[REVLON LOGO]
REVLON CONSUMER PRODUCTS CORPORATION
OFFER TO PURCHASE FOR CASH AND CONSENT SOLICITATION
RELATING TO ANY AND ALL OF ITS OUTSTANDING
$363,000,000
12% SENIOR SECURED NOTES DUE 2005
(CUSIP NO. 761519AT4)
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THE EARLY CONSENT DATE IS 5:00 P.M., NEW YORK CITY TIME, ON APRIL 29, 2004 (AS
IT MAY BE EXTENDED FROM TIME TO TIME, THE "EARLY CONSENT DATE"), AND THE
EXPIRATION DATE IS 3:00 P.M., NEW YORK CITY TIME, ON MAY 14, 2004 (AS IT MAY BE
EXTENDED FROM TIME TO TIME OR EARLIER TERMINATED, THE "EXPIRATION DATE"). IF WE
EXTEND EITHER OF THESE DATES OR TIMES, WE WILL ANNOUNCE THE NEW DATES OR TIMES.
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Revlon Consumer Products Corporation, a Delaware corporation ("Products
Corporation" or the "Company"), hereby offers to purchase (the "Tender Offer")
for cash, upon the terms and subject to the conditions set forth in this offer
to purchase and consent solicitation statement (as it may be amended or
supplemented, this "Offer to Purchase") and in the accompanying letter of
transmittal and consent (the "Letter of Transmittal"), any and all of its
outstanding 12% Senior Secured Notes due 2005 (the "Notes") issued on June 21,
2002, and solicits consents to amendments to certain of the provisions of the
indenture under which the Notes were issued.
The consideration offered hereby for each $1,000 principal amount of Notes
validly tendered and not withdrawn pursuant to the Tender Offer shall be the
price (calculated as described in Schedule A to this Offer to Purchase) equal
to (i) the present value on the Settlement Date (as defined below) of $1,000
principal amount of Notes (the amount payable on December 1, 2005, which is the
maturity date for the Notes (the "Maturity Date")) and the present value of the
interest that would be payable on, or accrue from, the last interest payment
date until the Maturity Date, in each case, determined on the basis of a yield
(the "Tender Offer Yield") to the Maturity Date equal to the sum of (x) the
bid-side yield on the 1.875% U.S. Treasury note due November 30, 2005 (the
"Reference Yield") calculated as described below, plus (y) 75 basis points
(such price being rounded to the nearest cent), minus accrued and unpaid
interest from the last interest payment date to, but not including, the
Settlement Date (the consideration referred to in this clause (i) is referred
to as the "Total Consideration"), minus (ii) $20.00 per $1,000 principal amount
of Notes, which is equal to the Consent Payment referred to below. The Total
Consideration minus the Consent Payment is referred to as the "Tender Offer
Consideration". In addition to the Total Consideration or the Tender Offer
Consideration, as applicable, Noteholders who validly tender and do not
withdraw their Notes in the Tender Offer will also receive accrued and unpaid
interest from the last interest payment date to, but not including, the
Settlement Date, payable on the Settlement Date.
The Reference Yield will be calculated by the Dealer Manager (as defined
below) in accordance with standard market practice, as of 2:00 p.m., New York
City time, on the second business day prior to the Expiration Date ("Price
Determination Date"), as reported by Bloomberg Government Pricing Monitor on
"Page PX4" (the "Bloomberg Page") or, if any relevant price is not available on
a timely basis on the Bloomberg Page or is manifestly erroneous, such other
recognized quotation source as the Dealer Manager shall select in its sole
discretion. The Company will publicly announce the pricing information referred
to above by press release to Business Wire by 9:30 a.m., New York City time, on
the next business day after the Price Determination Date.
The following table summarizes the material pricing terms for the Total
Consideration which includes the Consent Payment:
OUTSTANDING
PRINCIPAL TITLE OF CONSENT REFERENCE REFERENCE FIXED
CUSIP NO. AMOUNT SECURITY EARLY CONSENT DATE PAYMENT(1) SECURITY PAGE SPREAD
- ------------- --------------- --------------- --------------------- ------------ ----------------------- ----------- ----------
761519AT4 $363,000,000 12% Senior 5:00 p.m., $ 20.00 1.875% PX4 0.75%
Secured Notes New York City time, U.S. Treasury Note due
due 2005 Thursday, November 30, 2005
April 29, 2004
(1) Per $1,000 principal amount of Notes validly tendered.
The Dealer Manager for the Offer is:
CITIGROUP
April 16, 2004
The Total Consideration includes a consent payment (the "Consent Payment")
of $20.00 per $1,000 principal amount of Notes paid to each Noteholder that
validly tenders and does not withdraw its Notes prior to 5:00 p.m., New York
City time, on the Early Consent Date. Holders of Notes ("Noteholders") that
validly tender, and do not withdraw, their Notes pursuant to the Offer prior to
5:00 p.m., New York City time, on the Early Consent Date will receive the Total
Consideration (which includes the Consent Payment), subject to the terms and
conditions set forth in this Offer to Purchase and the accompanying Letter of
Transmittal, payable on the Settlement Date. Noteholders that validly tender,
and do not withdraw, their Notes after 5:00 p.m., New York City time, on the
Early Consent Date and before 3:00 p.m., New York City time, on the Expiration
Date will receive the Tender Offer Consideration payable for Notes validly
tendered, payable on the Settlement Date, which does not include the Consent
Payment. In each case, Noteholders that validly tender their Notes shall
receive accrued and unpaid interest from the last interest payment date to, but
not including, the Settlement Date, payable on the Settlement Date. The
"Settlement Date" is expected to be promptly following the Expiration Date. NO
TENDERS WILL BE VALID IF SUBMITTED AFTER 3:00 P.M., NEW YORK CITY TIME, ON THE
EXPIRATION DATE.
In connection with the Tender Offer, we are also soliciting consents (the
"Consent Solicitation" and, together with the Tender Offer, the "Offer") for
certain proposed amendments to the Notes which, subject to the consummation of
the Tender Offer, (x) would eliminate substantially all covenant protection
under the indenture (the "Proposed Amendments") governing the Notes (the
"Existing Indenture") and (y) would release the guarantees of the obligations
of the Company under the Notes and the collateral securing the obligations of
the Company and the guarantors (the "Collateral and Guaranty Release").
Acceptance by a Noteholder of the Tender Offer also constitutes a consent (a
"Consent") to the Proposed Amendments and the Collateral and Guaranty Release.
Any Notes owned by the Company or by any person directly or indirectly
controlling or controlled by or under common control with the Company shall be
disregarded in determining whether the Noteholders of the required principal
amount of Notes have given a Consent in connection with the Proposed Amendments
and the Collateral and Guaranty Release.
Promptly following receipt of sufficient Consents to effectuate the
Proposed Amendments and the Collateral and Guaranty Release, the Company, the
guarantors of the Company's obligations under the Notes (the "Guarantors") and
the trustee for the Existing Indenture intend to execute a supplemental
indenture (the "Supplemental Indenture") embodying the Proposed Amendments and
the Collateral and Guaranty Release as described in Appendix A. The
Supplemental Indenture will become effective upon execution by Products
Corporation, the Guarantors and the Trustee, but will provide that the Proposed
Amendments and the Collateral and Guaranty Release will not become operative
until the time that Products Corporation notifies the Trustee and the
depositary for the Notes, U.S. Bank National Association (the "Depositary"),
that the Notes tendered and not validly withdrawn pursuant to the Offer are
accepted for purchase. If the Offer is terminated or withdrawn, in whole or in
part, or the Notes are not accepted for purchase for any reason, the Existing
Indenture will remain in effect in its present form.
WITHDRAWAL RIGHTS WILL TERMINATE AT THE TIME THAT THE CONDITIONS RELATING
TO THE REQUISITE CONSENTS (AS DEFINED HEREIN) HAVE BEEN SATISFIED OR WAIVED
(THE "WITHDRAWAL DEADLINE"), at which time the Company will issue a press
release announcing that the Withdrawal Deadline has passed. Since the
Withdrawal Deadline may occur on any date, the Company cannot predict when the
Withdrawal Deadline may occur. Notwithstanding the foregoing, Notes may be
validly withdrawn and the related Consents may be validly revoked after the
Withdrawal Deadline if the Company reduces the amount of the Total
Consideration or the Tender Offer Consideration, as applicable, the Consent
Payment or the principal amount of Notes subject to the Offer or is otherwise
required by law to permit withdrawal. A valid withdrawal of tendered Notes will
constitute the concurrent, valid revocation of such Noteholders' related
Consent. To revoke Consents delivered in connection with tendered Notes,
Noteholders must withdraw the related tendered Notes. In addition, tendered
Notes may be validly withdrawn and the related Consents revoked if the Offer is
terminated without any Notes being purchased thereunder. In the event of a
termination of the Offer, the Notes tendered pursuant to the Offer will be
promptly returned to the tendering Noteholders and the related Consents will be
ii
revoked. FOLLOWING THE WITHDRAWAL DEADLINE, NOTES, INCLUDING NOTES TENDERED
PRIOR TO THE WITHDRAWAL DEADLINE AND NOTES TENDERED THEREAFTER, MAY NO LONGER
BE VALIDLY WITHDRAWN AND THE RELATED CONSENTS MAY NOT BE REVOKED.
Subject to the terms and conditions set forth in this Offer to Purchase
and the accompanying Letter of Transmittal, the Total Consideration or the
Tender Offer Consideration, as applicable, to which a tendering Noteholder is
entitled pursuant to the Tender Offer will be paid on the Settlement Date.
Any questions or requests for assistance concerning the terms of the
Tender Offer and Consent Solicitation may be directed to Citigroup Global
Markets Inc. (the "Dealer Manager") at the address and telephone number set
forth on the back cover of this Offer to Purchase. Questions and requests for
assistance or additional copies of this Offer to Purchase or the accompanying
Letter of Transmittal or other Offer materials should be directed to D.F. King
& Co., Inc. (the "Information Agent") at the address and telephone number set
forth on the back cover of this Offer to Purchase. Beneficial owners may also
contact their brokers, dealers, commercial banks, trust companies or other
nominee for assistance concerning the Offer. Any Noteholder or beneficial owner
that has questions concerning tender procedures should contact the Depositary
at the address and telephone number set forth on the back cover of this Offer
to Purchase.
NONE OF THE COMPANY, THE DEALER MANAGER, THE DEPOSITARY OR THE INFORMATION
AGENT MAKES ANY RECOMMENDATION THAT ANY NOTEHOLDER TENDER OR REFRAIN FROM
TENDERING ALL OR ANY PORTION OF THE PRINCIPAL AMOUNT OF SUCH NOTEHOLDER'S NOTES
OR CONSENT OR NOT CONSENT TO THE PROPOSED AMENDMENTS OR THE COLLATERAL AND
GUARANTY RELEASE, AND NO ONE HAS BEEN AUTHORIZED BY ANY OF THEM TO MAKE SUCH A
RECOMMENDATION. NOTEHOLDERS MUST MAKE THEIR OWN DECISIONS AS TO WHETHER TO
CONSENT TO THE PROPOSED AMENDMENTS, OR THE COLLATERAL AND GUARANTY RELEASE OR
TO TENDER NOTES, AND, IF SO, THE PRINCIPAL AMOUNT OF NOTES TO TENDER.
The Company currently intends to privately place approximately $400.0
million aggregate principal amount of senior unsecured debt (the "New Debt
Issuance"). The Company also intends to enter into a new senior secured credit
facility (the "New Credit Facility") concurrently with the consummation of the
Tender Offer, which the Company expects to be for an aggregate of approximately
$680.0 million, of which approximately $530.0 million is expected to be a term
loan facility, with the balance being a multi-currency revolving credit
facility. The Company intends to use a portion of the amounts borrowed under
the New Credit Facility and a portion of the net proceeds from the New Debt
Issuance to (i) purchase the Notes tendered and accepted in the Offer and to
purchase the 8 1/8% Senior Notes due 2006 and 9% Senior Notes due 2006 tendered
and accepted in the 8 1/8% Senior Notes and 9% Senior Notes Offers to Purchase
(as defined herein), (ii) redeem any such notes that remain outstanding
following the respective offers to purchase, (iii) repay amounts outstanding
under the Company's existing credit facility, and (iv) pay fees and expenses
incurred in connection therewith, as well as in connection with the
debt-for-equity exchange transactions completed in March 2004. Statements in
this Offer to Purchase regarding the New Debt Issuance shall not constitute an
offer to sell or a solicitation of an offer to buy any securities.
The Notes are currently redeemable. Following the Expiration Date and
subject to the receipt of the Requisite Consents, satisfaction of the
Refinancing Condition (as defined herein) and the satisfaction or, where
applicable, waiver of the General Conditions (as defined herein), the Company
currently intends to redeem all Notes not tendered and accepted for purchase
pursuant to the Offer, in accordance with the terms and conditions of the
Existing Indenture. The redemption price, like the Total Consideration, is
based on a fixed spread pricing formula linked to the yield on substantially
similar U.S. Treasury securities, Accordingly, the redemption price will be
affected by changes in such yield and may differ from the Total Consideration.
This Offer to Purchase does not constitute a call for redemption, which may be
made at a later date upon the terms and conditions set forth in the Existing
Indenture.
iii
Notwithstanding any other provision of the Tender Offer, the Company's
obligation to accept for purchase, and to pay the Total Consideration or Tender
Offer Consideration, as applicable, for the Notes validly tendered pursuant to
the Tender Offer is subject to, and conditioned upon, the satisfaction of or,
where applicable, the Company's waiver of, the following:
o the consummation by the Company on or prior to the Settlement Date of
the New Debt Issuance on terms and conditions satisfactory to the Company
(the "New Debt Issuance Condition");
o the Company's entry into the New Credit Facility on or prior to the
Settlement Date on terms and conditions satisfactory to the Company (the
"New Credit Facility Condition");
o that the net proceeds of the New Debt Issuance and the amounts borrowed
by the Company under the New Credit Facility are sufficient to purchase
all of the Notes tendered in the Tender Offer (the "Funding Condition"
and, collectively with the New Debt Issuance Condition and the New Credit
Facility Condition, the "Refinancing Condition");
o the receipt by the Company of the Proposed Amendments Requisite Consents
to the elimination of substantially all of the restrictive covenants in
the Existing Indenture and the execution of the Supplemental Indenture
implementing such amendments;
o the receipt by the Company of the Collateral and Guaranty Release
Requisite Consents for the Collateral and Guaranty Release and the
execution of the Supplemental Indenture implementing such amendments; and
o the General Conditions (as defined below in "Terms of the Offer --
Conditions to the Tender Offer and Consent Solicitation").
Subject to applicable securities laws and the terms set forth in this
Offer to Purchase, the Company reserves the right, in its sole discretion, to
terminate the Offer or waive any one or more of the conditions at any time. For
example, if at least a majority in aggregate principal amount of the Notes
outstanding, but less than 66% aggregate principal amount of the Notes
outstanding, consent to the Proposed Amendments and the Collateral and Guaranty
Release, the Company may waive the condition that it receive the Collateral and
Guaranty Release Requisite Consents. In such case, the Supplemental Indenture
would contain the Proposed Amendments but not the Collateral and Guaranty
Release. Similarly, if less than a majority in aggregate principal of the Notes
outstanding consent to the Proposed Amendments and the Collateral and Guaranty
Release, the Company may waive the condition of the receipt of both the
Proposed Amendments Requisite Consents and the Collateral and Guaranty Release
Requisite Consents and consummate the Tender Offer. In such case, the
Supplemental Indenture would not be executed and the Existing Indenture would
remain in effect in its current form, with respect to any untendered Notes. See
"Terms of the Offer -- Conditions to the Tender Offer and Consent
Solicitation." If the Company waives one or more of the conditions at any time
at or after the Withdrawal Deadline, the Company will not be obligated to
extend withdrawal rights, except as required by law.
Noteholders should take note of the following dates in connection with the
Offer:
DATE CALENDAR DATE EVENT
- -------------------- ---------------------------------- ----------------------------------
Early Consent Date 5:00 p.m., New York City time, The last day for Noteholders to
Thursday, April 29, 2004, unless tender Notes in order to qualify
extended by the Company. for the payment of the Total
Consideration, which includes the
Consent Payment.
iv
DATE CALENDAR DATE EVENT
- -------------------------- ------------------------------------ -----------------------------------
Withdrawal Deadline The time that the conditions The deadline for Noteholders to
relating to the Requisite Consents validly withdraw tenders of Notes
has been satisfied or waived. made prior to the Withdrawal
Deadline, subject to limited
exceptions.
Expiration Date 3:00 p.m., New York City time, The last day for Noteholders to
Friday, May 14, 2004, unless tender Notes pursuant to the
extended or earlier terminated by Offer.
the Company.
Settlement Date In respect of all Notes validly The Company accepts all Notes
tendered and not withdrawn, the validly tendered and not
Company will make payment withdrawn. The Company notifies
promptly following the Expiration the Depositary that the tendered
Date. Notes are accepted for purchase
and payment. The Company will
deposit with the Depositary the
amount of cash necessary to pay
each Noteholder whose Notes are
accepted the Total Consideration
or Tender Offer Consideration, as
applicable, and accrued and
unpaid interest up to but not
including the Settlement Date. The
Depositary will pay each
Noteholder whose Notes are
accepted for payment the Total
Consideration or Tender Offer
Consideration, as applicable, for
all Notes accepted for tender and
accrued and unpaid interest.
Price Determination Date The Price Determination Date will The Dealer Manager calculates the
be the second business day prior Reference Yield. The Company
to the Expiration Date. will announce the pricing
information by press release to
Business Wire by 9:30 a.m., New
York City time, on the next
business day.
The Company retains the right to extend the Early Consent Date. The
Company also reserves the right to extend the Offer, if necessary, in its sole
discretion, so that the Expiration Date occurs upon or shortly after the
satisfaction of the conditions to the Offer.
Subject to applicable securities laws, the Company reserves the right, in
its sole discretion: (1) to waive any and all conditions to the Offer; (2)
extend or to terminate the Offer; or (3) otherwise to amend the Offer in any
respect. In the event that the Offer is withdrawn or otherwise not completed,
the Total Consideration or Tender Offer Consideration, as applicable, will not
be paid or become payable to Noteholders who have validly tendered their Notes
in connection with the Offer and the Existing Indenture will remain in effect
in its present form.
v
TO HOLDERS OF
REVLON CONSUMER PRODUCTS CORPORATION
12% SENIOR SECURED NOTES DUE 2005
SUMMARY
The following summary is provided for your convenience. It highlights
material information in this Offer to Purchase and the accompanying Letter of
Transmittal, but does not describe all of the details of the Offer. Noteholders
are urged to read the more detailed information set forth in this Offer to
Purchase and in the accompanying Letter of Transmittal. Each of the capitalized
terms used in this summary and not defined herein has the meaning set forth
elsewhere in this Offer to Purchase.
The Company has commenced the Tender Offer for cash any and all outstanding
Notes as described below:
OUTSTANDING
PRINCIPAL TITLE OF EARLY CONSENT CONSENT REFERENCE FIXED
CUSIP NO. AMOUNT SECURITY DATE PAYMENT (1) REFERENCE SECURITY PAGE SPREAD
- -------------- --------------- ------------ ----------------- ------------- -------------------- ----------- ----------
761519AT4 $363,000,000 12% Senior 5:00 p.m., $ 20.00 1.875% PX4 0.75%
Secured New York City U.S. Treasury Note
Notes due time, Thursday, due
2005 April 29, 2004 November 30, 2005
(1) Per $1,000 principal amount of Notes validly tendered.
IF YOU HAVE QUESTIONS, PLEASE CALL THE INFORMATION AGENT OR THE DEALER MANAGER
TOLL-FREE AT THEIR RESPECTIVE TELEPHONE NUMBERS ON THE BACK COVER OF THIS OFFER
TO PURCHASE.
The Company................... Revlon Consumer Products Corporation.
The Notes..................... 12% Notes, due December 1, 2005. The Notes
are governed by the indenture, dated as of
November 26, 2001 (the "Existing Indenture"),
between the Company, the Guarantors and
Wilmington Trust Company, as trustee (the
"Trustee").
The Refinancing Transactions... The refinancing, which is expected to
substantially reduce the Company's annual
interest expense and extend the maturities of a
significant amount of its debt, which would
otherwise be due in 2005 and 2006, consists of
the following elements:
o the Company's entry into the New Credit
Facility, which the Company expects to be
for an aggregate of approximately $680.0
million, of which approximately $530.0
million is expected to be a term loan
facility, with the balance being a
multi-currency revolving credit facility;
o the private placement of new senior
unsecured debt in the New Debt Issuance,
which the Company expects will be in an
aggregate principal amount of approximately
$400.0 million;
o the repayment in full of the Company's
existing credit agreement in the amount of
$312.0 million, of which approximately
$228.2 million was outstanding as of April
13, 2004; and
1
o the retirement of all the outstanding
$363.0 million, $116.2 million and $75.5
million aggregate principal amounts of the
Notes, the 8 1/8% Senior Notes due 2006 of
the Company and the 9% Senior Notes due
2006 of the Company, respectively. See "The
Refinancing Transactions -- Offer to
Purchase the 8 1/8% Senior Notes due 2006
and the 9% Senior Notes due 2006."
The Company intends to use a portion of the net
proceeds from the New Debt Issuance and a
portion of the amounts borrowed under the New
Credit Facility to (i) purchase the Notes
tendered and accepted in the Tender Offer and
to purchase the 8 1/8% Senior Notes due 2006
and the 9% Senior Notes due 2006 tendered and
accepted in the 8 1/8% Senior Notes and the 9%
Senior Notes Offers to Purchase (ii) redeem any
such notes that remain outstanding following
the respective offers to purchase, (iii) repay
amounts outstanding under the Company's
existing credit facility, and (iv) pay fees and
expenses incurred in connection therewith, as
well as in connection with the debt-for-equity
exchange transactions completed in March 2004.
