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EXHIBIT 10.1
AMENDED AND RESTATED CONSULTING AGREEMENT
This AMENDED AND RESTATED CONSULTING AGREEMENT, dated as of January 1, 2001
(the "Agreement"), by and among CDRJ Investments (Lux) S.A., a Luxembourg
societe anonyme ("Lux SA"), Jafra Cosmetics International, Inc., a Delaware
corporation ("JCI") and Jafra Cosmetics International, S.A. de C.V., a sociedad
anonima de capital variable ("JCISA" and collectively with Lux SA and JCI, the
"Company Group"), and ▇▇▇▇▇▇▇, Dubilier & Rice, Inc., a Delaware corporation
("CD&R").
W I T N E S S E T H:
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WHEREAS, the Company Group has acquired the Jafra cosmetics business of ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ pursuant to the Acquisition Agreement, dated as of January 26,
1998, as amended (the "Acquisition Agreement") between ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and
Lux SA and CDRJ Holding Company, an affiliate of Lux SA ("Cayman Co"), and the
other parties thereto (such transaction being hereinafter referred to as the
"Acquisition");
WHEREAS, CD&R has performed financial, management advisory and other
services for the Company Group, including but not limited to assistance in
connection with (i) the preparation, negotiation, execution and delivery of the
Acquisition Agreement, (ii) the retention of legal, accounting, insurance,
investment banking, financial and other advisors and consultants in connection
with the Acquisition, (iii) the preparation, negotiation, execution and delivery
of the commitment, fee and engagement letters, registration rights and purchase
agreements, credit agreements, guarantees, mortgages, pledge agreements and
other security agreements, subscription, management equity agreements, and other
agreements, instruments and documents, relating to the Acquisition, the
financing of the Acquisition and (iv) the structuring, implementation and
consummation of the Acquisition (such services collectively, the "Acquisition
Services");
WHEREAS, the parties hereto entered into a Consulting Agreement, dated as
of April 30, 1998 (the "Original Agreement") pursuant to which the Company Group
receives financial and managerial advisory services from CD&R;
WHEREAS, in accordance with a resolution adopted by the Boards of Directors
of CDRJ, JCI and JCISA on March 1,2001, the parties to the Original Agreement
wish to amend certain provisions of the Original Agreement relating to, among
other things the services to be provided by CD&R to the Company Group and the
compensation to be paid by the Company Group to CD&R and, in connection
therewith, to amend and restate the Original Agreement in its entirety;
NOW, THEREFORE, in consideration of the premises and the respective
agreements hereinafter set forth and the mutual benefits to be derived herefrom,
the parties hereto hereby agree as follows:
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1. Engagement. The Company Group hereby engages CD&R as a consultant, and
CD&R hereby agrees to provide financial and managerial advisory services to the
Company Group, all on the terms and subject to the conditions set forth below.
2. Services, etc. (a) CD&R hereby agrees during the term of this Agreement
to assist, advise and consult with the respective Boards of Directors and
management of each member of the Company Group and its subsidiaries in such
manner and on such business, management and financial matters, and provide such
other financial and managerial advisory services (collectively, the "Continuing
Services"), as may be reasonably requested from time to time by the Boards of
Directors of each member of the Company Group, including but not limited to
assistance in:
(i) establishing and maintaining banking, legal and other business
relationships for each such member and its subsidiaries;
(ii) developing and implementing corporate and business strategy and
planning for each such member and its subsidiaries, including plans and
programs for improving operating, marketing and financial performance and
budgeting of future corporate investments;
(iii)arranging future debt and equity financings and refinancings; and
(iv) providing professional employees to serve as directors of members of
the Company Group.
(b) CD&R hereby agrees during the term of this engagement to provide each
member of the Company Group and its subsidiaries financial advisory, investment
banking and other similar services (the "Transaction Services") with respect to
any proposal for an acquisition, merger, recapitalization or any other similar
transaction directly or indirectly involving such member of the Company Group
and its subsidiaries and any other person or entity (collectively, "Add-on
Transactions").
