(c) Other Conditions. (i) The conditions precedent set forth inSection 9.1(t)and (u)shall have been satisfied both before and after giving effect to such Term Facility Increase and (ii) such Term Facility Increase shall be made on the terms and conditions set forth inSections 2.6.
AFFIRMATIVE COVENANTS
The Company hereby agrees that, until the Payment Obligations have been Fully Satisfied:
Section 10.1 Financial Statements. The Company will furnish to each Lender, through the Administrative Agent:
(a) as soon as available, but in any event within 90 days after the end of each fiscal year of the Company, a copy of the consolidated balance sheet of the Company and its Subsidiaries as at the end of such fiscal year and the related consolidated statements of operations and stockholders’ equity and cash flows for such year, setting forth in each case in comparative form (to the extent that such information has not previously been provided to the Lenders in form substantially similar to that required pursuant to thisSection 10.1(a)) the figures for the previous year, certified without a “going concern” or like qualification or exception, or qualification arising out of the scope of the audit, by KPMG LLP or other independent certified public accountants of nationally recognized standing reasonably acceptable to the Administrative Agent;
(b) as soon as available, but in any event within 90 days after the end of each fiscal year of the Company, a copy of (i) the annual business plan of the Company and its Subsidiaries for the next succeeding fiscal year, including model quarterly balance sheets and statements of operations and of cash flow, (ii) a two-year model (including, without limitation, model annual balance sheets and statements of operations and of cash flow) for the Company and its Subsidiaries and (iii) a two-year model (including, without limitation, model annual balance sheets and statements of operations and of cash flow) for Revlon and its Subsidiaries, and all of the foregoing shall be in form and detail reasonably satisfactory to the Administrative Agent and shall be certified by a Responsible Officer of the Company; and
(c) as soon as available, but in any event within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Company, a copy of (i) the unaudited consolidated, condensed balance sheets of the Company and its Subsidiaries as at the end of each such quarter, (ii) the related unaudited consolidated, condensed statements of operations and of cash flows for the portion of the fiscal year through such date and (iii) the related unaudited consolidated, condensed statements of operations for such quarterly period, setting forth in each case in comparative form (to the extent that such information has not previously been provided to the Lenders in form substantially similar to that required pursuant to thisSection 10.1(c)) the figures for the corresponding fiscal period of the previous year (other than the balance sheets, which shall present such corresponding figures at the last day of the previous fiscal year), certified (subject to normal year-end audit adjustments) by a Responsible Officer of the Company;
all such financial statements to be prepared in reasonable detail and (except as approved by such accountants or Responsible Officer, as the case may be, and disclosed therein) in accordance with
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GAAP applied consistently throughout the periods reflected therein (subject, in the case of interim periods, to normal year-end adjustments and the absence of notes).
Section 10.2 Certificates; Other Information. The Company will furnish to each Lender, through the Administrative Agent:
(a) concurrently with the delivery of its financial statements referred to inSection 10.1(a), a certificate of the independent certified public accountants certifying such financial statements, to the extent available pursuant to the policies and procedures of such independent certified public accountants, stating that in making the examination necessary therefor, no knowledge was obtained of any Default or Event of Default with respect toSection 11.1, except as specified in such certificate (which certificate may be limited by applicable accounting rules or guidelines);
(b) concurrently with the delivery of its financial statements referred to inSection 10.1(a) and(c), a certificate of a Responsible Officer of the Company, substantially in the form ofExhibit M (Form of Compliance Certificate)and if such certificate demonstrates an Event of Default of the covenant contained inSection 11.1, the Company may deliver together with such certificate, notice of its intent to cure (a “Notice of Intent to Cure”) such Event of Default pursuant toSection 12.2;
(c) within five days after the same are sent, copies of all financial statements and reports which the Company or any of its Subsidiaries and any Parent of the Company sends to holders of its publicly traded debt or equity securities, and within five days after the same are filed, copies of all financial statements and reports (including copies of all registration statements, proxy statements and regular and periodic reports, if any) which any of such Persons may make to, or file with, the Securities and Exchange Commission or any successor thereto;
(d) within 10 days following the last day of each fiscal quarter of the Company (commencing with the fiscal quarter ended December 31, 2006), a schedule listing (i) all Subsidiaries of the Company as of the last day of the fiscal quarter most recently ended, (ii) all Subsidiaries of the Company which have been acquired or created during the fiscal quarter then ended and (iii) all Persons which have ceased to be Subsidiaries of the Company during such prior fiscal quarter of the Company;
(e) at least 10 days prior to the issuance thereof, a certificate of a Responsible Officer of the Company as to the issuance of any letter of credit permitted bySection 11.2(m), which certificate shall include (i) the amount of such letter of credit (including, with respect to any such letter of credit that is denominated in a currency other than Dollars, the Equivalent in Dollars thereof), (ii) the stated expiry date thereof, (iii) the issuer thereof and (iv) the beneficiary thereof;
(f) promptly after the delivery of the same to the M&F Lender, any request for a borrowing of a M&F Loan; and
(g) promptly, such additional documents and financial and other information (including, without limitation, amendments to the Certificate of Incorporation and By-Laws of such Person) relating to REV Holdings and its Subsidiaries (or, at any time when REV Holdings ceases to have any significant Indebtedness, Revlon and its Subsidiaries) as any Agent, or any Lender acting through the Administrative Agent, may from time to time reasonably request.
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Section 10.3 Payment of Obligations. The Company will, and will cause each of its Subsidiaries to, pay, discharge or otherwise satisfy at or (to the extent not otherwise prohibited hereunder) before maturity or before they become delinquent, as the case may be, all its Indebtedness and other material obligations of whatever nature, except when the amount or validity thereof is then being contested in good faith by appropriate proceedings and reserves with respect thereto to the extent, if any, required by GAAP have been provided on the books of the Company or such Subsidiary, as the case may be. Notwithstanding anything to the contrary in the foregoing sentence, the Company shall not be in default under thisSection 10.3 unless the aggregate amount of non-contested Indebtedness or obligations which it and its Subsidiaries have so failed to pay, discharge or satisfy before they become delinquent and which remain delinquent at the time of determination is more than $10,000,000 (or, with respect to any other currency, the Equivalent thereof) in the aggregate.
Section 10.4 Conduct of Business and Maintenance of Existence. Except as permitted by this Agreement, the Company will continue to engage in business of the same general type as now conducted by it; and, except as permitted by this Agreement, the Company will, and will cause each of its Subsidiaries to, preserve, renew and keep in full force and effect its corporate existence and take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business, except as otherwise permitted pursuant toSections 11.5 and11.6, and comply with all Contractual Obligations and Requirements of Law except to the extent that all failures to comply therewith would not in the aggregate, be reasonably likely to have a Material Adverse Effect. The Company will not make any material change in its present method of conducting business. The Company will cause each of its Subsidiaries to engage primarily in no business other than the business of developing, manufacturing, distributing and/or selling (including marketing and advertising) beauty, skin care, fragrance, personal care and/or related products (or of holding properties incidental to such businesses).
Section 10.5 Maintenance of Property; Insurance. The Company will, and will cause each of its Subsidiaries to, (a) keep all property useful and necessary in its business in good working order and condition, except where the failure to do so would not, in the aggregate, be reasonably likely to have a Material Adverse Effect and (b) maintain with financially sound and reputable insurance companies insurance on such of its property and against such liabilities in at least such amounts and against at least such risks as are customarily insured against in the same general area by companies engaged in the same or a similar business and furnish to the Administrative Agent, upon written request, and to each Lender which makes a written request through the Administrative Agent, reasonable information as to the insurance carried.
Section 10.6 Inspection of Property; Books and Records; Discussions. The Company will, and will cause each of its Subsidiaries to, (a) keep proper books of accounts and records in which entries in conformity in all material respects with all Requirements of Law shall be made of all dealings and transactions in relation to its businesses and activities and which shall permit the preparation of financial statements in conformity with GAAP and (b) permit representatives of the Administrative Agent or the Collateral Agent to visit and inspect such of its properties during normal business hours as the Administrative Agent or Collateral Agent reasonably may request and (during such visit or inspection, or otherwise upon request by the Administrative Agent or Collateral Agent) examine and make abstracts from such of its books and records as it may reasonably request at any reasonable time and as often as may reasonably be desired, and to discuss the business, condition (financial or otherwise), performance, properties and prospects of the Company and its Subsidiaries with officers and employees of the Company and its Subsidiaries and with its then independent certified public accountants.
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Section 10.7 Notices. The Company will promptly give notice to the Administrative Agent and each Lender, through the Administrative Agent:
(a) of the occurrence of any Default or Event of Default;provided,however, that with respect to any Default or Event of Default arising underSection 12.1(q), the Company will give notice thereof to the Administrative Agent no later than the first Business Day after its becoming aware of the occurrence of any Default or Event of Default thereunder;
(b) of any default or event of default by the Company or any of its Subsidiaries under any Contractual Obligation of the Company or any of its Subsidiaries or the institution of, or the occurrence of any material adverse change, in the status or likely result of, any litigation, investigation or proceeding which may exist at any time between the Company or any of its Subsidiaries and any Governmental Authority or any other Person which, in any of the foregoing cases, would be reasonably likely to have a Material Adverse Effect;
(c) of any default or event of default by Revlon or (to its actual knowledge) REV Holdings, Revlon Holdings, M&FH, M&F, M&FG or Mafco Guarantor Corp. under any agreements or other instruments governing Indebtedness of such Person involving an aggregate amount in excess of $5,000,000 (or, with respect to any other currency, the Equivalent thereof);
(d) of (i) any violation or noncompliance by the Company or any of its Subsidiaries or, to the best of its knowledge, any other Person of any Environmental Laws which would be reasonably likely to have a Material Adverse Effect or (ii) any liability or potential liability to the Company or any of its Subsidiaries or, to the best of its knowledge, to any other Person under, any Environmental Laws which would be reasonably likely to have a Material Adverse Effect;
(e) of any of the following events, as soon as possible, and in any event, within 30 days after the Company knows or has reason to know thereof:
(i) the occurrence or expected occurrence of any Reportable Event with respect to any Plan; or
(ii) the institution of proceedings or the taking or expected taking of any other action by PBGC or the Company or any Commonly Controlled Entity to terminate, withdraw or partially withdraw from any Plan and with respect to a Multiemployer Plan, the Reorganization or Insolvency of such Plan;
if such Reportable Event, termination, withdrawal or partial withdrawal (and, in the case of any Multiemployer Plan, its Reorganization or Insolvency) would be reasonably likely to result in liability to the Company and the Guarantors, in the aggregate, in excess of $1,000,000;
(f) of a material adverse change in the business, condition (financial or otherwise), operations, performance, properties or prospects of the Company and its Subsidiaries taken as a whole, or of any event which would be reasonably likely to materially adversely affect the ability of the Company and its Subsidiaries taken as a whole to perform their obligations under the Loan Documents; and
(g) of the consummation of any transaction permitted bySection 11.8(e), which notices shall, in any event, be given within five Business Days thereafter.
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Each notice pursuant to thisSection 10.7 shall be accompanied by a statement of a Responsible Officer of the Company setting forth details of the occurrence referred to therein and stating what action the Company proposes to take with respect thereto.
Section 10.8 Maintenance of Corporate Identity. The Company will operate its businesses, and will cause its Subsidiaries to operate their respective businesses, and maintain their records, independently from any Person (a “Parent”) which, directly or indirectly, is in control (as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended) of the Company and independently from any Subsidiary of such Parent other than the Company and its Subsidiaries; and the Company will maintain bank accounts separate from the bank accounts of each Parent of the Company and act solely in its own corporate name and through its own authorized officers and agents.
Section 10.9 Environmental Laws. The Company will, and will cause each of its Subsidiaries to:
(a) Comply with and require compliance by all tenants and subtenants, if any, with all Environmental Laws and obtain and comply with and maintain, and require that all tenants and subtenants obtain and comply with and maintain, any and all licenses, approvals, registrations or permits required by Environmental Laws except to the extent that the failure to do so either individually or in the aggregate would not be reasonably likely to have a Material Adverse Effect; and
(b) Conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws and promptly comply with all orders and directives of all Governmental Authorities respecting Environmental Laws, except (i) to the extent that the failure to perform any obligations contained in thisclause (b) would not be reasonably likely to have a Material Adverse Effect or (ii) to the extent that such obligations are being contested in good faith by appropriate proceedings and provided that the pendency of any and all such proceedings would not be reasonably expected to have a Material Adverse Effect.
Section 10.10 Additional Guaranties. The Company will from time to time cause each Domestic Subsidiary thereof which has not previously done so to execute and deliver to the Administrative Agent duly executed supplements and amendments to the Guaranty, in each case, in form and substance satisfactory to the Administrative Agent. In the event that there shall be a change in law that eliminates the adverse tax consequences to the Company or any of its Subsidiaries that would have resulted on the date hereof (so that such consequences, if any, are immaterial) from the guaranty by any Foreign Subsidiary of the Payment Obligations, the Company will cause each of its Foreign Subsidiaries to execute and deliver to the Administrative Agent duly executed supplements and amendments to the Guaranty, in each case, in form and substance satisfactory to the Administrative Agent. Each such supplement or amendment shall be accompanied by such resolutions, incumbency certificates and legal opinions as are reasonably requested by the Administrative Agent and are in form and substance reasonably satisfactory to the Administrative Agent.
Section 10.11 Additional Stock Pledges.(a) The Company will, and will cause each of its Domestic Subsidiaries to, pledge to the Collateral Agent 100% of the issued and outstanding Stock and Stock Equivalents (other than directors’ qualifying shares) of each Domestic Subsidiary of the Company which has not previously been pledged hereunder. Such pledge shall be granted pursuant to duly executed joinders and amendments to the Pledge and
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Security Agreement and, if applicable, the other Security Documents, in each case in form and substance reasonably satisfactory to the Administrative Agent.
(b) The Company will, and will cause each of the Subsidiary Guarantors to, pledge to the Collateral Agent 66% (rounded downward to eliminate any fraction of a share) of the issued and outstanding shares of each class of Stock and Stock Equivalents entitled to vote (within the meaning of Treasury Regulation Section 1.956-2(c)(2)) (“Voting Stock”) and 100% of the issued and outstanding shares of each class of Stock and Stock Equivalents not entitled to vote (within the meaning of such regulation) (“Non-Voting Stock”) of each first-tier Foreign Subsidiary of the Company or such Subsidiary Guarantor which (in each case) is owned of record by the Company or such Subsidiary Guarantor and which has not previously been pledged hereunder;provided,however, that in no event shall the Company and the Subsidiary Guarantors pledge an aggregate amount of Voting Stock that exceeds 66% of the total outstanding Voting Stock (taken as a whole) of any first-tier Foreign Subsidiary of the Company or such Subsidiary Guarantor. Each such pledge shall be granted pursuant to duly executed joinders and amendments to the Pledge and Security Agreement and if applicable, the other Security Documents, in each case, as (x) the Administrative Agent deems necessary or advisable in order to effectively grant a valid, perfected and enforceable security interest in the Pledged Stock delivered thereto under the laws of the State of New York and, if such issuer of Pledged Stock is organized under the laws of the United Kingdom, Canada or Bermuda and, if requested by the Administrative Agent in its sole discretion exercised reasonably and in accordance with customary business practices for comparable financing transactions, such other jurisdiction in which the issuer of such Pledged Stock is organized to the extent such jurisdiction constitutes, directly or indirectly, one of the top five net revenue generating markets of the Company and its Subsidiaries and (y) is in form and substance reasonably satisfactory to the Administrative Agent. Notwithstanding the foregoing, unless either the Administrative Agent or the Required Lenders shall at any time otherwise reasonably request, no such pledge shall be required pursuant to thisSection 10.11(b) with respect to the Stock and Stock Equivalents of any first-tier Foreign Subsidiary listed onSchedule 8.13(b) which is not pledged on the Closing Date or is acquired or formed after the date hereof and either (A) is listed onSchedule 8.13(b) as being slated for liquidation, dissolution or merger or (B) does not have assets in excess of $5,000,000 (or, with respect to any other currency, the Equivalent thereof).
(c) Each joinder and amendment to the Pledge and Security Agreement and the other Security Documents required to be executed and delivered pursuant to thisSection 10.11 shall be promptly executed and delivered after the organization, acquisition or identification of any such Subsidiary Guarantor or first-tier Foreign Subsidiary and shall be accompanied by share certificates evidencing the Pledged Stock thereunder (to the extent that such Pledged Stock is certificated), together with an undated stock power for each such share certificate (duly executed in blank and delivered by a duly authorized officer of the pledgor of the Pledged Stock represented by such certificate). Each joinder and amendment to the Pledge and Security Agreement and the other Security Documents executed and delivered pursuant to thisSection 10.11 shall be accompanied by (i) in the case of the pledge of Stock or Stock Equivalents of any Foreign Subsidiary, evidence of the taking of all such other actions as may be necessary or appropriate for the perfection and first priority of such pledge, and (ii) in the case of any Subsidiary, such resolutions, incumbency certificates and legal opinions as are reasonably requested by the Administrative Agent and shall otherwise be in form and substance reasonably satisfactory to the Administrative Agent.