The Tender Offer.............. The Company is offering to purchase any and
all of its outstanding Notes at the price per
Note set forth below on the terms and subject
to the conditions set forth herein, including,
without limitation, the receipt or waiver of
the Refinancing Condition, the Requisite
Consents and the General Conditions.
Early Consent Date............ The Early Consent Date is 5:00 p.m., New York
City time. April 29, 2004, unless extended by
the Company. The Early Consent Date is the last
day for Noteholders to tender Notes in order to
qualify for the payment of Total Consideration,
which includes the Consent Payment.
Expiration Date............... The Tender Offer commenced on Friday, April
16, 2004, and will expire at 3:00 p.m., New
York City time, on Friday, May 14, 2004, unless
extended by the Company in its sole discretion.
The Company may, in its sole discretion and
subject to applicable law, terminate, withdraw
or amend the Tender Offer at any time as
described in this Offer to Purchase and the
accompanying Letter of Transmittal.
The Consent Solicitation...... The Company is seeking from each Noteholder a
Consent to the Proposed Amendments and to the
Collateral and Guaranty Release. Noteholders
who validly tender their Notes pursuant to the
Tender Offer will be deemed to have delivered a
Consent by such tender. Any Notes owned by the
Company or by any person directly or indirectly
controlling or controlled by or under common
2
control with the Company shall be disregarded
in determining whether the Noteholders of the
required principal amount of Notes have given
a Consent in connection with the Proposed
Amendments and the Collateral and Guaranty
Release.
Purpose of the Tender Offer and
the Consent Solicitation..... The Offer is part of the refinancing of
approximately $867.0 million of the Company's
debt. The principal purpose of the Tender Offer
and the Consent Solicitation is to purchase all
Notes and obtain Consents to the adoption of
the Proposed Amendments and the Collateral and
Guaranty Release as part of the Company's
previously announced plan to strengthen its
balance sheet and capital structure. The Tender
Offer and the Consent Solicitation are being
made in conjunction with (i) the tender offers
for the 8 1/8% Senior Notes due 2006 and 9%
Senior Notes due 2006, (ii) the New Debt
Issuance and (iii) the Company's entry into the
New Credit Facility, and are subject to the
receipt or waiver of the Refinancing Condition,
the Requisite Consents and the General
Conditions.
Total Consideration........... Total Consideration (which includes the
Consent Payment) shall be the price (calculated
as described on Schedule A to this Offer to
Purchase) equal to the present value on the
Settlement Date of $1,000 principal amount of
Notes (the amount payable on the Maturity Date
for the Notes) and the present value of the
interest that would be payable on, or accrue
from, the last interest payment date until the
Maturity Date, in each case, determined on the
basis of the Tender Offer Yield to the Maturity
Date equal to the sum of (x) the Reference
Yield, plus (y) 75 basis points (such price
being rounded to the nearest cent), minus
accrued and unpaid interest from the last
interest payment date to, but not including,
the Settlement Date.
The Dealer Manager will determine the
Reference Yield in accordance with standard
market practice, as of 2:00 p.m., New York
City time, on the Price Determination Date, as
reported on the Bloomberg Page or, if any
relevant price is not available on a timely
basis on the Bloomberg Page or is manifestly
erroneous, such other recognized quotation
source as the Dealer Manager shall select in
its sole discretion. The Company will publicly
announce the pricing information referred to
above by press release to the Business Wire by
9:30 a.m., New York City time, on the next
business day after the Price Determination
Date.
Tender Offer Consideration.... Total Consideration minus the Consent
Payment.
Consent Payment............... $20.00 per $1,000 principal amount of Notes
tendered on or prior to the Early Consent Date.
3
Interest...................... In addition to the Total Consideration or the
Tender Offer Consideration, as applicable,
Noteholders who validly tender and do not
withdraw their Notes in the Tender Offer will
also receive accrued and unpaid interest from
the last interest payment date to, but not
including, the Settlement Date, payable on the
Settlement Date.
Settlement Date............... Payment of the Total Consideration or the
Tender Offer Consideration, as applicable, plus
accrued and unpaid interest, for tendered Notes
accepted for payment will be on a date expected
to be promptly following the Expiration Date.
How to Tender Notes........... See "Terms of the Offer -- Procedures for
Tendering Notes and Consents." For further
information, call the Information Agent or the
Dealer Manager at the telephone numbers set
forth on the back cover of this Offer to
Purchase or consult your broker, dealer,
commercial bank or trust company for
assistance.
Withdrawal Rights............. Withdrawal rights will terminate upon the
Withdrawal Deadline, at which time the Company
will issue a press release announcing that the
Withdrawal Deadline has passed. Since the
Withdrawal Deadline may occur on any date, the
Company cannot predict when the Withdrawal
Deadline may occur. Notwithstanding the
foregoing, Notes may be validly withdrawn and
the related Consents may be validly revoked
after the Withdrawal Deadline if the Company
reduces the amount of the Total Consideration
or the Tender Offer Consideration, as
applicable, the Consent Payment or the
principal amount of Notes subject to the Offer
or is otherwise required by law to permit
withdrawal. A valid withdrawal of tendered
Notes will constitute the concurrent, valid
revocation of such Noteholders' related
Consent. To revoke Consents delivered in
connection with tendered Notes, Noteholders
must withdraw the related tendered Notes. In
addition, tendered Notes may be validly
withdrawn and the related Consents revoked if
the Offer is terminated without any Notes
being purchased thereunder. In the event of a
termination of the Offer, the Notes tendered
pursuant to the Offer will be promptly
returned to the tendering Noteholders and the
related Consents will be revoked. FOLLOWING
THE WITHDRAWAL DEADLINE, NOTES INCLUDING NOTES
TENDERED PRIOR TO THE WITHDRAWAL DEADLINE AND
NOTES TENDERED THEREAFTER, MAY NO LONGER BE
VALIDLY WITHDRAWN AND THE RELATED CONSENTS MAY
NOT BE REVOLVED.
Acceptance of Tendered Notes
and Payment.................. Subject to the terms of the Offer to Purchase
and the accompanying Letter of Transmittal and
upon satisfaction
4
or waiver of the conditions to the Offer
specified herein under "Terms of the Offer --
Conditions to the Tender Offer and the Consent
Solicitation," the Company will accept for
purchase all Notes validly tendered (or
defectively tendered, if such defect has been
waived by the Company) and not validly
withdrawn and promptly pay the Total
Consideration or the Tender Offer
Consideration, as applicable (plus accrued and
unpaid interest) for Notes accepted.
Payment of (i) the Total Consideration with
respect to Notes purchased in the Tender Offer
and Consents delivered in the Consent
Solicitation that are validly tendered and not
withdrawn on or prior to the Early Consent
Date and (ii) the Tender Offer Consideration
with respect to Notes purchased in the Tender
Offer and Consents delivered in the Consent
Solicitation that are validly tendered after
the Early Consent Date but on or prior to the
Expiration Date, is expected to be made on the
Settlement Date. The Company reserves the
right, subject to applicable laws, to (a)
accept for purchase and pay for all Notes
validly tendered on or prior to the Early
Consent Date or the Expiration Date and to
keep the Offer open or extend the Expiration
Date to a later date and time with respect to
any or all Notes as announced by the Company
and (b) waive all conditions to the Offer for
Notes tendered on or prior to the Early
Consent Date or Expiration Date, as
applicable.
On the Settlement Date, the Company will
deposit with the Depositary the amount of cash
necessary to pay each Noteholder whose Notes
are accepted the Total Consideration or Tender
Offer Consideration, as applicable, and
accrued and unpaid interest. The Depositary
will pay each Noteholder whose Notes are
accepted the Total Consideration or Tender
Offer Consideration, as applicable, for all
Notes accepted for tender and accrued and
unpaid interest. Under no circumstances will
any interest be payable because of any delay
in the transmission of funds to Noteholders by
the Depositary. See "Terms of the Offer --
Acceptance for Purchase; Payment for Notes."
Source of Funds............... Assuming (i) 100% of the Notes are tendered
on or prior to the Early Consent Date, (ii) the
Expiration Date is May 14, 2004, (iii) the
Reference Yield is 1.875% and (iv) the
Settlement Date is May 18, 2004, approximately
$434.3 million is required to pay the Total
Consideration including accrued and unpaid
interest from the last interest payment date
to, but not including, the Settlement Date. The
Company intends to privately place senior debt
pursuant to the New Debt Issuance and to enter
into the New Credit Facility. The Company
intends to use a portion of the net
5
proceeds from the New Debt Issuance and a
portion of the amounts borrowed under the New
Credit Facility to (i) purchase the Notes
tendered and accepted in the Tender Offer and
to purchase the 8 1/8% Senior Notes due 2006
and the 9% Senior Notes due 2006 tendered and
accepted in the 8 1/8% Senior Notes and the 9%
Senior Notes Offers to Purchase, (ii) redeem
any such notes that remain outstanding
following the respective offers to purchase,
(iii) repay amounts outstanding under the
Company's existing credit facility, and (iv)
pay fees and expenses incurred in connection
therewith, as well as in connection with the
debt-for-equity exchange transactions completed
in March 2004. See "Purpose of the Offer."
Amendments to the
Existing Indenture;.......... The Proposed Amendments would, among other
things, eliminate covenants in the Existing
Indenture that limit the Company and its
subsidiaries' ability to incur indebtedness,
grant liens, make payments in respect of
capital stock and subordinated debt, permit
restrictions on distributions from its
subsidiaries, transact business with
affiliates, amend its security documents and
engage in mergers, consolidations and sales of
assets or subsidiary stock. The Collateral and
Guaranty Release would release the Guarantors
from the guarantees of the Company's
obligations under the Notes and the collateral
guaranteeing the obligations of the Company and
the Guarantors under the Existing Indenture and
also eliminate from the Existing Indenture the
provisions relating to the collateral and
guarantees, references to these provisions and
definitions relating to these provisions.
The Supplemental Indenture, after execution by
the Company, the Guarantors and the Trustee,
will not become operative until and unless the
Notes validly tendered and not withdrawn are
accepted for purchase.
For a description of the Proposed Amendments
and the Collateral and Guaranty Release for
which Consents are being sought pursuant to
the Consent Solicitation, see "Terms of the
Tender Offer -- The Consent Solicitation" and
Appendix A.
Conditions to the Offer....... The Tender Offer is conditioned upon
satisfaction of certain conditions, including,
without limitation, the Refinancing Condition,
receipt by the Company of the Requisite
Consents, and the General Conditions. The
Company reserves the right to waive any and all
conditions to the Offer. For example, if at
least a majority in aggregate principal amount
of the Notes outstanding, but less than 66 2/3%
aggregate principal amount of the Notes
outstanding, consent to the Proposed Amendments
and the Collateral and Guaranty Release, the
Company may waive
6
the condition that it receive the Collateral
and Guaranty Release Requisite Consents. In
such case, the Supplemental Indenture would
contain the Proposed Amendments but not the
Collateral and Guaranty Release. Similarly, if
less than a majority in aggregate principal of
the Notes outstanding consent to the Proposed
Amendments and the Collateral and Guaranty
Release, the Company may waive the conditions
for the receipt of both the Proposed
Amendments Requisite Consents and the
Collateral and Guaranty Release Requisite
Consents and consummate the Tender Offer. In
such case, the Supplemental Indenture would
not be executed and the Existing Indenture
would remain in effect in its current form,
with respect to any untendered Notes. See
"Terms of the Offer -- Conditions to the
Tender Offer and the Consent Solicitation."
Untendered Notes.............. Notes not tendered and purchased pursuant to
the Tender Offer will remain outstanding.
ADOPTION OF THE PROPOSED AMENDMENTS MAY HAVE
ADVERSE CONSEQUENCES FOR NOTEHOLDERS WHO ELECT
NOT TO TENDER NOTES IN THE TENDER OFFER BECAUSE
HOLDERS OF NOTES OUTSTANDING AFTER CONSUMMATION
OF THE TENDER OFFER WILL NOT BE ENTITLED TO THE
BENEFIT OF SUBSTANTIALLY ALL OF THE COVENANTS
CONTAINED IN THE EXISTING INDENTURE, OTHER THAN
THE COVENANT TO PAY INTEREST ON AND PRINCIPAL
OF THE NOTES WHEN DUE, AS WELL AS CERTAIN
EVENTS OF DEFAULT. SIMILARLY, THE ADOPTION OF
THE COLLATERAL AND GUARANTY RELEASE MAY HAVE AN
ADVERSE CONSEQUENCE FOR NOTEHOLDERS WHO ELECT
NOT TO TENDER THEIR NOTES IN THE TENDER OFFER
BECAUSE SUCH NOTEHOLDERS WILL NOT HAVE RECOURSE
AGAINST ANY OF THE GUARANTORS OR A SECURITY
INTEREST IN THE COLLATERAL IN THE EVENT THAT
THE COMPANY CANNOT FULFILL ITS OBLIGATIONS
UNDER THE EXISTING INDENTURE. SEE "TERMS OF THE
OFFER -- CERTAIN SIGNIFICANT CONSEQUENCES TO
NON-TENDERING NOTEHOLDERS" AND "-- THE CONSENT
SOLICITATION -- PROPOSED AMENDMENTS TO THE
EXISTING INDENTURE" "-- THE CONSENT
SOLICITATION -- COLLATERAL AND GUARANTY
RELEASE." In addition, as a result of the
consummation of the Tender Offer, the aggregate
principal amount of the Notes that is
outstanding will be significantly reduced,
which may adversely affect the liquidity of
and, consequently, the market price for the
Notes that remain outstanding after
consummation of the Tender Offer, if any.
The Notes are currently redeemable. Following
the Expiration Date and subject to the receipt
or waiver of the Requisite Consents,
satisfaction of, or, where applicable, waiver
of the Refinancing Condition and the
satisfaction of, or, where applicable, waiver
of the General Conditions, the Company
currently intends to redeem all Notes not
tendered and accepted for purchase pursuant to
the Tender
7
Offer, in accordance with the terms and
conditions of the Existing Indenture. The
redemption price, like the Total
Consideration, is based on a fixed spread
pricing formula linked to the yield on
substantially similar U.S. Treasury
securities. Accordingly, the redemption price
will be affected by changes in such yield and
may differ from the Total Consideration. The
Tender Offer does not constitute a call for
redemption, which may be made at a later date
upon the terms and conditions set forth in the
Existing Indenture.
Material United States Federal
Income Tax Consequences...... For a summary of the material United States
federal income tax consequences of the Offer,
see "Material United States Federal Income Tax
Consequences."
Dealer Manager................ The Dealer Manager is Citigroup Global
Markets Inc.
Depositary and
Information Agent............. The Depositary for the Offer is U.S. Bank
National Association. The Information Agent for
the Offer is D.F. King & Co., Inc.
Further Information........... Questions and requests for assistance may be
directed to the Dealer Manager at the address
and telephone number set forth on the back
cover of this Offer to Purchase. Additional
copies of this Offer to Purchase and the
accompanying Letter of Transmittal and other
related materials may be obtained by contacting
the Information Agent at the address and
telephone number set forth on the back cover of
this Offer to Purchase.
8
REVLON CONSUMER PRODUCTS CORPORATION
Revlon Consumer Products Corporation, a direct wholly owned subsidiary of
Revlon, Inc. (collectively with its subsidiaries, "Revlon"), manufactures,
markets and sells an extensive array of cosmetics and skin care, fragrances and
personal care products. Revlon is one of the world's leading mass-market
cosmetics brands. Revlon believes that its global brand name recognition,
product quality and marketing experience have enabled it to create one of the
strongest consumer brand franchises in the world. Revlon's products are sold
worldwide and are marketed under such well-known brand names as Revlon,
ColorStay, Revlon Age Defying and Skinlights, as well as Almay in cosmetics;
Almay Kinetin, Vitamin C Absolutes, Eterna 27, Ultima II and Jeanne Gatineau in
skin care; Charlie in fragrances; and High Dimension, Flex, Mitchum, Colorsilk,
Jean Nate and Bozzano in personal care products.
Revlon was founded by Charles Revson, who revolutionized the cosmetics
industry by introducing nail enamels matched to lipsticks in fashion colors
over 70 years ago. Today, Revlon has leading market positions in a number of
its principal product categories in the U.S. mass-market distribution channel,
including the lip, face makeup and nail enamel categories. Revlon also has
leading market positions in several product categories in certain markets
outside of the U.S., including in Australia, Canada, Mexico and South Africa.
Revlon's products are sold in more than 100 countries across six continents.
For a description of the Company's business plan, please see the Company's
Annual Report on Form 10-K filed with the Securities and Exchange Commission
("SEC") for the year ended December 31, 2003 and incorporated herein by
reference.
PURPOSE OF THE OFFER
The Offer is part of the refinancing of approximately $867.0 million of
the Company's debt. The principal purpose of the Offer is to purchase all Notes
and obtain Consents to the adoption of the Proposed Amendments and the
Collateral and Guaranty Release as part of the Company's previously announced
plan to strengthen its balance sheet and capital structure. The Offer is being
made in conjunction with (i) the tender offers for the 8 1/8% Senior Notes due
2006 and 9% Senior Notes due 2006, (ii) the New Debt Issuance, and (iii) the
Company's entry into the New Credit Facility, and are subject to the receipt or
waiver of the Refinancing Condition, the Requisite Consents and the General
Conditions.
SOURCES AND AMOUNT OF FUNDS
If all outstanding Notes are validly tendered on or prior to the Early
Consent Date and the Reference Yield is 1.875%, the Total Consideration for all
Notes plus accrued and unpaid interest from the last interest payment date to,
but not including, the Settlement Date (assumed to be May 18, 2004), is
expected to be approximately $434.3 million. The Company intends to issue
senior unsecured debt pursuant to the New Debt Issuance and to enter into the
New Credit Facility. The Company intends to use a portion of the net proceeds
from the New Debt Issuance and a portion of the amounts borrowed under the New
Credit Facility to (i) purchase the Notes tendered and accepted in the Tender
Offer and to purchase the 8 1/8% Senior Notes due 2006 and the 9% Senior Notes
due 2006 tendered and accepted in the 8 1/8% Senior Notes and the 9% Senior
Notes Offers to Purchase, (ii) redeem any such notes that remain outstanding
following the respective offers to purchase, (iii) repay amounts outstanding
under the Company's existing credit facility, and (iv) pay fees and expenses
incurred in connection therewith, as well as in connection with the
debt-for-equity exchange transactions completed in March 2004. If the New Debt
Issuance or the New Credit Facility do not result in the receipt by the Company
of net proceeds or borrowed amounts, as applicable, sufficient to purchase all
of the Notes tendered pursuant to the Tender Offer, the Company shall not be
required to accept for payment, purchase or pay for, and may delay the
acceptance for payment of, any tendered Notes, in each event subject to Rule
14e-1(c) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and may terminate the Offer. Statements in this Offer to Purchase
regarding the New Debt Issuance shall not constitute an offer to sell or a
solicitation of an offer to buy any securities. See "Terms of the Offer --
Conditions to the Tender Offer and Consent Solicitation."
9
WHERE YOU CAN FIND MORE INFORMATION
The Company files or furnishes annual, quarterly and special reports and
other information with the Securities and Exchange Commission ("SEC"). You may
read and copy any document the Company files or furnishes at the SEC's public
reference rooms at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call
the SEC at 1-800-SEC-0330 for further information on the public reference
rooms. The SEC also maintains an internet site at http://www.sec.gov that
contains periodic filings, information statements and other information
regarding issuers that file electronically with the SEC, including the Company.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company has filed with the SEC its Annual Report on Form 10-K for the
year ended December 31, 2003 and such document is incorporated herein by
reference. In addition, the Current Report on Form 8-K furnished to the SEC by
Revlon on February 19, 2004, and the Current Report on Form 8-K filed with the
SEC on March 26, 2004 by Revlon are incorporated herein by reference.
In addition to the foregoing, all reports and other documents that the
Company files or furnishes pursuant to Section 13(a), 13(c), 14 and 15(d) of
the Exchange Act subsequent to the date of this Offer to Purchase and prior to
the Expiration Date of the Offer shall be deemed to be incorporated by
reference into this Offer to Purchase and to be a part hereof for the dates of
filing or furnishing of such reports and documents. Any statement contained in
this Offer to Purchase or in a document all or a portion of which is
incorporated or deemed to be incorporated by reference in this Offer to
Purchase shall be deemed to be modified or superseded for purposes of this
Offer to Purchase to the extent that a statement contained in this Offer to
Purchase, or in any other subsequently filed or furnished document that also is
deemed to be incorporated by reference in this Offer to Purchase, modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this Offer
to Purchase.
You should rely only on the information provided in this Offer to Purchase
or incorporated by reference. We have not authorized anyone else to provide you
with different information. You should not assume that the information in this
Offer to Purchase is accurate as of any date other than the date on the front
of the document. We are not making a Tender Offer for the Notes in any state
where the offer is not permitted.
