Issuer retaining any
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rating assigned to any debt securities of such Person or (ii) has
indicated to CDRJ, JCISA or any Issuer that it is considering (a) the
downgrading, suspension, or withdrawal of, or any review for a possible
change that does not indicate the direction of the possible change in, any
rating so assigned or (b) any change in the outlook for any rating on the
debt securities of such Person.
(ff) Each of the Issuers and the Guarantors has filed all necessary
federal, state and foreign income and franchise tax returns, except where
the failure to so file such returns would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, and has
paid all taxes shown as due thereon, and other than tax deficiencies which
the Issuers and the Guarantors are contesting in good faith and for which
adequate reserves have been provided in accordance with generally accepted
accounting principles, there is no tax deficiency that has been asserted
against the Issuers, the Guarantors or any of their subsidiaries that
would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(gg) On the Closing Date, after giving effect to the offering and
sale of the Offered Securities and the application of the proceeds thereof
as described in the Offering Circular, (i) the fair value and present fair
saleable value of the assets of the Parent and its subsidiaries on a going
concern basis will exceed the sum of its stated liabilities and identified
contingent liabilities; and (ii) each of the Parent and its subsidiaries
will not be (a) left with unreasonably small capital with which to carry
on its business as it is proposed to be conducted, (b) unable to pay its
debts (contingent or otherwise) as they mature or (c) otherwise insolvent.
In computing the amount of such contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount that, in the
light of all the facts and circumstances existing at such time, represent
the amount that can reasonably be expected to become an actual or matured
liability.
(hh) The Reorganization shall be consummated on the Closing Date as
described in the Offering Circular in all material respects.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Issuers agree to sell to the
Purchasers, and the Purchasers agree, severally and not jointly, to purchase
from the Issuers, at a purchase price of 97.0% of the aggregate principal amount
thereof plus accrued interest from May 20, 2003 to the Closing Date the
respective principal amounts set forth opposite the names of the several
Purchasers in Schedule A hereto.
The Purchasers acknowledge that Jafra US will be severally obligated with
respect to the payment of $80.0 million of principal of the Offered Securities,
together with interest thereon (the "JAFRA US PORTION"), and that Jafra Mexico
will be severally obligated with respect to the payment of $120.0 million of
principal of the Offered
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Securities, together with interest thereon (the "JAFRA MEXICO PORTION"). The
Purchasers agree to purchase the Offered Securities from the Issuers on a
several basis as between the Issuers, in the relative proportions of the Jafra
US Portion and the Jafra Mexico Portion, respectively, and agree that the net
proceeds of the sale of the Offered Securities and the net purchase price will
be paid to each of the Issuers in that ratio.
The Issuers will deliver against payment of the purchase price the Offered
Securities to be offered and sold by the Purchasers in reliance on Regulation S
(the "REGULATION S SECURITIES" ) in the form of one or more permanent global
securities in registered form without interest coupons (the "REGULATION S GLOBAL
SECURITIES") which will be deposited with the Trustee as custodian for The
Depository Trust Company ("DTC") for the respective accounts of the DTC
participants for ▇▇▇▇▇▇ Guaranty Trust Company of New York, Brussels office, as
operator of the Euroclear System ("EUROCLEAR"), and Clearstream Banking, societe
anonyme ("CLEARSTREAM, LUXEMBOURG") and registered in the name of Cede & Co., as
nominee for DTC. The Issuers will deliver against payment of the purchase price
the Offered Securities to be purchased by each Purchaser hereunder and to be
offered and sold by each Purchaser in reliance on Rule 144A under the Securities
Act (the "144A SECURITIES") in the form of one or more permanent global
securities in definitive form without interest coupons (the "RESTRICTED GLOBAL
SECURITIES") deposited with the Trustee as custodian for DTC and registered in
the name of Cede & Co., as nominee for DTC. The Regulation S Global Securities
and the Restricted Global Securities shall be assigned separate CUSIP numbers.
The Restricted Global Securities shall include the legend regarding restrictions
on transfer set forth under "Transfer Restrictions" in the Offering Circular.
Until the termination of the distribution compliance period (as defined in
Regulation S) with respect to the offering of the Offered Securities, interests
in the Regulation S Global Securities may only be held by the DTC participants
for Euroclear and Clearstream, Luxembourg. Interests in any permanent global
Securities will be held only in book-entry form through Euroclear, Clearstream,
Luxembourg or DTC, as the case may be, except in the limited circumstances
described in the Offering Circular.