(d) In the event that there shall be a change in law that eliminates the adverse tax consequences to the Company or any of its Subsidiaries that would have resulted on the date
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hereof (so that such consequences, if any, are immaterial) from the pledge of 66-2/3% or more of the Voting Stock of any Foreign Subsidiary, the Company will, and will cause each of its Subsidiaries to, (i) pledge such additional amount of shares of such Voting Stock (with respect to each Foreign Subsidiary the Voting Stock of which then is pledged hereunder) and (ii) notwithstanding the provisions ofSection 10.11(b), pledge the maximum amount of shares of such Voting Stock (with respect to each Foreign Subsidiary the Voting Stock of which is pledged thereafter), in each case which can be so pledged without the incurrence of adverse tax consequences and take or cause to be taken such further action as the Administrative Agent may reasonably request (including, without limitation, the delivery of legal opinions) in order to perfect its security interest in such stock.
Section 10.12 Additional Collateral. The Company will cause each of its Subsidiary Guarantors which has not previously done so to execute and deliver to the Administrative Agent duly executed joinders and amendments to the Pledge and Security Agreement and, if applicable, the other Security Documents, in each case, in form and substance reasonably satisfactory to the Administrative Agent, and to take such other action as reasonably shall be necessary or as the Administrative Agent reasonably shall request to grant to the Collateral Agent a valid and enforceable first priority perfected security interest in all Collateral of such Subsidiary Guarantor (subject to any Liens permitted bySection 11.3). Each such joinder and amendment shall be accompanied by such evidence of the taking of all actions as may be necessary or appropriate for the perfection and first priority of such security interest (including, without limitation, the filing of any necessary Uniform Commercial Code financing statements) and such resolutions, incumbency certificates and legal opinions as are reasonably requested by the Administrative Agent, all of which shall be in form and substance reasonably satisfactory to the Administrative Agent.
Section 10.13 Asset Transfers.(a) Each of the Company and the Subsidiary Guarantors will grant to the Collateral Agent a first priority, perfected security interest (subject to any Liens thereon which are permitted to encumber the relevant asset pursuant toSection 11.3) in all properties and assets (whether tangible or intangible) of a type that constitutes Collateral under any Security Document to which the Company or any Subsidiary Guarantor is a party which are sold, transferred, conveyed or otherwise distributed to the Company or any such Subsidiary Guarantor (including, without limitation, by way of merger or consolidation) from any Subsidiary of the Company simultaneously with the effectiveness of such sale, transfer, conveyance or other distribution.
(b) The Company and each Subsidiary Guarantor will take such action from time to time as is necessary (or otherwise reasonably requested by the Administrative Agent) to ensure that the Collateral Agent at all times holds a perfected security interest in all Collateral under the Security Documents, except as otherwise permitted hereunder.
Section 10.14 Intellectual Property.(a) The Company will, and will cause each of the Subsidiary Guarantors to, take such action as is necessary (or as otherwise is reasonably requested by the Administrative Agent) in order to grant to the Collateral Agent a first priority, perfected security interest in any copyright registration in which the Company or any of the Subsidiary Guarantors may from time to time obtain any interest.The Company will submit, and will cause each Subsidiary Guarantor to submit, to the Administrative Agent, by each January 31st and July 31st of each year following the Closing Date, commencing January 31, 2007 (or, if the Administrative Agent reasonably so requests in writing, more often;provided,however, that, except during such time as a Default or Event of Default has occurred and is continuing, the Administrative Agent shall not so request more frequently than monthly), a Copyright Security
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Agreement (substantially in the form attached to the Pledge and Security Agreement or such other form reasonably acceptable to the Administrative Agent) confirming the security interest of the Collateral Agent in any Copyright acquired or with respect to which the Company or any Subsidiary Guarantor filed an application for copyright registration during the two prior calendar quarters, duly executed and in proper form for recordation in the United States Copyright Office.
(b) The Company will, to the extent permitted by Title 15 of the United States Code, submit, and will cause each Subsidiary Guarantor to submit, to the United States Patent and Trademark Office for registration or recordation, as applicable:
(i) a completed application for trademark registration, in such class or classes as is in conformity with its ordinary business practice then in effect, of each Trademark acquired or adopted and used or intended to be used by it, with respect to any mark which, in the Company’s reasonable judgment, is a Significant Trademark;provided,however, that within 30 days after receipt of notice from the Administrative Agent, the Company shall, or shall cause the applicable Subsidiary Guarantor to, submit to the United States Patent and Trademark Office for registration a completed application for trademark registration, in such class or classes as is in conformity with its ordinary business practice then in effect, of any Trademark acquired or adopted and used or intended to be used by it, with respect to any mark which the Required Lenders reasonably deem to be of such significance as to require the Company or such Subsidiary Guarantor to take such steps as may be necessary or desirable to grant to the Collateral Agent a perfected, first priority security interest in such Trademark to the extent that it has any ownership interest in such Trademark which is registerable by it under trademark or other applicable law; and
(ii) with respect to any interest acquired after the date hereof by the Company or any of its Subsidiaries in a Significant Trademark, any appropriate assignment to the Company or such Subsidiary Guarantor of the interest acquired by it in the United States in such Significant Trademark, including, without limitation, all previously unrecorded assignments to the Company’s or such Subsidiary Guarantor’s predecessors-in-interest of which the Company or any Subsidiary Guarantor is or becomes aware.
The Company will, and will cause each Subsidiary Guarantor to, use its respective commercially reasonable best efforts to comply with all requirements of the Lanham Act and the rules and regulations thereunder, as from time to time in effect, or other applicable law necessary in order to validly register and maintain the registration of any such Significant Trademark with the United States Patent and Trademark Office, except as permitted pursuant toSections 10.4, 11.5 and 11.6 hereof. The Company will submit, and will cause each Subsidiary Guarantor to submit, to the Administrative Agent, by each January 31st and July 31st of each year following the Closing Date, commencing January 31, 2007 (or, if the Administrative Agent reasonably so requests in writing, more often;provided,however, that, except during such time as a Default or Event of Default has occurred and is continuing, the Administrative Agent shall not so request more frequently than monthly), a Trademark Security Agreement (substantially in the form attached to the Pledge and Security Agreement or such other form reasonably acceptable to the Administrative Agent) confirming the security interest of the Collateral Agent in any Trademark acquired or with respect to which the Company or any Subsidiary Guarantor filed an application for trademark registration during the two prior calendar quarters, duly executed and in proper form for recordation in the United States Patent and Trademark Office.
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(c) The Company will, to the extent permitted by Title 35 of the United States Code, submit, and will cause each Subsidiary Guarantor to submit, to the United States Patent and Trademark Office for issuance or recordation, as applicable:
(i) an application for letters patent for each patentable invention acquired by or invented by or for it which invention is of such a nature that the Company or its Subsidiaries, in accordance with its ordinary business practice then in effect, would file a patent application in the United States Patent and Trademark Office with respect to it; and
(ii) with respect to any interest acquired after the date hereof by the Company or any of its Subsidiaries in a Patent, any appropriate assignment to the Company or such Domestic Subsidiary of the interest acquired by it in the United States in such Patent, including, without limitation, all previously unrecorded assignments to the Company’s or such Domestic Subsidiary’s predecessors-in-interest of which the Company or any Subsidiary Guarantor is or becomes aware.
The Company will, and will cause each Subsidiary Guarantor to, use its respective commercially reasonable best efforts to comply with all requirements of the United States Patent Act and the rules and regulations thereunder, as from time to time in effect, or other applicable law necessary in order to validly obtain and maintain any Patent with the United States Patent and Trademark Office, except as permitted pursuant toSections 10.4, 11.5 and11.6 hereof. The Company will submit, and will cause each Subsidiary Guarantor to submit, to the Administrative Agent, by each January 31st and July 31st of each year following the Closing Date, commencing January 31, 2007 (or, if the Administrative Agent reasonably so requests in writing, more often;provided,however, that, except during such time as a Default or Event of Default has occurred and is continuing, the Administrative Agent shall not so request more frequently than monthly), a Patent Security Agreement (substantially in the form attached to the Pledge and Security Agreement or such other form reasonably acceptable to the Administrative Agent) confirming the security interest of the Collateral Agent in any Patent acquired or with respect to which the Company or any Subsidiary Guarantor filed an application for letters patent during the two prior calendar quarters, duly executed and in proper form for recordation in the United States Patent and Trademark Office.
(d) Notwithstanding anything to the contrary contained in thisSection 10.14, the Company and its Subsidiaries shall have the right to license their respective Patents and Trademarks to third parties on an arms’ length basis;provided,however, that, except with respect to Trademarks and Patents which constitute Disposition Assets or with respect to which the only substantial use by the Company and its Subsidiaries is in connection with a business constituting a Disposition Asset, that any such license of (i) a Trademark shall be for use with respect to products which are not reasonably likely to be competitive with those produced and/or marketed by the Company and its Subsidiaries and (ii) a Patent shall be for applications which would not be reasonably likely to diminish the value of any product line of the Company and its Subsidiaries, except for, in the case of each ofclause (i) and(ii), licenses or cross-licenses granted by the Company or any such Subsidiary in connection with the settlement or other disposition of litigation or other disputes with respect to Patents or Trademarks,provided,however, that such licenses or cross-licenses shall be granted (x) in the reasonable business judgment of the Company or any such Subsidiary, or (y) as may be required by any Governmental Authority having jurisdiction over any such litigation or dispute. The Administrative Agent and each Lender hereby acknowledges and agrees that any security interest held by the Collateral Agent in any Patent or Trademark which is licensed in accordance with the provisions of thisSection
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10.14(d) shall be subordinate to such license agreement and each Lender hereby instructs the Administrative Agent to execute and deliver such instruments, documents and agreements as the Company reasonably may request in order to confirm such subordination.
Section 10.15 Additional Mortgages. With respect to any fee interest in any real property located in the United States having a value (together with improvements thereon) of at least $7,500,000 acquired after the Closing Date by the Company or any of its Domestic Subsidiaries, the Company or such Subsidiary shall promptly (and in any event within 45 days after (x) the acquisition thereof or (y) in the case of costs and expenses referred to inclause (c) below, the receipt of an invoice in respect thereof) (a) execute and deliver a first-priority and a second-priority Mortgage, in favor of the Collateral Agent, for the benefit of the holders of the Secured Obligations, covering such real property (subject to Customary Permitted Liens, Liens securing the Multi-Currency Payment Obligations and Designated Eligible Obligations as provided by the Intercreditor Agreement and other Liens approved by the Administrative Agent), (b) if requested by the Administrative Agent, provide all Mortgage Supporting Documents relating thereto and (c) pay all costs and expenses associated with the foregoing.
Section 10.16 Post-Closing Matters.The Company shall, and shall cause each of its Subsidiaries to, deliver each of the documents, instruments and agreements set forth onSchedule 10.16 within the time periods set forth on such Schedule.
Section 10.17 [Intentionally Omitted.]
Section 10.18 Tax Reporting. Promptly after the Company determines that it intends to treat the Loans and the related transactions contemplated hereby as a “reportable transaction” (within the meaning of Treasury Regulation Section 1.6011-4), the Company shall give the Administrative Agent written notice thereof and shall deliver to the Administrative Agent all U.S. Internal Revenue Service forms required in connection therewith.
Section 10.19 Control Accounts; Approved Deposit Accounts.
(a) The Company shall, and shall cause each of the Subsidiary Guarantors to, except cash or Cash Equivalents subject to a Lien permitted underSection 11.3(c),(d),(p) or(q), (i) deposit in an Approved Deposit Account all cash and all Proceeds of any Account or General Intangible they receive from any other Person, (ii) not maintain any funds or other assets in any Securities Account that is not a Control Account and (iii) not establish or maintain any Deposit Account other than with a Deposit Account Bank;provided,however, that the Company and each of its Subsidiaries may deposit cash into and maintain (A) payroll, benefits, withholding tax, escrow, customs and other fiduciary accounts and (B) other accounts as long as the aggregate balance in all such other accounts does not exceed $5,000,000 at any time.
(b) The Administrative Agent may establish one or more Cash Collateral Accounts with such depositaries and Securities Intermediaries as it in its sole discretion shall determine to the extent expressly contemplated in any Loan Document and shall (or direct the Collateral Agent to) apply the all funds on deposit in such Cash Collateral Account as so contemplated. Funds on deposit in any Cash Collateral Account may be invested (but the Administrative Agent shall be under no obligation to make any such investment) in Cash Equivalents at the direction of the Administrative Agent and, except during the continuance of an Event of Default, the Administrative Agent agrees with the Company to direct the Collateral Agent to issue Entitlement Orders for such investments in Cash Equivalents as requested by the
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Company;provided,however, that neither Administrative Agent nor the Collateral Agent shall have any responsibility for, or bear any risk of loss of, any such investment or income thereon.
NEGATIVE COVENANTS
The Company hereby agrees that, until the Payment Obligations are Fully Satisfied:
Section 11.1 Financial Covenant. The Company will not permit the Senior Secured Leverage Ratio of the Company and its Subsidiaries for the period of four consecutive fiscal quarters of the Company ending during any period set forth below to be more than the amount set forth opposite such period:
Period | Senior Secured Leverage Ratio |
| December 31, 2006 through September 30, 2008 | 5.50 to 1.00 |
| December 31, 2008 and each fiscal quarter thereafter | 5.00 to 1.00 |
Section 11.2 Indebtedness. The Company will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness, except for:
(a) Indebtedness in respect of the Payment Obligations;
(b) Indebtedness under the Senior Notes Indenture in respect of the Existing Senior Notes and Indebtedness under the Subordinated Notes Indenture, and any Indebtedness resulting from the refinancing of any such Indebtedness, or the refinancing of any of the Term Loans in whole or in part (subject to the payment of any applicable Prepayment Fee);provided,however, that (i) the primary obligor with respect to any such refinancing Indebtedness is the same as the primary obligor on the Indebtedness refinanced thereby and (except in the case of any Permitted Third Lien Financing) any contingent obligor of such refinancing Indebtedness was or would have been required to be a contingent obligor of the Indebtedness refinanced thereby (except to the extent that such primary obligor and/or contingent obligor may be substituted by a new primary obligor or contingent obligor, as the case may be, which has no material assets other than assets which, immediately prior to such substitution, constituted the assets of the original primary obligor and/or contingent obligor), (ii) the principal amount of any such refinancing Indebtedness (as determined as of the date of the incurrence of such refinancing Indebtedness in accordance with GAAP) does not exceed the principal amount of the Indebtedness refinanced thereby together with any premium actually paid thereon and reasonable costs and expenses (including underwriting discounts) incurred in connection with such refinancing Indebtedness, (iii) the interest rate applicable to such refinancing Indebtedness shall not be less favorable to the obligor than it would obtain in an arm’s length transaction with a Person that is not an Affiliate thereof and shall reflect the prevailing market conditions at the time of such refinancing, (iv) such refinancing Indebtedness does not have any scheduled installments of principal thereof due prior
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to the date that is six months after the Term Loan Maturity Date, (v) with respect to each issue of refinancing Indebtedness in excess of $5,000,000 (or, with respect to any other currency, the Equivalent thereof) in the aggregate, either (A) the covenants, defaults and similar provisions applicable to such refinancing Indebtedness or obligations are no more restrictive, taken as a whole, than the provisions contained in and otherwise consistent with market terms of agreements governing comparable Indebtedness of similar companies in the high yield market at the time of such refinancing and do not conflict with the provisions of this Agreement, provided, that a certificate of a Responsible Officer delivered to the Administrative Agent at least five Business Days prior to the incurrence of such refinancing Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of the documentation relating thereto, stating that the Company has determined in good faith that such terms and conditions satisfy the foregoing requirement shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement and the requirement underclause (iii) above unless the Administrative Agent notifies the Company within such five Business Day period that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees), or (B) such refinancing Indebtedness is otherwise upon terms and subject to definitive documentation which is in form and substance reasonably satisfactory to the Administrative Agent, (vi) if the Indebtedness being refinanced is Indebtedness under the Subordinated Notes Indenture, such refinancing Indebtedness shall be (A) subordinated to the Payment Obligations on terms that are reasonably satisfactory to the Administrative Agent (it being understood that subordination terms substantially similar to those applicable to the Subordinated Notes are deemed to be satisfactory) or (B) pursuant to a Permitted Third Lien Financing and (vii) such refinancing Indebtedness shall be unsecured unless pursuant to a Permitted Third Lien Financing.