FORWARD LOOKING STATEMENTS
This Offer to Purchase contains forward-looking statements that involve
risks and uncertainties. The Company's actual results may differ materially
from those discussed in such forward-looking statements. Such statements
include, without limitation, the Company's expectations and estimates (whether
qualitative or quantitative) as to:
o The Company's plan to refinance its debt due in 2005 and 2006, including
by the consummation of this Offer and the concurrent offers to purchase
the Company's 8 1/8% Senior Notes due 2006 and 9% Senior Notes due 2006;
o the Company's intention to enter into a Supplemental Indenture with
respect to any untendered Notes;
o the Company's intention to privately place senior unsecured debt in the
New Debt Issuance including the aggregate amount of such debt issuance
and the expected closing date of such debt issuance;
o the Company's expectation to enter into the New Credit Facility which
will amend and restate its existing credit facility, including the terms
of and the aggregate amount available under such New Credit Facility, as
well as the timing of such transaction;
o the Company's plan or ability to use some or all of the net proceeds
from the New Debt Issuance and a portion of the amounts borrowed under
the New Credit Facility to repay
10
amounts outstanding under the existing credit facility, to purchase the
Notes tendered in this Offer and in the Company's concurrent offers to
purchase its 8 1/8% Senior Notes due 2006 and 9% Senior Notes due 2006, to
redeem any such notes that remain outstanding following the respective
offers to purchase and to pay expenses in connection with such
transactions and the debt-for-equity exchange transactions completed in
March 2004; and
o the Company's intention to redeem any Notes that remain outstanding
following the Expiration Date of this Offer and any of the 8 1/8% Senior
Notes and 9% Senior Notes that remain outstanding following the
consummation of their respective offers to purchase.
Statements that are not historical facts, including statements about our
beliefs and expectations, are forward-looking statements. Forward-looking
statements can be identified by, among other things, the use of forward-looking
language, such as "believes," "expects," "estimates," "may," "will," "should,"
"seeks," "plans," "scheduled to," "anticipates" or "intends" or the negative of
those terms, or other variations of those terms or comparable language, or by
discussions of strategy or intentions. Forward-looking statements speak only as
of the date they are made, and the Company undertakes no obligation to update
them. A number of important factors could cause actual results to differ
materially from those contained in any forward-looking statement. In addition
to factors that may be described in the Company's filings with the SEC, the
following factors, among others, could cause the Company's actual results to
differ materially from those expressed in any forward-looking statements made
by the Company:
o difficulties, delays or unanticipated costs in connection with
consummating this Offer and the Company's concurrent offers to purchase
the 8 1/8% Senior Notes due 2006 and 9% Senior Notes due 2006;
o difficulties, delays or unanticipated costs entering into a Supplemental
Indenture with respect to any untendered Notes;
o difficulties, delays or unanticipated costs in connection with
consummating the New Debt Issuance;
o difficulties, delays or unanticipated costs in connection with entering
into the New Credit Facility to amend and restate the existing credit
facility;
o the insufficiency of funds raised in the New Debt Issuance or the
unavailability of funds under the New Credit Facility to repurchase the
Notes tendered in this Offer or the notes tendered in the Company's
concurrent offers to purchase the 8 1/8% Senior Notes due 2006 and 9%
Senior Notes due 2006, to redeem any Notes that remain outstanding
following the Expiration Date of this Offer, or notes that remain
outstanding following the expiration of the Company's concurrent offer to
purchase the 8 1/8% Senior Notes due 2006 or 9% Senior Notes due 2006, to
repay the existing credit facility or to pay expenses in connection with
such transactions and the debt-for-equity exchange transactions completed
in March 2004; and
o difficulties, delays or unanticipated costs in connection with redeeming
any Notes that remain outstanding following the Expiration Date of this
Offer.
You should consider the areas of risk described above, as well as those
set forth in other documents we have filed with the SEC and which are
incorporated by reference into this Offer to Purchase, in connection with any
forward-looking statements that may be made by us. You are advised to consult
any additional disclosures we make in our Quarterly Reports on Form 10-Q,
Annual Report on Form 10-K and Current Reports on Form 8-K to the SEC (which,
among other places, can be found on the SEC's website at http://www.sec.gov).
See "Where You Can Find More Information." Please see our Annual Report on Form
10-K for the year ended December 31, 2003 for other forward-looking statements.
11
TERMS OF THE OFFER
GENERAL
On November 26, 2001, pursuant to the Indenture dated as of November 26,
2001, between the Company, the Guarantors and Wilmington Trust Company, as
Trustee, the Company issued the original notes in a private placement. On June
21, 2002, the original notes were exchanged for the Notes. As of April 16,
2004, there was approximately $363,000,000 aggregate principal amount of the
Notes outstanding. Interest is payable semi-annually on the Notes each June 1
and December 1. The Notes mature on December 1, 2005.
Upon the terms and subject to the conditions set forth in this Offer to
Purchase and the accompanying Letter of Transmittal (including, if the Offer is
extended or amended, the terms and conditions of any such extension or
amendment), the Company hereby offers to purchase for cash any and all
outstanding Notes for the Total Consideration or the Tender Offer
Consideration, as applicable, plus accrued and unpaid interest from the last
interest payment date to, but not including, the Settlement Date, in each case,
payable on the Settlement Date. The Company is also soliciting Consents from
Noteholders with respect to the Proposed Amendments and the Collateral and
Guaranty Release.
The Offer commenced on Friday, April 16, 2004 and will expire at 3:00
p.m., New York City time, on Friday, May 14, 2004, the Expiration Date, unless
extended by the Company in its sole discretion. The Company may, in its sole
discretion and subject to applicable law, terminate, withdraw or amend the
Offer at any time as discussed below.
Noteholders who validly tender and do not withdraw their Notes prior to
5:00 p.m., New York City time, on the Early Consent Date will, subject to the
terms and conditions set forth in this Offer to Purchase and the accompanying
Letter of Transmittal, receive the Total Consideration, which includes the
Consent Payment. Noteholders who validly tender their Notes after 5:00 p.m.,
New York City time, on the Early Consent Date but prior to 3:00 p.m., New York
City time, on the Expiration Date will, subject to the terms and conditions set
forth in this Offer to Purchase and accompanying Letter of Transmittal, receive
the Tender Offer Consideration, which does not include the Consent Payment.
Notes will be accepted for payment pursuant to the Tender Offer only in
integral multiples of $1,000. The consideration offered hereby for each $1,000
principal amount of Notes validly tendered and not withdrawn pursuant to the
Tender Offer will be calculated, as described in Schedule A to this Offer to
Purchase, in a manner intended to result in a price for the Notes equal to the
present value on the Settlement Date of $1,000 principal amount of Notes (the
amount payable on the Maturity Date for the Notes) and the present value of the
interest that would be payable on, or accrue from, the last interest payment
date until the Maturity Date, in each case, determined on the basis of the
Tender Offer Yield to the Maturity Date equal to the sum of (x) the Reference
Yield, plus (y) 75 basis points (such price being rounded to the nearest cent),
minus accrued and unpaid interest from the last interest payment date to, but
not including, the Settlement Date. The sum is the Total Consideration, which
includes the Consent Payment. The Tender Offer Consideration is the Total
Consideration minus the Consent Payment. In addition to the Total Consideration
or Tender Offer Consideration, as applicable, Noteholders who validly tender
and do not withdraw their Notes in the Offer will also receive accrued and
unpaid interest from the last interest payment date to, but not including, the
Settlement Date, payable on the Settlement Date.
The Dealer Manager will determine the Reference Yield in accordance with
standard market practice, as of 2:00 p.m., New York City time, on the Price
Determination Date, as reported on the Bloomberg Page or, if any relevant price
is not available on a timely basis on the Bloomberg Page or is manifestly
erroneous, such other recognized quotation source as the Dealer Manager shall
select in their sole discretion. The Company will publicly announce the pricing
information referred to above by press release to Business Wire by 9:30 a.m.,
New York City time, on the next business day after the Price Determination
Date.
See Schedule B for a hypothetical illustration of the Tender Offer
Consideration and the Total Consideration and the accrued and unpaid interest
on the Notes from the last interest payment date
12
to, but not including, the assumed Settlement Date based on hypothetical data.
This Schedule B should only be used for the purpose of obtaining an
understanding of the calculation of the Tender Offer Consideration and the
Total Consideration, as quoted at hypothetical rates and times, and should not
be relied upon for other purposes.
BECAUSE THE TOTAL CONSIDERATION, AND THEREFORE THE TENDER OFFER
CONSIDERATION, IS BASED ON A FIXED SPREAD PRICING FORMULA LINKED TO THE YIELD
ON THE REFERENCE SECURITY, THE ACTUAL AMOUNT OF CONSIDERATION THAT MAY BE
RECEIVED BY A TENDERING NOTEHOLDER PURSUANT TO THE TENDER OFFER WILL BE
AFFECTED BY CHANGES IN SUCH YIELD DURING THE TERM OF THE TENDER OFFER PRIOR TO
THE PRICE DETERMINATION DATE. AFTER THE PRICE DETERMINATION DATE, WHEN THE
TOTAL CONSIDERATION IS NO LONGER LINKED TO THE YIELD ON THE REFERENCE SECURITY,
THE ACTUAL AMOUNT OF CASH THAT MAY BE RECEIVED BY A TENDERING NOTEHOLDER
PURSUANT TO THE TENDER OFFER WILL BE KNOWN AND NOTEHOLDERS WILL BE ABLE TO
ASCERTAIN THE TOTAL CONSIDERATION, AND THEREFORE THE TENDER OFFER
CONSIDERATION, THAT WOULD BE RECEIVED BY ALL TENDERING NOTEHOLDERS PURSUANT TO
THE OFFER IN THE MANNER DESCRIBED ABOVE.
In the event of any dispute or controversy regarding the Tender Offer
Consideration, Reference Yield, Tender Offer Yield or the amount of accrued
interest for each Note tendered pursuant to this Tender Offer, the Dealer
Manager's determination shall be conclusive and binding, absent manifest error.
Prior to 2:00 p.m., New York City time, on the Price Determination Date,
Noteholders may obtain a hypothetical quote of the yield of the Reference
Security (calculated as of a then-recent time) and the resulting hypothetical
Total Consideration by contacting the Dealer Manager and the Information Agent
at the telephone numbers set forth on the back cover of this Offer to Purchase.
As soon as practicable after the Dealer Manager calculates the Reference Yield,
and through the Expiration Date, the Dealer Manager and the Information Agent
will be able to provide the actual Reference Yield and the resulting Total
Consideration to Noteholders who contact them at such telephone numbers. In
addition, as soon as practicable after 2:00 p.m., New York City time on the
Price Determination Date, but in any event at or before 9:30 a.m., New York
City time, on the next business day after the Price Determination Date, the
Company will publicly announce the pricing information by press release to
Business Wire.
All Notes validly tendered and not withdrawn in accordance with the
procedures set forth herein prior to the Withdrawal Date, upon the terms and
subject to the conditions hereof, including satisfaction of the Refinancing
Condition, the receipt of the Requisite Consents and the General Conditions,
unless any of such Refinancing Condition, receipt of the Requisite Consents and
the General Conditions has been waived, will be accepted for payment by the
Company, and payments will be made therefor on the Settlement Date, which is
expected to be promptly following the Expiration Date. If the Tender Offer is
not consummated, no such payments will be made. All conditions to the Tender
Offer must be either satisfied or waived, as applicable, by the Company prior
to the expiration of the Tender Offer on the Expiration Date. If at least a
majority in aggregate principal amount of the Notes outstanding, but less than
66 2/3% aggregate principal amount of the Notes outstanding, consent to the
Proposed Amendments and the Collateral and Guaranty Release, the Company may
waive the condition that it receive the Collateral and Guaranty Release
Requisite Consents. In such case, the Supplemental Indenture would contain the
Proposed Amendments but not the Collateral and Guaranty Release. Similarly, if
less than a majority in aggregate principal of the Notes outstanding consents
to the Proposed Amendments and the Collateral and Guaranty Release, the Company
may waive conditions for the receipt of the Proposed Amendments Requisite
Consents and the Collateral and Guaranty Release Requisite Consents and
consummate the Tender Offer. In such case, the Supplemental Indenture would not
be executed and the Existing Indenture would remain in effect in its current
form, with respect to any untendered Notes.
The Company's obligation to accept, and pay for, Notes validly tendered
pursuant to the Offer is conditioned upon the Company's receipt of the
Requisite Consents, satisfaction of the Refinancing Condition and the General
Conditions; provided that any of the foregoing conditions may be waived by the
Company as set forth in "Terms of the Offer -- Conditions to the Offer." The
Company reserves the right, in its sole discretion prior to the expiration of
the Offer on the Expiration Date, (1)
13
to waive any and all conditions to the Offer, (2) to terminate the Offer or
extend the Early Consent Date or the Expiration Date or (3) otherwise to amend
the Offer in any respect. The rights reserved by the Company in this paragraph
are in addition to the Company's rights to terminate the Offer described in
"Terms of the Offer -- Conditions to the Tender Offer and Consent
Solicitation."
Any amendment to the Offer will apply to all Notes tendered in the Offer.
Any extension, amendment or termination will be followed as promptly as
practicable by public announcement thereof, the announcement in the case of an
extension of the Offer or the Early Consent Date to be issued no later than
9:30 a.m., New York City time, on the next business day after the previously
scheduled Early Consent Date or Expiration Date. Without limiting the manner in
which any public announcement may be made, the Company shall have no obligation
to publish, advertise or otherwise communicate any such public announcement
other than by issuing a release to Business Wire.
If the Company makes a material change in the terms of the Offer or the
information concerning the Offer, the Company will disseminate additional Offer
materials and extend the Offer to the extent required by law.
NONE OF THE COMPANY, THE GUARANTORS, THE TRUSTEE, THE INFORMATION AGENT,
THE DEPOSITARY OR THE DEALER MANAGER MAKES ANY RECOMMENDATION AS TO WHETHER OR
NOT NOTEHOLDERS SHOULD TENDER THEIR NOTES OR CONSENT TO THE PROPOSED AMENDMENTS
OR TO THE COLLATERAL AND GUARANTY RELEASE PURSUANT TO THE OFFER. NOTEHOLDERS
MUST MAKE THEIR OWN DECISIONS WITH REGARD TO TENDERING NOTES OR CONSENTING TO
THE PROPOSED AMENDMENTS OR TO THE COLLATERAL AND GUARANTY RELEASE.
THE CONSENT SOLICITATION
PURSUANT TO THE TERMS OF THE LETTER OF TRANSMITTAL, THE COMPLETION,
EXECUTION AND DELIVERY THEREOF BY A NOTEHOLDER IN CONNECTION WITH THE TENDER OF
NOTES WILL BE DEEMED TO CONSTITUTE THE DELIVERY OF A CONSENT OF SUCH TENDERING
HOLDER TO THE PROPOSED AMENDMENTS AND THE COLLATERAL AND GUARANTY RELEASE.
NOTEHOLDERS MAY NOT DELIVER CONSENTS WITHOUT TENDERING THEIR NOTES IN THE
OFFER.
Subject to the terms and conditions set forth herein, Noteholders who
validly tender their Notes and thereby deliver their Consents pursuant to the
Offer on or prior to the Early Consent Date and do not withdraw such tenders
will be paid the Total Consideration (which includes the Consent Payment) on
the Settlement Date, whereas Noteholders who validly tender their Notes after
the Early Consent Date, but on or prior to the Expiration Date, will be paid
only the Tender Offer Consideration (which does not include the Consent
Payment), payable on the Settlement Date.
Tendering and consenting Noteholders must consent to the Proposed
Amendments and Collateral and Guaranty Release as an entirety. The Proposed
Amendments and Collateral and Guaranty Release will only be effective upon the
tender of Notes and delivery of Consents by Noteholders of, with respect to the
Proposed Amendments, not less than a majority in aggregate principal amount of
the Notes outstanding (the "Proposed Amendments Requisite Consents") and, with
respect to the Collateral and Guaranty Release, not less than 66 2/3% aggregate
principal amount of the Notes outstanding (the "Collateral and Guaranty Release
Requisite Consents" and, together with the Proposed Amendments Requisite
Consents, the "Requisite Consents"). Any Notes owned by the Company or by any
person directly or indirectly controlling or controlled by or under common
control with the Company shall be disregarded in determining whether the
Noteholders of the required principal amount of Notes have given a Consent in
connection with the Proposed Amendments and the Collateral and Guaranty
Release.
In addition, although the Company is not aware of any non-compliance by it
with respect to the Notes or the Existing Indenture, each Noteholder who
tenders its Notes and Consents to the Proposed Amendments and the Collateral
and Guaranty Release will, upon receipt in full of the Total Consideration or
the Tender Offer Consideration, as applicable, be deemed to have released and
waived any and all claims it may have arising from prior non-compliance, if
any.
Promptly following receipt of the Requisite Consents, the Company and the
Trustee intend to execute the Supplemental Indenture embodying the Proposed
Amendments and the Collateral and
14
Guaranty Release as described in Appendix A. The Supplemental Indenture will
become effective upon execution by Products Corporation, the Guarantors and the
Trustee, but will not be operative until the Notes tendered and not validly
withdrawn are accepted for payment. Thereafter, the Supplemental Indenture will
be binding on all non-tendering Noteholders. If the Tender Offer is terminated
or withdrawn with respect to the Notes, if such Notes are never accepted for
payment, or if the Requisite Consents are not received, the Supplemental
Indenture will never become operative and the Existing Indenture will remain in
effect in its present form.
If at least a majority in aggregate principal amount of the Notes
outstanding, but less than 66 2/3% aggregate principal amount of the Notes
outstanding, consent to the Proposed Amendments and the Collateral and Guaranty
Release, the Company may waive the condition that it receive the Collateral and
Guaranty Release Requisite Consents. In such case, the Supplemental Indenture
would contain the Proposed Amendments but not the Collateral and Guaranty
Release. Similarly, if less than a majority in aggregate principal of the Notes
outstanding consents to the Proposed Amendments and the Collateral and Guaranty
Release, the Company may waive the conditions for the receipt of the Proposed
Amendments Requisite Consents and the Collateral and Guaranty Release Requisite
Consents and consummate the Tender Offer. In such case, the Supplemental
Indenture would not be executed and the Existing Indenture would remain in
effect in its current form, with respect to any untendered Notes.
Proposed Amendments to the Existing Indenture
The principal purpose of the Proposed Amendments is to eliminate
substantially all of the restrictive covenants in the Existing Indenture.
Pursuant to the terms of the Existing Indenture, the Proposed Amendments
require the consent of the Noteholders holding at least a majority in aggregate
principal amount of the Notes outstanding. Any Notes owned by the Company or by
any person directly or indirectly controlling or controlled by or under common
control with the Company shall be disregarded in determining whether the
Noteholders of the required principal amount of Notes have given a Consent in
connection with the Proposed Amendments and the Collateral and Guaranty
Release. Capitalized terms used in this section without definition have the
meanings set forth in the Existing Indenture.
Deletion of Covenants. The Proposed Amendments would eliminate the
following covenants, references to these covenants and definitions relating to
such covenants from the Existing Indenture:
o SEC Reports. This provision requires Products Corporation to file with
the SEC certain information, documents and other reports specified in
Sections 13 and 15(d) of the Exchange Act, notwithstanding that Products
Corporation may not be required to be subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act.
o Limitation on Debt. This provision restricts the ability of Products
Corporation and any Subsidiary to issue certain Debt.
o Limitation on Liens. This provision restricts the ability of Products
Corporation and any Subsidiary to incur Liens upon any of their property
or assets, including Capital Stock or Debt of any Subsidiary of Products
Corporation.
o Limitation on Restricted Payments. This provision restricts the ability
of Products Corporation and any Subsidiary to make certain distributions,
payments and investments.
o Limitation on Restrictions on Distributions from Subsidiaries. This
provision restricts the ability of Products Corporation and its
Subsidiaries to create any consensual encumbrance or restriction on the
ability of any Subsidiary to pay dividends or make other distributions,
or make or pay loans or advances to Products Corporation or otherwise
transfer assets or property to Products Corporation.
o Limitation on Sales of Assets and Subsidiary Stock. This provision
restricts the ability of Products Corporation and any Subsidiary (other
than a Non-Recourse Subsidiary) to make certain Asset Dispositions.
15
o Limitation on Transactions with Affiliates. This provision restricts the
ability of Products Corporation and any Subsidiary (other than a
Non-Recourse Subsidiary) to enter into certain transactions with
Affiliates of the Company, legal or beneficial owners of 10% or more of
the Voting Stock of the Company or with an Affiliate of any such owner.
o Change of Control. This provision provides for the right of Holders upon
a Change of Control to require Products Corporation to repurchase all or
any part of such Holders' Notes.
o Additional Security Documents. This provision requires that, if Revlon
or any of its Subsidiaries executes certain additional agreements or
instruments to secure Debt or other Primary First Lien Obligations,
Products Corporation will execute, or cause to be executed, substantially
identical additional agreements or instruments in order to vest in the
Collateral Agent, on behalf of the Holders, a perfected security
interest, subject to Permitted Liens and the Collateral Agency Agreement.
o Restrictions on Mergers or Transfers of Assets by Guarantors. This
provision restricts the ability of Products Corporation to permit a
Guarantor to consolidate with or merge with or into, or convey, transfer,
lease all or substantially all of its assets to, any Person (other than
Products Corporation or a Subsidiary Guarantor).
The amendments would also amend (A) the section entitled "When Company May
Merge or Transfer Assets" to delete the requirements in clause (iii) and (iv)
thereof, respectively, that, immediately after giving effect to a consolidation
with or merger into, or conveyance, transfer or lease of all or substantially
all of the Company's assets to, any Person, (x) the resulting, surviving or
transferee Person would be able to incur at least $1.00 of Debt pursuant to
Section 4.03(a) of the Existing Indenture and (y) the resulting, surviving,
transferee Person shall have Consolidated Net Worth in an amount which is not
less than the Consolidated Net Worth of the Company immediately prior to such
transaction and (B) Sections 6.01(6), (7), (8) and (9) (Events of Default) by
deleting references therein to the Parent Guarantor.
The amendments would make certain other changes in the Existing Indenture
and the Notes of a technical or conforming nature, including, without
limitation and to the extent applicable, deleting definitions of terms that are
used only in the covenants described above and removal of any references to any
of the deleted provisions described above, including those contained in Section
6.01, entitled "Events of Default." Copies of the Existing Indenture are
available from Products Corporation upon request.