Payment for the Regulation S Securities and the 144A Securities shall be
made by the Purchasers in Federal (same day) funds by wire transfer to an
account at a bank acceptable to CSFB drawn to the order of the Issuers at the
office of Debevoise & ▇▇▇▇▇▇▇▇ at 10:00 A.M. (New York time), on May 20, 2003,
or at such other time not later than seven full business days thereafter as CSFB
and the Issuers determine, such time being herein referred to as the "CLOSING
DATE", against delivery to the Trustee as custodian for DTC of (i) the
Regulation S Global Securities representing all of the Regulation S Securities
for the respective accounts of the DTC participants for Euroclear and
Clearstream, Luxembourg and (ii) the Restricted Global Securities representing
all of the 144A Securities. The Regulation S Global Securities and the
Restricted Global Securities will be made available for checking at the above
office of Debevoise & ▇▇▇▇▇▇▇▇ at least 24 hours prior to the Closing Date.
11
4. Representations by Purchasers; Resale by Purchasers.
(a) Each Purchaser severally represents and warrants to the Issuers
that it is an "accredited investor" within the meaning of Regulation D
under the Securities Act.
(b) Each Purchaser severally acknowledges that the Offered
Securities have not been registered under the Securities Act and may not
be offered or sold within the United States or to, or for the account or
benefit of, U.S. persons except in accordance with Regulation S or
pursuant to an exemption from the registration requirements of the
Securities Act. Each Purchaser severally represents and agrees that it has
offered and sold the Offered Securities, and will offer and sell the
Offered Securities, (i) as part of its distribution at any time and (ii)
otherwise until 40 days after the later of the commencement of the
offering and the Closing Date, only in accordance with Rule 903 or Rule
144A under the Securities Act ("RULE 144A"). Accordingly, neither such
Purchaser nor its affiliates, nor any persons acting on its or their
behalf, has engaged or will engage in any directed selling efforts with
respect to the Offered Securities, and such Purchaser, its affiliates and
all persons acting on its or their behalf have complied and will comply
with the offering restrictions requirement of Regulation S. Each Purchaser
severally agrees that, at or prior to confirmation of sale of the Offered
Securities, other than a sale pursuant to Rule 144A, such Purchaser will
have sent to each distributor, dealer or person receiving a selling
concession, fee or other remuneration that purchases the Offered
Securities from it during the restricted period a confirmation or notice
to substantially the following effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933 (the "SECURITIES ACT") and may not be
offered or sold within the United States or to, or for the account
or benefit of, U.S. persons (i) as part of their distribution at any
time or (ii) otherwise until 40 days after the later of the date of
the commencement of the offering and the closing date, except in
either case in accordance with Regulation S (or Rule 144A if
available) under the Securities Act. Terms used above have the
meanings given to them by Regulation S."
Terms used in this subsection (b) have the meanings given to them by
Regulation S.
(c) Each Purchaser severally agrees that it and each of its
affiliates have not entered and will not enter into any contractual
arrangement with respect to the distribution of the Offered Securities
except for any such arrangements with the other Purchasers or affiliates
of the other Purchasers or with the prior written consent of the Issuers.
12
(d) Each Purchaser severally agrees that it and each of its
affiliates will not offer or sell the Offered Securities in the United
States by means of any form of general solicitation or general advertising
within the meaning of Rule 502(c) under the Securities Act, including but
not limited to (i) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or
broadcast over television or radio, or (ii) any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising. Each Purchaser severally agrees, with respect to resales made
in reliance on Rule 144A of any of the Offered Securities, to deliver
either with the confirmation of such resale or otherwise prior to
settlement of such resale a notice to the effect that the resale of such
Offered Securities has been made in reliance upon the exemption from the
registration requirements of the Securities Act provided by Rule 144A.
(e) Prior to or simultaneously with any confirmation of sale to any
purchaser in the initial resale, each Purchaser will deliver to each such
purchaser of the Offered Securities in connection with its original
distribution of the Offered Securities, a copy of the Offering Circular as
amended and supplemented at the date of such delivery.
(f) Each of the Purchasers severally represents and agrees that (i)
it has not offered or sold and prior to the date six months after the date
of issue of the Offered Securities will not offer or sell any Offered
Securities to persons in the United Kingdom except to persons whose
ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will
not result in an offer to the public in the United Kingdom within the
meaning of the Public Offers of Securities Regulations 1995 (as amended);
(ii) it has only communicated or caused to be communicated and will only
communicate or cause to be communicated any invitation or inducement to
engage in investment activity (within the meaning of Section 21 of the
Financial Services and Markets Act 2000 (the "FSMA")) received by it in
connection with the issue or sale of any Offered Securities in
circumstances in which Section 21(1) of the FSMA does not apply; and (iii)
it has complied and will comply with all applicable provisions of the FSMA
with respect to anything done by it in relation to the Offered Securities
in, from or otherwise involving the United Kingdom.
(g) Each of the Purchasers severally represents and agrees that it
has not publicly offered or sold and will not publicly offer or sell the
Offered Securities in Mexico.