(c) Indebtedness (i) of the Company owing to any of its wholly-owned Subsidiaries, (ii) of any wholly-owned Subsidiary of the Company owing to any other wholly-owned Subsidiary of the Company and (iii) of any wholly-owned Subsidiary of the Company owing to the Company;provided,however, in each case, that the aggregate principal amount of such Indebtedness of any Subsidiary that is not a Guarantor incurred after the date hereof shall be subject toSection 11.8(j);
(d) Indebtedness of any Foreign Subsidiary or any foreign branch of a Domestic Subsidiary principally doing business outside of the United States (including, without limitation, Indebtedness on account of letters of credit not issued under the Existing Credit Agreement) incurred for working capital purposes (and, without duplication, any Contingent Obligation of the Company in respect thereof) in an aggregate principal amount at any time outstanding not exceeding for the Foreign Subsidiaries and foreign branches of Domestic Subsidiaries in the aggregate $50,000,000 (or, with respect to any other currency, the Equivalent in Dollars thereof);provided,however, that for purposes of thisSection 11.2(d), such aggregate principal amount shall not include (x) an amount equal to the aggregate principal amount of Indebtedness of the Foreign Subsidiaries and foreign branches of Domestic Subsidiaries to any bank which is offset by compensating balances at such bank (which Indebtedness shall be permitted hereunder) and (y) Indebtedness otherwise permitted by thisSection 11.2;
(e) Indebtedness of the Company to Affiliates in respect of Capital Contribution Notes which evidence cash amounts actually received by the Company from such Affiliates on account of Capital Contributions;
(f) Indebtedness to employees or former employees of the Company or any of its Subsidiaries in the nature of deferred compensation;
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(g) Indebtedness of the Company and its Subsidiaries under Interest Rate Agreements which are in existence on the date hereof, and other Indebtedness of the Company and its Subsidiaries under Interest Rate Agreements, which (i) have a tenor which is not in excess of six years, (ii) are not leveraged, (iii) are in an aggregate notional amount (net of any offsetting economic positions among such Interest Rate Agreements) not to exceed $300,000,000 at any one time outstanding (including, without limitation, all Interest Rate Agreements in effect on the date hereof) and (iv) have the sole purpose of hedging interest rate exposure of the Company and its Subsidiaries;
(h) Hedging Contracts of the Company and its Subsidiaries entered into in the ordinary course of business of the Company and its Subsidiaries for the purpose of providing foreign exchange for their respective operating requirements or of hedging currency exposure;
(i) unsecured Indebtedness of the Company to an M&F Lender in an aggregate amount not to exceed $152,000,000 at any one time outstanding (as may be increased due to the accrual and capitalization of interest) (the “Permitted M&F Loan Amount”), consisting of Indebtedness in respect of (i) the M&F Consolidated Line of Credit and (ii) any refinancing or replacement of, or addition to, any such Indebtedness (whether upon repayment of such Indebtedness or at any time thereafter) in an aggregate principal amount not to exceed the Permitted M&F Loan Amount on terms and conditions (taken as whole) that are no less favorable to the Company or the Lenders than the terms and conditions of the M&F Loans as in effect on the Closing Date (taken as a whole);provided,however, that such Indebtedness may be refinanced or replaced by any Person other than an M&F Lender (or any Affiliate thereof) to the extent (A) the final maturity date for such refinancing Indebtedness shall be at least 90 days after the Term Loan Maturity Date, (B) the aggregate principal amount of any Indebtedness permitted under thisclause (i)shall not exceed the Permitted M&F Loan Amount and (C) the covenants, defaults and similar provisions applicable to such refinancing Indebtedness or obligations are no more restrictive, taken as a whole, than the provisions contained in and otherwise consistent with market terms of agreements governing Indebtedness of similar companies in the high yield market at the time of such refinancing and do not conflict with the provisions of this Agreement; provided, that a certificate of a Responsible Officer delivered to the Administrative Agent at least five Business Days prior to the incurrence of such refinancing Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of the documentation relating thereto, stating that the Company has determined in good faith that such terms and conditions satisfy the foregoing requirement shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement unless the Administrative Agent notifies the Company within such five Business Day period that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees);
(j) Indebtedness of the Company or any of its Subsidiaries in the nature of guarantees as referred to inclause (k) of the definition of “Indebtedness” inSection 1.1 which is permitted bySection 11.3(m);
(k) Indebtedness of any Foreign Subsidiary or a foreign branch of a Domestic Subsidiary principally doing business outside of the United States to any Person (other than an Affiliate of the Company), in an aggregate principal amount at any one time outstanding not to exceed $50,000,000 (or with respect to any other currency, the Equivalent in Dollars thereof);provided,however, that, such Indebtedness (i) is not guaranteed by the Company (except to the extent that the Lien permitted bySection 11.3(m), in itself, constitutes a guarantee) and (ii) is either offset or secured by a counterpart deposit, compensating balance or a pledge of cash
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deposit;provided,further, that such counterpart deposit, compensating balance or cash deposit pledge does not constitute Collateral (as defined in any Security Document) or any of the Unpledged International Property;
(l) Capital Lease Obligations and purchase money Indebtedness of the Company or any of its Subsidiaries to finance the acquisition of capital assets;provided,however, that the Dollar Equivalent of the aggregate outstanding principal amount of all such Capital Lease Obligations and purchase money Indebtedness shall not exceed $35,000,000 at any time;
(m) Indebtedness to any Person (other than an Affiliate of the Company) in respect of the undrawn portion of the face amount of or unpaid reimbursement obligations in respect of letters of credit not issued under the Existing Credit Agreement for the account of the Company or any of its Subsidiaries in an aggregate amount at any one time outstanding not to exceed $30,000,000 (or with respect to any other currency, the Equivalent in Dollars thereof);provided,however, that such Indebtedness is offset or secured by a counterpart deposit, compensating balance or a pledge of cash deposits;
(n) [intentionally omitted]
(o) additional Indebtedness in an aggregate principal amount not to exceed $200,000,000 at any one time outstanding;provided,however, that such Indebtedness shall be unsecured at all times during the term of this Agreement;
(p) Indebtedness incurred in connection with financing Permitted Acquisitions or any refinancing of Indebtedness under this clause (p);provided,however, that any Indebtedness pursuant to this clause (p) shall be (i) unsecured at all times during the term of this Agreement and (ii) subordinated to the Payment Obligations on terms that are reasonably satisfactory to the Administrative Agent (it being understood that subordination terms substantially similar to those applicable to the Subordinated Notes are deemed to be satisfactory); and
(q) Indebtedness under the Existing Credit Agreement, any Facilities Increase (as defined in the Existing Credit Agreement) and any Indebtedness resulting from the refinancing of such Indebtedness;provided,however, that (i) the aggregateprincipal amount of any Indebtedness permitted under this clause (q)at any time outstanding shall not exceed $210,000,000, (ii) the primary obligor with respect to any such refinancing Indebtedness is the same as the primary obligor on the Indebtedness refinanced thereby and any contingent obligor of such refinancing Indebtedness was or would have been required to be a contingent obligor of the Indebtedness refinanced thereby, (iii) the interest rate applicable to such refinancing Indebtedness shall not be less favorable to the obligor than it would obtain in an arm’s length transaction with a Person that is not an Affiliate thereof and shall reflect the prevailing market conditions at the time of such refinancing, (iv) such refinancing Indebtedness does not have a final maturity prior to the Term Loan Maturity Date, (v) the covenants, defaults and similar provisions applicable to such refinancing Indebtedness or obligations are no more restrictive, taken as a whole, than the provisions contained in the credit agreement referred to inclause (i)of the definition of “Existing Credit Agreement” and do not conflict with the provisions of this Agreement,provided, that a certificate of a Responsible Officer delivered to the Administrative Agent at least five Business Days prior to the incurrence of such refinancing Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of the documentation relating thereto, stating that the Company has determined in good faith that such terms and conditions satisfy the foregoing requirement and the requirement inclause (iii) above
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shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement unless the Administrative Agent notifies the Company within such five Business Day period that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees),and (vi) such refinancing indebtedness is subject to an intercreditor agreement on termsreasonablysatisfactory to the Administrative Agent (it being understood that terms substantially similar to those applicable to the Existing Credit Agreement under the Intercreditor Agreement are deemed to be satisfactory);
provided,however, that in no event may the Company or any of its Subsidiaries incur any Indebtedness to REV Holdings or RPH.
Section 11.3 Limitation on Liens. The Company will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any of their properties, assets (including shares of stock) or revenues, whether now owned or hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested in good faith and by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of the Company or any of its Subsidiaries, as the case may be, in accordance with GAAP;
(b) carriers’, warehousemens’, mechanics’, materialmens’, repairmens’ or other like Liens arising in the ordinary course of business which are not overdue for a period of more than 45 days or which are being contested in good faith and by appropriate proceedings;
(c) pledges or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation;provided,however, that no such Lien shall encumber any Collateral (other than cash or Cash Equivalents) under any of the Security Documents or any of the Unpledged International Property;
(d) deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business,provided,however, that no such Lien shall encumber any Collateral (other than cash or Cash Equivalents) under any of the Security Documents or any of the Unpledged International Property;
(e) easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business which, in the aggregate, are not substantial in amount, and which do not in any case materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the business of the Company or any of its Subsidiaries;
(f) Liens in favor of the United States of America for amounts paid by the Company or any of its Subsidiaries as progress payments under government contracts entered into by them;provided,however, that no such Lien shall encumber any Collateral under any of the Security Documents or any of the Unpledged International Property;
(g) Liens existing on the date of this Agreement which are disclosed in the title insurance policies delivered pursuant toSection 9.1(d) orSchedule 11.3;
(h) Liens under the Security Documents (including, without limitation, Liens which secure Designated Eligible Obligations as provided for in the Intercreditor Agreement) or any other Lien securing all or any portion of the Payment Obligations, the Multi-Currency
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Payment Obligations or any refinancings thereof permitted bySection 11.2(q), or Designated Eligible Obligations as provided for in the Intercreditor Agreement;
(i) attachment, judgment or other similar Liens arising in connection with court or arbitration proceedings; provided,however, that the same are discharged, or that execution or enforcement thereof is stayed pending appeal, within 30 days or (in the case of any execution or enforcement pending appeal) such lesser time during which such appeal may be taken;
(j) other Liens incidental to the conduct of the business of the Company and its Subsidiaries or the ownership of any of their assets not incurred in connection with Indebtedness or Contingent Obligations, which Liens do not in any case materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the business of the Company or any of its Subsidiaries;provided,however, that no such Lien shall encumber any Collateral under any Security Document or any of the Unpledged International Property;
(k) Liens securing any Indebtedness permitted bySection 11.2(d) or any Liens replacing such permitted Liens; provided,however, that (i) no such Lien shall encumber any asset of the Company or any of its Subsidiaries organized under the laws of a jurisdiction within the United States or any Collateral under any Security Document or any of the Unpledged International Property and (ii) any such Lien which secures reimbursement obligations under letters of credit not issued under the Existing Credit Agreement shall be limited to (A) the assets acquired or shipped with the support of such letter of credit and (B) any assets of a Foreign Subsidiary which are in the care, custody or control of such issuer of such letter of credit in the ordinary course of business;
(l) Liens securing any Indebtedness permitted bySection 11.2(g),Section 11.2(h) or obligations of any Foreign Subsidiary or a foreign branch of any Domestic Subsidiary principally doing business outside of the United States in respect of treasury, depository, overdraft and other cash management arrangements maintained with any Lender, any Multi-Currency Lender, any Affiliate of a Lender or a Multi-Currency Lender or any other Person reasonably acceptable to the Administrative Agent or any Liens replacing such permitted Liens;provided,however, that no such Lien shall encumber any asset of the Company or any of its Subsidiaries organized under the laws of a jurisdiction within the United States or any Collateral under any Security Document or any of the Unpledged International Property;
(m) Liens in the nature of counterpart deposits or pledges of cash deposits of the Company or any of its Subsidiaries to secure Indebtedness of Foreign Subsidiaries of the Company or a foreign branch of a Domestic Subsidiary principally doing business outside of the United States, which Indebtedness is permitted pursuant toSection 11.2(k)); provided,however, that no such Lien shall encumber any Collateral under any of the Security Documents or any of the Unpledged International Property;
(n) possessory Liens in favor of securities intermediaries, commodity intermediaries, brokers and dealers arising in connection with the acquisition or disposition of investments of the type permitted bySection 11.8;provided,however, that such Liens (i) attach only to such investments and (ii) secure only obligations incurred in the ordinary course and arising in connection with the acquisition or disposition of such investments and not any obligation in connection with margin financing; andprovided,further, that such Liens attach only to the property of the Company or its Subsidiary, as the case may be, for whose account any such obligations have been incurred;
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(o) purchase money Liens granted by the Company or any of its Subsidiaries (including the interest of a lessor under a Capital Lease and purchase money Liens to which any property is subject at the time, on or after the date hereof, of the Company’s or such Subsidiary’s acquisition thereof) securing Indebtedness permitted underSection 11.2(l) and limited in each case to the property purchased with the proceeds of such purchase money Indebtedness or subject to such Capital Lease (or proceeds thereof or additional property in the nature of improvements thereto);
(p) Liens in the nature of counterpart deposits or pledges of cash deposits of the Company or any of its Subsidiaries to secure Indebtedness permitted pursuant toSection 11.2(m);provided,however, that the amount of any such deposit does not exceed the amount of the Indebtedness it secures;
(q) additional Liens incurred in the ordinary course of business of the Company and its Subsidiaries securing Indebtedness or other obligations of the Company and/or any of its Subsidiaries (other than such Indebtedness or other obligation owing to an Affiliate of the Company) not to exceed $10,000,000 (or, with respect to any other currency, the Equivalent thereof) in the aggregate at any one time outstanding; provided,however, that no such Lien shall encumber any Collateral (other than cash or Cash Equivalents) under any of the Security Documents or any of the Unpledged International Property; and
(r) Liens securing any Permitted Third Lien Financing.
Section 11.4 Limitation on Contingent Obligations. The Company will not, and will not permit any of its Subsidiaries to, agree to, or assume or incur, or otherwise in any way be or become responsible or liable, directly or indirectly, with respect to, any Contingent Obligation, except for:
(a) the Guaranty;
(b) Contingent Obligations set forth onSchedule 11.4;
(c) any Contingent Obligation of the Company in the nature of a guarantee in the ordinary course of business of any Indebtedness or other obligations of any of its Subsidiaries permitted under this Agreement;
(d) any Contingent Obligation of any Subsidiary of the Company in the nature of a guarantee in the ordinary course of business of any Indebtedness or other obligations of any of the Subsidiaries of such Subsidiary permitted under this Agreement;
(e) any Contingent Obligation of any Subsidiary of the Company in the nature of a guarantee in the ordinary course of business of Indebtedness (other than the Subordinated Notes, the Existing Senior Notes or any Indebtedness referred to inSection 11.2(b) that is not permitted to have such Contingent Obligation by the terms of suchSection 11.2(b)) or other obligations of the Company or any other Subsidiary of the Company;
(f) any Contingent Obligation of the Company or any of its Subsidiaries in the nature of a guarantee of Indebtedness of any Permitted Joint Venture;provided,however, that the incurrence of such Contingent Obligation is permitted bySection 11.8(e) orSection 11.8(k); and
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(g) any Contingent Obligation of the Company or any of its Subsidiaries in the nature of a guarantee of Indebtedness of officers and directors of the Company and its Subsidiaries in the ordinary course of business;provided,however, that the sum of the aggregate principal amount of the Indebtedness so guaranteed and the aggregate principal amount of all then outstanding loans permitted bySection 11.8(f) does not exceed $7,000,000 at any one time outstanding.
Section 11.5 Limitation on Fundamental Changes. The Company will not, and will not permit any of its Subsidiaries to, enter into any transaction in the nature of merger or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), convey, sell, lease, assign, transfer (including any transfer, relocation, situation or registration of any asset owned by any Loan Party to the Commonwealth of Australia other than in the ordinary course of business) or otherwise dispose of, in one transaction or a series of related transactions, all or a substantial part of the business or assets of the Company, or enter into any such transaction or series of related transactions with regard to a group of Subsidiaries which, if merged into a single Subsidiary, would constitute a substantial part of the business or assets of the Company, or acquire by purchase or otherwise all or substantially all the business or assets of, or stock or other evidences of beneficial ownership of, any Person, except that during such time as no Specified Default or Event of Default has occurred and is continuing (or would result therefrom):
(a) the Company and its Subsidiaries may engage in Permitted Intercompany Transfers; and
(b) the Company and any of its Subsidiaries may engage in transactions permitted underSection 11.6 or Section 11.8(d),(e), (i) or (k).