Adoption of the Proposed Amendments may have substantial adverse
consequences for Noteholders that elect not to tender Notes in the Tender Offer
because Notes outstanding after the consummation of the Tender Offer will not
be entitled to the benefit of the covenants presently contained in the
Indenture that are to be eliminated, as described in this Offer to Purchase.
Collateral and Guaranty Release
The principal purpose of the Collateral and Guaranty Release is to release
the guarantees of the Company's obligations under the Notes provided by the
Guarantors, release the liens that the Noteholders have against the Collateral
(as defined below) that secure the obligations of the Company and the
Guarantors under the Existing Indenture and terminate the collateral documents
relating to such lien. Pursuant to the terms of the Existing Indenture, the
Collateral and Guaranty Release requires the consent of the Noteholders holding
at least 66 2/3% aggregate principal amount of the Notes outstanding. Any Notes
owned by the Company or by any person directly or indirectly controlling or
controlled by or under common control with the Company shall be disregarded in
determining whether the Noteholders of the required principal amount of Notes
have given a Consent in connection with the Proposed Amendments and the
Collateral and Guaranty Release.
The Notes are supported by guaranties from Revlon, Inc. and, subject to
certain limited exceptions, Products Corporation's domestic subsidiaries. The
obligations of Products Corporation under the Notes and the obligations under
the aforementioned guaranties are secured, on a second-priority basis, subject
to certain limited exceptions, primarily by (i) a mortgage on Products
16
Corporation's facility in Oxford, North Carolina, (ii) the capital stock of
Products Corporation and its domestic subsidiaries and 66% of the capital stock
of Products Corporation's and its domestic subsidiaries' first-tier foreign
subsidiaries, (iii) domestic intellectual property and certain other domestic
intangibles of Products Corporation and its domestic subsidiaries and (iv)
domestic inventory, accounts receivable, equipment and certain investment
property of Products Corporation and its domestic subsidiaries (collectively,
the "Collateral"). As a result of the Collateral and Guaranty Release,
Noteholders who do not tender their Notes in the Offer will no longer have
recourse against any of the Guarantors or a lien on the Collateral and in the
event that the Company is unable to fulfill its obligations under the Existing
Indenture, neither the Noteholders or the Trustee will be able to exercise any
remedy against the Collateral or the Guarantors.
The Collateral and Guaranty Release would also eliminate from the Existing
Indenture the provisions relating to the Collateral and guarantees, references
to these provisions and definitions relating to these provisions. The remaining
sections of the Existing Indenture will not be changed by the Collateral and
Guaranty Release, other than, to the extent applicable, certain other changes
of a technical or conforming nature relating to the deletions described above.
Copies of the Existing Indenture are available from Products Corporation upon
request.
CERTAIN SIGNIFICANT CONSEQUENCES TO NON-TENDERING NOTEHOLDERS
In deciding whether to participate in the Offer, each Noteholder should
consider carefully, in addition to the other information contained in and
incorporated by reference in this Offer to Purchase, the following:
Limited Trading Market for the Notes
To the extent that Notes are tendered and accepted in the Offer, the
trading market for Notes will likely become limited. A bid for a debt security
with a smaller outstanding principal amount available for trading (a smaller
"float") may be lower than a bid for a comparable debt security with a greater
float. Therefore, the market price for and liquidity of Notes not tendered or
tendered but not purchased may be affected adversely to the extent that the
principal amount of Notes purchased pursuant to the Offer reduces the float of
the Notes. The reduced float may also tend to make the trading price more
volatile. Noteholders of unpurchased Notes may attempt to obtain quotations for
their Notes from their brokers; however, there can be no assurance that an
active trading market will exist for the Notes following consummation of the
Offer. The extent of the market for the Notes following consummation of the
Offer will depend upon a number of factors, including the size of the float,
the number of Noteholders remaining at such time and the interest in
maintaining a market in the Notes on the part of securities firms and other
factors.
Effect of the Proposed Amendments and the Collateral and Guaranty Release
on Unpurchased Notes
If the Offer is consummated and the Proposed Amendments become effective
and operative, Noteholders of Notes that are not purchased pursuant to the
Offer for any reason will no longer be entitled to the benefits of certain
restrictive covenants contained in the Existing Indenture as currently in
effect. Similarly, if the Offer is consummated and the Collateral and Guaranty
Release becomes effective and operative, Noteholders of Notes that are not
purchased pursuant to the Offer for any reason will no longer have recourse
against any of the Guarantors or a lien on the Collateral and in the event that
the Company is unable to fulfill its obligations under the Existing Indenture,
neither the Noteholders or the Trustee will be able to exercise any remedy
against the Collateral or the Guarantors.
As a result, the Proposed Amendments and the Collateral and Guaranty
Release could negatively impact the price at which the outstanding Notes may
trade.
Redemption of the Unpurchased Notes
The Notes are currently redeemable. Following the Expiration Date and
subject to the receipt or waiver of the Requisite Consents, satisfaction of or,
where applicable, waiver of the Refinancing
17
Condition and the satisfaction of or, where applicable, waiver of the General
Conditions, the Company currently intends to redeem all Notes not tendered and
accepted for purchase pursuant to the Offer, in accordance with the terms and
conditions of the Existing Indenture. The redemption price, like the Total
Consideration, is based on a fixed spread pricing formula linked to the yield
on substantially similar U.S. Treasury securities. Accordingly, the redemption
price will be affected by changes in such yield and may differ from the Total
Consideration. The Tender Offer does not constitute a call for redemption,
which may be made at a later date upon the terms and conditions set forth in
the Existing Indenture.
ACCEPTANCE FOR PURCHASE; PAYMENT FOR NOTES
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such
extension or amendment) and applicable law, on the Settlement Date the Company
will purchase, by accepting for payment, and will promptly pay for all Notes
validly tendered and not withdrawn pursuant to the Offer. Notes will be
accepted for payment in the Offer only in integral multiples of $1,000.
Payment for Notes purchased pursuant to the Tender Offer will be made by
the deposit of the Total Consideration or Tender Offer Consideration, as
applicable, plus accrued and unpaid interest in immediately available funds by
the Company on the Settlement Date with the Depositary, which will act as agent
for tendering Noteholders for the purpose of receiving payment from the Company
and transmitting such payment to tendering Noteholders. For purposes of the
Offer, the Company will be deemed to have accepted for purchase all Notes
validly tendered (or defectively tendered Notes with respect to which the
Company has waived such defect) and not properly withdrawn if, as and when the
Company gives oral (confirmed in writing ) or written notice thereof to the
Depositary.
The Company expressly reserves the right, in its sole discretion and
subject to Rule 14e-1(c) under the Exchange Act, to delay acceptance for
payment of or payment for Notes if any of the conditions to the Offer shall not
have been satisfied or waived, or in order to comply, in whole or in part, with
any applicable law. See "Terms of the Offer -- the Conditions to the Offer." In
all cases, payment by the Depositary to Noteholders or beneficial owners of the
Total Consideration or Tender Offer Consideration, as applicable, and accrued
and unpaid interest for Notes purchased pursuant to the Tender Offer will be
made only after timely receipt by the Depositary of (i) certificates
representing such Notes or timely confirmation of a book-entry transfer of such
Notes into the Depositary's account at DTC pursuant to the procedures set forth
under "Procedures for Tendering Notes," (ii) a properly completed and duly
executed Letter of Transmittal (or manually signed facsimile thereof) or a
properly transmitted Agent's Message and (iii) any other documents required by
the Letter of Transmittal.
If any tendered Notes are not purchased pursuant to the Tender Offer for
any reason, such Notes not purchased will be returned promptly, without
expense, to the tendering Noteholder (or, in the case of Notes tendered by
book-entry transfer, such Notes will be promptly credited to the account
maintained at DTC from which Notes were delivered) after the expiration or
termination of the Offer.
Noteholders of Notes whose Notes are accepted for payment pursuant to the
Tender Offer will be entitled to receive the Total Consideration or Tender
Offer Consideration, as applicable, plus accrued and unpaid interest up to, but
not including, the Settlement Date. Under no circumstances will any additional
interest be payable because of any delay in the transmission of funds to
Noteholders by the Depositary.
Tendering Noteholders, whose Notes are purchased in the Tender Offer, will
not be obligated to pay brokerage commissions to the Dealer Manager,
Information Agent or Depositary. The Company will pay or cause to be paid all
transfer taxes with respect to the purchase of any Notes unless the box titled
"Special Payment Instructions" or the box titled "Special Delivery
Instructions" on the Letter of Transmittal has been completed, as described in
the Instructions thereto. The Company will pay all other charges and expenses
in connection with the Offer.
18
PROCEDURE FOR TENDERING NOTES AND CONSENTS
The tender of Notes pursuant to the Tender Offer and in accordance with
the procedures described below will constitute a valid tender of Notes and
Consents. Noteholders will not be entitled to receive the Total Consideration
(which includes the Consent Payment) unless they tender their Notes pursuant to
the Offer prior to 5:00 p.m., New York City time, on the Early Consent Date.
Noteholders who validly tender their Notes after 5:00 p.m., New York City time,
on the Early Consent Date, and prior to 3:00 p.m., New York City time, on the
Expiration Date will receive only the Tender Offer Consideration (which does
not include the Consent Payment).
The method of delivery of Notes and the Letter of Transmittal, any
required signature guarantees and all other required documents, including
delivery through DTC and any acceptance of an Agent's Message transmitted
through ATOP, is at the election and the risk of the Noteholder tendering Notes
and delivering the Letter of Transmittal or transmitting an Agent's Message
and, except as otherwise provided in the Letter of Transmittal, delivery will
be deemed made only when actually received by the Depositary. If delivery is by
mail, it is suggested that the Noteholder use properly insured, registered mail
with return receipt requested, and that the mailing be made sufficiently in
advance of the Early Consent Date or the Expiration Date, as applicable, to
permit delivery to the Depositary on or prior to such date. Manually signed
facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. IN NO EVENT SHOULD THE NOTEHOLDERS SEND ANY NOTES
OR LETTERS OF TRANSMITTAL TO THE DEALER MANAGER, THE TRUSTEE, THE INFORMATION
AGENT OR THE COMPANY.
Tender of Notes and Consents in Relation to Notes Held Through DTC
For a tender of Notes and Consents in relation to Notes held of record by
DTC to be valid and for a Noteholder to receive payment for Notes that are
tendered:
o the Notes must be delivered to the Depositary pursuant to the book-entry
delivery procedures described below; and either
o the Depositary must receive from the DTC participant in whose amount the
Notes are held at DTC, at the address of the Depositary set forth on the
back cover of this Offer to Purchase, a properly completed and duly
executed Letter of Transmittal (or a manually signed facsimile thereof);
or
o an acceptance of the Tender Offer must be transmitted to the Depositary
in accordance with DTC's ATOP procedures,
in each case at or prior to 3:00 p.m., New York City time, on the Expiration
Date, provided that for a Noteholder to be entitled to receive the Total
Consideration (which includes the Consent Payment) such materials must be
received prior to 5:00 p.m. New York City time, on the Early Consent Date.
A beneficial owner of Notes held through a custodian or nominee that is a
direct or indirect DTC participant, such as bank, broker, trust company or
other financial intermediary, must instruct the custodian or nominee to tender
the beneficial owner's Notes on behalf of such beneficial owner.
The Depositary and DTC have confirmed that the Tender Offer is eligible
for ATOP. Accordingly, DTC participants may electronically transmit their
acceptance of the Tender Offer by causing DTC to transfer Notes to the
Depositary in accordance with DTC's ATOP procedures for transfer. DTC will then
send an Agent's Message (as defined below) to the Depositary. Noteholders using
ATOP must allow sufficient time for completion of the ATOP procedures during
normal business hours of DTC at or prior to the Expiration Date. If the ATOP
procedures are used, the DTC participant in whose account the Notes are held at
DTC need not complete and physically deliver the Letter of Transmittal to the
Depositary.
The term "Agent's Message" means a message transmitted by DTC, received by
the Depositary and forming part of the Book-Entry Confirmation (as defined
below), which states that DTC has received an express acknowledgment from the
DTC participant tendering Notes which are the subject of such Book-Entry
Confirmation that such DTC participant has received and agrees to be bound by
the terms of this Offer to Purchase and the accompanying Letter of Transmittal
and that the Company may enforce such agreement against such DTC participant.
19
Tender of Notes Held in Physical Form
For a Noteholder to validly tender Notes held in physical form pursuant to
the Tender Offer, a properly completed and validly executed Letter of
Transmittal (or a manually signed facsimile thereof), together with any
signature guarantees and any other documents required by the instructions to
the Letter of Transmittal, must be received by the Depositary at its address
set forth on the back cover of this Offer to Purchase and either certificates
for tendered Notes must be received by the Depositary at such address or such
Notes must be transferred pursuant to the procedures for book-entry transfer
described above and a confirmation of such book-entry transfer must be received
by the Depositary, in either case, prior to 3:00 p.m., New York City time, on
the Expiration Date, provided that for a Noteholder to be entitled receive the
Total Consideration (which includes the Consent Payment), such materials must
be received by 5:00 p.m. New York City time on the Early Consent Date.
THE LETTER OF TRANSMITTAL AND NOTES SHOULD BE SENT ONLY TO THE DEPOSITARY,
AND NOT TO THE COMPANY, THE TRUSTEE, THE INFORMATION AGENT, THE DEALER MANAGER
OR TO ANY BOOK-ENTRY TRANSFER FACILITY.
THE METHOD OF DELIVERY OF NOTES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS TO THE DEPOSITARY IS AT THE ELECTION AND THE RISK OF THE
NOTEHOLDER TENDERING NOTES. DELIVERY OF SUCH DOCUMENTS WILL BE DEEMED MADE ONLY
WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF SUCH DELIVERY IS BY MAIL, IT IS
SUGGESTED THAT THE NOTEHOLDER USE PROPERLY INSURED, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, AND THAT THE MAILING BE MADE SUFFICIENTLY IN ADVANCE OF THE
EARLY CONSENT DATE OR THE EXPIRATION DATE TO PERMIT DELIVERY TO THE DEPOSITARY
PRIOR TO SUCH DATE. NO ALTERNATIVE, CONDITIONAL OR CONTINGENT TENDERS OF NOTES
WILL BE ACCEPTED.
No Guaranteed Delivery
THERE ARE NO GUARANTEED DELIVERY PROVISIONS PROVIDED FOR BY PRODUCTS
CORPORATION IN CONJUNCTION WITH THE OFFER UNDER THE TERMS OF THIS OFFER TO
PURCHASE OR ANY OTHER OF THE OFFER MATERIALS. NOTEHOLDERS MUST TIMELY TENDER
THEIR NOTES IN ACCORDANCE WITH THE PROCEDURES SET FORTH UNDER "PROCEDURES FOR
TENDERING AND CONSENTS."
Signature Guarantees
Signatures on the Letter of Transmittal must be guaranteed by a firm that
is a participant in the Security Transfer Agents Medallion Program, the New
York Stock Exchange Medallion Signature Program or the Stock Exchange Medallion
Program (generally a member of a registered national securities exchange, a
member of the National Association of Securities Dealers, Inc., or a commercial
bank or trust company having an office in the United States) (an "Eligible
Institution"), unless (a) the Letter of Transmittal is signed by the registered
holder of the Notes tendered therewith (or by a participant in DTC whose name
appears on a security position listing it as the owner of such Notes) and
payment of the Total Consideration or Tender Offer Consideration, as
applicable, is to be made, or if any Notes for principal amounts not tendered
or not accepted for purchase are to be issued, directly to such Noteholder (or,
if tendered by a participant in DTC, any Notes for principal amounts not
tendered or not accepted for purchase are to be credited to such participant's
account at DTC) and neither the "Special Payment Instructions" box nor the
"Special Delivery Instructions" box on the Letter of Transmittal has been
completed, or (b) such Notes are tendered for the account of an Eligible
Institution.
Book-Entry Transfer
The Depositary will establish a new account or utilize an existing account
with respect to the Notes at DTC (DTC being a Book-Entry Transfer Facility) for
purposes of the Tender Offer promptly
20
after the date of this Offer to Purchase (to the extent such arrangements have
not been made previously by the Depositary), and any financial institution that
is a participant in DTC and whose name appears on a security position listing
as the owner of the Notes may make book-entry delivery of Notes by causing DTC
to transfer such Notes into the Depositary's account in accordance with DTC's
procedures for such transfer. Delivery of documents to DTC in accordance with
such Book-Entry Transfer Facility's procedures does not constitute delivery to
the Depositary. The confirmation of a book-entry transfer of Notes into the
Depositary's account at a Book-Entry Transfer Facility as described above is
referred to herein as a "Book-Entry Confirmation."
Other Matters
Notwithstanding any other provision hereof, payment for Notes accepted for
payment pursuant to the Tender Offer will in all cases be made only after
timely receipt by the Depositary of (i) certificates for (or a timely
Book-Entry Confirmation with respect to) such Notes, (ii) a Letter of
Transmittal (or a manually signed facsimile thereof), properly completed and
duly executed, with any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message and (iii) any other documents required
by the Letter of Transmittal.
Tenders of Notes pursuant to any of the procedures described above, and
acceptance thereof by the Company for purchase, will constitute a binding
agreement between the Company and the tendering Noteholder, upon the terms and
subject to the conditions of the Tender Offer in effect on the Expiration Date.
By executing a Letter of Transmittal, and subject to and effective upon
acceptance for purchase of, and payment for, the Notes tendered therewith, a
tendering Noteholder irrevocably sells, assigns and transfers to or upon the
order of the Company all right, title and interests in and to all the Notes
tendered thereby, waives any and all other rights with respect to the Notes and
releases and discharges the Company from any and all claims, if any, such
Noteholder may have now, or may have in the future, arising out of, or related
to, the Notes, including without limitation any claims that such U.S.
Noteholder is entitled to receive additional principal or interest payments
with respect to the Notes or to participate in any redemption of the Notes.
All questions as to the form of all documents and the validity (including
time of receipt) and acceptance of all tenders of Notes will be determined by
the Company, in its sole discretion, the determination of which shall be
conclusive and binding. Alternative, conditional or contingent tenders of Notes
will not be considered valid. The Company reserves the absolute right to reject
any or all tenders of Notes that are not in proper form or the acceptance of
which, in the Company's opinion, would be unlawful. The Company also reserves
the right to waive any defects, irregularities or conditions of tender as to
particular Notes.
Any defect or irregularity in connection with tenders of Notes must be
cured within such time as the Company determines, unless waived by the Company.
Tenders of Notes shall not be deemed to have been made until all defects and
irregularities have been waived by the Company or cured. None of the Company,
the Dealer Manager, the Depositary, the Information Agent, the Trustee or any
other person will be under any duty to give notice of any defects or
irregularities in tenders of Notes or will incur any liability to Noteholders
for failure to give any such notice.
Backup Withholding
For a discussion of material United States federal income tax
considerations related to backup withholding, see "Material United States
Federal Income Tax Consequences."
WITHDRAWAL OF TENDERS; REVOCATION OF CONSENTS
Withdrawal rights will terminate upon the Withdrawal Deadline, at which
time the Company will issue a press release announcing that the Withdrawal
Deadline has passed. Since the Withdrawal Deadline may occur on any date, the
Company cannot predict when the Withdrawal Deadline may occur. Notwithstanding
the foregoing, Notes may be validy withdrawn and the related Consents may
21
be validly revoked after the Withdrawal Deadline if the Company reduces the
amount of the Total Consideration or the Tender Offer Consideration, as
applicable, the Consent Payment or the principal amount of Notes subject to the
Offer or is otherwise required by law to permit withdrawal. A valid withdrawal
of tendered Notes will constitute the concurrent, valid revocation of such
Noteholders' related Consent. To revoke Consents delivered in connection with
tendered Notes, Noteholders must withdraw the related tendered Notes. In
addition, tendered Notes may be validly withdrawn and the related Consents
revoked if the Offer is terminated without any Notes being purchased
thereunder. In the event of a termination of the Offer, the Notes tendered
pursuant to the Offer will be promptly returned to the tendering Noteholders
and the related Consents will be revoked. FOLLOWING THE WITHDRAWAL DEADLINE,
NOTES, INCLUDING THE NOTES TENDERED PRIOR TO THE WITHDRAWAL DEADLINE AND NOTES
TENDERED THEREAFTER, MAY NO LONGER BE VALIDLY WITHDRAWN AND THE RELATED
CONSENTS MAY NOT BE REVOKED.
Noteholders who wish to exercise their right of withdrawal with respect to
the Offer must give written notice of withdrawal by mail, hand delivery or
manually signed facsimile transmission, which notice must be received by the
Depositary at its address set forth on the back cover of this Offer to Purchase
prior to the issuance by the Company of a press release announcing that the
Withdrawal Deadline has passed. In order to be valid, a notice of withdrawal
must specify the name of the person who tendered the Notes to be withdrawn (the
"Notes Depositor"), the name in which the Notes are registered (or, if tendered
by book-entry transfer, the name of the participant in the Book-Entry Transfer
Facility whose name appears on the security position listing as the owner of
such Notes), if different from that of the Notes Depositor, and the principal
amount of Notes to be withdrawn. If certificates have been delivered or
otherwise identified (through confirmation of book-entry transfer of such
Notes) to the Depositary, the name of the Noteholder and the certificate number
or numbers relating to such Notes withdrawn must also be furnished to the
Depositary as aforesaid prior to the physical release of the certificates for
the withdrawn Notes (or, in the case of Notes transferred by book-entry
transfer, the name, and number of the account at the Book-Entry Transfer
Facility to be credited with withdrawn Notes). The notice of withdrawal must be
signed by the Noteholder in the same manner as the Letter of Transmittal
(including, in any case, any required signature guarantees), or be accompanied
by evidence satisfactory to the Company that the person withdrawing the tender
has succeeded to the beneficial ownership of such Notes. Noteholders may not
rescind withdrawals of tendered Notes. However, properly withdrawn Notes may be
retendered by following the procedures therefor described elsewhere in this
Offer to Purchase at any time prior to the Expiration Date.