13
5. Certain Agreements of the Issuers and the Guarantors. Each Issuer and
Guarantor, jointly and severally, agrees with the several Purchasers that:
(a) The Issuers will advise CSFB promptly of any proposal to amend
or supplement the Offering Circular and will not effect such amendment or
supplementation without CSFB's consent (which consent will not be
unreasonably withheld). If, at any time prior to the completion of the
resale of the Offered Securities by the Purchasers, any event occurs as a
result of which the Offering Circular as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or
if it is necessary at any such time to amend or supplement the Offering
Circular to comply with any applicable law, the Issuers promptly will
notify CSFB of such event and promptly will prepare, at their own expense,
an amendment or supplement which will correct such statement or omission
or effect such compliance. Neither CSFB's consent to, nor the Purchasers'
delivery to offerees or investors of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in Section 6.
(b) The Issuers will furnish to CSFB copies of the Preliminary
Offering Circular, Offering Circular and all amendments and supplements to
such documents, in each case as soon as available and in such quantities
as CSFB reasonably requests. At any time when the Offered Securities are
outstanding and are "restricted securities" within the meaning of Rule
144(a)(3) under the Securities Act and the Issuers or any Guarantor is not
subject to Section 13 or 15(d) of the Exchange Act and is not exempt from
reporting pursuant to Rule 12g3-2(b) under the Exchange Act, the Issuers
or the Guarantors, as applicable, will promptly furnish or cause to be
furnished to CSFB (and, upon request, to each of the other Purchasers)
and, upon request of holders and prospective purchasers of the Offered
Securities, to such holders and purchasers, copies of the information
required to be delivered to holders and prospective purchasers of the
Offered Securities pursuant to Rule 144A(d)(4) under the Securities Act
(or any successor provision thereto) in order to permit compliance with
Rule 144A in connection with resales by such holders of the Offered
Securities. The Issuers will pay the expenses of printing and distributing
to the Purchasers all such documents.
(c) The Issuers will arrange for the qualification of the Offered
Securities for sale and the determination of their eligibility for
investment under the laws of such jurisdictions in the United States and
Canada as CSFB reasonably designates and will continue such qualifications
in effect so long as reasonably required for the initial resale of the
Offered Securities by the Purchasers; provided that the Issuers and the
Guarantors will not be required to qualify as a foreign corporation
14
or to file a general consent to service of process in any such state or
other jurisdiction or to subject themselves to taxation in respect of
doing business in any state or other jurisdiction in which they are not
otherwise so subject.
(d) During the period prior to the effectiveness of the Exchange
Offer Registration Statement or a Shelf Registration Statement, as the
case may be, the Parent will provide or cause to be provided to CSFB and,
upon request, to each of the other Purchasers, information substantially
equivalent to the information that would be contained in the reports that
would be filed by Parent with the Commission as provided in the Indenture
if Parent were then subject to the reporting requirements of Section 13(a)
or 15(d) of the Exchange Act, in each case within 15 days after the
respective date on which such report would have been required to be so
filed.
(e) During the period of two years after the Closing Date, the
Issuers and the Guarantors will, upon request, make available to CSFB and
each of the other Purchasers and any holder of Offered Securities a copy
of the restrictions on transfer applicable to the Offered Securities.
(f) During the period of two years after the Closing Date, the
Issuers will not, and will not permit any of their affiliates (as defined
in Rule 144 under the Securities Act) to, resell any of the Offered
Securities that have been reacquired by any of them, except for Offered
Securities purchased by the Issuers or any of their affiliates and resold
in a transaction registered under the Securities Act.
(g) During the period of two years after the Closing Date, neither
the Issuers nor any Guarantor will be or become, an open-end investment
company, unit investment trust or face-amount certificate company that is
or is required to be registered under Section 8 of the Investment Company
Act.
(h) The Issuers will pay all reasonable expenses (together with VAT
where applicable) incidental to the performance of their and the
Guarantors' obligations under this Agreement, the Registration Rights
Agreement and the Indenture, including (i) the fees and expenses of the
Trustee and its professional advisers; (ii) all expenses in connection
with the execution, issue, authentication, packaging and initial delivery
of the Offered Securities and, as applicable, the Exchange Securities (as
defined in the Registration Rights Agreement), the preparation and
printing of this Agreement, the Registration Rights Agreement, the Offered
Securities, the Exchange Securities, the Indenture, the Preliminary
Offering Circular and the Offering Circular and all amendments and
supplements thereto, and any other document relating to the issuance,
offer, sale and delivery of the Offered Securities or the Exchange
Securities; (iii) the cost of qualifying the Offered Securities for
trading in The Portal Market (PORTAL) and any expenses incidental thereto;
(iv) the cost of any advertising approved by Issuers in connection with
the issue of the Offered Securities; (v) any expenses (including
15
reasonable fees and disbursements of counsel) incurred in connection with
qualification of the Offered Securities or the Exchange Securities, for
sale under the laws of such jurisdictions in the United States and Canada
as CSFB reasonably designates and the printing of memoranda relating
thereto; (vi) any fees charged by investment rating agencies for the
rating of the Offered Securities or the Exchange Securities, and (vii)
expenses incurred in distributing preliminary offering circulars and the
Offering Circular (including any amendments and supplements thereto) to
the Purchasers; provided, however, that except as provided in the next
sentence of this Section 5(h) and Section 9, the Purchasers shall pay
their own costs and expenses, including the costs and expenses of their
counsel, any taxes on the Offered Securities which they may sell and the
expenses of advertising and offering of the Offered Securities made by the
Purchasers. The Issuers will also pay or reimburse the Purchasers (to the
extent incurred by them prior to the Closing Date) for all reasonable
travel expenses of the Purchasers and the Issuers' officers and employees
and any other reasonable expenses of the Purchasers and the Issuers in
connection with attending or hosting meetings with prospective purchasers
of the Offered Securities from the Purchasers.