Section 11.6 Limitation on Sale of Assets. The Company will not, and will not permit any of its Subsidiaries to, sell, lease, assign, transfer or otherwise dispose of any of its assets (including, without limitation, receivables and leasehold interests), whether now owned or hereafter acquired, or, in the case of any of the Subsidiaries of the Company, issue any Stock or Stock Equivalents (other than any director’s qualifying shares), to any Person, except:
(a) sales, transfers and other dispositions by the Company and its Subsidiaries of (i) obsolete or worn out property in the ordinary course of business or (ii) contemplated byclause (b)(ii) of the definition of “Net Proceeds Event”;
(b) sales, transfers and other dispositions of property (including, without limitation, inventory) by the Company and its Subsidiaries to third parties in the ordinary course of business for fair market value;
(c) during such time as no Specified Default or Event of Default has occurred and is continuing (or would result therefrom), Permitted Intercompany Transfers;
(d) during such time as no Specified Default or Event of Default has occurred and is continuing (or would result therefrom), any Specified Dispositions for fair market value (which property, in the aggregate, the Company hereby represents and warrants is not material to the conduct of the business of the Company and its Subsidiaries);
(e) during such time as no Specified Default or Event of Default has occurred and is continuing (or would result therefrom), sales, transfers and other dispositions of
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assets of the Company and its Subsidiaries to Permitted Joint Ventures in accordance with the provisions of Section 11.8;
(f) during such time as no Specified Default or Event of Default has occurred and is continuing (or would result therefrom), any Resale Transactions to Persons other than Affiliates for fair market value;
(g) other sales, transfers and other dispositions by the Company and its Subsidiaries which are permitted bySection 10.14,11.3 or11.5; and
(h) sales, transfers and other dispositions by the Company and its Subsidiaries of assets with an aggregate fair market value not to exceed (i) $50,000,000 in the calendar year ending December 31, 2006 and (ii) $25,000,000 in any calendar year thereafter;provided,however, that, in the case of clauses (i) and (ii), no Default or Event of Default shall be in effect prior to or after giving effect to any such sale, transfer or other disposition;provided,further, that in the event that any amount of assets permitted to be disposed of in any calendar year pursuant to this clause (h) is not disposed of during such calendar year, such amount may be carried over for dispositions in any subsequent calendar year (up to a maximum amount not to exceed $50,000,000 and limited to an aggregate fair market value of $50,000,000 for any calendar year);provided,further, that, in the case of clauses (i) and (ii), all Net Proceeds of such sale, transfer or other disposition are applied to the payment of the Payment Obligations as set forth in, and to the extent required by,Section 7.3(b)(ii)).
Section 11.7 Limitation on Restricted Payments. (a) The Company will not, and will not permit any of its Subsidiaries to, make any Restricted Payment, except that, so long as no Default or Event of Default has occurred and is continuing at the time such Restricted Payment is made or would result therefrom and the representations and warranties deemed to be made pursuant toSection 11.7(b) are true and correct in all material respects as of the date such Restricted Payment is made, the following Restricted Payments may be made:
(i) Restricted Payments on account of amounts payable under the Prior Tax Sharing Agreement, with respect to state and local taxes and federal taxes;provided,however, that no such Restricted Payment (whether in cash or otherwise) shall be made more than ten Business Days prior to the date upon which the related liability to the Internal Revenue Service (or the relevant state or local taxing authority) for tax (including estimated taxes) is paid (or, if no such taxes are payable, ordinarily would have been due);
(ii) Restricted Payments made to Permitted Joint Ventures, to the extent that such Restricted Payments are permitted pursuant toSection 11.8(e)orSection 11.8(k);
(iii) Restricted Payments made from time to time to finance Revlon’s purchase, redemption, acquisition or retirement for value of, or payment of amounts owing in respect of, any shares, interests, rights to purchase, warrants, options, participations, stock appreciation rights, performance units or other equivalents or interests in the equity of Revlon held by any current or former director, officer, consultant or employee of Revlon, the Company or any Subsidiary of the Company in such person’s role as a director, officer, consultant or employee (or by their estates or any beneficiaries of their estates);provided,however, that (x) the sum of (1) the aggregate amount of Restricted Payments made pursuant to thisclause (iii) and (2) the aggregate amount of open-market purchases of common stock and restricted stock of Revlon together with any
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other investments made as permitted underSection 11.8(g), does not exceed $8,000,000 in any calendar year (including calendar year 2006) and (y) amounts available pursuant to thisclause (iii)to be utilized for Restricted Payments during any calendar year which are not utilized during such year may be carried forward and utilized in any succeeding calendar year;
(iv) subject to the limitations set forth inSections 11.8(f) and11.8(g), Restricted Payments made from time to time to finance the investments contemplated bySections 11.8(f) and11.8(g); and
(v) additional Restricted Payments in an aggregate amount, together with the aggregate principal amount of all Indebtedness defeased, prepaid or otherwise repurchased pursuant toSection 11.9(c)(vi), not to exceedthe sum of (x) $15,000,000 and (y) the portion, if any, of Capital Contributions received by the Company that (1) are not used to defease, prepay or otherwise repurchase the principal amount of any Indebtedness under the Subordinated Notes Indenture and (2) do not constitute a Cure Amountor an Existing Credit Agreement Cure Amount.
(b) The making of each Restricted Payment pursuant toSection 11.7(a) shall constitute a representation and warranty by the Company that, on and as of the date upon which such Restricted Payment is made (both before and after giving effect to the making thereof), the representations and warranties contained inSection 8.10andSection 8.15(a) are true and correct.
Section 11.8 Limitation on Investments. The Company will not, and will not permit any of its Subsidiaries to, make or commit to make any advance, loan, extension of credit or capital contribution to, or purchase of any stock, bonds, notes, debentures or other securities of, or make any other investment in, any Person, except as otherwise permitted bySection 11.10 and except that:
(a) each of the Company and its Subsidiaries may make or commit to make investments in cash or Cash Equivalents held in a Deposit Account or a Control Account, subject toSection 10.19, if applicable, with respect to the Company and the Subsidiary Guarantors;
(b) each of the Company and its Subsidiaries may make or commit to make investments in contract rights, accounts and chattel paper (as defined in the UCC), put and call foreign exchange options to the extent necessary to hedge foreign exchange exposures or foreign exchange spot and forward contracts, and notes receivable, arising or acquired in the ordinary course of business and in Hedging Contracts;
(c) the Company may make or commit to make any loan or advance or purchase any securities constituting a Restricted Payment permitted bySection 11.7;
(d) if in the reasonable judgment of the Company, any customer is deemed to be in a reorganization or unable to make a timely cash payment on Indebtedness or other obligations of such customer owing to it, each of the Company and its Subsidiaries may invest or commit to invest in securities issued by such customer or any Affiliate thereof (other than any Affiliate of the Company) in lieu of cash payment;provided,however, that the Company or such Subsidiary, as the case may be, has paid no new consideration (other than forgiveness of Indebtedness or other obligations) therefor;
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(e) each of the Company and its Subsidiaries may make or commit to make Investments;provided,however, that (i) no Default or Event of Default has occurred and is continuing at the time of such Investment (or would result therefrom) and(ii) the aggregate Investment Consideration (excluding any such consideration paid with the proceeds of, or Stock or Stock Equivalents issued pursuant to, an Equity Offering and as reduced by the amount equal to the Net Proceeds received by the Company and its Subsidiaries from any Net Proceeds Event on account of any Resale Transaction with respect to any such Investment) with respect to all such Investments made after the date hereof pursuant to thisSection 11.8(e) plus Contingent Obligations incurred after the date hereof pursuant toSection 11.4(f) by virtue of thisSection 11.8(e) plus Intercompany Investments made after the date hereof pursuant toSection 11.8(j)(iii)(z) does not exceed$50,000,000 at any one time outstanding;
(f) each of the Company and its Subsidiaries may make or commit to make loans to officers and directors of the Company and its Subsidiaries in the ordinary course of business to the extent permitted by applicable law, in an aggregate principal amount which, in the aggregate with all then outstanding Contingent Obligations permitted by Section 11.4(g), does not exceed $7,000,000 at any one time outstanding from the Company and its Subsidiaries to all such officers and directors;
(g) the Company (and, in the case ofclause (ii) below, the Company’s Domestic Subsidiaries) may make or commit to make investments in (i) open-market purchases of common stock of Revlon and (ii) any other investment available to highly compensated employees under any “excess 401-(k) plan” of the Company (or any of its Domestic Subsidiaries, as applicable), in each case to the extent necessary to permit the Company (or such Domestic Subsidiary, as applicable) to satisfy its obligations under such “excess 401-(k) plan” for highly compensated employees;provided,however, that the aggregate amount of such purchases and other investments under thisSection 11.8(g) together with any Restricted Payments made as permitted under Section 11.7(a)(iii) does not exceed $8,000,000 in any calendar year (including calendar year 2006) and (ii) amounts available pursuant to thisSection 11.8(g) to be utilized for investments during any year which are not utilized during such year may be carried forward and utilized in any succeeding year;
(h) subject to the limitations set forth inSection 11.7(a)(iii), each of the Company and its Subsidiaries may make or commit to make investments from time to time in connection with the transactions contemplated bySection 11.7(a)(iii);
(i) each of the Company and its Subsidiaries may make or commit to make Permitted Acquisitions;
(j) each of the Company and its Subsidiaries may make or commit to make any advance, loan, extension of credit or capital contribution to, or purchase any Stock or Stock Equivalents, bonds, notes, debentures or other securities of, or make any other investment in, any of the Company (except for any Stock, Stock Equivalents or bonds, notes, debentures or other securities or other Indebtedness, other than intercompany Indebtedness incurred in the ordinary course of business, of the Company) or any Subsidiary (each an “Intercompany Investment”);provided,however, that with respect to any Intercompany Investment made after the date hereof by the Company or any Domestic Subsidiary in any Subsidiary that is not a Guarantor, (i) such Intercompany Investment shall only be made in the ordinary course of business or consistent with past practice, (ii) if such Intercompany Investment is made in cash as an advance, loan or other extension of credit, such Intercompany Investment shall be evidenced by an intercompany note which, in the case of any such note held by the Company or any Subsidiary Guarantor, shall be
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promptly pledged to the Collateral Agent, for the benefit of the Secured Parties, pursuant to the relevant Security Documents and (iii) if such Intercompany Investment is made in cash as a capital contribution, such Intercompany Investment shall only be made in a Foreign Subsidiary (w) in an aggregate amount such that after giving effect thereto, such Foreign Subsidiary (A) is in compliance with all material Requirements of Law applicable to it with respect to capitalization, (B) has sufficient capital with which to conduct its business in accordance with past practice and (C) is not undercapitalized to such an extent that, solely as a result of such undercapitalization, any creditor of such Foreign Subsidiary would be deemed under the laws of any relevant jurisdiction to owe a fiduciary duty to any other creditor of such Foreign Subsidiary, (x) to the extent that on the date of such contribution, the cash contributed to the capital of the applicable Foreign Subsidiary, if loaned or advanced through an intercompany loan evidenced by a note, would either (A) not cause the Company or the Domestic Subsidiary of the Company acquiring such note to be deemed to be doing business in any jurisdiction outside of the United States or otherwise subject to taxation or regulation in such jurisdiction or (B) not require the Foreign Subsidiary issuing such note to withhold from any payment made in respect thereof any amount now or hereafter imposed, levied, collected or assessed by any relevant jurisdiction, or any political subdivision or taxing authority thereof or therein, (y) in connection with any sale, transfer or other disposition of capital stock or other equity interests or assets of such Foreign Subsidiary permitted hereunder, to the extent that the aggregate amount of such capital contribution does not exceed the aggregate amount outstanding of any Indebtedness and other obligations of such Foreign Subsidiary owing to the Company or any of its Domestic Subsidiaries that was in each case created or otherwise incurred on or prior to the date of such sale, transfer or other disposition and which Indebtedness and other obligations are outstanding immediately prior to such sale, transfer or other disposition or (z)in connection with the formation or organization of such Foreign Subsidiary, to the extent that the amounts expended after the date hereof pursuant to thisSection 11.8(j)(iii)(z) plus amounts expended after the date hereof pursuant toSection 11.8(e) plus Contingent Obligations incurredafter the date hereof pursuant toSection 11.4(f) by virtue ofSection 11.8(e) do not exceed $50,000,000 at any one time outstanding; and
(k) each of the Company and its Subsidiaries may make or commit to make Investments in Permitted Joint Ventures;provided,however, that (i) no Default or Event of Default has occurred and is continuing at the time of such Investment (or would result therefrom) and (ii) the aggregate Investment Consideration (excluding any such consideration paid with the proceeds of, or Stock or Stock Equivalents issued pursuant to, an Equity Offering and as reduced by the amount equal to the Net Proceeds received by the Company and its Subsidiaries from any Net Proceeds Event on account of any Resale Transaction with respect to anysuchInvestment) with respect to all such Investments made pursuant to this clause (k) does not exceed $50,000,000 at any one time outstanding;provided,further, that none of the Company or any of its Subsidiaries shall commit to make any such Investment unless such Investment is then permitted hereunder.
Section 11.9 Limitation on Payments on Account of Debt; Synthetic Purchase Agreements. The Company will not, and will not permit any of its Subsidiaries to:
(a) amend, waive, supplement or otherwise modify in any material respect (including without limitation, amendments of the interest rate or payment terms thereof) (i) any Indenture or any agreement governing the Subordinated Notes or any agreement governing any refinancing Indebtedness of the Indentures or the Term Loans incurred pursuant toSection 11.2(b), if the proposed amendment, waiver or supplement is adverse to the Lenders, (ii) any agreement governing the M&F Loans on terms and conditions (taken as whole) unless such amendment, waiver, supplement or modification is no less favorable to the Company or the
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Lenders than the terms and conditions of the M&F Loans as in effect on the Closing Date (taken as a whole), (iii) any Indebtedness permitted pursuant toSection 11.2(o), if the proposed amendment, waiver or supplement is adverse to the Lenders or (iv) any other Indebtedness not permitted pursuant to the terms of this Agreement as in effect on the date hereof but entered into with the consent of the Required Lenders, if the proposed amendment, waiver or supplement is adverse to the Lenders;
(b) amend, waive, supplement or otherwise modify any Capital Contribution Note;
(c) directly or indirectly, defease, or make or commit to make any optional prepayment of, or otherwise repurchase, any of its Indebtedness, except:
(i) Indebtedness under this Agreement;
(ii) Indebtedness which is permitted byparagraphs (c),(d),(f),(g) through(m) and(o) through(q) ofSection 11.2;
(iii) Indebtedness which is permitted byparagraph (b)ofSection 11.2 with proceeds of any refinancing of such Indebtedness pursuant toSections 11.2(b),11.2(i) or11.2(o) or with proceeds of any Capital Contribution that do not constitute a Cure Amount or an Existing Credit Agreement Cure Amount;provided, that in the case of any refinancing with Indebtedness pursuant toSection 11.2(o), such refinancing Indebtedness matures at least six months after the Term Loan Maturity Date;
(iv) Indebtedness (including, without limitation, Indebtedness which is permitted underSection 11.2(b)) in an aggregate amount not to exceed the amount of Excess Cash Flow in any fiscal year not required to be applied as a mandatory prepayment of the Term Loans pursuant toSection 7.3(a);provided,however, that the prepayment required bySection 7.3(a) with respect to such fiscal year has been made;
(v) Indebtedness(including, without limitation, Indebtedness which is permitted underSection 11.2(b))that is repaid with the proceeds of Equity Offerings by Revlon; and
(vi) additional Indebtedness(including, without limitation, Indebtedness which is permitted underSection 11.2(b))in an aggregate principal amount, together with the aggregate amount of all Restricted Payments made pursuant toSection 11.7(a)(v), not to exceed the sum of (x) $15,000,000 and (y) the portion, if any, of Capital Contributions received by the Company that are not used to defease, prepay or otherwise repurchase the principal amount of any Indebtedness under the Subordinated Notes Indenture; and
(d) enter into or be party to, or make any payment under, any Synthetic Purchase Agreement.
Section 11.10 Limitation on Transactions with Affiliates. The Company will not, and will not permit any of its Subsidiaries to, (a) engage in any transaction with any Affiliate of the Company, except upon terms no less favorable to the Company or such Subsidiary, as the case may be, than it would obtain in a comparable arm’s length transaction with a Person not an Affiliate, or (b) sell, transfer, convey, assign or otherwise dispose of any material asset to any Affiliate of the Company;provided,however, that nothing contained in thisSection 11.10 shall
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prohibit (x) the Company from making Restricted Payments permitted bySection 11.7, (y) the Company or any of its Subsidiaries from engaging in any transaction pursuant to and in accordance with the Occupancy Agreement, dated as of June 1, 2001, between M&FG and the Company, as amended by Amendments thereto dated as of October 14, 2003 and June 14, 2004 and (z) payments required to be made by the Company with respect to its obligations under the Company Tax Sharing Agreement.