All questions as to form and validity (including time of delivery) of any
notice of withdrawal will be determined by the Company in its sole discretion,
which determination will be conclusive and binding. The Company shall not be
under any duty to give notification of any defect or irregularity in any notice
of withdrawal of a tender, or incur any liability for failure to give any such
notification.
If the Company is delayed in its acceptance for purchase of, or payment
for, the Notes or is unable to accept for purchase or pay for Notes pursuant to
the Tender Offer for any reason, then, without prejudice to the Company's
rights hereunder, tendered Notes may be retained by the Depositary on behalf of
the Company and may not be withdrawn (subject to Rule 14e-1 under the Exchange
Act, which requires that an offeror pay the consideration offered or return the
Notes deposited by or on behalf of the Noteholders thereof promptly after the
termination or withdrawal of a tender offer).
EXPIRATION DATE; EXTENSION; TERMINATION; AMENDMENT
The Offer will expire at 3:00 p.m., New York City time, on Friday, May 14,
2004, unless extended or earlier terminated by the Company. In the event that
the Offer is extended or earlier terminated, the term "Expiration Date" with
respect to such extended or earlier terminated Offer shall mean the time and
date on which the Offer, as so extended or earlier terminated, shall expire.
Subject to applicable law, the Company expressly reserves the right in its sole
discretion to:
o extend the period of time during which the Offer shall remain open at
any time and from time to time by giving oral or written notice of such
extension to the Dealer Manager; and
22
o terminate, amend or withdraw the Offer at any time.
Please note that the terms of any extension of, or amendment of the terms
of, the Tender Offer may vary from the terms of the original Tender Offer
depending on such factors as prevailing interest rates and the principal amount
of Notes previously tendered or otherwise purchased.
There can be no assurance that the Company will exercise its right to
extend, terminate or amend the Offer or to extend the Early Consent Date or the
Withdrawal Deadline. Any extension, termination or amendment will be followed
as promptly as practicable by public announcement thereof. In the case of an
extension, such announcement will be made no later than 9:30 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date, Early Consent Date or Withdrawal Deadline, as applicable. Without
limiting the manner in which the Company may choose to make such public
announcement, the Company shall not have any obligation to publish, advertise
or otherwise communicate such public announcement other than by issuing a press
release to the Business Wire.
CONDITIONS TO THE TENDER OFFER AND THE CONSENT SOLICITATION
Refinancing Condition and Requisite Consents
Notwithstanding any other provision of this Tender Offer and the Consent
Solicitation, the Company's obligation to accept for purchase, and to pay the
Total Consideration or the Tender Offer Consideration, as applicable, for the
Notes validly tendered pursuant to the Tender Offer is in each case subject to,
and conditioned upon, unless waived, the Refinancing Condition and the receipt
of the Requisite Consents. If the foregoing conditions are not satisfied, the
Company shall not be required to accept for payment, purchase or pay for, and
may delay the acceptance for payment of, any tendered Notes, in each event
subject to Rule 14e-l(c) under the Exchange Act, and may terminate the Tender
Offer. The Company expects that in such an event, it will return all tendered
Notes promptly following the Expiration Date.
General Conditions
Notwithstanding any other provision of the Tender Offer and the Consent
Solicitation and in addition to (and not in limitation of) the Company's rights
to terminate, to extend and/or amend the Tender Offer and the Consent
Solicitation in its sole discretion, the Company shall not be required to
accept for payment, purchase or pay for, and may delay the acceptance for
payment of, any tendered Notes, in each event subject to Rule 14e-1(c) under
the Exchange Act, and may terminate the Offer, if any of the following (the
"General Conditions") have occurred or have been waived:
(1) there shall have been instituted, threatened or be pending any
action, proceeding or investigation (whether formal or informal) (or there
shall have been any material adverse development to any action or
proceeding currently instituted, threatened or pending) before or by any
court, governmental, regulatory or administrative agency or
instrumentality, or by any other person, in connection with the Tender
Offer, the Consent Solicitation, the Proposed Amendments or the Collateral
and Guaranty Release that, in the sole judgment of the Company, either (a)
is, or is reasonably likely to be, materially adverse to the business,
operations, properties, condition (financial or otherwise), assets,
liabilities or prospects of the Company, or (b) would or might prohibit,
prevent, restrict or delay consummation of the Tender Offer or the Consent
Solicitation;
(2) an order, statute, rule, regulation, executive order, stay, decree,
judgment or injunction shall have been proposed, enacted, entered, issued,
promulgated, enforced or deemed applicable by any court or governmental,
regulatory or administrative agency or instrumentality that, in the sole
judgment of the Company, either (a) would or might prohibit, prevent,
restrict or delay consummation of the Tender Offer or the Consent
Solicitation or (b) is, or is reasonably likely to be, materially adverse
to the business, operations, properties, condition (financial or
otherwise), assets, liabilities or prospects of the Company or its
affiliates;
(3) there shall have occurred or be likely to occur any event affecting
the business or financial affairs of the Company and its subsidiaries
that, in the sole judgment of the Company, would or might prohibit,
prevent, restrict or delay consummation of the Tender Offer or the Consent
Solicitation;
23
(4) the Trustee shall have objected in any respect to or taken action
that could, in the sole judgment of the Company, adversely affect the
consummation of the Tender Offer or the Consent Solicitation or shall have
taken any action that challenges the validity or effectiveness of the
procedures used by the Company in the making of the Tender Offer or the
Consent Solicitation or the acceptance of, or payment for, the Notes; or
(5) there has occurred (a) any general suspension of, or limitation on
prices for, trading in securities in the United States securities or
financial markets, (b) any significant adverse change in the price of the
Notes in the United States or other major securities or financial markets,
(c) a material impairment in the trading market for debt securities, (d) a
declaration of a banking moratorium or any suspension of payments in
respect to banks in the United States or other major financial markets,
(e) any limitation (whether or not mandatory) by any government or
governmental, administrative or regulatory authority or agency, domestic
or foreign, or other event that, in the reasonable judgment of the
Company, might affect the extension of credit by banks or other lending
institutions, (f) a commencement of a war, armed hostilities, terrorist
acts or other national or international calamity directly or indirectly
involving the United States or (g) in the case of any of the foregoing
existing on the date hereof, a material acceleration or worsening thereof.
The foregoing conditions are for the sole benefit of the Company and may
be asserted by the Company regardless of the circumstances giving rise to any
such condition (including any action or inaction by the Company) and may be
waived by the Company, in whole or in part, at any time and from time to time,
in the sole discretion of the Company. For example, if at least a majority in
aggregate principal amount of the Notes outstanding, but less than 66 2/3%
aggregate principal amount of the Notes outstanding, consent to the Proposed
Amendments and the Collateral and Guaranty Release, the Company may waive the
condition that it receive the Collateral and Guaranty Release Requisite
Consents. In such case, the Supplemental Indenture would contain the Proposed
Amendments but not the Collateral and Guaranty Release. Similarly, if less than
a majority in aggregate principal of the Notes outstanding consents to the
Proposed Amendments and the Collateral and Guaranty Release, the Company may
waive the conditions for the receipt of the Proposed Amendments Requisite
Consents and the Collateral and Guaranty Release Requisite Consents and
consummate the Tender Offer. In such case, the Supplemental Indenture would not
be executed and the Existing Indenture would remain in effect in its current
form, with respect to any untendered Notes. All conditions to the Offer must,
if the Notes are to be accepted for payment promptly after the satisfaction of
the Refinancing Condition or the Expiration Date, as applicable, be either
satisfied or waived by the Company prior to the satisfaction of the Refinancing
Condition or the expiration of the Offer on the Expiration Date, as applicable.
The failure by the Company at any time to exercise any of the foregoing rights
will not be deemed a waiver of any other right and each right will be deemed an
ongoing right which may be asserted at any time and from time to time.
MARKET FOR NOTES
The Notes are not listed on any national or regional securities exchange
or reported on a national quotation system. To the extent that the Notes are
traded, prices of the Notes may fluctuate greatly depending on the trading
volume and the balance between buy and sell orders. Quotations for Notes may
differ from actual trading prices and should be viewed as approximations.
Noteholders are urged to obtain current information with respect to the market
prices for the Notes.
24
THE REFINANCING TRANSACTIONS
THE NEW DEBT ISSUANCE
In connection with the Offer, the Company currently intends to privately
place new senior unsecured debt in the New Debt Issuance, which the Company
expects will be in an aggregate principal amount of approximately $400.0
million. The Company expects to consummate the New Debt Issuance prior to or on
the Settlement Date. A portion of the net proceeds received by the Company from
the New Debt Issuance will be used by the Company to (i) purchase those Notes
tendered and accepted in the Offer and to purchase the 8 1/8% Senior Notes due
2006 and the 9% Senior Notes due 2006 tendered and accepted in the 8 1/8% Senior
Notes and 9% Senior Notes Offers to Purchase, (ii) redeem any such notes that
remain outstanding following the respective offers to purchase, (iii) repay
amounts outstanding under the Company's existing credit facility, and (iv) pay
fees and expenses incurred in connection therewith, as well as in connection
with the debt-for-equity exchange transactions completed in March 2004. The
securities to be placed in the New Debt Issuance have not been and will not be
registered under the Securities Act of 1933.
THE NEW CREDIT FACILITY
In connection with the Offer, the Company currently intends to enter into
the New Credit Facility which will amend and restate its existing credit
facility. The Company currently expects the New Credit Facility to be for an
aggregate of approximately $680.0 million, of which approximately $530.0
million is currently expected to be a term loan facility, with the remainder
being a multi-currency revolving credit facility. It is expected that the New
Credit Facility will be secured on a first-priority basis by the same
collateral that secures the Company's existing credit facility and will contain
customary covenants. It is expected that borrowings under the new credit
agreement, as they are under the existing credit agreement, will be guaranteed
by Revlon, Inc., and, subject to certain limited exceptions, each of the
Company's domestic subsidiaries. The New Credit Facility is expected to be
executed prior to or on the Settlement Date. A portion of the amounts borrowed
under the New Credit Facility will be used by the Company to (i) purchase those
Notes tendered and accepted in the Offer and to purchase the 8 1/8% Senior Notes
due 2006 and the 9% Senior Notes due 2006 tendered and accepted in the 8 1/8%
Senior Notes and 9% Senior Notes Offers to Purchase, (ii) redeem any such notes
that remain outstanding following the respective offers to purchase, (iii)
repay amounts outstanding under the Company's existing credit facility, and
(iv) pay fees and expenses incurred in connection therewith, as well as in
connection with the debt-for-equity exchange transactions completed in March
2004.
OFFER TO PURCHASE THE 8 1/8% SENIOR NOTES DUE 2006 AND THE 9% SENIOR NOTES DUE
2006
Simultaneously with the launch of this Offer, the Company commenced offers
to purchase (together, the "8 1/8% Senior Notes and the 9% Senior Notes Offer to
Purchase") any and all of its outstanding 8 1/8% Senior Notes due 2006
($116,218,000 aggregate principal amount outstanding) and 9% Senior Notes due
2006 ($75,535,000 aggregate principal amount outstanding). The consideration
offered by us to holders of the 8 1/8% Senior Notes and the 9% Senior Notes who
validly tender and do not withdraw their notes in the 8 1/8% Senior Notes and
the 9% Senior Notes Offer to Purchase is 101.604% of the aggregate principal
amount of the notes, in the case of the 8 1/8% Senior Notes and 103.25% of the
aggregate principal amount of the notes, in the case of the 9% Senior Notes,
plus in each case accrued and unpaid interest up to, but not including, the
consummation date of the 8 1/8% Senior Notes and the 9% Senior Notes Offer to
Purchase. The 8 1/8% Senior Notes and the 9% Senior Notes Offer to Purchase is
expected to expire simultaneously with the Offer. Following the consummation of
the 8 1/8% Senior Notes and the 9% Senior Notes Offer to Purchase, the Company
intends, but is not obligated, to redeem those 8 1/8% Senior Notes and 9% Senior
Notes not tendered in the 8 1/8% Senior Notes and the 9% Senior Notes Offer to
Purchase. If called for redemption, the 8 1/8% Senior Notes and the 9% Senior
Notes will be called at the redemption prices under the indentures governing
such notes, which prices are 25 basis points less than the consideration
offered in the 8 1/8% Senior Notes and 9% Senior Notes Offer to Purchase.
25
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material United States federal income
tax consequences of the Offer to Noteholders. This summary is based upon
existing United States federal income tax law, which is subject to change,
possibly with retroactive effect. This summary does not discuss all aspects of
United States federal income taxation which may be important to particular
investors in light of their individual investment circumstances, such as Notes
held by investors subject to special tax rules (e.g., financial institutions,
insurance companies, broker-dealers, partnerships and their partners, and
tax-exempt organizations (including private foundations)) or to persons that
hold the Notes as part of a straddle, hedge, conversion, constructive sale, or
other integrated security transaction for United States federal income tax
purposes, all of whom may be subject to tax rules that differ significantly
from those summarized below. In addition, this summary does not discuss any (i)
United States federal income tax consequences to a Non-United States Holder
that (A) is engaged in the conduct of a United States trade or business, (B) is
a nonresident alien individual and such holder is present in the United States
for 183 or more days during the taxable year, or (C) is a corporation which
operates through a United States branch, and (ii) foreign, state, or local tax
considerations. This summary assumes that a Noteholder has held his notes as
"capital assets" (generally, property held for investment) under the Internal
Revenue Code of 1986, as amended (the "Code"). Each Noteholder is urged to
consult his tax advisor regarding the United States federal, state, local, and
foreign income and other tax considerations of the Offer.
For purposes of this summary, a "United States Holder" is a beneficial
owner of a Note that is, for United States federal income tax purposes, (i) an
individual who is a citizen or resident of the United States, (ii) a
corporation, partnership, or other entity created in, or organized under the
law of, the United States or any State or political subdivision thereof, (iii)
an estate the income of which is includible in gross income for United States
federal income tax purposes regardless of its source, or (iv) a trust (A) the
administration of which is subject to the primary supervision of a United
States court and which has one or more United States persons who have the
authority to control all substantial decisions of the trust or (B) that was in
existence on August 20, 1996, was treated as a United States person on the
previous day, and elected to continue to be so treated. A beneficial owner of a
Note that is not a United States Holder is referred to herein as a "Non-United
States Holder."
CONSEQUENCES TO TENDERING UNITED STATES HOLDERS
Sale of Notes. Your receipt of cash in exchange for Notes will be a
taxable transaction for United States federal income tax purposes. Accordingly,
you will recognize gain or loss in an amount equal to the difference between
(i) the amount of cash received (including the Consent Payment but excluding
amounts attributable to accrued but unpaid stated interest, which will be
subject to tax as ordinary income) and (ii) your adjusted tax basis in the
Notes. Subject to the market discount rules discussed below, such gain or loss
will be capital gain or loss and will be long term if the Notes have been held
for more than one year. A claim for a deduction in respect of a capital loss
may be subject to limitations.
Market Discount. A Note has "market discount" if its principal amount
exceeded its tax basis at the time of your acquisition of the Note, unless a
statutorily defined de minimis exception applied. Gain recognized by you with
respect to a Note that was acquired with market discount will generally be
subject to tax as ordinary income to the extent of the market discount accrued
during your period of ownership. This rule will not apply if you had previously
elected for United States federal income tax purposes to include accrued market
discount in income during the period that you held the Note.
CONSEQUENCES TO TENDERING NON-UNITED STATES HOLDERS
Any gain realized by a Non-United States Holder participating in the Offer
generally will not be subject to United States federal income tax.
Amounts received pursuant to this offer attributable to accrued but unpaid
interest on a Note by a Non-United States Holder generally will not be subject
to United States federal income tax,
26
provided that (i) the holder does not actually or constructively own 10% or
more of the total combined voting power of all classes of stock of the Company
that are entitled to vote or (ii) the Non-United States Holder is not (A) a
controlled foreign corporation that is related to the Company through stock
ownership or (B) a bank receiving interest on a loan entered into in the
ordinary course of business.
CONSEQUENCES TO NON-TENDERING HOLDERS
Under general principles of United States federal income tax law, the
modification of a debt instrument creates a deemed exchange upon which gain or
loss is realized (a "Deemed Exchange") if the modified debt instrument differs
materially either in kind or in extent from the original debt instrument. A
modification of a debt instrument that is not a "significant modification" does
not create a Deemed Exchange.
Although the matter is not free from doubt, if we consummate the Offer and
the Proposed Amendments become operative, the modification of the Indenture
pursuant to the amendments will not cause a Deemed Exchange of the Notes
because the amendments do not constitute a significant modification to the
terms of the Notes for United States federal income tax purposes. Accordingly,
upon the adoption of the Proposed Amendments (or if we consummate the Offer,
but waive the Proposed Amendments Requisite Consents and the Collateral and
Guaranty Release Requisite Consents), if you do not tender your Notes you will
not recognize any gain or loss and you will have the same adjusted tax basis,
holding period and accrued market discount, if any, in the Notes that you had
in the Notes immediately before the Offer.
INFORMATION REPORTING AND BACKUP WITHHOLDING
A United States Holder may be subject to information reporting and backup
withholding at the applicable rate on payments of the Total Consideration on
the Notes, unless the United States holder (i) provides its taxpayer
identification number ("TIN") and certifies, under penalties of perjury, that
the TIN it has provided is correct and that it (x) is exempt from backup
withholding, (y) has not been notified by the IRS that it is subject to backup
withholding, or (z) has been notified by the IRS that it is no longer subject
to backup withholding, or (ii) otherwise establishes an exemption. Each United
States Holder is asked to provide its TIN and the certifications described in
the previous sentence by completing the Form W-9 or Substitute Form W-9 that is
included in the Letter of Transmittal.
A Non-United States Holder may be subject to information reporting and
backup withholding at the applicable rate on payments of the Total
Consideration on the Notes, unless the Non-United States Holder (i) certifies
its exempt status by providing a properly executed Form W-8BEN or (ii)
otherwise establishes an exemption.
DEALER MANAGERS, INFORMATION AGENT AND THE DEPOSITARY
The Company has retained Citigroup Global Markets Inc. to act on behalf of
the Company as Dealer Manager in connection with the Offer. In connection with
acting in such capacity, the Company has agreed to reimburse the Dealer Manager
for its reasonable out-of-pocket expenses incurred in connection with the
Offer, including reasonable fees and disbursements of counsel, and to indemnify
the Dealer Manager against certain liabilities arising in connection with the
Offer, including liabilities under the federal securities laws.
The Dealer Manager, in the ordinary course of its business, makes markets
in debt securities of the Company, including the Notes, for its own accounts
and for the accounts of its customers. As a result, from time to time, the
Dealer Manager may own certain of the Company's debt securities, including the
Notes.
The Company has retained D.F. King & Co., Inc. to act as Information Agent
in connection with the Offer. The Information Agent will assist Noteholders who
request assistance in connection with the Offer, and may request brokers,
dealers and other nominee Noteholders to forward materials relating to the
Offer to beneficial owners. The Company has agreed to pay the Information Agent
a
27
customary fee for such service. The Company has also agreed to reimburse the
Information Agent for its reasonable out-of-pocket expenses and to indemnify
the Information Agent against certain liabilities in connection with the Offer,
including liabilities arising under the federal securities laws.
U.S. Bank National Association has been appointed as Depositary for the
Tender Offer and the Consent Solicitation. Letters of Transmittal and all
correspondence in connection with the Tender Offer and the Consent Solicitation
should be sent or delivered by each Noteholder or a beneficial owner's broker,
dealer, commercial bank, trust company or other nominee to the Depositary at
the address and telephone number set forth on the back cover page of this Offer
to Purchase. Any Noteholder or beneficial owner that has questions concerning
tender procedures should contact the Depositary at the address and telephone
number set forth on the back cover of this Offer to Purchase.
OTHER MATTERS
The Offer is not being made to (nor will tenders of Notes be accepted from
or on behalf of) Noteholders of Notes in any jurisdiction in which the making
or acceptance of the Offer would not be in compliance with the laws of such
jurisdiction. If the Company becomes aware of any jurisdiction in which the
making of the Offer or the tender of Notes would not be in compliance with
applicable law, the Company may or may not, in its sole discretion, make an
effort to comply with any such law. If, after such effort, if any, the Company
cannot comply with any such law, the Offer will not be made to the Noteholder
residing in such jurisdiction.
28
SCHEDULE A
Formulas to Determine Tender Offer Consideration and Total Consideration
and Accrued Interest
YLD = Tender Offer Yield expressed as a decimal.
CPN = The nominal rate of interest payable on the Notes expressed as
a decimal.
N = The number of semi-annual interest payments, based on the
maturity date for the Notes, from (but not including) the
Settlement Date to (and including) the maturity date pursuant
to the terms of the Notes.
S = The number of days from and including the semi-annual interest
payment date immediately preceding the Settlement Date up to
(but not including) the Settlement Date. The number of days is
computed using the 30/360 day-count method.
R = Assumed principal amount at maturity, which is $1,000.
/ = Divide. The term immediately to the left of the division symbol
is divided by the term immediately to the right of the division
symbol before any other addition or subtraction operations are
performed.
exp = Exponentiate. The term to the left of "exp" is raised to the
power indicated by the term to the right of "exp."
N = Summate. The term in the brackets to the right of the
(sum) summation symbol is separately calculated "N" times
k=1 (substituting for "k" in that term each whole k=1 number
between 1 and N, inclusive), and the separate calculations are
then added together.
Tender Offer = The price per $1,000 principal amount of the Notes. The Tender
Consideration Consideration is rounded to the nearest cent.