(i) In connection with the initial offering, until the earlier of
(i) such time as CSFB shall have notified the Issuers and the other
Purchasers of the completion by the Purchasers of the initial resale of
the Offered Securities and (ii) 180 days after the Closing Date, none of
the Issuers, the Guarantors and their affiliates has or will, either alone
or with one or more other persons, bid for or purchase, for any account in
which it or any of its affiliates has a beneficial interest, any Offered
Securities or attempt to induce any person to purchase any Offered
Securities; and none of the Issuers, the Guarantors and their affiliates
will make bids or purchases, in any such case for the purpose of creating
actual, or apparent, active trading in, or of raising the price of, the
Offered Securities. CSFB agrees to give such notice promptly upon such
completion of the initial resale.
(j) For a period of 180 days after the Closing Date (if the sale of
the Offered Securities by the Issuers to the Purchasers shall have
occurred), none of the Issuers or any Guarantor will offer, sell, contract
to sell, pledge or otherwise dispose of, directly or indirectly, or file
with the SEC a registration statement under this Securities Act relating
to, any United States dollar-denominated debt securities issued or
guaranteed by the Issuers or the Guarantors and having a maturity of more
than one year from the date of issue, or publicly disclose the intention
to make such an offer, sale, pledge disposition or filing, except (i)
promissory notes or other debt securities issued or guaranteed in
immaterial amounts in the ordinary course of business or (ii) issuances of
Exchange Securities pursuant to the Registration Rights Agreement. The
Issuers and the Guarantors will not offer, sell, contract to sell, pledge
or otherwise dispose of, directly or indirectly, any securities under
circumstances where such offer, sale, pledge, contract or disposition
would cause the exemption afforded by Section
16
4(2) of the Securities Act or the safe harbor of Regulation S thereunder
to cease to be applicable to the offer and sale of the Offered Securities.
(k) The Issuers, CDRJ (until such time as the Reorganization is
consummated as described in the Offering Circular) and Parent will
indemnify and hold harmless the Purchasers against any non-U.S.
documentary, stamp or similar issuance tax, including any interest and
penalties, on the creation, issuance and sale of the Offered Securities by
the Issuers to the Purchasers and on the execution and delivery of this
Agreement. All payments to be made by the Issuers and the Guarantors
hereunder shall be made without withholding or deduction for or on account
of any present or future non-U.S. taxes, duties or governmental charges
whatsoever unless either Issuer or a Guarantor, as appropriate, is
compelled by law to deduct or withhold such taxes, duties or charges. In
that event, the Issuers and Parent shall pay such additional amounts as
may be necessary in order that the net amounts received after such
withholding or deduction shall equal the amounts that would have been
received if no withholding or deduction had been made, except to the
extent such taxes arise because of some connection between any Purchaser
and the foreign jurisdiction imposing such tax, other than the purchase of
the Offered Securities.
(l) The Issuers and the Guarantors will use their reasonable best
efforts to have the Offered Securities admitted to trading in the Private
Offering, Resale and Trading through Automated Linkages (PORTAL) Market of
the Nasdaq Stock Market, Inc.
(m) The Company will use the net proceeds from the sale of the
Offered Securities as set forth under "Use of Proceeds" in the Offering
Circular in all material respects.
6. Conditions of the Obligations of the Purchasers. The obligations of the
several Purchasers to purchase and pay for the Offered Securities will be
subject to the accuracy of the representations and warranties on the part of the
Company herein, to the accuracy of the statements of officers of each Issuer and
Guarantor made pursuant to the provisions hereof, to the performance by each
Issuer and Guarantor of its obligations hereunder, and to the following
additional conditions precedent:
(a) (i) The Purchasers shall have received a letter, dated the date
of this Agreement, of Ernst & Young confirming that they are independent
public accountants within the meaning of the Securities Act and the
applicable published rules and regulations thereunder ("RULES AND
REGULATIONS") and substantially in the form of Exhibit D hereto, or
otherwise in form and substance reasonably satisfactory to the Purchasers.