Section 11.11 Hazardous Materials. The Company will not, and will not permit any of its Subsidiaries to, cause or knowingly permit any of the Mortgaged Properties or any other of its assets to be used to generate, manufacture, refine, transport, treat, store, handle, dispose, transfer, produce or process Hazardous Materials, except in compliance in all respects with all applicable Environmental Laws and in a manner that would not reasonably be expected to result in a liability under any applicable Environmental Laws, nor release, discharge, dispose of or permit or suffer any release or disposal as a result of any act or omission on its part, or on the part of any tenant or subtenant, of Hazardous Materials onto any such property or asset in violation of any Environmental Law or in a manner that would reasonably be expected to result in a liability under any applicable Environmental Laws, except where such non-compliance or liability would not be reasonably likely to have a Material Adverse Effect.
Section 11.12 Accounting Changes.(a) The Company will not, and will not permit any of its Subsidiaries to, make or permit to be made any change in accounting policies affecting the presentation of financial statements or reporting practices from those employed by the Company in the audited financial statements contained in its Annual Report on Form 10-K for its fiscal year ended December 31, 2005, unless (i) such changes are required or permitted by GAAP, (ii) such changes are disclosed to the Lenders through the Administrative Agent or otherwise and (iii) if requested by the Administrative Agent, relevant prior financial statements are reconciled (in form and detail reasonably satisfactory to the Administrative Agent) to show comparative results and reconciliations.
(b) Notwithstanding anything to the contrary contained herein, compliance withSection 11.1 shall be determined based upon GAAP as in effect as of the date of, and as used in, the preparation of the audited consolidated financial statements of the Company and its Subsidiaries for the fiscal year ended December 31, 2005.
Section 11.13 Limitation on Negative Pledge Clauses.The Company will not, and will not permit any of its Subsidiaries to, enter into any agreement (other than the Loan Documents and documents related to the M&F Loansor the Existing Credit Agreementor any permitted refinancing thereof) with any Person which prohibits or limits the ability of the Company or any of its Subsidiaries to create, incur, assume or suffer to exist any Lien securing the Payment Obligations upon any of its properties, assets or revenues, whether now owned or hereafter acquired;provided,however, that any of the Company and its Subsidiaries may enter into any such agreement to the extent that such agreement is in connection with a Lien permitted byparagraph (c),(d),(f),(h),(j),(k),(m),(n),(o),(p),(q) or(r) ofSection 11.3 and any such prohibitions or limitations apply only to the property encumbered by such Lien.
Section 11.14 Amendment of Company Tax Sharing Agreement. The Company will not, and will not permit any of its Subsidiaries to, amend, modify, change, waive, cancel or terminate any term or condition of the Company Tax Sharing Agreement in a manner adverse to the interests of the Company or the Lenders without the prior written consent of the Required Lenders.
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Section 11.15 Limitations on Restrictions on Subsidiary Distributions. The Company shall not, and shall not permit any of its Subsidiaries to, agree to enter into or suffer to exist or become effective any consensual encumbrance or restriction of any kind on the ability of such Subsidiary to pay dividends or make any other distribution or transfer of funds or assets or make loans or advances to or other investments in, or pay any Indebtedness owed to, the Company or any other Subsidiary of the Company, except (i) pursuant to the Loan Documents and the Existing Credit Agreement and any permitted refinancing thereof, (ii) any agreements governing purchase money Indebtedness or Capital Lease Obligations permitted bySection 11.2(l) (in which latter case, any prohibition or limitation shall only be effective against the assets financed thereby) and (iii) pursuant to any agreement relating to a disposition of property of the Company or any Subsidiary permitted under this Agreement, to the extent such restrictions restrict the transfer of the property subject to such agreement.
Section 11.16 Limitation on Activities of RPH. Notwithstanding anything to the contrary in this Agreement or any other Loan Document, the Company shall not cause or permit RPH to (a) conduct, transact or otherwise engage in, or commit to conduct, transact or otherwise engage in, any business or operations, (b) incur, create, assume or suffer to exist any Indebtedness or other liabilities or financial obligations or (c) own, lease, manage or otherwise operate any properties or assets (including cash and Cash Equivalents), in each case, other than (i) those incidental to RPH’s ownership and licensing of the Intellectual Property transferred to it in connection with the Company’s disposition of its professional products business and (ii) nonconsensual obligations imposed by Requirement of Law and obligations with respect to its capital stock.
Section 11.17 Prohibition on Speculative Hedging Transactions. The Company shall not, and shall not permit any of its Subsidiaries to, engage in any speculative transaction involving Hedging Contracts, except as expressly permitted under this Agreement and for the sole purpose of hedging in the ordinary course of business.
EVENTS OF DEFAULT
Section 12.1 Events of Default. Upon the occurrence and during the continuance of any of the following events:
(a) Payments. Failure by the Company to pay any principal of any Loan or Note, when due in accordance with the terms thereof and hereof; or failure by the Company to pay any interest on any Loan or Note, within five days after the date when due in accordance with the terms thereof and hereof or any fee or other amount payable in connection with any Loan Document within five days after the date when due; or
(b) Representations and Warranties. Any representation or warranty made or deemed made by the Company or any other Loan Party in any Loan Document or which is contained in any certificate or financial statement furnished at any time under or in connection herewith or therewith shall prove to have been incorrect, false or misleading in any material respect on or as of the date when made or deemed to have been made; or
(c) Certain Covenants.
(i) [Intentionally omitted.]
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(ii) Default by any Loan Party in the observance or performance of any negative covenant or agreement contained inArticle XI; or
(iii) Default by any Loan Party in the observance of any covenant or agreement contained inSections 10.4(with respect to the first sentence thereof) or10.7(a); or
(d) Other Covenants. Default by any Loan Party in the observance or performance of any other covenant or agreement contained or incorporated by reference in this Agreement or any other Loan Document and the continuance of such default unremedied for a period of 15 days; or
(e) Effectiveness of the Security Documents. On or after the Closing Date and subject toSection 10.16, (i) for any reason (other than any act on the part of any Agent or any Lender) any Security Document ceases to be or is not in full force and effect or any of the Liens intended to be created by any Security Document ceases to be or is not a valid and perfected Lien having the priority contemplated thereby with respect to Collateral having an aggregate fair market value in excess of $1,000,000 or (ii) the Company, or any other Loan Party shall assert in writing that any Security Document has ceased to be or is not in full force and effect; or
(f) Cross Default. Any of Revlon or any of its Subsidiaries shall Cross Default;
(g) Control Persons. (i) Any Person (or group of Persons acting in concert), other than Ronald O. Perelman or, in the event of his incompetence or death, his estate, heirs, executor, administrator, committee or other personal representative and his (or any of their) Affiliates (without giving effect toclause (a) of the definition thereof) (collectively, “ROP”), shall “control” the Company, as such term is used in Rule 405 promulgated under the Securities Act of 1933, as amended, or (ii) in the event that ROP ceases to so “control” the Company, any other Person (or group of Persons acting in concert) shall own, directly or indirectly, equity interests representing more than 35% of the total voting power represented by the issued and outstanding equity interests of the Company then entitled to vote in the election of the Board of Directors of the Company, or (iii) the Continuing Directors shall cease to constitute at least a majority of the board of directors of the Company; or
(h) Ownership. Revlon shall at any time for any reason cease to be the beneficial and record owner of 100% of the outstanding shares of capital stock and other equity interests of the Company; or
(i) Default under Company Tax Sharing Agreement. At any time, any party (other than the Company or any of its Subsidiaries) shall default in its payment obligations under the Company Tax Sharing Agreement; or
(j) Commencement of Bankruptcy or Reorganization Proceeding. (i) Revlon, the Company or any of its Subsidiaries shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, wind-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets; or, (ii) there shall be
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commenced against Revlon, the Company or any of its Subsidiaries any such case, proceeding or other action referred to inclause (i) of thisparagraph (j) which results in the entry of an order for relief or any such adjudication or appointment remains undismissed, undischarged or unbonded for a period of 60 days;provided,however, that the Company, for itself and as agent for each of its Subsidiaries, hereby expressly authorizes each Agent and each Lender to appear in any court conducting any such case, proceeding or other action during such 60-day period to preserve, protect and defend their rights under the Loan Documents; or (iii) there shall be commenced against Revlon, the Company or any of its Subsidiaries any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) Revlon, the Company or any of its Subsidiaries shall take any action authorizing, or in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth above in thisparagraph (j); or (v) Revlon, the Company or any of its Subsidiaries shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or
(k) Material Judgments. (i) One or more judgments or decrees shall be entered against the Company or any of its Subsidiaries involving in the aggregate a liability of $5,000,000 or more or any judgment or decree shall be entered against Revlon in excess of $20,000,000 (or, in each case, with respect to any other currency, the Equivalent thereof) and all such judgments or decrees shall not have been vacated, stayed, satisfied, discharged or bonded (or, if available subject to the foreign equivalent thereof) pending appeal within 60 days from the entry thereof (provided that no Event of Default shall arise under thisSection 12.1(k) as a result of any such judgment or decree to the extent that (x) it is covered by a valid policy of insurance covering payment thereof which has been provided by an Eligible Insurer and (y) such Eligible Insurer has been notified of, and has not disputed the claim made for payment of, the amount of such judgment or decree) or (ii) any non-monetary judgment or order shall be rendered against the Company or any of its Subsidiaries that is reasonably likely to have a Material Adverse Effect, and in the case of eitherclause (i) or(ii), there shall be any period of 10 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect unless such judgment or order shall have been vacated, satisfied, discharged or bonded (or, if available subject to the foreign equivalent thereof) pending appeal; or
(l) ERISA. (i) Any Person shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any “accumulated funding deficiency” (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan or, for years for which funding requirements are governed by the Pension Protection Act of 2006, any failure to satisfy the applicable minimum funding standard under Section 412(a)(2) of the Code, whether or not waived, shall exist with respect to any Plan, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of the Required Lenders, likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the Company or any Commonly Controlled Entity of the Company shall, or in the reasonable opinion of the Required Lenders is likely to, incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other event or condition shall occur or exist, with respect to a Plan; and in each case in clauses (i) through (vi) above, such event or condition, together with all
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other such events or conditions, if any, would be reasonably likely to have a Material Adverse Effect; or
(m) Matters Relating to Subordinated and Other Indebtedness. On or after the Closing Date, (i) if for any reason (other than any act on the part of any Agent or any Lender) (A) any Affiliate Subordination Letter then required to be delivered by an Affiliate pursuant to the terms of this Agreement shall cause to be or shall not be in full force and effect or (B) any Affiliate which is party to an Affiliate Subordination Letter shall assert in writing that the Affiliate Subordination Letter to which it is a party has ceased to be or is not in full force and effect or (ii) any Subordinated Notes or other Indebtedness (other than trade credit in the ordinary course of business and any Capital Contribution Note) of the Company or any of its Subsidiaries shall be held by (or otherwise owing to) any Affiliate of the Company (other than officers and directors of the Company) if such Affiliate has not executed and delivered an agreement substantially in the form of the Affiliate Subordination Letter within ten Business Days following the acquisition of such Indebtedness by such Affiliate;provided,however, that an Affiliate Subordination Letter shall not be required to be delivered with respect to (i) trade credit in the ordinary course of business, (ii) any Capital Contribution Note, (iii) any M&F Loan, (iv) any Indebtedness permitted underSection 11.2(o)or (v) any Indebtedness of the Company or any of its Subsidiaries of a class that is publicly held or issued pursuant to a Rule 144A offering, including Indebtedness issued pursuant to an Indenture; or
(n) Additional Subsidiaries. Revlon shall create or otherwise have any direct Subsidiary other than the Company; or
(o) Capital Contributions. Revlon shall fail to promptly (and in any event within five Business Days following receipt by it of the applicable Net Proceeds) make Capital Contributions to the Company in an amount equal to 100% of the Net Proceeds of any Equity Offering (other than amounts which are applied by Revlon to repurchase, repay, defease or redeem any Subordinated Notes, Existing Senior Notes, Multi-Currency Loans (with a corresponding reduction of the revolving commitments under the Existing Credit Agreement) or other Indebtedness for borrowed money of the Company scheduled to mature on or prior to the Term Loan Maturity Date, which Indebtedness so purchased is substantially concurrently contributed by Revlon to the capital of the Company or transferred in exchange for Stock of the Company); or
(p) Revlon Operations. Revlon shall have any meaningful assets (other than any Capital Contribution Notes or rights with respect to the M&F Investment Agreement, the Company Tax Sharing Agreement and the Stockholders Agreement) or Indebtedness (other than (w) Indebtedness the Net Proceeds of which are applied to prepay the Term Loans to the extent required bySection 7.3(b)(i) or to repay Multi-Currency Loans under the Existing Credit Agreement with a corresponding reduction of the revolving credit commitments thereunder, (x) Indebtedness of the type contemplated byclause (i) of the definition of such term, (y) Indebtedness in respect of the Guaranty and (z) Indebtedness in respect of the Indentures or other permitted Indebtedness of the Company) or shall conduct any meaningful business, other than (i) its ownership of the Company and (ii) such activities as are customary for a publicly traded holding company which is not itself an operating company; or
(q) M&F Loans. Any M&F Lender shall have failed to fund any binding commitments by such M&F Lender under any agreement governing any M&F Loan, which request shall be sent promptly to the Administrative Agent pursuant toSection 10.2(f) hereof; or
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(r) [intentionally omitted]
(s) Subordinated Notes. The Subordinated Notes or the guarantees thereof (or any refinancing Indebtedness of the Subordinated Notes incurred pursuant to Section 11.2(b)(vi)(A)) shall cease, for any reason, to be validly subordinated to the Payment Obligations as provided in the Subordinated Note Indenture (or the agreement governing such refinancing Indebtedness) or the trustee in respect of the Subordinated Notes (or the agreement governing such refinancing Indebtedness) or the holders of at least 25% in aggregate principal amount of the Subordinated Notes (or such refinancing Indebtedness) shall so assert; or
(t) Additional Equity Offerings. (i) The aggregate commitments by the M&F Lenders to provide the M&F Loans to the Company (whether such commitments are funded or unfunded) shall be less than $87,000,000 at any time during the period from the date hereof to the date on which Revlon shall have consummated one or more Equity Offerings after the date hereof generating at least $75,000,000 in gross proceeds and made Capital Contributions to the Company in an amount equal to the Net Proceeds in respect thereof, other than amounts which are applied by Revlon to repurchase, repay, defease or redeem any Subordinated Notes, Existing Senior Notes, Multi-Currency Loans (with a corresponding reduction of the revolving commitments under the Existing Credit Agreement) or other Indebtedness for borrowed money of the Company scheduled to mature on or prior to the Term Loan Maturity Date (provided that no such Equity Offering shall be required hereunder), or (ii) the Company shall fail to apply any Capital Contributions referred to in clause (i) above promptly after its receipt thereof to repurchase, repay, defease or redeem any Subordinated Notes, Existing Senior Notes or other Indebtedness for borrowed money of the Company scheduled to mature on or prior to the Term Loan Maturity Date, including, without limitation, repayment of Term Loans and repayment of any outstanding revolving loans under the Existing Credit Agreement without any corresponding permanent reduction in the aggregate commitment thereunder;
then, and in any such event, (x) if such event is an Event of Default specified inclause (i), (ii) or(iii) ofparagraph (j) of thisSection 12.1 with respect to any Loan Party, automatically the Term Loan Commitments shall immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the Notes, and (y) if such event is any other Event of Default, with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Company, declare all or any part of the Term Loans (with accrued interest thereon) and any other amounts owing under this Agreement to the Lenders and the Term Loan Notes to be due and payable forthwith, whereupon the same shall immediately become due and payable. In addition to the remedies set forth above, the Administrative Agent may direct the Collateral Agent to exercise any remedies provided for by the Security Documents in accordance with the terms thereof or any other remedies provided by applicable law.
Except as expressly provided above in thisSection 12.1, presentment, demand, protest and all other notices of any kind are hereby expressly waived.
Section 12.2 Right to Cure.
(a) Notwithstanding anything to the contrary contained inSection 12.1(c)(ii), in the event that the Company fails to comply with the requirements of the covenant set forth inSection 11.1 for any period, at any time on or before the tenth day after the date of delivery of a Notice of Intent to Cure by the Company to the Administrative Agent pursuant toSection 10.2(b), the Company shall have the right (the “Cure Right”) to issue Permitted Cure Securities to Revlon
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for cash or otherwise receive Capital Contributions in cash from Revlon, and upon the receipt by the Company of such cash (the “Cure Amount”), the covenant set forth inSection 11.1 shall be recalculated, giving effect to a pro forma increase to EBITDA in accordance with the definition thereof forthe fiscal quarter for which such Cure Right was exercised in an amount equal to such Cure Amount (and such increase shall be included in each period that includes such fiscal quarter);provided,however, that such pro forma adjustment to EBITDA shall be given solely for the purpose of determining the existence of a Default or an Event of Default under the covenant set forth inSection 11.1 with respect to any period that includes the fiscal quarter for which such Cure Right was exercised and not for any other purpose under any Loan Document.