(c) Each member of the Company Group will furnish CD&R with such
information as CD&R believes appropriate to its engagement hereunder (all such
information so furnished being referred to herein as the "Information"). Each
member of the Company Group recognizes and confirms that (i) CD&R will use and
rely primarily on the Information and on information available from generally
recognized public sources in performing the services to be performed hereunder
and (ii) CD&R does not assume responsibility for the accuracy or completeness of
the Information and such other information.
3. Compensation; Payment of Expenses. (a) Concurrently with the execution
of the Original Agreement, the Company Group paid CD&R as compensation for the
Acquisition Services, a fee of $2,700,000.
(b) JCI and JCISA, jointly and severally agree to pay to CD&R, as
compensation for Continuing Services rendered and to be rendered by CD&R
hereunder, a fee of
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$1,000,000 per year (the "Continuing Services Fee"), one quarter of which shall
be payable quarterly in advance on the first day of each of January, April, July
and October commencing on January 1, 2001. Any Continuing Services Fees due for
the quarterly period commencing January 1, 2001 that has not been paid shall be
payable on the date hereof. Such Continuing Services Fee may be increased with
the approval of a majority of the members of Lux SA's, JCI's and JCISA's Board
of Directors who are not employees of any member of the Company Group, CD&R or
any affiliate of CD&R (the "Disinterested Directors") but may not be decreased
without the prior written consent of CD&R. If any employee of CD&R shall be
elected to serve on the Board of Directors of any member of the Company Group or
any of their affiliates (a "Designated Director"), in consideration of the
Continuing Services Fee being paid to CD&R, CD&R shall cause such Designated
Director to waive any and all fees to which such director would otherwise be
entitled as a director for any period for which the Continuing Services Fee or
any installment thereof is paid.
(c) If an employee of CD&R is appointed to an executive management position
(or a position of comparable responsibility), whether in addition to or other
than as a Designated Director, in any member of the Company Group, then for the
period of such employee's service in such position the Continuing Services Fee
shall be increased by an amount to be determined by CD&R, such amount not to
exceed 100% of the Continuing Services Fee in effect at such time.
(d) JCI and JCISA jointly and severally agree to pay to CD&R upon
consummation of any Add-on Transaction, as compensation for Transaction Services
rendered by CD&R hereunder with respect to such Add-on Transaction, a cash fee
equal to 1.0% of the Transaction Value of such Add-on Transaction (the "Add-on
Fee"). Payment by the Company of an Add-on Fee in excess of 1.0% of the
Transaction Value of the Add-on Transaction shall require the approval of a
majority of the Disinterested Directors, provided that an Add-on Fee shall not
be payable in connection with the sale by way of merger or otherwise of all or
substantially all of the outstanding shares of capital stock of Lux SA or the
sale of all or substantially all of the assets of Lux SA and its subsidiaries.
As used herein, the term "Transaction Value" means the total value of the Add-on
Transaction, including, without limitation, the aggregate amount of the cash
funds or other securities required to complete the Add-on Transaction (excluding
any fees payable pursuant to this Section 3(d)) including the amount of any
indebtedness, preferred stock or similar items assumed, refinanced or left
outstanding. For purposes of calculating the Add-on Fee, the value of any
securities included in the Transaction Value will be determined by the average
of the last sales prices for such securities on the five trading days ending
five days prior to the consummation of the Add-on Transaction, provided that if
such securities do not have an existing public trading market, the value of the
securities shall be their fair market value as mutually agreed between the
Company Group and CD&R on the day prior to consummation of the Add-on
Transaction.
(e) JCI and JCISA jointly and severally agree to reimburse CD&R for such
reasonable travel and other out-of-pocket expenses ("Expenses") as may be
incurred by CD&R and its employees and agents in the course or on account of
rendering any services hereunder, including but not limited to any fees and
expenses of any legal,
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accounting or other professional advisors to CD&R engaged in connection with
services previously provided or being provided hereunder and any expenses
incurred by any Designated Director in connection with the performance of his or
her duties. CD&R may submit monthly expense statements, which shall be payable
within thirty days.