(ii) (A) The Purchasers shall have received from Deloitte & Touche a
letter dated the date of this Agreement confirming that they are
independent
17
public accountants within the meaning of the Securities Act and the Rules
and Regulations and substantially in the form of Exhibit E hereto, or
otherwise in form and substance reasonably satisfactory to the Purchasers
and (B) either (x) the Purchasers shall have received from Deloitte &
Touche a letter dated on or prior to the date of first delivery by the
Purchasers of the final Offering Circular, confirming that they are
independent public accountants and providing comfort on all data, to the
extent comparable to the data covered in the letter delivered pursuant to
clause (ii)(A) of this paragraph, included in such final Offering Circular
to at least the same extent that comfort on such data was provided in the
letter delivered pursuant to clause (ii)(A) of this paragraph or (y)(1)
the Purchasers shall have received a certificate of the Chief Financial
Officer of the Company dated on or prior to such date of first delivery,
certifying that he has no reason to believe that any such data are
inaccurate as set forth in the final Offering Circular and (2) no data
within the scope of the letter delivered pursuant to clause (ii)(A) of
this paragraph is in fact modified in the final Offering Circular. The
Purchasers may in their sole discretion waive the condition set forth in
clause (ii)(B)(y) with respect to any particular modification of such
data, but no such waiver shall constitute a waiver of such condition with
respect to any other modification.
(iii) The Purchasers shall have received a certificate of the chief
financial officer of the Issuers certifying to the accuracy of certain
financial information contained in the Offering Circular in the form of
Exhibit F hereto, or otherwise in form and substance reasonably
satisfactory to the Purchasers.
(b) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development or event
that would reasonably be expected to result in a change, in the condition
(financial or other), business, properties or results of operations of any
Issuer or Guarantor which, in the reasonable judgment of a majority in
interest of the Purchasers, including CSFB, is material and adverse and
makes it impractical to proceed with the completion of the offering
contemplated herein or the sale of and payment for the Offered Securities;
(ii) any downgrading in the rating of any debt securities of the Issuers
or JCISA by any "nationally recognized statistical rating organization"
(as defined for purposes of Rule 436(g) under the Securities Act), or any
public announcement that any such organization has under surveillance or
review its rating of such debt securities (other than an announcement with
positive implications of a possible upgrading, and no implication of a
possible downgrading of such rating) or any announcement that the Company
has been placed on negative outlook; (iii) any material adverse change in
U.S. or international financial, political or economic conditions or
currency exchange rates or exchange rates or exchange controls as would,
in the reasonable judgment of a majority in interest of the Purchasers,
including CSFB, be likely to prejudice materially the success of the
proposed issue, sale or distribution of the Offered
18
Securities, whether in the primary market or in respect of dealings in the
secondary market; (iv) any material suspension or material limitation of
trading in securities generally on the New York Stock Exchange, or any
setting of minimum prices for trading on such exchange or in the
over-the-counter market, or any suspension of trading of any securities of
any Issuer or any Guarantor on any exchange or in the over-the-counter
market; (v) any banking moratorium declared by U.S. Federal, New York or
Mexican authorities; (vi) any major disruption of settlements of
securities or clearance services in the United States or (vii) any
material attack on, outbreak or escalation of hostilities or act of
terrorism involving the United States or Mexico, any declaration of war by
Congress or any other national or international calamity or emergency if,
in the reasonable judgment of a majority in interest of the Purchasers,
including CSFB, the effect of any such attack, outbreak, escalation, act,
declaration, calamity or emergency makes it impractical to proceed with
completion of the offering or sale of and payment for the Offered
Securities.
(c) The Purchasers shall have received an opinion, dated the Closing
Date, of Debevoise & ▇▇▇▇▇▇▇▇, the special New York counsel for the
Issuers and Parent, substantially in the form of Exhibit A hereto, or
otherwise in form and substance reasonably satisfactory to the Purchasers.
In rendering such opinion, Debevoise & ▇▇▇▇▇▇▇▇ may, as to matters
governed by Mexican law and the laws of Luxembourg, rely upon or assume
the accuracy of the opinions of ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇, S.C. and Bonn &
▇▇▇▇▇▇▇, respectively.
(d) The Purchasers shall have received an opinion, dated the Closing
Date, of ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇, S.C., special counsel for JCISA and its
subsidiaries, substantially in the form of Exhibit B hereto, or otherwise
in form and substance reasonably satisfactory to the Purchasers.
(e) The Purchasers shall have received an opinion, dated the Closing
Date, of Bonn & ▇▇▇▇▇▇▇, special Luxembourg counsel for CDRJ and Parent,
substantially in the form of Exhibit C hereto, or otherwise in form and
substance reasonably satisfactory to the Purchasers.
(f) The Purchasers shall have received from Cravath, Swaine & ▇▇▇▇▇,
counsel for the Purchasers, such opinion or opinions, dated the Closing
Date, with respect to the incorporation of Jafra US, the validity of the
Offered Securities and the Offering Circular, the exemption from
registration for the offer and sale of the Offered Securities by the
Issuers to the several Purchasers and the resales by the several
Purchasers as contemplated hereby and other related matters as CSFB may
reasonably require, and each Issuer, CDRJ and the Parent shall have
furnished to such counsel such documents as they may reasonably request
for the purpose of enabling them to pass upon such matters. In rendering
such opinion, Cravath, Swaine & ▇▇▇▇▇ may rely as to all matters governed
by Mexican law
19
and the laws of Luxembourg upon the opinions of ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇,
S.C. and Bonn & ▇▇▇▇▇▇▇, respectively.