(b) If, after the exercise of the Cure Right and the recalculations pursuant toclause (a) above, the Company shall then be in compliance with the requirements of the covenant set forth inSection 11.1 for such fiscal quarter, the Company shall be deemed to have satisfied the requirements of the covenant set forth inSection 11.1 as of the relevant date of determination with the same effect as though there had been no failure to comply therewith at such date, and the applicable Default or Event of Default underSection 12.1(c)(ii) that had occurred shall be deemed cured;provided,however, that (i) the Company may not exercise the Cure Right more than two times in any four fiscal quarter period, (ii) with respect to any exercise of the Cure Right, the Cure Amount shall be no greater than the amount required to cause the Company to be in compliance withSection 11.1 and (iii) to the extent that the Cure Amount proceeds are used to repay Indebtedness, such Indebtedness shall not be deemed to have been repaid for purposes of calculating the covenant inSection 11.1 for the period with respect to which such Cure Amount applies.
THE AGENTS
Section 13.1 Authorization and Action.
(a) Each Lender hereby appoints Citicorp as the Administrative Agent hereunder and each Lender authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under this Agreement and the other Loan Documents as are delegated to the Administrative Agent under such agreements and to exercise such powers as are reasonably incidental thereto. Without limiting the foregoing, each Lender hereby authorizes the Administrative Agent to execute and deliver, and to perform its obligations under, each of the Loan Documents to which the Administrative Agent is a party, to exercise all rights, powers and remedies that the Administrative Agent may have under such Loan Documents.
(b) Each Lender hereby acknowledges the appointment of Citicorp as the Collateral Agent, and hereby authorizes the Collateral Agent to take such action as agent on its behalf and to exercise such powers, as set forth in the Intercreditor Agreement.
(c) As to any matters not expressly provided for by this Agreement and the other Loan Documents (including enforcement or collection), the Agents shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of (i) in the case of the Administrative Agent, the Required Lenders (or, where required by the express terms of this Agreement, a greater proportion of the Lenders), and such instructions shall be binding upon each Lender, and (ii) in the case of the Collateral Agent, as set forth in the Intercreditor Agreement, and such instructions shall be binding upon each Lender (in each case,
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subject to any limitations imposed thereon in the Intercreditor Agreement);provided,however, that no Agent shall be required to take any action that (i) such Agent in good faith believes exposes it to personal liability unless such Agent receives an indemnification satisfactory to it from the applicable Lenders with respect to such action or (ii) is contrary to this Agreement or any Requirement of Law. Each Agent agrees to give to each applicable Lender prompt notice of each notice given to it by any Loan Party pursuant to the terms of this Agreement or the other Loan Documents.
(d) In performing its functions and duties hereunder and under the other Loan Documents, each Agent is acting solely on behalf of (i) the applicable Lenders and in the case of the Collateral Agent, the Secured Parties and its duties are entirely administrative in nature. No Agent assumes, or shall be deemed to have assumed, any obligation other than as expressly set forth herein and in the other Loan Documents or any other relationship as the agent, fiduciary or trustee of or for any Lender, Secured Party or holder of any other Payment Obligation. Each Agent may perform any of their duties under any Loan Document by or through their agents or employees.
(e) The Arranger, the Syndication Agent and the Documentation Agent shall have no obligations or duties whatsoever in such capacities under this Agreement or any other Loan Document and shall incur no liability hereunder or thereunder in such capacities.
Section 13.2 Agents’ Reliance, Etc. None of the Agents, any of their Affiliates or any of their respective directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it, him, her or them under or in connection with this Agreement or the other Loan Documents, except for its, his, her or their own gross negligence, bad faith or willful misconduct. Without limiting the foregoing, each of the Agents (a) may treat the payee of any Note as its holder until such Note has been assigned in accordance withSection 14.6, (b) may rely on the Register to the extent set forth in Section 14.6, (c) may consult with legal counsel (including counsel to the Company or any other Loan Party), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts, (d) makes no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, warranties or representations made by or on behalf of Revlon, the Company or any of the Company’s Subsidiaries in or in connection with this Agreement or any other Loan Document, (e) shall not have any duty to ascertain or to inquire either as to the performance or observance of any term, covenant or condition of this Agreement or any other Loan Document, as to the financial condition of the Company or any Loan Party or as to the existence or possible existence of any Default or Event of Default, (f) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the attachment, perfection or priority of any Lien created or purported to be created under or in connection with, this Agreement, any other Loan Document or any other instrument or document furnished pursuant hereto or thereto and (g) shall incur no liability under or in respect of this Agreement or any other Loan Document by acting upon any notice, consent, certificate or other instrument or writing (which writing may be a telecopy or electronic mail) or any telephone message believed by it to be genuine and signed or sent by the proper party or parties.
Section 13.3 Posting of Approved Electronic Communications.
(a) Each of the Lenders and the Company agrees, and the Company shall cause each Subsidiary Guarantor to agree, that the Agents may, but shall not be obligated to,
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make the Approved Electronic Communications available to the Lenders by posting such Approved Electronic Communications on IntraLinks™ or a substantially similar electronic platform chosen by the Agents to be their electronic transmission system (the “Approved Electronic Platform”).
(b) Although the Approved Electronic Platform and its primary web portal are secured with generally-applicable security procedures and policies implemented or modified by the Administrative Agent from time to time (including, as of the Closing Date, a dual firewall and a User ID/Password Authorization System) and the Approved Electronic Platform is secured through a single-user-per-deal authorization method whereby each user may access the Approved Electronic Platform only on a deal-by-deal basis, each of the Lenders and the Company acknowledges and agrees, and the Company shall cause each Subsidiary Guarantor to acknowledge and agree, that the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution. In consideration for the convenience and other benefits afforded by such distribution and for the other consideration provided hereunder, the receipt and sufficiency of which is hereby acknowledged, each of the Lenders and the Company hereby approves, and the Company shall cause each Subsidiary Guarantor to approve, distribution of the Approved Electronic Communications through the Approved Electronic Platform and understands and assumes, and the Company shall cause each Subsidiary Guarantor to understand and assume, the risks of such distribution.
(c) THE APPROVED ELECTRONIC COMMUNICATIONS AND THE APPROVED ELECTRONIC PLATFORM ARE PROVIDED “AS IS” AND “AS AVAILABLE”. NONE OF THE ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES OR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES (THE “AGENT AFFILIATES”) WARRANT THE ACCURACY, ADEQUACY OR COMPLETENESS OF THE APPROVED ELECTRONIC COMMUNICATIONS AND THE APPROVED ELECTRONIC PLATFORM AND EACH EXPRESSLY DISCLAIMS LIABILITY FOR ERRORS OR OMISSIONS IN THE APPROVED ELECTRONIC COMMUNICATIONS AND THE APPROVED ELECTRONIC PLATFORM. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY (INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS) IS MADE BY THE AGENT AFFILIATES IN CONNECTION WITH THE APPROVED ELECTRONIC COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM.
(d) Each of the Lenders and the Company agrees, and the Company shall cause each Subsidiary Guarantor to agree, that the Administrative Agent may, but (except as may be required by applicable law) shall not be obligated to, store the Approved Electronic Communications on the Approved Electronic Platform in accordance with the Administrative Agent’s generally-applicable document retention procedures and policies.
Section 13.4 The Agents Individually. With respect to its Term Loan Commitment and Loans, the Administrative Agent and the Collateral Agent, each in their individual capacity, shall each have and may exercise the same rights and powers hereunder and is subject to the same obligations and liabilities as and to the extent set forth herein for any other Lender. The terms “Lenders”, “Required Lenders”, and any similar terms shall, unless the context clearly otherwise indicates, include, without limitation, the Administrative Agent and the Collateral Agent in its individual capacity as a Lender or as one of the Required Lenders. The
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Administrative Agent or Collateral Agent or any of their respective Affiliates may accept deposits from, lend money to, and generally engage in any kind of banking, trust or other business with, the Company and any Loan Party as if such Person were not acting as an Agent.
Section 13.5 Lender Credit Decision. Each Lender acknowledges that it shall, independently and without reliance upon the Administrative Agent or any other Lender conduct its own independent investigation of the financial condition and affairs of the Company and each Loan Party in connection with the making and continuance of the Loans. Each Lender also acknowledges that it shall, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and other Loan Documents.
Section 13.6 Indemnification. Each Lender agrees to indemnify each Agent and each of its Affiliates, and each of their respective directors, officers, employees, agents and advisors (to the extent not reimbursed by the Company), from and against such Lender’s Commitment Percentage of any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements (including fees, expenses and disbursements of financial and legal advisors) of any kind or nature whatsoever that may be imposed on, incurred by, or asserted against, such Agent or any of its Affiliates, directors, officers, employees, agents and advisors in any way relating to or arising out of this Agreement or the other Loan Documents or any action taken or omitted by such Agent under this Agreement or the other Loan Documents;provided,however, that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Agent’s or such Affiliate’s gross negligence or willful misconduct. Without limiting the foregoing, each Lender agrees to reimburse each Agent promptly upon demand for its ratable share of any out-of-pocket expenses (including fees, expenses and disbursements of financial and legal advisors) incurred by such Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of its rights or responsibilities under, this Agreement or the other Loan Documents, to the extent that such Agent is not reimbursed for such expenses by the Company or another Loan Party.
Section 13.7 Successor Agent. Subject to the terms of thisSection 13.7, the Administrative Agent may resign at any time by giving written notice thereof to the Lenders and the Company. Upon any such resignation, the Required Lenders shall have the right to appoint a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed, and shall have accepted such appointment, within 30 days after the retiring Administrative Agent’s giving of notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent selected from among the Lenders. In either case, such appointment shall be subject to the prior written approval of the Company (which approval may not be unreasonably withheld or delayed and shall not be required upon the occurrence and during the continuance of an Event of Default). Upon the acceptance of any appointment as Administrative Agent by a successor Administrative Agent, such successor Administrative Agent shall succeed to, and become vested with, all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement and the other Loan Documents. Prior to any retiring Administrative Agent’s resignation hereunder as Administrative Agent, the retiring Administrative Agent shall take such action as may be reasonably necessary to assign to the successor Administrative Agent its rights as Administrative Agent under the Loan
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Documents. After such resignation, the retiring Administrative Agent shall continue to have the benefit of this Article XIII as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement and the other Loan Documents. If no Lender has accepted appointment as a successor Administrative Agent within 30 days following a retiring Administrative Agent’s notice of resignation, the retiring Administrative Agent’s resignation shall nevertheless thereupon become effective, and the Required Lenders shall assume and perform all of the duties of the retiring Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above. The resignation and removal of the Collateral Agent shall be governed by the Intercreditor Agreement.
Section 13.8 Concerning the Collateral and the Security Documents.
(a) Each Lender agrees that any action taken by the Agent or the Required Lenders (or, where required by the express terms of this Agreement, a greater proportion of the Lenders) in accordance with the provisions of this Agreement or of the other Loan Documents, and the exercise by the Administrative Agent or the Required Lenders of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the Lenders. Each Lender agrees that any action taken by the Collateral Agent in accordance with the provisions of this Agreement or of the other Loan Documents, and the exercise by the Collateral Agent of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the Lenders and the other Secured Parties. Without limiting the generality of the foregoing, the Collateral Agent shall have the sole and exclusive right and authority to (i) act as the disbursing and collecting agent for the Lenders with respect to all payments and collections arising in connection with the Collateral and with the Security Documents, (ii) execute and deliver each Security Document and accept delivery of each such agreement delivered by Revlon, the Company or any of its Subsidiaries, (iii) act as collateral agent for the Lenders and the other Secured Parties for purposes of the perfection of all security interests and Liens created by such agreements and all other purposes stated therein;provided,however, that the Collateral Agent hereby appoints, authorizes and directs the Administrative Agent and each Lender to act as collateral sub-agent for the Administrative Agent, Collateral Agent, the Lenders and the other Secured Parties for purposes of the perfection of all security interests and Liens with respect to the Collateral, including any Deposit Accounts maintained by a Loan Party with, and cash and Cash Equivalents held by, the Administrative Agent and Lender, (iv) manage, supervise and otherwise deal with the Collateral, (v) take such action as is necessary or desirable to maintain the perfection and priority of the security interests and Liens created or purported to be created by the Security Documents and (vi) except as may be otherwise specifically restricted by the terms hereof or of any other Loan Document, upon receipt of instructions from the Administrative Agent pursuant to the Intercreditor Agreement, exercise all remedies given to the Administrative Agent, the Lenders and the other Secured Parties with respect to the Collateral under the Loan Documents relating thereto, applicable law or otherwise.
(b) Each of the Administrative Agent and the Lenders hereby authorizes and directs the Collateral Agent (without any further notice or consent) to, promptly release or subordinate any Lien as set forth inSection 9 of the Intercreditor Agreement.
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ARTICLE I
MISCELLANEOUS
Section 14.1 Amendments and Waivers.
(a) Except as otherwise expressly provided in this Agreement or the Intercreditor Agreement, the Administrative Agent, on the one hand, and the Company, on the other hand, may from time to time with the prior written consent of the Required Lenders enter into written amendments, supplements or modifications for the purpose of adding, deleting or modifying any provision of any Loan Document or changing in any manner the rights, remedies, obligations and duties of the parties thereto, and with the written consent of the Required Lenders, the Administrative Agent, on behalf of the Lenders, may execute and deliver a written instrument waiving, on such terms and conditions as may be specified in such instrument, any of the requirements applicable to the Loan Parties, as the case may be, party to any Loan Document, or any Default or Event of Default and its consequences;provided,however, that:
(i) without the consent of any Lender, the Company and the Administrative Agent may enter into any amendment necessary to implement the terms of any Term Facility Increase in accordance with the terms of this Agreement (as in effect on the Closing Date);
(ii) (A) no amendment, waiver or consent shall, unless in writing and signed by any Agent in addition to the Lenders required above to take such action, affect the rights or duties of such Agent under this Agreement or the other Loan Documents and (B) no amendment, waiver or consent shall, unless in writing and signed by any Special Purpose Vehicle that has been granted an option pursuant toSection 14.6(f), affect the grant or nature of such option or the right or duties of such Special Purpose Vehicle hereunder;
(iii) no amendment, supplement or modification of, or waiver or consent under, any of the Security Documents to which the Collateral Agent is a party shall be effective unless in writing and signed by the Collateral Agent (at the direction of the Multi-Currency Administrative Agent, the Multi-Currency Lenders, the Administrative Agent or the Lenders, as applicable, pursuant to the Intercreditor Agreement) in addition to the Agents and Lenders required above to take such action; and
(iv) the Administrative Agent may, with the consent of the Company, amend, modify or supplement any Loan Document to cure any ambiguity, typographical error, defect or inconsistency;
provided,further, that, except as otherwise expressly provided in this Agreement or the Intercreditor Agreement, no such waiver, amendment, supplement or modification shall be effective to, without the prior written consent, in addition to the Lenders required above to take such action, of each Lender directly affected thereby:
(v) (A) modify the Term Loan Commitment of such Lender or subject such Lender to any additional obligation, (B) extend any scheduled final maturity of any Loan owing to such Lender, (C) waive or reduce, or postpone or cancel any scheduled date fixed for the payment of (it being understood that any mandatory prepayment required underSection 7.3 does not constitute any scheduled date fixed for payments), principal of
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or interest on any such Loan or any fees owing to such Lender, (D) reduce, or release the Company from its obligations to repay, any other Payment Obligation owed to such Lender or (E) consent to the assignment or transfer by the Company of any of its rights and obligations under this Agreement;
(vi) amend, modify or waive any provision ofSection 7.4 (Application of Payments),Section 7.15 (Pro Rata Treatment and Payments) orSection 14.7 (Adjustments; Set-off);
(vii) expressly subordinate any of the Payment Obligations or Liens securing the Payment Obligations, except in accordance with this Agreement and the Intercreditor Agreement;
(viii) (A) amend, modify or waive thisSection 14.1 or any other provision specifying the Agents, Lenders or group of Lenders required for any amendment, modification or waiver thereof or (B) change the respective percentages specified in the definition of “Required Lenders”; or
(ix) release (A) all or substantially all of the Collateral provided for in the Security Documents, (B) the guarantee obligations of Revlon provided for in any Security Document or (C) the guarantee obligations of all or substantially all of the Guarantors (other than Revlon) provided for in the Security Documents.