4. Term, etc. (a) This Agreement shall be in effect until, and shall
terminate upon, the earlier to occur of (x) the tenth anniversary of the date of
the Original Agreement and (y) the date on which ▇▇▇▇▇▇▇, Dubilier & Rice Fund V
Limited Partnership ("CD&R Fund") no longer owns any shares of the capital stock
of Lux SA, and may be earlier terminated by either party hereto upon 30 days'
prior written notice to the other party hereto. The provisions of this Agreement
shall survive any termination of this Agreement, except for the provisions of
Section 1, Section 2(a), Section 2(b), the first sentence of Section 2(c) and
(solely as to any portion of any Continuing Services Fee, any Add-on Fee or any
Expense not paid or reimbursed prior to such termination and not required to be
paid or reimbursed thereafter pursuant to Section 4(c) hereof) Section 3 hereof.
(b) Upon any consolidation or merger, or any conveyance, transfer or lease
of all or substantially all of the assets of JCI or JCISA as an entirety, the
successor corporation formed by such consolidation or into which JCI or JCISA,
as the case may be, is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, JCI or JCISA, as the case may be,
under this Agreement with the same effect as if such successor corporation had
been a party thereto. No such consolidation, merger or conveyance, transfer or
lease of all or substantially all of the assets of JCI or JCISA shall have the
effect of terminating this Agreement or of releasing JCI or JCISA or any such
successor corporation from its obligations hereunder.
(c) Upon any termination of this Agreement, any accrued and unpaid
installment of the Continuing Services Fee or portion thereof (pro rated, with
respect to the month in which such termination occurs, for the portion of such
month that precedes such termination), any accrued and unpaid Add-on Fee or
portion thereof and any unpaid and unreimbursed Expenses that shall have been
incurred prior to such termination (whether or not such Expenses shall then have
become payable), shall be immediately paid or reimbursed, as the case may be, by
JCI or JCISA. In the event of the liquidation of JCI or JCISA, all amounts due
CD&R hereunder shall be paid to CD&R before any liquidating distributions or
similar payments are made to stockholders of JCI or JCISA.
5. Indemnification. (a) Each member of the Company Group confirms and
reaffirms its obligations pursuant to the Indemnification Agreement, dated as of
April 30, 1998, (the "Indemnification Agreement"), among Lux SA, JCI, JCISA,
Cayman Co., CD&R and CD&R Fund, as the same may be amended, waived, modified or
supplemented from time to time. Without limiting the generality of the
foregoing, each member of the Company Group confirms and agrees that (a) it
shall indemnify, defend and hold harmless CD&R, CD&R Fund, CD&R Associates, CD&R
Associates Inc. (each as defined in the Indemnification Agreement), and CD&R
Investment Associates II, Inc. and each of the respective directors, officers,
partners, members, employees, agents, advisors, representatives and controlling
persons (within the meaning of the Securities
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Act of 1933, as amended) of CD&R, CD&R Fund and CD&R Associates (collectively,
"Indemnitees") from and against any and all claims, obligations, liabilities,
causes of action, actions, suits, proceedings, investigations, judgments,
decrees, losses, damages, fees, costs and expenses (including without limitation
interest, penalties and fees and disbursements of attorneys, accountants,
investment bankers and other professional advisors) (collectively,
"Obligations"), whether incurred with respect to third parties or otherwise, in
any way resulting from, arising out of or in connection with, based upon or
relating to, the performance of the services contemplated hereby, except to the
extent that any such Obligation is found in a final judgment by a court having
jurisdiction to have resulted from the gross negligence or intentional
misconduct of CD&R, (b) no Indemnitee shall have any liability (whether direct
or indirect, in contract or tort or otherwise) to a member of the Company Group
or their respective security holders or creditors with respect to any Obligation
in any way resulting from, arising out of or in connection with, based upon or
relating to, the performance of the services contemplated hereby, except to the
extent that any such Obligation is found in a final judgment by a court having
jurisdiction to have resulted from the gross negligence or intentional
misconduct of CD&R, and (c) the rights of each Indemnitee to be indemnified
under any agreement, document, certificate or instrument or applicable law are
independent of and in addition to any rights of such Indemnitee under any other
agreement, document, certificate or instrument or applicable law.