(g) The Purchasers shall have received from the Issuers and Parent
certificates dated the Closing Date of the President or any Vice President
and a principal financial or accounting officer of each Issuer in which
such officers shall state that, to the best of their knowledge after
reasonable investigation, as of the Closing Date, the representations and
warranties of the such Issuer, CDRJ or the Parent, as appropriate, in this
Agreement are true and correct (in the case of any such representation or
warranty to the extent subject to a materiality qualification) or true and
correct in all material respects (in the case of any such representation
or warranty to the extent not subject to a materiality qualification),
that such Issuer or Parent, as appropriate, has in all material respects
complied with all agreements and satisfied all conditions on its part to
be performed or satisfied hereunder at or prior to the Closing Date, and
that, subsequent to the date of the most recent financial statements
contained in the Offering Circular, there has been no material adverse
change, nor any development or event that, in his reasonable judgment,
would reasonably be expected to result in material adverse change, in the
condition (financial or other), business, properties or results of
operations of the Company taken as a whole, except as set forth in or
contemplated by the Offering Circular or as described in such certificate.
(h) The Purchasers shall have received (i) from Ernst & Young a
letter dated the Closing Date bringing down to three days before the
Closing Date the information set forth in its letter referred to in
Section 6(a)(i) and (ii) either (A) in the event a letter is delivered in
accordance with Section 6(a)(ii)(B)(x), a letter from Deloitte & Touche
dated the Closing Date bringing down to three days before the Closing Date
the information set forth in its letter referred to in Section
6(a)(ii)(B)(x) or (B) in the event no such letter is delivered, a letter
from Deloitte & Touche dated the Closing Date bringing down to three days
before the Closing Date the information set forth in its letter referred
to in Section 6(a)(ii)(A).
(i) The Reorganization and related financings and transactions
(including the closing of the senior secured credit facilities (the
"SENIOR SECURED CREDIT FACILITIES") on or prior to the Closing Date) shall
have been consummated substantially as described in the Offering Circular.
(j) The Offered Securities shall have been designated for trading on
PORTAL.
(k) Each of the Issuers, the Guarantors and the Trustee shall have
executed and delivered the Indenture in form and substance reasonably
satisfactory to the Purchasers and the Indenture shall be in full force
and effect.
20
(l) Each of the Issuers and the Guarantors shall have executed and
delivered the Registration Rights Agreement in form and substance
reasonably satisfactory to the Purchasers and the Registration Rights
Agreement shall be in full force and effect.
(m) Each Issuer and Parent will furnish the several Purchasers with
such conformed copies of such opinions, certificates, letters and
documents as the Purchasers reasonably request. CSFB may in its reasonable
discretion waive on behalf of the several Purchasers compliance with any
conditions to the obligations of the Purchasers hereunder, whether in
respect of the Closing Date or otherwise.
7. Indemnification and Contribution.
(a) Each Issuer and Guarantor, jointly and severally, will indemnify
and hold harmless each Purchaser, its partners, directors and officers and
each person, if any, who controls such Purchaser within the meaning of
Section 15 of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which such Purchaser may become subject,
under the Securities Act or the Exchange Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of any untrue statement or alleged untrue statement of any
material fact contained in the Offering Circular, or any amendment or
supplement thereto, or any related preliminary offering circular, or arise
out of or are based upon the omission or alleged omission to state therein
a 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 were made, not misleading, including any losses, claims damages or
liabilities arising out of or based upon the Issuers' failure to perform
their obligations under Section 5(a) of this Agreement, and will reimburse
each Purchaser for any legal or other expenses reasonably incurred by such
Purchaser in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that none of the
Issuers or any Guarantor will be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or
alleged omission from any of such documents in reliance upon and in
conformity with written information furnished to the Issuers or Parent by
any Purchaser through CSFB specifically for use therein, it being
understood and agreed that the only such information consists of the
information described as such in subsection (b) below; and provided
further, that the foregoing indemnity with respect to the preliminary
offering circular shall not inure to the benefit of any Purchaser from
whom the person asserting any such losses, claims, damages or liabilities
purchased Offered Securities, to the extent that any such losses, claims,
damages or liabilities of such Purchaser result solely from the fact that
such Purchaser sold Offered Securities to a person in an initial resale to
whom there was not sent or given at or prior to the written confirmation
of the sale of such Offered Securities, a copy of the final
21
offering circular (as amended and supplemented), if the Issuers had
previously furnished such amendments or supplements to such Purchaser
prior to confirmation of the sale of such Offered Securities to such
person by such Purchaser and the losses, claims, damages or liabilities of
such Purchaser result from an untrue statement or omission of a material
fact contained in the preliminary offering circular, which was corrected
in the final offering circular.