(b) Any waiver, amendment, supplement or modification pursuant to thisSection 14.1 shall apply equally to each of the Lenders and shall be binding upon the Lenders and all future holders of any of the Loans, the Notes and all other Payment Obligations. In the case of such waiver, the parties to the Loan Documents, the Lenders, the Collateral Agent and the Administrative Agent shall be restored to their former positions and rights hereunder and under the Notes and the Security Documents, and any Default or any Event of Default waived shall, to the extent provided in such waiver, be deemed to be cured and not continuing; but, no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon. The Administrative Agent shall, as soon as practicable, furnish a copy of each such amendment, supplement, modification or waiver to each Lender.
(c) To the extent (a) the consent of any Lender in its capacity as a Lender is required, but not obtained (any such Lender whose consent is not obtained as described in thisSection 14.1(c) being referred to as a “Non-Consenting Lender”) in connection with any proposed amendment, modification, supplement or waiver (a “Proposed Change”) and (b) the Administrative Agent shall have consented to such Proposed Change, at the request of the Company and with the consent of the Administrative Agent (in its sole discretion exercised reasonably), any Eligible Assignee reasonably acceptable to the Administrative Agent (which Eligible Assignee may be the Lender acting as the Administrative Agent and shall have consented to such Proposed Change) shall have the right (but not the obligation) to purchase from such Non-Consenting Lender, and such Non-Consenting Lender shall, upon the request of the Administrative Agent, sell and assign to such Eligible Assignee all of the Term Loan Commitments and the Term Loans of such Non-Consenting Lender for an amount equal to the principal balance of all applicable Loans held by such Non-Consenting Lender and all accrued and unpaid interest and fees with respect thereto through the date of such sale and purchase (the “Purchase Amount”);provided,however, that such sale and purchase (and the corresponding assignment) shall not be effective until (A) the Administrative Agent shall have received from such Eligible Assignee an agreement in form and substance satisfactory to the Administrative
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Agent and the Company whereby such Eligible Assignee shall agree to be bound by the terms hereof, (B) such Non-Consenting Lender shall have received the Purchase Amount from such Eligible Assignee and (C) the Company shall have paid such Non-Consenting Lender an amount equal to the Prepayment Fee, if any, on the aggregate outstanding principal amount of all Term Loans subject to such sale and purchase (which sale and purchase shall constitute a prepayment of such Term Loans). Each Lender agrees that, if it becomes a Non-Consenting Lender, it shall execute and deliver to the Administrative Agent (x) an Assignment and Acceptance to evidence such sale and assignment and (y) to the extent the Term Loan Commitments and Loans subject to such Assignment and Acceptance are evidenced by a Note or Notes, such Note or Notes;provided,however, that the failure of any Non-Consenting Lender to execute an Assignment and Acceptance or deliver such Note or Notes shall not render such sale and purchase (and the corresponding assignment) invalid.
Section 14.2 Notices. (a)Addresses for Notices. All notices, demands, requests, consents and other communications provided for in this Agreement or any other Loan Document shall be given in writing, or by any telecommunication device capable of creating a written record (including electronic mail), and addressed to the party to be notified as follows:
Revlon Consumer Products Corporation
237 Park Avenue
New York, New York 10017
Attention: Vice President, Finance and Treasury
Telecopy: (212) 527-5225
E-Mail Address: manuel.rivero@revlon.com
with a copy (other than of items relating to funding and payments) to:
Revlon Consumer Products Corporation
237 Park Avenue
New York, New York 10017
Attention: Executive Vice President, Chief Legal Officer and General Counsel
Telecopy: (212) 527-5693
E-Mail Address: robert.kretzman@revlon.com
| | (ii) | if to any Lender, at its lending office specified opposite its name onSchedule I or on the signature page of any applicable Assignment and Acceptance; |
| (iii) | if to the Administrative Agent: |
Citicorp USA, Inc.
388 Greenwich Street
New York, New York 10013
Attention: James J. McCarthy
Telecopy no: (212) 816-2613
E-Mail Address: james.j.mccarthy@citigroup.com
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with a copy (other than of items relating to funding and payments) to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153-0119
Attention: Daniel S. Dokos
Telecopy no: (212) 310-8007
E-Mail Address: daniel.dokos@weil.com
or at such other address as shall be notified in writing (x) in the case of the Company and the Administrative Agent, to the other parties and (y) in the case of all other parties, to the Company and the Administrative Agent.
(b) Effectiveness of Notices. All notices, demands, requests, consents and other communications described inclause (a)above shall be effective (i) if delivered by hand, including any overnight courier service, upon delivery, (ii) if delivered by first class, postage prepaid mail, five days after deposited in the mails, (iii) except to any Loan Party, if delivered by posting to an Approved Electronic Platform, an Internet website or a similar telecommunication device requiring that a user have prior access to such Approved Electronic Platform, website or other device, when such notice, demand, request, consent and other communication shall have been made generally available on such Approved Electronic Platform, Internet website or similar device to the class of Person being notified (regardless of whether any such Person must accomplish, and whether or not any such Person shall have accomplished, any action prior to obtaining access to such items, including registration, disclosure of contact information, compliance with a standard user agreement or undertaking a duty of confidentiality) and (iv) if delivered by electronic mail or any other telecommunications device, when transmitted to an electronic mail address (or by another means of electronic delivery) as provided inclause (a)above;provided,however, that notices and communications to the Administrative Agent pursuant toArticle II, Article VIIandArticle XIII shall not be effective until received by the Administrative Agent.
(c) Use of Electronic Platform. Notwithstandingclauses(a)and(b) above (unless the Administrative Agent requests that the provisions ofclauses (a)and(b) above be followed) and any other provision in this Agreement or any other Loan Document providing for the delivery of, any Approved Electronic Communication by any other means, the Loan Parties shall deliver all Approved Electronic Communications to the Administrative Agent by properly transmitting such Approved Electronic Communications electronically (in a format acceptable to the Administrative Agent) to oploanswebadmin@citigroup.com or such other electronic mail address (or similar means of electronic delivery) as the Administrative Agent may notify the Company. Nothing in thisclause(c) shall prejudice the right of the Administrative Agent or any Lender to deliver any Approved Electronic Communication to any Loan Party in any manner authorized in this Agreement.
Section 14.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Administrative Agent, the Collateral Agent or any Lender, any right, remedy, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.
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Section 14.4 Survival of Representations and Warranties. All representations and warranties made hereunder and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the Notes.
Section 14.5 Payment of Expenses. (a) The Company shall, and shall cause each other Loan Party to, upon demand, pay, or reimburse each Agent and the Arranger, as applicable, for all of such Agent’s and Arranger’s, as applicable, reasonable and invoiced internal audit, appraisal and valuation costs and expenses and all reasonable and invoiced out-of-pocket costs and expenses of every type and nature (including the reasonable fees, expenses and disbursements of the Agents’ and Arranger’s counsel, Weil, Gotshal & Manges LLP (or any other primary counsel selected by such Agent or Arranger), local legal counsel, auditors, accountants, appraisers, printers, insurance and environmental advisors, and other consultants and agents) incurred by such Agent and Arranger, as applicable, in connection with any of the following: (i) the syndication of the Term Loan Facility, (ii) the Administrative Agent’s audit and investigation of the Company and its Subsidiaries in connection with the preparation, negotiation or execution of any Loan Document or the Administrative Agent’s periodic audits of the Company or any of its Subsidiaries, as the case may be, (iii) the preparation, negotiation, execution or interpretation of this Agreement (including, without limitation, the satisfaction or attempted satisfaction of any condition set forth inArticle IX), any Loan Document or any proposal letter or commitment letter issued in connection therewith, or the making of the Loans hereunder, (iv) the creation, perfection or protection of the Liens under any Loan Document (including any reasonable fees, disbursements and expenses for local counsel in various jurisdictions as contemplated by the Agreement), (v) the ongoing administration of this Agreement and the Loans, including consultation with attorneys in connection therewith and with respect to each Agent’s rights and responsibilities hereunder and under the other Loan Documents, (vi) the protection, collection or enforcement of any Payment Obligation or the enforcement of any Loan Document, (vii) the commencement, defense or intervention in any court proceeding relating in any way to the Payment Obligations, any Loan Party, any of the Company’s Subsidiaries, this Agreement or any other Loan Document, (viii) the response to, and preparation for, any subpoena or request for document production with which such Agent is served or deposition or other proceeding in which such Agent is called to testify, in each case, relating in any way to the Payment Obligations, any Loan Party, any of the Company’s Subsidiaries, this Agreement or any other Loan Document or (ix) any amendment, consent, waiver, assignment, restatement, or supplement to any Loan Document or the preparation, negotiation and execution of the same.
(b) The Company further agrees to, and to cause each other Loan Party to, pay or reimburse each of the Agents and each of the Lenders upon demand for all out-of-pocket costs and expenses, including reasonable and invoiced attorneys’ fees (including costs of counsel and costs of settlement), incurred by such Agents or such Lenders in connection with any of the following: (i) in enforcing any Loan Document or Payment Obligation or any security therefor or exercising or enforcing any other right or remedy available by reason of an Event of Default, (ii) in connection with any refinancing or restructuring of the credit arrangements provided hereunder in the nature of a “work-out” or in any insolvency or bankruptcy proceeding, (iii) in commencing, defending or intervening in any litigation or in filing a petition, complaint, answer, motion or other pleadings in any legal proceeding relating to the Payment Obligations, any Loan Party, any of the Company’s Subsidiaries and related to or arising out of the transactions contemplated hereby or by any other Loan Document or (iv) in taking any other action in or with respect to any suit or proceeding (bankruptcy or otherwise) described inclause (i), (ii) or(iii) above.
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(c) Any obligation of the Company or any other Loan Party pursuant to thisSection 14.5 shall survive Full Satisfaction of the Payment Obligations.
Section 14.6 Assignments and Participations; Binding Effect. (a) Each Lender may sell, transfer, negotiate or assign to one or more Eligible Assignees all or a portion of its rights and obligations hereunder (including all of its rights and obligations with respect to the Term Loans);provided,however, that (i) the aggregate amount being assigned pursuant to each such assignment (determined as of the date of the Assignment and Acceptance with respect to such assignment) shall in no event (if less than the assignor’s entire interest) be less than $1,000,000 or an integral multiple of $1,000,000 in excess thereof, except (A) with the consent of the Company and the Administrative Agent or (B) if such assignment is being made to a Lender or an Affiliate or Related Fund of such Lender and (iii) if such Eligible Assignee is not, prior to the date of such assignment, a Lender or an Affiliate or Related Fund of a Lender, such assignment shall be subject to the prior consent of the Administrative Agent and the Company (which consents shall not be unreasonably withheld or delayed); andprovided,further, that, notwithstanding any other provision of this Section 14.6, the consent of the Company shall not be required (x) for any assignment occurring when any Event of Default shall have occurred and be continuing and (y) for any assignment by the Administrative Agent or any Affiliate or Related Fund of the Administrative Agent of the Term Loan Commitment or Loans held on the Closing Date by the Administrative Agent or any such Affiliate or Related Fund if such assignment is made as part of the primary syndication of the Facility.
(b) The parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance and recording, an Assignment and Acceptance, together with any Note (if the assigning Lender’s Loans are evidenced by a Note) subject to such assignment. Upon the execution, delivery, acceptance and recording of any Assignment and Acceptance and, other than in respect of assignments made pursuant to Section 14.1(c), the receipt by the Administrative Agent from the assignee of an assignment fee in the amount of $3,500, from and after the effective date specified in such Assignment and Acceptance, (i) the assignee thereunder shall become a party hereto and, to the extent that rights and obligations under the Loan Documents have been assigned to such assignee pursuant to such Assignment and Acceptance, have the rights and obligations (including without limitation the obligations underSection 7.12(c)) of a Lender hereunder;provided, however, that no Transferee (including an assignee that is already a Lender hereunder at the time of the assignment) shall be entitled to receive any greater amount pursuant to Section 7.12 than that to which the assignor Lender would have been entitled to receive had no such assignment occurred, (ii) the Notes (if any) corresponding to the Loans assigned thereby shall be transferred to such assignee by notification in the Register and (iii) the assignor thereunder shall, to the extent that rights and obligations under this Agreement have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights (except for those surviving the payment in full of the Payment Obligations) and be released from its obligations under the Loan Documents, other than those relating to events or circumstances occurring prior to such assignment (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations under the Loan Documents, such Lender shall cease to be a party hereto). Solely for purposes of calculating the assignment fee under thisSection 14.6(b), multiple assignments on the same date by a Lender to its Affiliates or Related Funds shall constitute one assignment.
(c) The Administrative Agent shall maintain at its address referred to in Section 14.2 a copy of each Assignment and Acceptance delivered to and accepted by it and a register for the recording of the names and addresses of the Lenders and the applicable Term Loan Commitments of and principal amount of and interest with respect to the Term Loans owing
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to each applicable Lender from time to time (each, a “Register”). Any assignment pursuant to thisSection 14.6 shall not be effective until such assignment is recorded in such Register. The entries in each Register shall be conclusive and binding for all purposes, absent manifest error, and the Loan Parties, the Administrative Agent and the Lenders may treat each Person whose name is recorded in such Register as a Lender for all purposes of this Agreement. All information contained in each Register as to any Lender shall be available for inspection by the Company, the Administrative Agent or such Lender at any reasonable time and from time to time upon reasonable prior notice.
(d) Notwithstanding anything to the contrary contained herein, the Term Loans (including the Notes evidencing such Loans) are registered obligations and the right, title, and interest of the Lenders and their assignees in and to such Term Loans shall be transferable only upon notation of such transfer in the applicable Register. A Note shall only evidence the Lender’s or an assignee’s right, title and interest in and to the related Loan, and in no event is any such Note to be considered a bearer instrument or obligation. ThisSection 14.6 shall be construed so that the Term Loans are at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Internal Revenue Code and any related regulations (or any successor provisions of the Internal Revenue Code or such regulations). Solely for purposes of this and for tax purposes only, the Administrative Agent shall act as the Company’s agent for purposes of maintaining such notations of transfer in each Register.
(e) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and an assignee, the Administrative Agent shall, if such Assignment and Acceptance has been completed, (i) accept such Assignment and Acceptance, (ii) record or cause to be recorded the information contained therein in the applicable Register and (iii) give prompt notice thereof to the Company. Within five Business Days after its receipt of such notice, the Company, at its own expense, shall, if requested by such assignee, execute and deliver to the Administrative Agent, new Notes to the order of such assignee in an amount equal to the Loans and Term Loan Commitment assumed by it pursuant to such Assignment and Acceptance and, if the assigning Lender has surrendered any Note for exchange in connection with the assignment and has retained Loans or Term Loan Commitment hereunder, new Notes to the order of the assigning Lender in an amount equal to the Loans or Term Loan Commitment retained by it hereunder. Such new Notes shall be dated the same date as the surrendered Notes.
(f) In addition to the other assignment rights provided in thisSection 14.6, each Lender may do each of the following:
(i) grant to a Special Purpose Vehicle the option to make all or any part of any Loan that such Lender would otherwise be required to make hereunder and the exercise of such option by any such Special Purpose Vehicle and the making of Loans pursuant thereto shall satisfy (once and to the extent that such Loans are made) the obligation of such Lender to make such Loans thereunder,provided,however, that (x) nothing herein shall constitute a commitment or an offer to commit by such a Special Purpose Vehicle to make Loans hereunder and no such Special Purpose Vehicle shall be liable for any indemnity or other Payment Obligation (other than the making of Loans for which such Special Purpose Vehicle shall have exercised an option, and then only in accordance with the relevant option agreement) and (y) such Lender’s obligations under the Loan Documents shall remain unchanged, such Lender shall remain responsible to the other parties for the performance of its obligations under the terms of this Agreement and shall remain the holder of the Payment Obligations for all purposes hereunder; and
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(ii) assign, as collateral or otherwise, any of its rights under this Agreement, whether now owned or hereafter acquired (including rights to payments of principal or interest on the Loans), to (A) without notice to or consent of the Administrative Agent or the Company, any Federal Reserve Bank (pursuant to Regulation A of the Federal Reserve Board) and (B) without consent of the Administrative Agent or the Company, (1) any holder of, or trustee for the benefit of, the holders of such Lender’s securities and (2) any Special Purpose Vehicle to which such Lender has granted an option pursuant toclause (i) above;
provided,however, that no such assignment or grant shall release such Lender from any of its obligations hereunder except as expressly provided inclause (i) above and except, in the case of a subsequent foreclosure pursuant to an assignment as collateral, if such foreclosure is made in compliance with the other provisions of thisSection 14.6 other than thisclause (f) orclause (g) below. Each party hereto acknowledges and agrees that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior debt of any such Special Purpose Vehicle, such party shall not institute against, or join any other Person in instituting against, any Special Purpose Vehicle that has been granted an option pursuant to thisclause (f)any bankruptcy, reorganization, insolvency or liquidation proceeding (such agreement shall survive the payment in full of the Payment Obligations). The terms of the designation of, or assignment to, such Special Purpose Vehicle shall not restrict such Lender’s ability to, or grant such Special Purpose Vehicle the right to, consent to any amendment or waiver to this Agreement or any other Loan Document or to the departure by the Company from any provision of this Agreement or any other Loan Document without the consent of such Special Purpose Vehicle except, as long as the Administrative Agent and the Lenders, and other Secured Parties shall continue to, and shall be entitled to continue to, deal solely and directly with such Lender in connection with such Lender’s obligations under this Agreement, to the extent any such consent would reduce the principal amount of, or the rate of interest on, any Payment Obligations, amend thisclause (f) or postpone any scheduled date of payment of such principal or interest. Each Special Purpose Vehicle shall be entitled to the benefits ofSection 7.9(d), 7.10 and7.12 as if it were such Lender;provided,however, that anything herein to the contrary notwithstanding, the Company shall not, at any time, be obligated to make underSection 7.9(d),7.10 and7.12 to any such Special Purpose Vehicle and any such Lender any payment in excess of the amount the Company would have been obligated to pay to such Lender in respect of such interest if such Special Purpose Vehicle had not been assigned the rights of such Lender hereunder;provided,further, that any such Special Purpose Vehicle shall have complied with the requirements ofSection 7.12.