CP = Consent Payment, which is $20.00 per $1,000 principal amount
of Notes.
Total Consideration = The sum of the Tender Offer Consideration and the Consent
Payment
TENDER OFFER CONSIDERATION =
{ R } { N R(CPN/2) }
{ ---------------------------- } + { (sum) -------------------------- } - R(CPN/2)(S/180) - CP
(1 + YLD/2)exp(N - S/180) k=1 (1 + YLD/2)exp(k - S/180)
TOTAL CONSIDERATION =
{ R } { N R(CPN/2) }
{ ---------------------------- } + { (sum) -------------------------- } - R(CPN/2)(S/180)
(1 + YLD/2)exp(N - S/180) k=1 (1 + YLD/2)exp(k - S/180)
Accrued Interest = R(CPN/2)(S/180)
A-1
SCHEDULE B
EXAMPLE OF TENDER OFFER CONSIDERATION AND TOTAL CONSIDERATION
This schedule provides a hypothetical illustration of the Tender Offer
Consideration, the Total Consideration for the Notes and the accrued and unpaid
interest on the Notes from the last interest payment date to, but not including
the Assumed Settlement Date based on hypothetical data, and should, therefore,
be used solely for the purpose of obtaining an understanding of the calculation
of the Tender Offer Consideration and the Total Consideration, as quoted at
hypothetical rates and times, and should not be used or relied upon for any
other purposes.
Revlon Consumer Products Corporation
12% Senior Secured Notes due 2005
Maturity Date: December 1, 2005
Reference Security (UST Benchmark): 1.875% U.S. Treasury Note due November 30, 2005
Fixed Spread: 75 basis points
Example:
Assumed Price Determination Date and Time: 2:00 p.m. New York City time, on May 12, 2004
Assumed Settlement Date: Tuesday, May 18, 2004
Reference Security Yield: 0.0185
Fixed Spread: 0.0075
YLD = 0.0260
CPN = 0.1200
N = 4
S = 167
R = $1,000
CP = $20.00 per $1,000 principal amount of notes
Tender Offer Consideration = $1,120.63
Total Consideration = $1,140.63
B-1
APPENDIX A
Text of Existing Indenture
affected by Proposed Amendments
and Collateral and Guaranty Release
This Appendix A shows the major substantive changes which will be made to
the Existing Indenture upon the effectiveness of the Proposed Amendments and/or
the Collateral and Guaranty Release. Products Corporation expressly reserves
the right to make additional amendments to the Existing Indenture and the Notes
provided that such additional changes do not affect the interests of the
Noteholders in any material respect and are made pursuant to the terms of the
Existing Indenture. Capitalized terms used in this Appendix A without
definition have the meanings set forth in the Existing Indenture. Noteholders
may request copies of the Existing Indenture and/or the form of the
Supplemental Indenture from the Information Agent.
TEXT OF COVENANTS TO BE ELIMINATED BY THE PROPOSED AMENDMENTS.
Pursuant to the Proposed Amendments, the following sections of the
Existing Indenture, together with references to those sections and definitions
used in those sections, will be deleted in their entirety. The Proposed
Amendments require the consent of at least a majority in aggregate principal
amount of the Notes outstanding.
SECTION 4.02. SEC Reports. Notwithstanding that the Company may not be
required to be subject to the reporting requirements of Section 13 or 15(d) of
the Exchange Act, the Company shall file or cause to be filed with the SEC and
provide the Trustee and Securityholders with the information, documents and
other reports (or copies of such portions of any of the foregoing as the SEC
may by rules and regulations prescribe) with respect to the Company which are
specified in Sections 13 and 15(d) of the Exchange Act. The Company also shall
comply with the other provisions of TIA ss. 314(a).
SECTION 4.03. Limitation on Debt.
(a) The Company shall not, and shall not permit any Subsidiary of the
Company to, Issue, directly or indirectly, any Debt; provided, however,
that the Company and its Subsidiaries shall be permitted to Issue Debt if,
at the time of such Issuance, the Consolidated EBITDA Coverage Ratio for
the period of the most recently completed four consecutive fiscal quarters
ending at least 45 days prior to the date such Debt is Issued exceeds the
ratio of 2.0 to 1.0.
(b) Notwithstanding the foregoing, the Company and its Subsidiaries may
Issue the following Debt:
(1) Debt Issued pursuant to the Credit Agreement and the Securities,
any Refinancing thereof, or any other credit agreement, indenture or other
agreement, in an aggregate principal amount outstanding at any one time
not to exceed an amount equal to $675 million less the sum of all
principal payments (whether by prepayment, repayment or purchase) made
with respect to such Debt pursuant to Section 4.07(a)(iii)(A),
(a)(iii)(B)(1) or (a)(iii)(C) to the extent that such payments (i) are as
a result of an Asset Disposition involving assets that are included in the
Collateral, or are owned, directly or indirectly, by a Foreign Subsidiary
the stock of which is included in the Collateral, and (ii) permanently
retire such Debt in accordance with the terms of the agreements governing
such Debt;
(2) Debt Issued on an unsecured basis pursuant to any other credit
agreement, indenture or other agreement in an aggregate principal amount
not to exceed $225 million outstanding at any one time;
(3) Debt (other than Debt described in clauses (1) and (2) above) in
respect of the undrawn portion of the face amount of or unpaid
reimbursement obligations in respect of letters of credit for the account
of the Company or any of its Subsidiaries in an aggregate amount at any
time outstanding not to exceed the excess of (i) $150 million over (ii)
the undrawn portion of the face amount of or unpaid reimbursement
obligations in respect of
A-1
letters of credit Issued under the Credit Agreement or any Refinancing
thereof or any other credit agreement, indenture or other agreement
pursuant to clause (1) above;
(4) Debt of the Company Issued to and held by a Wholly Owned Recourse
Subsidiary of the Company and Debt of a Subsidiary of the Company Issued
to and held by the Company or a Wholly Owned Recourse Subsidiary;
provided, however, that any subsequent Issuance or transfer of any Capital
Stock that results in any such Wholly Owned Recourse Subsidiary ceasing to
be a Wholly Owned Recourse Subsidiary or any subsequent transfer of such
Debt (other than to the Company or a Wholly Owned Recourse Subsidiary)
shall be deemed, in each case, to constitute the Issuance of such Debt by
the Company or of such Debt by such Subsidiary;
(5) Debt of the Company consisting of the Existing 9% Senior
Securities, the Existing 8 1/8% Senior Securities, the Existing Senior
Subordinated Securities and Debt of the Company Issued to Refinance any
Debt permitted by this clause (5); provided, however, that, in the case of
a Refinancing, the principal amount of the Debt so Issued shall not exceed
the principal amount of the Debt so Refinanced plus any Refinancing Costs
thereof; provided further, however, that any Debt Issued pursuant to this
clause (5) to Refinance the Existing Senior Subordinated Securities or any
Refinancing thereof shall be subordinated to the Securities to at least
the same extent as the Existing Senior Subordinated Securities are
subordinated to the Securities;
(6) Debt (other than Debt described in clause (1), (2), (3), (4) or (5)
above or (11) or (12) below) of the Company or any of its Subsidiaries
outstanding on the Issue Date, as set forth on Schedule III hereto, and
Debt Issued to Refinance any Debt permitted by this clause (6) or by
Section 4.03(a); provided, however, that, in the case of a Refinancing,
the principal amount of the Debt so Issued shall not exceed the principal
amount of the Debt so Refinanced plus any Refinancing Costs thereof;
(7) Debt Issued and arising out of purchase money obligations for
property acquired in an amount not to exceed, for the period through
December 31, 2002, $50 million, plus for each period of twelve consecutive
months ending on December 31 thereafter, $15 million; provided, however,
that any such amounts which are available to be utilized during any such
twelve month period and are not so utilized may be utilized during any
succeeding period;
(8) Debt of a Subsidiary of the Company Issued and outstanding on or
prior to the date on which such Subsidiary was acquired by the Company
(other than Debt Issued as consideration in, or to provide all or any
portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such
Subsidiary became a Subsidiary of the Company or was acquired by the
Company);
(9) Debt Issued to Refinance Debt referred to in the foregoing clause
(8) or this clause (9); provided, however, that the principal amount of
the Debt so Issued shall not exceed the principal amount of the Debt so
Refinanced plus any Refinancing Costs thereof;
(10) Non-Recourse Debt of a Non-Recourse Subsidiary; provided, however,
that if any such Debt thereafter ceases to be Non-Recourse Debt of a
Non-Recourse Subsidiary, then such event shall be deemed for the purpose of
this Section 4.03 to constitute the Issuance of such Debt by the issuer
thereof;
(11) Permitted Affiliate Debt;
(12) Debt of Foreign Subsidiaries in an aggregate principal amount at
the time of Issuance which, when taken together with all other Debt issued
by Foreign Subsidiaries pursuant to this clause (12) and then outstanding,
does not exceed $60 million; provided, however, that such Foreign
Subsidiaries shall not be permitted to have more than $30 million of such
Debt outstanding at any one time that consists of Debt that is not offset
or secured by a compensating cash balance, a counterpart cash deposit or a
cash deposit pledge at the bank or banks to whom such Debt was Issued (or
an affiliate of such bank or banks); and
(13) Debt (other than Debt described in clauses (1) through (12) above
and in Section 4.03(a)) in an aggregate principal amount outstanding at
any time not to exceed $150 million.
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(c) Notwithstanding the foregoing Section 4.03(b), the Company shall not
permit any Foreign Subsidiary that is not a Subsidiary Guarantor to Issue,
directly or indirectly, any Debt pursuant to Section 4.03(b) except (i)
Debt Issued pursuant to clause (1) of Section 4.03(b) if, at the time of
such Issuance, the principal amount of such Debt does not exceed in the
aggregate, when taken together with all other Debt Issued by all Foreign
Subsidiaries pursuant to clause (1) of Section 4.03(b) and then
outstanding, $75 million and (ii) Debt Issued pursuant to clauses (4) and
(7) through (12) of Section 4.03(b).
(d) To the extent the Company or any Subsidiary of the Company
Guarantees any Debt of the Company or a Subsidiary of the Company, such
Guarantee and such Debt will be deemed to be the same indebtedness and only
the amount of the Debt will be deemed to be outstanding. If the Company or
a Subsidiary of the Company Guarantees any Debt of a Person that,
subsequent to the Issuance of such Guarantee, becomes a Subsidiary, such
Guarantee and the Debt so Guaranteed shall be deemed to be the same
indebtedness, which shall be deemed to have been Issued when the Guarantee
was Issued and shall be deemed to be permitted to the extent the Guarantee
was permitted when Issued.
(e) For purposes of determining compliance with any U.S. dollar
denominated restriction on the Issuance of Debt where the Debt Issued is
denominated in a different currency, the amount of such Debt will be the
U.S. Dollar Equivalent determined on the date of the Issuance of such Debt,
provided, however, that if any such Debt denominated in a different
currency is subject to a Hedging Obligation with respect to U.S. dollars
covering all principal, premium, if any, and interest payable on such Debt,
the amount of such Debt expressed in U.S. dollars will be as provided in
such Hedging Obligation. The principal amount of any Refinancing Debt
Issued in the same currency as the Debt being Refinanced will be the U.S.
Dollar Equivalent of the Debt Refinanced, except to the extent that (1)
such U.S. Dollar Equivalent was determined based on a Hedging Obligation,
in which case the Refinancing Debt will be determined in accordance with
the preceding sentence, and (2) the principal amount of the Refinancing
Debt exceeds the principal amount of the Debt being Refinanced, in which
case the U.S. Dollar Equivalent of such excess will be determined on the
date such Refinancing Debt is Issued.
(f) Notwithstanding Section 4.03(b)(1), prior to the date of the
Collateral Agency Agreement, the Securities shall be treated as not having
been Issued for purposes of this Section 4.03.
SECTION 4.04. Limitation on Liens.
(a) The Company shall not, and shall not permit any Subsidiary of the
Company to, create or suffer to exist any Lien upon any of its property or
assets (including Capital Stock or Debt of any Subsidiary of the Company)
now owned or hereafter acquired by it, securing any Debt or other
obligation other than the following Liens:
(1) Liens existing as of the Issue Date;
(2) any Lien arising by reason of (i) any judgment, decree or order of
any court or arbitrator, so long as such judgment, decree or order is
being contested in good faith and any appropriate legal proceedings which
may have been duly initiated for the review of such judgment, decree or
order shall not have been finally terminated or the period within which
such proceedings may be initiated shall not have expired, (ii) taxes not
delinquent or which are being contested in good faith, for which adequate
reserves (as determined by the Company) have been established, (iii)
security for payment of workers' compensation or other insurance, (iv)
security for the performance of tenders, contracts (other than contracts
for the payment of borrowed money) or leases in the ordinary course of
business, (v) deposits to secure public or statutory obligations, or in
lieu of surety or appeal bonds entered into in the ordinary course of
business, (vi) operation of law in favor of carriers, warehousemen,
landlords, mechanics, materialmen, laborers, employees, suppliers or
similar Persons, incurred in the ordinary course of business for sums
which are not delinquent for a period of more than 30 days or are being
contested in good faith by negotiations or by appropriate proceedings
which suspend the
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collection thereof, (vii) security for surety, appeal, reclamation,
performance or other similar bonds and (viii) security for Hedging
Obligations;
(3) Liens to secure the payment of all or a part of the purchase price
of, or Capital Lease Obligations with respect to, assets (including
Capital Stock) or property or business acquired or constructed after the
Issue Date; provided, however, that (i) the Debt secured by such Liens
shall have otherwise been permitted to be Issued under this Indenture and
(ii) such Liens shall not encumber any other assets or property of the
Company or any of its Subsidiaries and shall attach to such assets or
property within 180 days of the completion of construction or acquisition
of such assets or property;
(4) Liens on the assets or property of a Subsidiary of the Company
existing at the time such Subsidiary became a Subsidiary of the Company
and not incurred as a result of (or in connection with or in anticipation
of) such Subsidiary becoming a Subsidiary of the Company; provided,
however, that such Liens do not extend to or cover any other property or
assets of the Company or any of its Subsidiaries;
(5) Liens on any assets, including Collateral, of the Company or any
Subsidiary of the Company securing (i) obligations in respect of any Debt
permitted by Section 4.03(b)(1) and (ii) obligations in respect of Debt,
in an aggregate principal amount not to exceed $30 million at any time
outstanding, permitted by Section 4.03(b)(12);
(6) leases and subleases of real property by the Company and its
Subsidiaries (in any such case, as lessor) which do not interfere with the
ordinary conduct of the business of the Company or any of its
Subsidiaries, and which are made on customary and usual terms applicable
to similar properties;
(7) Liens securing Debt which is Issued to Refinance Debt which has
been secured by a Lien permitted under this Indenture and is permitted to
be Refinanced under this Indenture; provided, however, that such Liens do
not extend to or cover any property or assets of the Company or any of its
Subsidiaries not securing the Debt so Refinanced, other than as otherwise
permitted by this Sections 4.04;
(8) easements, reservations, licenses, rights-of-way, zoning
restrictions and covenants, conditions and restrictions and other similar
encumbrances or title defects which, in the aggregate, do not materially
detract from the use of the property subject thereto or materially
interfere with the ordinary conduct of the business of the Company or any
of its Subsidiaries;
(9) Liens on assets of a Non-Recourse Subsidiary;
(10) Liens on assets located outside the United States and Canada to
secure Debt Issued by Foreign Subsidiaries permitted by Sections 4.03(b)
and 4.03(c);
(11) 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;
(12) 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 Debt, 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; and
(13) Liens granted in the ordinary course of business of the Company or
any of its Subsidiaries in favor of issuers of documentary or trade
letters of credit for the account of the Company or such Subsidiary or
bankers' acceptances, which Liens secure the reimbursement obligations of
the Company or such Subsidiary on account of such letters of credit or
bankers' acceptances; provided that each such Lien is limited to (i) the
assets acquired or shipped with the support of such letter of credit or
bankers' acceptances and (ii) any assets of the Company or such Subsidiary
which are in the care, custody or control of such issuer in the ordinary
course of business.
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(b) Notwithstanding Section 4.04(a) above, the Company shall not, and
shall not permit any Subsidiary of the Company to, create or suffer to
exist any Lien upon any of the Collateral (including Collateral consisting
of Capital Stock or Debt of any Subsidiary of the Company) now owned or
hereafter acquired by it (i) securing any Public Debt unless the holders of
such Public Debt share in the distribution of proceeds from the foreclosure
on Collateral either (x) on an equal and ratable basis with the holders of
the Primary First Lien Obligations (and any other obligations that share on
an equal and ratable basis with the Primary First Lien Obligations) or (y)
on an equal and ratable basis with the Holders of the Securities (and any
other obligations that share on an equal and ratable basis with the Holders
of the Securities) or (ii) securing any Debt or other obligations (other
than Public Debt) unless the holders thereof share in the distribution of
proceeds from the foreclosure on Collateral on an equal or any greater
basis with the Holders of the Securities or on any basis with the holders
of the Primary First Lien Obligations or any other obligations that share
in such proceeds. Liens permitted by Section 4.04(a) above and which comply
with the requirements of this Section 4.04(b) are referred to collectively
as "Permitted Liens."
SECTION 4.05. Limitation on Restricted Payments. (a) The Company shall
not, and shall not permit any Subsidiary of the Company, directly or
indirectly, to (i) declare or pay any dividend or make any distribution on or
in respect of its Capital Stock (including any payment in connection with any
merger or consolidation involving the Company) or to the holders of its Capital
Stock (except dividends or distributions payable solely in its Non-Convertible
Capital Stock or in options, warrants or other rights to purchase its
Non-Convertible Capital Stock and except dividends or distributions payable to
the Company or a Subsidiary of the Company and, if a Subsidiary of the Company
is not wholly owned, to its other equity holders to the extent they are not
Affiliates of the Company), (ii) purchase, redeem or otherwise acquire or
retire for value any Capital Stock of the Company, (iii) purchase, repurchase,
redeem, defease or otherwise acquire or retire for value, prior to scheduled
maturity, scheduled repayment or scheduled sinking fund payment any
Subordinated Obligations (other than the purchase, repurchase or other
acquisition of Subordinated Obligations purchased in anticipation of satisfying
a sinking fund obligation, principal installment or final maturity, in each
case within one year of the date of acquisition) or (iv) make any Investment in
(A) an Affiliate of the Company other than a Subsidiary of the Company and
other than an Affiliate of the Company which will become a Subsidiary of the
Company as a result of any such Investment, or (B) a Non-Recourse Subsidiary
(any such dividend, distribution, purchase, redemption, repurchase, defeasance,
other acquisition, retirement or Investment being herein referred to as a
"Restricted Payment") if at the time the Company or such Subsidiary makes such
Restricted Payment (the amount of any such Restricted Payment, if other than in
cash, as determined in good faith by the Board of Directors, the determination
of which shall be evidenced by a resolution of the Board of Directors):
(1) a Default shall have occurred and be continuing (or would result
therefrom); or
(2) the Company is not able to incur $1.00 of additional Debt in
accordance with the provisions of Section 4.03(a); or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments after the Issue Date would exceed the sum of:
(a) 50% of the Consolidated Net Income of the Company accrued during
the period (treated as one accounting period) from October 1, 2001, to the
end of the most recent fiscal quarter ending at least 45 days prior to the
date of such Restricted Payment (or, in case such Consolidated Net Income
shall be a deficit, minus 100% of such deficit);
(b) the aggregate Net Cash Proceeds received by the Company from the
Issue or sale of its Capital Stock (other than Redeemable Stock or
Exchangeable Stock) subsequent to the Issue Date (other than an Issuance
or sale to a Subsidiary of the Company or an employee stock ownership plan
or other trust established by the Company or any Subsidiary for the
benefit of their employees);
(c) the aggregate Net Cash Proceeds received by the Company from the
Issue or sale of its Capital Stock (other than Redeemable Stock or
Exchangeable Stock) to an employee stock
A-5
ownership plan subsequent to the Issue Date; provided, however, that if
such employee stock ownership plan incurs any Debt, such aggregate amount
shall be limited to an amount equal to any increase in the Consolidated
Net Worth of the Company resulting from principal repayments made by such
employee stock ownership plan with respect to Debt incurred by it to
finance the purchase of such Capital Stock;
(d) the amount by which Debt of the Company is reduced on the Company's
balance sheet upon the conversion or exchange (other than by a Subsidiary)
subsequent to the Issue Date of any Debt of the Company convertible or
exchangeable for Capital Stock (other than Redeemable Stock or
Exchangeable Stock) of the Company (less the amount of any cash, or other
property, distributed by the Company upon such conversion or exchange);
(e) the aggregate net cash proceeds received by the Company subsequent
to the Issue Date as capital contributions (which shall not be deemed to
include any net cash proceeds received in connection with (i) the issuance
of any Permitted Affiliate Debt and (ii) any contribution designated at
the time it is made as a restricted contribution (a "Restricted
Contribution"); and
(f) to the extent that an Investment made by the Company or a
Subsidiary subsequent to the Issue Date has theretofore been included in
the calculation of the amount of Restricted Payments, the aggregate cash
repayments to the Company or a Subsidiary of such Investment to the extent
not included in Consolidated Net Income of the Company.
Notwithstanding the foregoing, the Company may take actions to make a
Restricted Payment in anticipation of the occurrence of any of the events
described in this Section 4.05(a) or Section 4.05(b); provided, however, that
the making of such Restricted Payment shall be conditional upon the occurrence
of such event.