(b) JCI and JCISA hereby agree to advance costs and expenses, including
attorneys' fees, incurred by CD&R (acting on its own behalf or, if requested by
any such Indemnitee other than itself, on behalf of such Indemnitee) or any
Indemnitee in defending any claim relating to any Obligation in advance of the
final disposition of such claim within 30 days of receipt from CD&R of (i) a
notice setting forth the amount of such costs and expenses (a "Payment Notice")
and (ii) an undertaking by or on behalf of CD&R or such Indemnitee to repay
amounts so advanced if it shall ultimately be determined that CD&R or such
Indemnitee is not entitled to be indemnified by the Company as authorized by
this Agreement. CD&R may submit Payment Notices to the Company monthly.
6. Independent Contractor Status. The parties agree that CD&R shall perform
services hereunder as an independent contractor, retaining control over and
responsibility for its own operations and personnel. Neither CD&R nor any of its
employees or agents shall, solely by virtue of this Agreement or the
arrangements hereunder, be considered employees or agents of any member of the
Company Group nor shall any of them have authority to contract in the name of a
member of or bind any member of the Company Group, except (a) to the extent that
any professional employee of CD&R may be serving as a director of a member of
the Company Group pursuant to Section 2(a)(iv) hereof or as an officer of a
member of the Company Group pursuant to Section 3(c) hereof or (b) as expressly
agreed to in writing by a member of the Company Group. Each member of the
Company Group hereby acknowledges and agrees that any agreements, arrangements
or understandings entered into by CD&R on behalf of any member of the Company
Group prior to the date hereof in connection with the Acquisition (including,
but not limited to, any confidentiality agreements, agreements with brokers or
finders and any arrangements relating to the financing of the Acquisition)
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shall be obligations of the members of the Company Group binding on them to the
same extent as such obligations may be binding on CD&R, and the Company Group
shall fully perform, and shall indemnify and hold harmless CD&R from and
against, all such obligations. Any duties of CD&R arising out of its engagement
to perform services hereunder shall be owed solely to the Company Group.
7. Notices. Any notice or other communication required or permitted to be
given or made under this Agreement by one party to the other parties shall be in
writing and shall be deemed to have been duly given and effective (i) on the
date of delivery if delivered personally or (ii) when sent if sent by prepaid
telegram, or mailed first-class, postage prepaid, registered or certified mail,
or facsimile transmission as follows (or to such other address as shall be given
in writing by one party to the other parties in accordance herewith):
If to Lux SA, JCI or JCISA to:
Jafra Cosmetics International, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (805) 449-
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, III, Esq.
If to CD&R, to:
▇▇▇▇▇▇▇, Dubilier & Rice, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
With a copy to:
Debevoise & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇, Esq.
8. Entire Agreement. This Agreement, together with the Indemnification
Agreement, (a) contains the complete and entire understanding and agreement of
CD&R and each member of the Company Group with respect to the subject matter
hereof and (b) supersedes all prior and contemporaneous understandings,
conditions and agreements,
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oral or written, express or implied, in respect of the subject matter hereof,
including but not limited to in respect of the engagement of CD&R in connection
with the subject matter hereof. There are no representations or warranties of
CD&R in connection with this Agreement or the services to be provided hereunder,
except as expressly made and contained in this Agreement.
9. Headings. The headings contained in this Agreement are for purposes of
convenience only and shall not affect the meaning or interpretation of this
Agreement.
10. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original and all of which shall together
constitute one and the same instrument.
11. Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties to this Agreement and their respective
successors and assigns and to each Indemnitee, provided that none of CD&R or any
member of the Company Group may assign any of its rights or obligations under
this Agreement without the express written consent of the other party hereto.
This Agreement is not intended to confer any right or remedy hereunder upon any
person other than the parties to this Agreement and their respective successors
and permitted assigns and each Indemnitee.
12. Governing Law. This Agreement shall be deemed to be a contract made
under, and is to be governed and construed in accordance with, the laws of the
State of New York, without regard to the conflict of laws principles or rules
thereof. Each member of the Company Group and CD&R hereby irrevocably submit to
the jurisdiction of the courts of the State of New York and the Federal courts
of the United States of America, in each case located in the State, City and
County of New York, solely in respect of the interpretation and enforcement of
the provisions of this Agreement, and hereby waive, and agree not to assert, as
a defense in any action, suit or proceeding for the interpretation or
enforcement hereof, that it is not subject thereto or that such action, suit or
proceeding may not be brought or is not maintainable in such courts or that the
venue thereof may not be appropriate or that this Agreement may not enforced in
or by such courts, and the parties hereto irrevocably agree that all claims with
respect to such action or proceeding shall be heard and determined in such a New
York State or Federal court. Each member of the Company Group and CD&R hereby
consent to and grant any such court jurisdiction over the person of such parties
and over the subject matter of any such dispute and agree that mailing of
process or other papers in connection with any such action or proceeding in the
manner provided in Section 7, or in such other manner as may be permitted by
law, shall be valid and sufficient service thereof.
13. Waiver of Jury Trial. Each party hereto acknowledges and agrees that
any controversy that may arise under this Agreement is likely to involve
complicated and difficult issues, and therefore it hereby irrevocably and
unconditionally waives any right it may have to a trial by jury in respect of
any litigation directly or indirectly arising out of or relating to this
Agreement, or the breach, termination or validity of this Agreement, or the
transactions contemplated by this Agreement. Each party certifies and
acknowledges that (a) no representative, agent or attorney of any other party
has
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represented, expressly or otherwise, that such other party would not, in the
event of litigation, seek to enforce the foregoing waiver, (b) it understands
and has considered the implications of this waiver, (c) it makes this waiver
voluntarily, and (d) it has been induced to enter into this Agreement by, among
other things, the mutual waivers and certifications contained in this Section
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14. Amendment; Waivers. No amendment, modification, supplement or discharge
of this Agreement, and no waiver hereunder, shall be valid or binding unless set
forth in writing and duly executed by the party or Indemnitee against whom
enforcement of the amendment, modification, supplement, discharge or waiver is
sought (and in the case of a member of the Company Group, approved by resolution
of the Board of Directors or the sole stockholder of such member of the Company
Group). Any such waiver shall constitute a waiver only with respect to the
specific matter described in such writing and shall in no way impair the rights
of the party or Indemnitee granting such waiver in any other respect or at any
other time. Neither the waiver by any of the parties hereto or any Indemnitee of
a breach of or a default under any of the provisions of this Agreement, nor the
failure by any party hereto or any Indemnitee on one or more occasions, to
enforce any of the provisions of this Agreement or to exercise any right, powers
or privilege hereunder, shall be construed as a waiver of any other breach or
default of a similar nature, or as a waiver of any of such provisions, rights,
power or privileges hereunder. The rights and remedies herein provided are
cumulative and are not exclusive of any rights or remedies that any party or
Indemnitee may otherwise have at law or in equity or otherwise.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
▇▇▇▇▇▇▇, DUBILIER & RICE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇, III
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇, III
Title: Chairman
CDRJ INVESTMENTS (LUX) S.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, III
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, III
Title: Executive Vice President
JAFRA COSMETICS INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, III
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, III
Title: Vice Chairman
JAFRA COSMETICS INTERNATIONAL,
S.A. de C.V.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, III
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, III
Title: Assistant Secretary
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