(b) Each Purchaser will severally and not jointly indemnify and hold
harmless the Issuers and the Guarantors, as appropriate, and their
partners, directors and officers and each person, if any, who controls
such Person within the meaning of Section 15 of the Securities Act,
against any losses, claims, damages or liabilities to which any of the
Issuers and the Guarantors may become subject, under the Securities Act or
the Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact
contained in the Offering Circular, or any amendment or supplement
thereto, or any related preliminary offering circular, or arise out of or
are based upon the omission or the alleged omission to state therein a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, in
each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished
to the Issuers or the Guarantors by such Purchaser or through CSFB
specifically for use therein, and will reimburse any legal or other
expenses reasonably incurred by the Issuers or the Guarantors in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred, it being understood and
agreed that the only such information furnished by any Purchaser consists
of the following information in the Offering Circular furnished on behalf
of each Purchaser: paragraph six, the third and fourth sentences of
paragraph nine and paragraphs eleven and twelve under the caption "Plan of
Distribution"; provided, however, that the Purchasers shall not be liable
for any losses, claims, damages or liabilities arising out of or based
upon any Issuer's failure to perform its obligations under Section 5(a) of
this Agreement.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) or (b) above, notify the
indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability (i)
under subsection (a) or (b) above except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights or
defenses) by such failure or (ii) which it may have to any indemnified
party otherwise than under subsection (a) or (b) above. In case any such
action is
22
brought against any indemnified party and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled
to participate therein and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party
(if such counsel is counsel to the indemnifying party and the
representation of the indemnified party would present such counsel with a
conflict of interest, the indemnified party will have the right to employ
separate counsel, and the indemnifying party will bear the reasonable
fees, costs and expenses of only one such separate counsel for all
indemnified parties), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement
of any pending or threatened action in respect of which any indemnified
party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party unless such settlement includes (i) an
unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action and (ii) does not
include a statement as to or an admission of fault or failure to act by or
on behalf of any indemnified party.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or
(b) above (i) in such proportion as is appropriate to reflect the relative
benefits received by the Issuers and the Guarantors on the one hand and
the Purchasers on the other from the offering of the Offered Securities or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) above but also the
relative fault of the Issuers and the Guarantors on the one hand and the
Purchasers on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities as well as
any other relevant equitable considerations. The relative benefits
received by the Issuers and the Guarantors on the one hand and the
Purchasers on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses)
received by the Issuers and the Guarantors bear to the total discounts and
commissions received by the Purchasers from the Issuers and the Guarantors
in the offering. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Issuers or the Guarantors or the
Purchasers and the parties'
23
relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid by
an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (d) shall
be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any
action or claim which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), no Purchaser shall
be required to contribute any amount in excess of the amount by which the
total price at which the Offered Securities purchased by it were resold
exceeds the amount of any damages which such Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. The Purchasers' obligations in this
subsection (d) to contribute are several in proportion to their respective
purchase obligations and not joint.
(e) The obligations of each Issuer and Guarantor, as appropriate,
under this Section shall be in addition to any liability which each Issuer
or Guarantor may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls such Issuer or Guarantor,
as appropriate, within the meaning of the Securities Act or the Exchange
Act; and the obligations of the Purchasers under this Section shall be in
addition to any liability which the respective Purchasers may otherwise
have and shall extend, upon the same terms and conditions, to each person,
if any, who controls any Purchaser within the meaning of the Securities
Act or the Exchange Act.
(f) No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
8. Default of Purchasers. If any Purchaser or Purchasers default in their
obligations to purchase Offered Securities hereunder and the aggregate principal
amount of Offered Securities that such defaulting Purchaser or Purchasers agreed
but failed to purchase does not exceed 10% of the total principal amount of
Offered Securities, CSFB may make arrangements satisfactory to the Issuers for
the purchase of such Offered Securities by other persons, including any of the
Purchasers, but if no such arrangements are made by such Closing Date, the
non-defaulting Purchasers shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Offered Securities that such
defaulting Purchasers agreed but failed to purchase. If any Purchaser or
Purchasers so default and the aggregate principal amount of Offered Securities
with respect to which such default or defaults occur exceeds 10% of the total
principal amount of Offered Securities and arrangements satisfactory to CSFB and
the Issuers for the purchase of such Offered Securities by other persons are not
made within 36 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Purchaser or the Issuers, except as
provided in Section 9. As used in
24
this Agreement, the term "Purchaser" includes any person substituted for a
Purchaser under this Section. Nothing herein will relieve a defaulting Purchaser
from liability for its default.