(g) Each Lender may sell participations to one or more Persons in or to all or a portion of its rights and obligations under the Loan Documents (including all its rights and obligations with respect to Term Loans). The terms of such participation shall not, in any event, require the participant’s consent to any amendments, waivers or other modifications of any provision of any Loan Documents, the consent to any departure by any Loan Party therefrom, or to the exercising or refraining from exercising any powers or rights such Lender may have under or in respect of the Loan Documents (including the right to enforce the obligations of the Loan Parties), except if any such amendment, waiver or other modification or consent would (i) reduce the amount, or postpone any date fixed for the payment of principal, interest or fees payable to such participant under the Loan Documents, to which such participant would otherwise be entitled under such participation or (ii) result in the release of all or substantially all of the Collateral other than in accordance with Section 9 of the Intercreditor Agreement. In the event of the sale of any participation by any Lender, (w) such Lender’s obligations under the Loan Documents shall remain unchanged, (x) such Lender shall remain solely responsible to the other
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parties for the performance of such obligations, (y) such Lender shall remain the holder of such Payment Obligations for all purposes of this Agreement and (z) the Company, the Agents and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Each participant shall be entitled to the benefits ofSection 7.9(d), 7.10 and7.12 as if it were a Lender;provided,however, that notwithstanding anything herein to the contrary, the Company shall not, at any time, be obligated to make any payment underSection 7.9(d), 7.10and 7.12 to the participants in the rights and obligations of any Lender (together with such Lender) in excess of the amount the Company would have been obligated to pay to such Lender in respect of such interest had such participation not been sold;provided,further, that any such participant shall have complied with the requirements ofSection 7.12.
(h) This Agreement shall become effective when it shall have been executed by the Company, the Administrative Agent and the Collateral Agent and when the Administrative Agent shall have been notified by each Lender that such Lender has executed it and thereafter shall be binding upon and inure to the benefit of the Company, the Administrative Agent, the Collateral Agent and each Lender and, in each case, their respective successors and assigns;provided,however, that the Company shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lenders.
Section 14.7 Adjustments; Set-off. (a) Unless an Event of Default has occurred and is continuing, if any Lender (a “benefitted Lender”) shall at any time receive any payment of all or part of any of its Loans owing to it, or interest thereon, pursuant to a guarantee or otherwise, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off or otherwise), in a greater proportion than any such payment to and collateral received by any other Lender, if any, in respect of such other Lender’s Loans owing to it or interest thereon, such benefitted Lender shall purchase for cash from the other Lenders such portion of each such other Lender’s similar Loans, or shall provide such other Lenders with the benefits of any such collateral, or the proceeds thereof, as shall be necessary to cause such benefitted Lender to share the excess payment or benefits of such collateral or proceeds ratably with each of the Lenders which hold such Term Loans;provided,however, that if all or any portion of such excess payment or benefits is thereafter recovered from such benefitted Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest. The Company agrees that each Lender so purchasing a portion of another Lender’s Loans may exercise all rights of payment (including, without limitation, rights of set-off) with respect to such portion as fully as if such purchasing Lender were the direct holder of such portion. After the delivery of a Notice of Actionable Default and prior to the withdrawal of all Notices of Actionable Default then pending, all payments or Collateral (or proceeds thereof) received by any Agent or Lender in contravention of this Agreement, the Intercreditor Agreement or any other Loan Document, shall be segregated and held in trust and forthwith paid over to the Collateral Agent to be applied pursuant toSection 7.15(e).
(b) Subject to the Intercreditor Agreement, in addition to any rights and remedies of the Lenders provided by law, upon both the occurrence of an Event of Default and acceleration of the Payment Obligations owing in connection with this Agreement, each Lender and each of its Affiliates shall have the right, without prior notice to the Company, any such notice being expressly waived to the extent permitted by applicable law, to set off and apply against any indebtedness, whether matured or unmatured, of the Company to such or any other Lender or such Affiliate any amount owing from such Lender or such Affiliate to the Company at, or at any time after, the happening of both of the above mentioned events, and such right of set-off may be exercised by such Lender or such Affiliate against the Company or against any
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trustee in bankruptcy, debtor in possession, assignee for the benefit of creditors, receiver, custodian or execution, judgment or attachment creditor of the Company, or against anyone else claiming through or against the Company or such trustee in bankruptcy, debtor in possession, assignee for the benefit of creditors, receivers, or execution, judgment or attachment creditor, notwithstanding the fact that such right of set-off shall not have been exercised by such Lender or such Affiliate prior to the making, filing or issuance, or service upon such Lender or such Affiliate of, or of notice of, any such petition, assignment for the benefit of creditors, appointment or application for the appointment of a receiver, or issuance of execution, subpoena, order or warrant. Each Lender agrees promptly to notify the Company and the Administrative Agent after any such set-off and application made by such Lender or any of its Affiliates; provided,however, that the failure to give such notice shall not affect the validity of such set-off and application.
Section 14.8 [Intentionally Omitted.]
Section 14.9 [Intentionally Omitted.]
Section 14.10 Intercreditor Agreement. Each Lender hereby acknowledges that it has fully reviewed the Intercreditor Agreement and, by its execution of this Agreement, hereby consents to the execution and delivery of the Intercreditor Agreement by the Administrative Agent and the Collateral Agent (in their respective capacities as Agents hereunder, as agents under the Existing Credit Agreement, and as agent for the holders of the Designated Eligible Obligations) and agrees to comply with the terms thereof (which terms are incorporated herein by reference in their entirety) as if such Lender were a direct signatory thereto.
Section 14.11 Severability; Conflicts. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. In the event of any conflict between the terms of this Agreement and any other Loan Document (except for the Intercreditor Agreement), the terms of this Agreement shall govern. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement or any other Loan Document, the Intercreditor Agreement shall govern.
Section 14.12 Counterparts; Confidentiality. (a) This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Agreement by facsimile transmission or by posting on the Approved Electronic Platform shall be as effective as delivery of a manually executed counterpart hereof. A set of the copies of this Agreement signed by all the parties shall be lodged with the Company and the Administrative Agent.
(b) Each Lender agrees that it will not disclose Confidential Information (as defined below) to any Person other than (i) as may be consented to by the Company, (ii) as may be required by law or pursuant to legal process and (iii) to prospective participants and Transferees and those of such Lender’s directors, officers, employees, examiners and professional advisors who have a need to know the Confidential Information in accordance with customary banking practices and who receive the Confidential Information having been made aware of the restrictions of thisSection 14.12(b). As used herein, the term “Confidential Information” means all information contained in materials relating to the Company and its Subsidiaries provided to
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the Lenders by the Company or its representatives or agents other than (x) information which is at the time so provided or thereafter becomes generally available to the public other than as a result of a disclosure by one or more Lenders, (y) information which was available to any Lender prior to its disclosure to the Lenders by the Company, its representatives or agents and (z) information which becomes available to one or more Lenders from a source other than the Company, its representatives or agents.
Section 14.13 Submission To Jurisdiction; Waivers. (a) [Intentionally Omitted.]
(b) The Company hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or proceeding relating to this Agreement or any other Loan Document to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York, the courts of the United States for the Southern District of New York, and appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought in such courts and waives trial by jury and any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to it at its address set forth inSection 14.2 or at such other address of which the Administrative Agent shall have been notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction.
(c) The Company, each Agent and each Lender hereby irrevocably and unconditionally waives trial by jury in any legal action or proceeding referred to inclause (a) above.
Section 14.14 Acknowledgements. The Company hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents;
(b) none of any Agent, the Arranger or any Lender has any fiduciary relationship with or duty to the Company arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between each such Agent, Arranger and Lenders, on one hand, and the Company, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and
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(c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among the Company and the Lenders.
Section 14.15 USA PATRIOT Act. Each Lender hereby notifies the Company that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies the Company, which information includes the name and address of the Company and other information that will allow such Lender to identify the Company in accordance with the Act.
Section 14.16 Governing Law. This Agreement shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.
Section 14.17 Indemnities. (a) The Company agrees to, and shall cause each other Loan Party to, indemnify and hold harmless each Agent, the Arranger, each Lender and each of their respective Affiliates, and each of the directors, officers, employees, agents, trustees, representatives, attorneys, consultants and advisors of or to any of the foregoing (including those retained in connection with the satisfaction or attempted satisfaction of any condition set forth inArticle IX) (each such Person being an “Indemnitee”) from and against any and all claims, damages, liabilities, obligations, losses, penalties, actions, judgments, suits, costs, disbursements and expenses, joint or several, of any kind or nature (including reasonable fees, disbursements and expenses of financial and legal advisors to any such Indemnitee) that may be imposed on, incurred by or asserted against any such Indemnitee in connection with or arising out of any investigation, litigation or proceeding, whether or not such investigation, litigation or proceeding is brought by any such Indemnitee or any of its directors, security holders or creditors or any such Indemnitee, director, security holder or creditor is a party thereto, whether direct, indirect, or consequential and whether based on any federal, state or local law or other statutory regulation, securities or commercial law or regulation, or under common law or in equity, or on contract, tort or otherwise, in any manner relating to or arising out of this Agreement, any other Loan Document, any Payment Obligation, or any act, event or transaction related or attendant to any thereof, or the use or intended use of the proceeds of the Loans or in connection with any investigation of any potential matter covered hereby (collectively, the “Indemnified Matters”);provided,however, that the Company shall not have any liability under thisSection 14.17 to an Indemnitee with respect to any Indemnified Matter to the extent such liability has resulted from the gross negligence or willful misconduct of that Indemnitee, as determined by a court of competent jurisdiction in a final non-appealable judgment or order;provided,further, that the Company shall not be required to reimburse the Indemnitees for the fees and expenses of more than one joint counsel for the Administrative Agent and the Collateral Agent and one joint counsel for the other Indemnitees unless such representation shall result in a conflict of interest among the Indemnitees. Without limiting the foregoing, “Indemnified Matters” include (i) all Environmental Liabilities and Costs arising from or connected with the past, present or future operations of the Company or any of its Subsidiaries involving any property subject to a Security Document, or damage to real or personal property or natural resources or harm or injury alleged to have resulted from any Release of Hazardous Materials on, upon or into such property or any contiguous real estate, (ii) any costs or liabilities incurred in connection with any Remedial Action concerning the Company or any of its Subsidiaries, (iii) any costs or liabilities incurred in connection with any Lien in favor of any Governmental Authority for Environmental Liabilities and Costs and (iv) any costs or liabilities incurred in connection with any other matter under any Environmental Law, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (49 U.S.C. § 9601 et seq.) and applicable state property transfer laws, whether, with respect to any such matter, such Indemnitee is a mortgagee pursuant to any
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leasehold mortgage, a mortgagee in possession, the successor in interest to the Company or any of its Subsidiaries, or the owner, lessee or operator of any property of the Company or any of its Subsidiaries by virtue of foreclosure, except, with respect to those matters referred to inclauses (i),(ii),(iii) and(iv) above, to the extent (x) incurred following foreclosure by the Collateral Agent, at the direction of the Administrative Agent, any Lender, or any Agent or any Lender having become the successor in interest to the Company or any of its Subsidiaries and (y) to the extent attributable to acts of the Agents, such Lender or any agent on behalf of such Agent or such Lender.
(b) The Company shall, and shall cause each other Loan Party to, indemnify the Agents and the Lenders for, and hold the Agents and the Lenders harmless from and against, any and all claims for brokerage commissions, fees and other compensation made against the Agents and the Lenders for any broker, finder or consultant with respect to any agreement, arrangement or understanding made by or on behalf of any Loan Party or any of its Subsidiaries in connection with the transactions contemplated by this Agreement.
(c) The Company, at the request of any Indemnitee, shall have the obligation to defend against any investigation, litigation or proceeding or requested Remedial Action, in each case contemplated inclause (a)above, and the Company, in any event, may participate in the defense thereof with legal counsel of the Company’s choice. In the event that such Indemnitee requests the Company to defend against such investigation, litigation or proceeding or requested Remedial Action, the Company shall promptly do so and lead such defense, and such Indemnitee shall have the right to have legal counsel of its choice participate in such defense;provided,however, that the fees and expenses of such counsel shall be reasonable for a secondary counsel;provided,further, that the Company shall not be required to reimburse the Indemnitees for the fees and expenses of more than one joint counsel for the Administrative Agent and the Collateral Agent and one joint counsel for the other Indemnitees unless such representation shall result in a conflict of interest among the Indemnitees. No action taken by legal counsel chosen by such Indemnitee in defending against any such investigation, litigation or proceeding or requested Remedial Action, shall vitiate or in any way impair the Company’s obligation and duty hereunder to indemnify and hold harmless such Indemnitee.
(d) The Company agrees that any indemnification or other protection provided to any Indemnitee pursuant to this Agreement (including pursuant to thisSection 14.17) or any other Loan Document shall (i) survive Full Satisfaction of the Payment Obligations and (ii) inure to the benefit of any Person that was at any time an Indemnitee under this Agreement or any other Loan Document.
Section 14.18 Limitation of Liability. (a) The Company agrees that no Indemnitee shall have any liability (whether in contract, tort or otherwise) to any Loan Party or any of their respective Subsidiaries or any of their respective equity holders or creditors for or in connection with the transactions contemplated hereby and in the other Loan Documents, except to the extent such liability is determined in a final non-appealable judgment by a court of competent jurisdiction to have resulted primarily from such Indemnitee’s gross negligence or willful misconduct. In no event, however, shall any Indemnitee be liable on any theory of liability for any special, indirect, consequential or punitive damages (including, without limitation, any loss of profits, business or anticipated savings). The Company hereby waives, releases and agrees (each for itself and on behalf of Revlon and the Company’s Subsidiaries) not to sue upon any such claim for any special, indirect, consequential or punitive damages, whether or not accrued and whether or not known or suspected to exist in its favor.
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(b) IN NO EVENT SHALL ANY AGENT AFFILIATE HAVE ANY LIABILITY TO ANY LOAN PARTY, LENDER OR ANY OTHER PERSON FOR DAMAGES OF ANY KIND, INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT OR CONTRACT OR OTHERWISE) ARISING OUT OF ANY LOAN PARTY OR ANY AGENT AFFILIATE’S TRANSMISSION OF APPROVED ELECTRONIC COMMUNICATIONS THROUGH THE INTERNET OR ANY USE OF THE APPROVED ELECTRONIC PLATFORM, EXCEPT TO THE EXTENT SUCH LIABILITY OF ANY AGENT AFFILIATE IS FOUND IN A FINAL NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FORM SUCH AGENT AFFILIATE’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
[SIGNATUREPAGESFOLLOW]
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INWITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
| | REVLON CONSUMER PRODUCTS CORPORATION |
| | |
| |
| | By: | /s/ Robert K. Kretzman |
| | |
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| | | Name: Robert K. Kretzman |
| | | Title: Executive Vice President, Chief Legal Officer and General Counsel |
[SIGNATURE PAGE TO TERM LOAN AGREEMENT]
| | CITICORP USA, INC., as Administrative
Agent, Collateral Agent and Lender |
| | |
| |
| | By: | /s/ David Leland |
| | |
|
| | | Name: David Leland |
| | | Title: Vice President |
[SIGNATURE PAGE TO TERM LOAN AGREEMENT]