(b) Section 4.05(a) shall not prohibit the following:
(i) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Capital Stock or Subordinated
Obligations of the Company made by exchange for, or out of the proceeds of
the substantially concurrent Issue or sale of, Capital Stock of the Company
(other than Redeemable Stock or Exchangeable Stock and other than Capital
Stock issued or sold to a Subsidiary or an employee stock ownership plan)
or of a cash capital contribution to the Company; provided, however, that
(A) such purchase, repurchase, redemption, defeasance or other acquisition
or retirement for value shall be excluded in the calculation of the amount
of Restricted Payments and (B) the Net Cash Proceeds from such sale shall
be excluded from Section 4.05(a)(3)(b) and Section 4.05(a)(3)(c);
(ii) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations of the
Company made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Subordinated Obligations; provided, however, that such
purchase, repurchase, redemption, defeasance or other acquisition or
retirement for value shall be excluded in the calculation of the amount of
Restricted Payments;
(iii) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations from Net
Available Cash to the extent permitted by Section 4.07; provided, however,
that such purchase, repurchase, redemption, defeasance or other acquisition
or retirement for value shall be excluded in the calculation of the amount
of Restricted Payments;
(iv) dividends paid within 60 days after the date of declaration
thereof, or Restricted Payments made within 60 days after the making of a
binding commitment in respect thereof, if at such date of declaration or
commitment such dividend or other Restricted Payment would have complied
with Section 4.05(a); provided, however, that at the time of payment of
such dividend or the making of such other Restricted Payment, no other
Default shall have occurred and be continuing (or result therefrom);
provided further, however, that such dividend or other Restricted Payment
shall be included in the calculation of the amount of Restricted Payments;
(v) dividends in an aggregate amount per annum not to exceed 6% of the
aggregate Net Cash Proceeds received by the Company in connection with all
Public Equity Offerings occurring
A-6
after the Issue Date; provided, however, that such amount shall be included
in the calculation of the amount of Restricted Payments;
(vi) so long as no Default has occurred and is continuing or would
result from such transaction, (x) amounts paid or property transferred
pursuant to the Permitted Transactions and (y) dividends, distributions,
redemptions of Capital Stock and other Restricted Payments in an aggregate
amount not to exceed the sum of all Restricted Contributions; provided,
however, that in the case of clause (y), such dividends or distributions,
redemptions of Capital Stock and other Restricted Payments are not
prohibited by the Credit Agreement or any Refinancing thereof (whether
pursuant to its terms or as a result of waiver, amendment, termination or
otherwise); provided further, however, that such amounts paid, property
transferred, dividends, distributions, redemptions and Restricted Payments
shall be excluded in the calculation of the amount of Restricted Payments;
(vii) so long as no Default has occurred and is continuing or would
result from such transaction, Restricted Payments in an aggregate amount
not to exceed the sum of (x) $30 million and (y) $5 million per annum from
the Issue Date (net of any applicable cash exercise price actually received
by the Company) made from time to time to finance the purchase by the
Company or the Parent of its common stock (for not more than fair market
value) in connection with the delivery of such common stock to grantees
under any stock option plan of the Company or the Parent upon the exercise
by such grantees of stock options or stock appreciation rights settled with
common stock or upon the grant of shares of restricted common stock
pursuant thereto; provided, however, that (A) amounts available pursuant to
this clause (vii) to be utilized for Restricted Payments during any such
year may be carried forward and utilized in any succeeding year, (B) no
Restricted Payments shall be permitted pursuant to this clause unless, at
the time of such purchase, the issuance by the Company or the Parent of new
shares of common stock to such optionee would cause more than 19.9% of the
total voting power or more than 19.9% of the total value of the stock of
the Company or Parent to be held by Persons other than members of the Mafco
Consolidated Group (the term "stock" for purposes of this clause shall have
the same meaning as such term has for purposes of Section 1504 of the Code)
and (C) no Restricted Payments shall be permitted pursuant to this clause
if, at the time of and after giving effect to such Restricted Payment, the
aggregate number of shares of common stock of Parent purchased by the
Company or the Parent pursuant to this clause would exceed 2.5% of the
total number of shares of common stock of the Parent outstanding at the
time of such Restricted Payment; provided further, however, that such
amounts shall be excluded in the calculation of the amount of Restricted
Payments;
(viii) any purchase, repurchase, redemption, defeasance or other
acquisition by any Non-Recourse Subsidiary of Non-Recourse Debt of such
Non-Recourse Subsidiary; provided, however, that the amount of such
purchase, repurchase, redemption, defeasance or other acquisition shall be
excluded in the calculation of the amount of Restricted Payments;
(ix) any purchase of Existing Senior Subordinated Securities pursuant to
the "Change of Control" provisions thereof and any purchase of any other
Subordinated Obligations pursuant to an option given to a holder of such
Subordinated Obligation pursuant to a "Change of Control" covenant which is
no more favorable to the holders of such Subordinated Obligations than the
provisions of this Indenture relating to a Change of Control are to Holders
as determined in good faith by the Board of Directors of the Company, the
determination of which shall be evidenced by a resolution adopted by such
Board of Directors; provided, however, that no such purchase shall be
permitted prior to the time when the Company shall have purchased all
Securities tendered for purchase by Holders electing to have their
Securities purchased pursuant to Section 4.09; provided further, however,
that such purchases shall be excluded from the calculation of Restricted
Payments;
(x) so long as no Default shall have occurred and be continuing, amounts
paid to Parent, to the extent necessary to enable Parent to pay actual
expenses, other than those paid to Affiliates
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of the Company, incidental to being a publicly reporting, but
non-operating, company; provided, however, that such amounts paid shall be
excluded in the calculation of the amount of Restricted Payments; or
(xi) any loan to a Permitted Affiliate entered into in the ordinary
course of business; provided, however, that such Permitted Affiliate holds,
directly or indirectly, no more than 10% of the outstanding Capital Stock
of the Company.
SECTION 4.06. Limitation on Restrictions on Distributions from
Subsidiaries. The Company shall not, and shall not permit any Subsidiary of the
Company to, create or otherwise cause or permit to exist or become effective
any consensual encumbrance or restriction on the ability of any Subsidiary of
the Company to (i) pay dividends or make any other distributions on its Capital
Stock or pay any Debt owed to the Company, (ii) make any loans or advances to
the Company or (iii) transfer any of its property or assets to the Company,
except:
(1) any encumbrance or restriction in effect at or entered into on the
Issue Date, including pursuant to the Credit Agreement, any agreement
entered into pursuant thereto or any other agreement;
(2) any encumbrance or restriction with respect to a Subsidiary of the
Company pursuant to an agreement relating to any Debt Issued by such
Subsidiary on or prior to the date on which such Subsidiary was acquired by
the Company (other than Debt Issued as consideration in, or to provide all
or any portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such
Subsidiary became a Subsidiary of the Company or was acquired by the
Company) and outstanding on such date;
(3) any encumbrance or restriction pursuant to an agreement effecting an
Issuance of Bank Debt or a Refinancing of any other Debt Issued pursuant to
an agreement referred to in clause (1) or (2) above or this clause (3) or
contained in any amendment to an agreement referred to in clause (1) or (2)
above or this clause (3); provided, however, that any such encumbrance or
restriction with respect to any Subsidiary is no less favorable to the
Securityholders than the least favorable of the encumbrances and
restrictions with respect to such Subsidiary contained in the agreements
referred to in clause (1) or (2) above, as determined in good faith by the
Board of Directors of the Company, the determination of which shall be
evidenced by a resolution of such Board of Directors;
(4) any such encumbrance or restriction consisting of customary
nonassignment provisions in leases governing leasehold interests to the
extent such provisions restrict the transfer of the lease;
(5) in the case of clause (iii) above, restrictions contained in
security agreements securing Debt of a Subsidiary (other than security
agreements securing Debt of a Subsidiary Issued in connection with any
agreement referred to in clause (1), (2) or (3) above) and restrictions
contained in agreements relating to a disposition of property of a
Subsidiary, to the extent such restrictions restrict the transfer of the
property subject to such agreements;
(6) any encumbrance or restriction binding on a Foreign Subsidiary
contained in an agreement pursuant to which such Foreign Subsidiary has
Issued Debt consisting of working capital borrowings; and
(7) any encumbrance or restriction relating to a Non-Recourse
Subsidiary.
SECTION 4.07. Limitation on Sales of Assets and Subsidiary Stock.
(a) The Company shall not, and shall not permit any Subsidiary of the
Company (other than a Non-Recourse Subsidiary) to, make any Asset
Disposition unless
(i) the Company or such Subsidiary receives consideration at the time
of such Asset Disposition at least equal to the fair market value, as
determined in good faith by the Board of Directors of the Company, the
determination of which shall be conclusive and evidenced by a resolution
of the Board of Directors of the Company (including as to the value of all
noncash consideration), of the Capital Stock and assets subject to such
Asset Disposition;
A-8
(ii) at least 75% of the consideration consists of cash, cash
equivalents, readily marketable securities which the Company intends, in
good faith, to liquidate promptly after such Asset Disposition or the
assumption of liabilities (including, in the case of the sale of the
Capital Stock of a Subsidiary of the Company, liabilities of the Company
or such Subsidiary); and
(iii) an amount equal to 100% of the Net Available Cash from such Asset
Disposition is applied by the Company (or such Subsidiary, as the case may
be):
(A) first, to the extent the Company is so required by the terms of
any Applicable Debt, to prepay, repay or purchase such Applicable Debt
(in each case other than Debt owed to the Company or an Affiliate of the
Company) in accordance with the terms of such Debt;
(B) second, to the extent of the balance of such Net Available Cash
after application in accordance with clause (A), at the Company's
election, to either (1) the optional prepayment, repayment or repurchase
of Applicable Debt (in each case other than Debt owed to the Company or
an Affiliate of the Company) which the Company is not required by the
terms thereof to prepay, repay or repurchase (whether or not the related
loan commitment is permanently reduced in connection therewith), or (2)
the investment by the Company or any Wholly Owned Recourse Subsidiary
(or, additionally in the case of an Asset Disposition by a Subsidiary
that is not a Wholly Owned Recourse Subsidiary, the investment by such
Subsidiary) in assets to replace the assets that were the subject of
such Asset Disposition or in assets that (as determined by the Board of
Directors of the Company, the determination of which shall be conclusive
and evidenced by a resolution of such Board of Directors) will be used
in the businesses of the Company and its Wholly Owned Recourse
Subsidiaries (or, additionally in the case of an Asset Disposition by a
Subsidiary that is not a Wholly Owned Recourse Subsidiary, the
businesses of such Subsidiary) existing on the Issue Date or in
businesses reasonably related thereto (provided, that if the assets that
were the subject of such Asset Disposition constituted Collateral, then
such replacement or other assets shall be pledged at the time of their
acquisition to the Collateral Agent as Collateral, subject to Permitted
Liens and the Collateral Agency Agreement), in all cases, within the
later of one year from the date of such Asset Disposition or the receipt
of such Net Available Cash; and
(C) third, to the extent of the balance of such Net Available Cash
after application in accordance with clauses (A) and (B), to make an
Tender Offer Securities and other Applicable Pari Passu Debt designated
by the Company pursuant to and subject to the conditions of Section
4.07(b);
provided, however, that in connection with an offer pursuant to clause (C)
above, if the principal amount and premium of such Securities and such
Applicable Pari Passu Debt, together with accrued and unpaid interest tendered
for acceptance pursuant to such offer exceeds the balance of Net Available
Cash, then the Company will accept for purchase the Securities and such
Applicable Pari Passu Debt of each such tendering holder on a pro rata basis in
accordance with the principal amount so tendered.
Notwithstanding the foregoing provisions of this Section 4.07(a), the
Company and the Subsidiaries shall not be required to apply any Net Available
Cash in accordance with this Section 4.07(a) except to the extent that the
aggregate Net Available Cash from all Asset Dispositions which are not applied
in accordance with this Section 4.07(a) exceed $10 million. Pending application
of Net Available Cash pursuant to this Section 4.07(a), such Net Available Cash
shall be (i) invested in Temporary Cash Investments (which, if the assets that
were the subject of such Asset Disposition constituted Collateral, then such
Temporary Cash Investments shall be pledged to the Collateral Agent as
Collateral, subject to Permitted Liens and the Collateral Agency Agreement,
pending such application) or (ii) used to make an optional prepayment under any
revolving credit facility constituting Applicable Debt, whether or not the
related loan commitment is permanently reduced in connection therewith.
(b) In the event of an Asset Disposition that requires the purchase of
Securities pursuant to Section 4.07(a)(iii)(C), the Company will be required to
purchase Securities and other Applicable Pari
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Passu Debt designated by the Company tendered pursuant to an offer by the
Company for the Securities and such Applicable Pari Passu Debt (the "Offer") at
a purchase price of 100% of their principal amount, without premium, plus
accrued interest to the Purchase Date (or in respect of other Applicable Pari
Passu Debt such lesser price, if any, as may be provided for by the terms of
such Applicable Pari Passu Debt) in accordance with the procedures (including
prorationing in the event of oversubscription) set forth in Section 4.07(c),
provided, that the procedures for making an offer to holders of other
Applicable Pari Passu Debt will be as provided for by the terms of such
Applicable Pari Passu Debt. If (x) the aggregate purchase price of Securities
and other Applicable Pari Passu Debt tendered pursuant to the Offer is less
than the Net Available Cash allotted to the purchase of the Securities and
Applicable Pari Passu Debt, (y) the Company shall not be obligated to make an
offer pursuant to the last sentence of this paragraph, or (z) the Company shall
be unable to purchase Securities from Holders thereof in an Offer because of
the provisions of applicable law or of the Company's or its Subsidiaries' loan
agreements, indentures or other contracts governing Debt or Debt of
Subsidiaries (in which case the Company need not make an Offer) the Company
shall apply the remaining Net Available Cash to (i) invest in assets to replace
the assets that were the subject of the Asset Disposition or in assets that (as
determined by the Board of Directors of the Company, the determination of which
shall be conclusive and evidenced by a resolution of such Board of Directors)
will be used in the businesses of the Company and its Wholly Owned Recourse
Subsidiaries (or, additionally in the case of an Asset Disposition by a
Subsidiary that is not a Wholly Owned Recourse Subsidiary, the business of such
Subsidiary) existing on the Issue Date or in businesses reasonably related
thereto or (ii) in the case of clause (x) or (y) above, prepay, repay or
repurchase any Debt of the Company or Debt of a Wholly Owned Recourse
Subsidiary or, additionally in the case of an Asset Disposition by a Subsidiary
that is not a Wholly Owned Recourse Subsidiary, Debt of such Subsidiary (in
each case other than Debt owed to the Company or an Affiliate of the Company),
whether or not the related loan commitment is permanently reduced in connection
therewith. The Company shall not be required to make an Offer for Securities
and other Applicable Pari Passu Debt pursuant to this Section if the Net
Available Cash available therefor (after application of the proceeds as
provided in clause (A) and clause (B) of Section 4.07(a)(iii)) are less than
$10 million for any particular Asset Disposition (which lesser amounts shall,
except with respect to Asset Dispositions involving Collateral, not be carried
forward for purposes of determining whether an Offer is required with respect
to the Net Available Cash from any subsequent Asset Disposition).
(c) (1) Promptly, and in any event within five days after the last date by
which the Company must have applied Net Available Cash pursuant to Section
4.07(a)(iii)(B), the Company shall be obligated to deliver to the Trustee and
send, by first-class mail to each Holder, a written notice stating that the
Holder may elect to have his Securities purchased by the Company either in
whole or in part (subject to prorationing as hereinafter described in the event
the Offer is oversubscribed) in integral multiples of $1,000 of Principal
amount, at the applicable purchase price. The notice shall specify a purchase
date not less than 30 days nor more than 60 days after the date of such notice
(the "Purchase Date") and shall contain information concerning the business of
the Company which the Company in good faith believes will enable such Holders
to make an informed decision (which at a minimum will include (i) the most
recently filed Annual Report on Form 10-K (including audited consolidated
financial statements) of the Company, the most recent subsequently filed
Quarterly Report on Form 10-Q and any Current Report on Form 8-K of the Company
filed subsequent to such Quarterly Report, other than Current Reports
describing Asset Dispositions otherwise described in the offering materials (or
corresponding successor reports), and (ii) if material, appropriate pro forma
financial information) and all instructions and materials necessary to tender
Securities pursuant to the Offer, together with the information contained in
clause (2) below.
(2) Not later than the date upon which written notice of an Offer is
delivered to the Trustee as provided above, the Company shall deliver to
the Trustee an Officers' Certificate as to (i) the amount of the Offer
(the "Offer Amount"), (ii) the allocation of the Net Available Cash from
the Asset Dispositions pursuant to which such Offer is being made and
(iii) the compliance of such allocation with the provisions of Section
4.07(a). On such date, the Company shall also irrevocably deposit with the
Trustee or with a paying agent (or, if the
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Company is acting as its own paying agent, segregate and hold in trust) in
immediately available funds an amount equal to the Offer Amount to be held
for payment in accordance with the provisions of this Section. The amount
so deposited, at the option of, and pursuant to the specific written
direction of, the Company, may be invested in Temporary Cash Investments
the maturity date of which is not later than the Purchase Date. The
Company shall be entitled to any interest or dividends accrued, earned or
paid on such Temporary Cash Investments. Upon the expiration of the period
for which the Offer remains open (the "Offer Period"), the Company shall
deliver to the Trustee for cancellation the Securities or portions thereof
which have been properly tendered to and are to be accepted by the
Company. The Trustee shall, on the Purchase Date, mail or deliver payment
to each tendering Holder in the amount of the purchase price. In the event
that the aggregate purchase price of the Securities and other Applicable
Pari Passu Debt delivered by the Company to the Trustee is less than the
Offer Amount, the Trustee shall deliver the excess to the Company promptly
after the expiration of the Offer Period.
(3) Holders electing to have a Security purchased will be required to
surrender the Security, with an appropriate form duly completed, to the
Company at the address specified in the notice at least ten Business Days
prior to the Purchase Date. Holders will be entitled to withdraw their
election if the Trustee or the Company receives not later than three
Business Days prior to the Purchase Date, a facsimile transmission or
letter setting forth the name of the Holder, the Principal amount of the
Security which was delivered for purchase by the Holder and a statement
that such Holder is withdrawing his election to have such Security
purchased. If at the expiration of the Offer Period the aggregate
Principal amount of Securities surrendered by Holders exceeds the Offer
Amount, the Company shall select the Securities to be purchased on a pro
rata basis (with such adjustments as may be deemed appropriate by the
Company so that only Securities in denominations of $1,000, or integral
multiples thereof, shall be purchased). Holders whose Securities are
purchased only in part will be Issued new Securities equal in Principal
amount to the unpurchased portion of the Securities surrendered.
(4) At the time the Company delivers Securities to the Trustee which
are to be accepted for purchase, the Company will also deliver an
Officers' Certificate stating that such Securities are to be accepted by
the Company pursuant to and in accordance with the terms of this Section.
A Security shall be deemed to have been accepted for purchase at the time
the Trustee, directly or through an agent, mails or delivers payment
therefor to the surrendering Holder.
(d) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue thereof.
SECTION 4.08. Limitation on Transactions with Affiliates. (a) The Company
shall not, and shall not permit any of its Subsidiaries (other than a
Non-Recourse Subsidiary) to, conduct any business or enter into any transaction
or series of similar transactions (including the purchase, sale, lease or
exchange of any property or the rendering of any service) with any Affiliate of
the Company or any legal or beneficial owner of 10% or more of the voting power
of the Voting Stock of the Company or with an Affiliate of any such owner
unless:
(i) the terms of such business, transaction or series of transactions
are (A) set forth in writing and (B) at least as favorable to the Company
or such Subsidiary as terms that would be obtainable at the time for a
comparable transaction or series of similar transactions in arm's-length
dealings with an unrelated third Person and
(ii) to the extent that such business, transaction or series of
transactions (other than Debt Issued by the Company which is permitted by
Section 4.03) is known by the Board of Directors
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of the Company to involve an Affiliate of the Company or a legal or
beneficial owner of 10% or more of the voting power of the Voting Stock of
the Company or an Affiliate of such owner, then
(A) with respect to a transaction or series of related transactions,
other than any purchase or sale of inventory in the ordinary course of
business (an "Inventory Transaction"), involving aggregate payments or
other consideration in excess of $5.0 million, such transaction or series
of related transactions has been approved (and the value of any noncash
consideration has been determined) by a majority of those members of the
Board of Directors of the Company having no personal stake in such
business, transaction or series of transactions and
(B) with respect to a transaction or series of related transactions,
other than any Inventory Transaction, involving aggregate payments or
other consideration in excess of $20.0 million (with the value of any
noncash consideration being determined by a majority of those members of
the Board of Directors of the Company having no personal stake in such
business, transaction or series of transactions), such transaction or
series of related transactions has been determined, in the written opinion
of a nationally recognized, investment banking firm to be fair, from a
financial point of view, to the Company or such Subsidiary, as the case
may be.
(b) The provisions of Section 4.08(a) shall not prohibit:
(i) any Restricted Payment permitted to be paid pursuant to Section
4.05;
(ii) any transaction between the Company and any of its Subsidiaries;
provided, however, that no portion of any minority interest in any such
Subsidiary is owned by (x) any Affiliate (other than the Company, a Wholly
Owned Recourse Subsidiary of the Company, a Permitted Affiliate or an
Unrestricted Affiliate) of the Company or (y) any legal or beneficial owner
of 10% or more of the voting power of the Voting Stock of the Company or
any Affiliate of such owner (other than the Company, any Wholly Owned
Recourse Subsidiary of the Company or an Unrestricted Affiliate);
(iii) any transaction between Subsidiaries of the Company; provided,
however, that no portion of any minority interest in any such Subsidiary is
owned by (x) any Affiliate (other than the Company, a Wholly Owned Recourse
Subsidiary of the Company, a Permitted Affiliate or an Unrestricted
Affiliate) of the Company or (y) any legal or beneficial owner of 10% or
more of the voting power of the Voting Stock of the Company or any
Affiliate of such owner (other than the Company, any Wholly Owned Recourse
Subsidiary of the Company or an Unrestricted Affiliate);
(iv) any transaction between the Company or a Subsidiary of the Company
and its own employee stock ownership plan;
(v) any transaction with an officer or director of the Company, of
Parent or of any Subsidiary of the Company entered into in the ordinary
course of business (including compensation or employee benefit arrangements
with any such officer or director); provided, however, that such officer
holds, directly or indirectly, no more than 10% of the outstanding Capital
Stock of the Company;
(vi) any business or transaction with an Unrestricted Affiliate;
(vii) any transaction which is a Permitted Transaction; and
(viii) any transaction pursuant to which Mafco Holdings will provide to
the Company and its Subsidiaries at their request and at the cost to Mafco
Holdings with certain allocated services to be purchased from third party
providers, such as legal and accounting services, insurance coverage and
other services.