9. Survival of Certain Representations and Obligations. Subject to the
last sentence of this Section, the respective indemnities, agreements,
representations, warranties and other statements of CDRJ, each Issuer, each
Guarantor or their officers and of the several Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Purchaser, CDRJ, Issuer, Guarantor or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Offered Securities. If this Agreement is
terminated pursuant to Section 8 or if for any reason the purchase of the
Offered Securities by the Purchasers is not consummated, the Issuers and
Guarantors shall remain responsible for the expenses to be paid or reimbursed by
them pursuant to Section 5 and the respective obligations of the Issuers and
Guarantors and the Purchasers pursuant to Section 7 shall remain in effect. If
the purchase of the Offered Securities by the Purchasers is not consummated for
any reason other than solely because of the termination of this Agreement
pursuant to Section 8 or the occurrence of any event specified in Section 6(b)
or the failure of the Senior Secured Credit Facilities to close on or prior to
the Closing Date (unless such failure of the Senior Secured Credit Facilities to
close results from the fault of the Company), the Issuers and Guarantors will
reimburse the Purchasers for all reasonable out-of-pocket expenses (including
fees and disbursements of counsel) reasonably incurred by them in connection
with the offering of the Offered Securities. The Purchasers agree that from and
after the Closing Date and the consummation of the Reorganization, CDRJ and its
officers, directors and shareholders shall not have any liability to the
Purchasers pursuant to this Agreement or otherwise resulting from or in
connection with the transactions contemplated hereby; provided that, with
respect to the officers, directors and shareholders of CDRJ, the foregoing
limitation shall apply solely in their capacity as officers, directors or
shareholders of CDRJ.
10. Notices. All communications hereunder will be in writing and, if sent
to the Purchasers will be mailed, delivered or telegraphed and confirmed to the
Purchasers, c/o Credit Suisse First Boston LLC, Eleven Madison Avenue, New York,
N.Y. 10010-3629, Attention: Investment Banking Department Transactions Advisory
Group, or, if sent to the Issuers or the Parent, will be mailed, delivered or
telegraphed and confirmed to it at Jafra Cosmetics International, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Corporate Secretary; provided,
however, that any notice to a Purchaser pursuant to Section 7 will be mailed,
delivered or telegraphed and confirmed to such Purchaser.
11. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the controlling
persons referred to in Section 7(e), and no other person will have any right or
obligation hereunder, except
25
that holders of Offered Securities shall be entitled to enforce the agreements
for their benefit contained in the second sentence of Section 5(b) hereof
against the Issuers and Parent as if such holders were parties thereto.
12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
13. Applicable law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to principles
of conflicts of laws.
Each party hereto hereby submits to the jurisdiction of the Federal and
state courts in the Borough of Manhattan in The City of New York in any suit or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. Each of Parent and Jafra Mexico irrevocably appoints Jafra
US as its authorized agent upon which process may be served in any such suit or
proceeding, and agrees that service of process upon such agent, and written
notice of said service to Jafra Mexico or Parent, as the case may be, by the
person serving the same to the address provided in Section 10, shall be deemed
in every respect effective service of process upon Jafra Mexico or Parent, as
the case may be, in any such suit or proceeding. Each of Parent and Jafra Mexico
further agrees to take any and all action as may be necessary to maintain such
designation and appointment of such agent in full force and effect for a period
of three years from the date of this Agreement.
The obligation of Parent and Jafra Mexico in respect of any sum due to any
Purchaser shall, notwithstanding any judgment in a currency other than United
States dollars, not be discharged until the first business day, following
receipt by such Purchaser of any sum adjudged to be so due in such other
currency, on which (and only to the extent that) such Purchaser may in
accordance with normal banking procedures purchase United States dollars with
such other currency; if the United States dollars so purchased are less than the
sum originally due to such Purchaser hereunder, Jafra Mexico or Parent, as the
case may be, agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify such Purchaser against such loss. If the United States
dollars so purchased are greater than the sum originally due to such Purchaser
hereunder, such Purchaser agrees to pay to Jafra Mexico or Parent, as the case
may be, an amount equal to the excess of the dollars so purchased over the sum
originally due to such Purchaser hereunder.
26
EXECUTION COPY
If the foregoing is in accordance with the Purchasers' understanding of
our agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement among CDRJ, Parent, each Issuer and
the several Purchasers in accordance with its terms.
Very truly yours,
Jafra Comestics International, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and C.O.O.
Distribuidora Comercial Jafra, S.A. de C.V.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and C.O.O.
Jafra Worldwide Holdings (Lux) S.ar.L.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Manager
CDRJ Investments (Lux) S.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and C.O.O.
The foregoing Purchase
Agreement is hereby
confirmed and accepted as
of the date first above
written.
Credit Suisse First Boston LLC
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
By: Credit Suisse First Boston LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: MANAGING DIRECTOR
By: ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: DIRECTOR
SCHEDULE A
PRINCIPAL AMOUNT OF
PURCHASER OFFERED SECURITIES
--------- ------------------
Credit Suisse First Boston LLC ......................... $130,000,000
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ..... $ 70,000,000
------------
Total $200,000,000