SECTION 4.09. Change of Control.
(a) Upon a Change of Control, each Holder shall have the right to
require that the Company repurchase all or any part of such Holder's
Securities at a repurchase price in cash equal to their Put Amount as of
the date of repurchase plus accrued and unpaid interest to the date of
repurchase, in accordance with the terms contemplated in Section 4.09(b).
Prior to the mailing of
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the notice to Holders provided for in Section 4.09(b) but in any event
within 30 days following any Change of Control, the Company covenants to
(i) repay in full all Bank Debt or to offer to repay in full all Bank Debt
and to repay the Bank Debt of each lender who has accepted such offer or
(ii) obtain the requisite consent under the Bank Debt to permit the
repurchase of the Securities as provided for in Section 4.09(b). The
Company shall first comply with the covenant in the preceding sentence
before it shall be required to purchase Securities pursuant to this Section
4.09.
(b) Within 45 days following any Change of Control, the Company shall
mail a notice to each Holder with a copy to the Trustee stating:
(1) that a Change of Control has occurred and that such Holder has the
right to require the Company to repurchase all or any part of such
Holder's Securities at a repurchase price in cash equal to their Put
Amount as of the date of repurchase plus accrued and unpaid interest to
the date of repurchase;
(2) the circumstances and relevant facts regarding such Change of
Control;
(3) the repurchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and
(4) the instructions determined by the Company, consistent with this
Section, that a Holder must follow in order to have its Securities
purchased.
(c) Holders electing to have a Security repurchased will be required to
surrender the Security, with an appropriate form duly completed, to the
Company at the address specified in the notice at least 10 Business Days
prior to the purchase date. Holders will be entitled to withdraw their
election if the Trustee or the Company receives not later than three
Business Days prior to the purchase date, a facsimile transmission or
letter setting forth the name of the Holder, the Principal amount of the
Security which was delivered for purchase by the Holder and a statement
that such Holder is withdrawing his election to have such Security
repurchased.
(d) On the repurchase date, all Securities repurchased by the Company
under this Section shall be delivered to the Trustee for cancellation, and
the Company shall pay the repurchase price plus accrued and unpaid interest
to the Holders entitled thereto. Upon surrender of a Security that is
repurchased under this Section in part, the Company shall execute and the
Trustee shall authenticate for the Holder thereof (at the Company's
expense) a new Security having a Principal amount equal to the Principal
amount of the Security surrendered less the portion of the Principal amount
of the Security repurchased.
(e) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Securities
pursuant to this Section. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Section,
the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under
this Section by virtue thereof.
SECTION 4.12. Additional Security Documents. From and after the date the
Security Documents are executed and delivered, if the Parent Guarantor or any
Subsidiary of the Parent Guarantor executes and delivers in respect of any
property of such Person any mortgages, deeds of trust, security agreements,
pledge agreements or similar instruments to secure Debt or other obligations
that at the time constitute Primary First Lien Obligations (except a Foreign
Subsidiary that does so solely in respect of Debt or other obligations of
itself or another Foreign Subsidiary), then the Company will, or will cause
such Person to, execute and deliver substantially identical mortgages, deeds of
trust, security agreements, pledge agreements or similar instruments in order
to vest in the Collateral Agent a perfected security interest, subject only to
Permitted Liens and the Collateral Agency Agreement, in such property for the
benefit of the Collateral Agent on behalf of the Holders, among others, and
thereupon all provisions of this Indenture and the Collateral Agency Agreement
relating to Collateral shall be deemed to relate to such property to the same
extent and with the same force and effect.
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TEXT OF COVENANTS TO BE MODIFIED BY THE PROPOSED AMENDMENTS
Pursuant to the Proposed Amendments, the following sections of the
Existing Indenture will be modified to eliminate the text marked as deleted
below.
SECTION 5.01 When Company May Merge or Transfer Assets.
(a) The Company shall not consolidate with or merge with or into, or
convey, transfer or lease all or substantially all its assets to, any
Person, unless:
(i) the resulting, surviving or transferee Person (if not the
Company) shall be a Person organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia
and such Person shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to
the Trustee, all the obligations of the Company under the Securities and
this Indenture;
(ii) immediately after giving effect to such transaction (and
treating any Debt which becomes an obligation of the resulting,
surviving or transferee Person or any of its Subsidiaries as a result of
such transaction as having been Issued by such Person or such Subsidiary
at the time of such transaction), no Default shall have occurred and be
continuing;
[DELETED TEXT]
(iii) immediately after giving effect to such transaction, the
resulting, surviving or transferee Person would be able to incur at
least $1.00 of Debt pursuant to Section 4.03(a);
(iv) immediately after giving effect to such transaction, the
resulting, surviving or transferee Person shall have a Consolidated Net
Worth in an amount which is not less than the Consolidated Net Worth of
the Company immediately prior to such transaction; and
[/DELETED TEXT]
(v) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if
any) comply with this Indenture;
provided, that this Section 5.01 shall not prohibit a Wholly Owned Recourse
Subsidiary from consolidating with or merging with or into, or conveying,
transferring or leasing all or substantially all its assets to, the Company.
SECTION 6.01. Events of Default. An "Event of Default" occurs if:
(1) the Company defaults in any payment of interest on any Security when
the same becomes due and payable and such default continues for a period of
30 days;
(2) the Company (i) defaults in the payment of the Principal of any
Security when the same becomes due and payable at its Stated Maturity, upon
redemption, upon declaration or otherwise or (ii) fails to redeem or
purchase Securities when required pursuant to this Indenture or the
Securities;
(3) the Company fails to comply with Section 5.01;
(4) the Company fails to comply with Section 4.02, 4.03, 4.04, 4.05,
4.06, 4.07 (other than a failure to purchase Securities), 4.08, 4.09 (other
than a failure to purchase Securities), 4.10, 4.11 or 4.12 and such failure
continues for 30 days after the notice specified below;
(5) the Company fails to comply with any of the other agreements
applicable to it in the Securities or this Indenture (other than those
referred to in (1), (2), (3) or (4) above) and such failure continues for
60 days after the notice specified below;
(6) Debt of [DELETED TEXT]the Parent Guarantor,[/DELETED TEXT] the
Company or any Significant Subsidiary is not paid within any applicable grace
period after final maturity or is accelerated by the holders thereof because
of a default, the total principal amount of the portion of such Debt that is
unpaid or accelerated exceeds $25 million or its foreign currency equivalent
and such default continues for 10 days after the notice specified below;
(7) [DELETED TEXT]the Parent Guarantor,[/DELETED TEXT] the Company or any
Significant Subsidiary pursuant to or within the meaning of any Bankruptcy
Law:
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(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in an
involuntary case;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property; or
(D) makes a general assignment for the benefit of its creditors; or
takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against [DELETED TEXT]the Parent
Guarantor,[/DELETED TEXT] the Company or any Significant Subsidiary in
an involuntary case;
(B) appoints a Custodian of [DELETED TEXT]the Parent
Guarantor,[/DELETED TEXT] the Company or any Significant Subsidiary or
for any substantial part of its property; or
(C) orders the winding up or liquidation of [DELETED TEXT]the Parent
Guarantor,[/DELETED TEXT] the Company or any Significant Subsidiary; or
any similar relief is granted under any foreign laws and the order or
decree remains unstayed and in effect for 60 days;
(9) any judgment or decree for the payment of money in excess of $25
million or its foreign currency equivalent is entered against
[DELETED TEXT]the Parent Guarantor,[/DELETED TEXT] the Company or any
Significant Subsidiary and is not discharged and either (A) an enforcement
proceeding has been commenced by any creditor upon such judgment or decree
or (B) there is a period of 60 days following the entry of such judgment or
decree during which such judgment or decree is not discharged, waived or the
execution thereof stayed and, in the case of (B), such default continues for
10 days after the notice specified below;
(10) the Liens created by the Security Documents shall at any time not
constitute a valid and perfected Lien on the Collateral intended to be
covered thereby (to the extent perfection by filing, registration,
recordation or possession is required herein or therein) in favor of the
Collateral Agent, free and clear of all other Liens (other than Permitted
Liens), or, except for expiration in accordance with its terms or
amendment, modification, waiver, termination or release in accordance with
the terms of this Indenture, any of the Security Documents shall for
whatever reason be terminated or cease to be in full force and effect, if
in either case, such default continues for 10 days after the notice
specified below or the enforceability thereof shall be contested by the
Company or any Guarantor; or
(11) an Indenture Guarantee ceases to be in full force and effect (other
than in accordance with the terms of this Indenture) and such default
continues for 10 days after the notice specified below or a Guarantor
denies or disaffirms its obligations under its Indenture Guarantee.
The foregoing will constitute Events of Default whatever the reason for
any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body.
The term "Bankruptcy Law" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clause (4), (5), (6), (9)(B), (10) and (11) is not an
Event of Default until the Trustee or the Holders of at least 25% in
Principal amount of the Securities notify the Company of the Default and
the Company does not cure such Default within the time specified after
receipt of such Notice. Such Notice must specify the Default, demand that
it be remedied and state that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate
of any event which with the giving of notice
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and the lapse of time would become an Event of Default under clause (4),
(5), (6), (9)(B), (10) or (11), its status and what action the Company is
taking or proposes to take with respect thereto.
TEXT OF COVENANTS TO BE ELIMINATED BY THE COLLATERAL AND GUARANTY RELEASE.
Pursuant to the Collateral and Guaranty Release and certain related
amendments, the following sections of the Existing Indenture, together with
references to these sections and definitions used in those sections, will be
deleted in their entirety. In addition, the Collateral and Guaranty Release
will release the guaranties of the Company's obligations under the Notes
provided by the Guarantors, release the liens that the Noteholders have against
the Collateral that secure the Company and the Guarantors under the existing
identure and terminate the collateral documents relating to such liens. The
Collateral and Guaranty Release requires the consent of at least 66 2/3% in
aggregate amount of the Notes outstanding.
SECTION 4.10. Additional Guarantees; Releases of Guarantors.
(a) From and after the Issue Date, if any Subsidiary of the Parent
Guarantor, whether existing on the Issue Date or thereafter formed or
acquired, becomes an obligor in respect of Debt or other obligations that
at the time constitutes Primary First Lien Obligations (except a Foreign
Subsidiary that becomes an obligor solely in respect of Debt or other
obligations of itself or another Foreign Subsidiary), and such Subsidiary
is not at the time a Guarantor, then the Company shall cause such
Subsidiary to execute and deliver to the Trustee a supplemental indenture,
substantially in the form of Exhibit C (a "Subsidiary Supplemental
Indenture"), pursuant to which such Subsidiary shall provide an Indenture
Guarantee as set forth in Article X.
SECTION 5.01 When Company May Merge or Transfer Assets.
(c) Unless the Indenture Guarantee of a Guarantor is being released as
permitted by Section 4.10(b) in connection with a merger, conveyance,
transfer or lease, the Company will not permit such Guarantor to
consolidate with or merge with or into, or convey, transfer or lease all or
substantially all of its assets to, any Person (other than the Company or a
Subsidiary Guarantor) unless:
(i) the resulting, surviving or transferee Person (if not such
Guarantor) is organized and existing under the laws of the jurisdiction
under which such Guarantor was organized or under the laws of the United
States of America, any State thereof or the District of Columbia and
such Person expressly assumes by a supplemental guarantee agreement,
executed and delivered to the Trustee, all the obligations of such
Guarantor under its Indenture Guarantee;
(ii) immediately after giving effect to such transaction (and
treating any Debt which becomes an obligation of the resulting,
surviving or transferee Person or any of its Subsidiaries as a result of
such transaction as having been issued by such Person or such Subsidiary
at the time of the transaction), no Default has occurred and is
continuing; and
(iii) the Company delivers to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger
or transfer and such supplemental guarantee agreement (if any) comply
with this Indenture.
SECTION 10.01. Indenture Guarantees. Subject to the provisions of this
Article X, each Guarantor, as primary obligor and not merely as surety, jointly
and severally, irrevocably and unconditionally guarantees the punctual payment
when due, whether at Stated Maturity, by acceleration or otherwise, of all
Obligations of the Company and the Guarantors under the Securities, this
Indenture and the other Indenture Documents whether for Principal of or
interest (if any) on the Securities, expenses, indemnification or otherwise
(all such Obligations guaranteed hereby by such Guarantor being the "Guaranteed
Obligations"). The guaranty of any Guarantor under this Article X (including
pursuant to any Subsidiary Supplemental Indenture) is herein referred to as
this "Indenture Guarantee".
Each Guarantor agrees to pay, in addition to the amount stated above, any
and all expenses (including reasonable counsel fees and expenses) incurred by
the Trustee or the Holders in enforcing any rights under this Article X.
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Without limiting the generality of the foregoing, this Indenture Guarantee
guarantees, jointly and severally, to the extent provided herein, the payment
of all amounts which constitute part of the Guaranteed Obligations and would be
owed by the Company under this Indenture or the Securities but for the fact
that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the Company.
SECTION 10.02. Guaranty Absolute. This Indenture Guarantee is irrevocable,
absolute, present and unconditional. Each Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of
this Indenture, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the
Trustee or the Holders with respect thereto. Each Guarantor further agrees that
its Indenture Guarantee herein constitutes a guarantee of payment, performance
and compliance (and not a guarantee of collection). The obligations of each
Guarantor under its Indenture Guarantee herein are independent of the
Guaranteed Obligations, and a separate action or actions may be brought and
prosecuted against any Guarantor to enforce its Indenture Guarantee,
irrespective of whether any action is brought against the Company or any other
guarantor or whether the Company or any other guarantor is joined in any such
action or actions. The liability of each Guarantor under its Indenture
Guarantee herein shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of this Indenture or the
Securities with respect to the Company or any agreement or instrument
relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations, or any other
amendment or waiver of or any consent to departure from this Indenture,
including any increase in the Guaranteed Obligations resulting from the
extension of additional credit to the Company or otherwise;
(c) the failure to give notice to such Guarantor of the occurrence of a
Default under the provisions of this Indenture or the Securities;
(d) any taking, exchange, release or nonperfection of any collateral, or
any taking, release or amendment or waiver of or consent to departure from
any other guaranty, for all or any of the Guaranteed Obligations;
(e) any manner of application of collateral, or proceeds thereof, to all
or any of the Guaranteed Obligations, or any manner of sale or other
disposition of any collateral or any other assets of the Company;
(f) any failure, omission, delay by or inability on the part of the
Trustee or the Holders to assert or exercise any right, power or remedy
conferred on the Trustee or the Holders in this Indenture or the
Securities;
(g) any change in the corporate structure, or termination, dissolution,
consolidation or merger of the Company or any guarantor (including any
other Guarantor) with or into any other entity, the voluntary or
involuntary liquidation, dissolution, sale or other disposition of all or
substantially all the assets of the Company or any guarantor (including any
other Guarantor), the marshaling of the assets and liabilities of the
Company or any guarantor, the receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition with creditors, or readjustment of, or other similar
proceedings affecting the Company or any guarantor (including any other
Guarantor), or any of the assets of any of them;
(h) the assignment of any right, title or interest of the Trustee or any
Holder in this Indenture or the Securities to any other Person; or
(i) any other event or circumstance (including any statute of
limitations), whether foreseen or unforeseen and whether similar or
dissimilar to any of the foregoing, that might otherwise constitute a
defense available to, or a discharge of, the Company or a guarantor
(including any other Guarantor), other than payment in full of the
Guaranteed Obligations; it being the intent of such Guarantor that its
obligations hereunder shall not be discharged except by payment of all
amounts owing pursuant to this Indenture or the Securities and except as
otherwise provided in Section 4.10(b).
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This Indenture Guarantee shall continue to be effective or be reinstated,
as the case may be, if at any time any payment or performance with respect to
any of the Guaranteed Obligations is rescinded or must otherwise be returned by
the Trustee, any Holder or any other Person upon the insolvency, bankruptcy or
reorganization of the Company or otherwise, all as though such payment or
performance had not been made or occurred. Except as expressly set forth in
Sections 4.10(b), 8.01(b) and 10.03, the obligations of each Guarantor under
its Indenture Guarantee herein shall not be subject to reduction, termination
or other impairment by any set-off, recoupment, counterclaim or defense or for
any other reason.
SECTION 10.03. Limitation on Liability. Any term or provision of this
Indenture to the contrary notwithstanding, the maximum, aggregate amount of the
Guaranteed Obligations Guaranteed by any Guarantor shall not exceed the maximum
amount that can be hereby Guaranteed without rendering this Indenture, as it
relates to such Guarantor, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally.
SECTION 10.04. Waivers. Each Guarantor hereby irrevocably waives, to the
extent permitted by applicable law:
(a) promptness, diligence, notice of acceptance and any other notice
with respect to any of the Guaranteed Obligations and this Indenture
Guarantee;
(b) any requirement that the Trustee, any Holder or any other Person
protect, secure, perfect or insure any Lien or any property subject thereto
or exhaust any right or take any action against the Company or any other
Person or any collateral, or obtain any relief pursuant to this Indenture
or pursue any other available remedy;
(c) all right to trial by jury in any action, proceeding or counterclaim
arising out of or relating to this Indenture or the Securities;
(d) any defense arising by reason of any claim or defense based upon an
election of remedies by the Trustee or any Holder which in any manner
impairs, reduces, releases or otherwise adversely affects its subrogation,
contribution or reimbursement rights or other rights to proceed against the
Company or any other Person or any collateral; and
(e) any duty on the part of the Trustee or any Holder to disclose to
such Guarantor any matter, fact or thing relating to the business,
operation or condition of the Company and its assets now known or hereafter
known by the Trustee or such Holder.
SECTION 10.05. Waiver of Subrogation and Contribution. Until this
Indenture has been discharged, each Guarantor hereby irrevocably waives any
claim or other right which it may now or hereafter acquire against the Company
or any guarantor (including any other Guarantor) that arise from the existence,
payment, performance or enforcement of such Guarantor's obligations under its
Indenture Guarantee herein, including any right of subrogation, reimbursement,
exoneration, contribution, indemnification, any right to participate in any
claim or remedy of the Trustee or any Holder against the Company or any
guarantor or any collateral which the Trustee or any Holder now has or
hereafter acquires, whether or not such claim, remedy or right arises in
equity, or under contract, statute or common law, including the right to take
or receive from the Company, directly or indirectly, in cash or other property
or by setoff or in any other manner, payment or security on account of such
claim or other rights. If any amount shall be paid to such Guarantor in
violation of the preceding sentence and the Guaranteed Obligations shall not
have been paid in full, such amount shall be deemed to have been paid to such
Guarantor for the benefit of, and held in trust for the benefit of, the
Trustee, and the Holders, and shall forthwith be paid to the Trustee for the
benefit of the Holders to be credited and applied to the Guaranteed
Obligations, whether matured or unmatured, in accordance with the terms of this
Indenture. Each Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by this Indenture and
that the waivers set forth in this Section 10.05 are knowingly made in
contemplation of such benefits.
SECTION 10.06. No Waiver; Cumulative Remedies. No failure on the part of
the Trustee or any Holder to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof;
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nor shall any single or partial exercise of any right hereunder preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law. The Trustee and the Holders shall have all the rights and
remedies granted in this Indenture and available at law or in equity, and these
same rights and remedies may be pursued separately, successively or
concurrently against the Company or any Guarantor, or any collateral.
SECTION 10.07. Successors and Assigns. Until its Indenture Guarantee is
released pursuant to Section 4.10(b) or 8.01(b), this Article X shall be
binding upon each Guarantor and its successors and assigns and shall enure to
the benefit of the successors and assigns of the Trustee and the Holders and,
in the event of any transfer or assignment of rights by any Holder or the
Trustee, the rights and privileges conferred upon that party in this Indenture
and in the Securities shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions of this
Indenture.
SECTION 10.08. Severability. Any provision of this Article X which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization, without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
SECTION 11.01. Collateral and Security Documents. (a) To secure the due
and punctual payment of the Obligations of the Company and the Guarantors under
this Indenture, the Securities and the other Indenture Documents, the Company,
the Collateral Agent and the Trustee will enter into the Collateral Agency
Agreement, and the Company, the Guarantors and the Collateral Agent will enter
into the Security Documents, to create the security interests and related
matters referred to therein. The Trustee and the Company hereby acknowledge and
agree that the Collateral Agent holds the Collateral in trust for the benefit
of the Holders and the Trustee, among others, pursuant to the terms of the
Security Documents and subject to the terms of the Collateral Agency Agreement.
(b) Each Holder, by accepting a Security, agrees to all of the terms and
provisions of the Security Documents and the Collateral Agency Agreement,
and authorizes and directs the Trustee and the Collateral Agent to perform
their respective obligations and exercise their respective rights under the
Security Documents and the Collateral Agency Agreement in accordance
therewith; provided, however, that if any provisions of the Security
Documents or the Collateral Agency Agreement limit, qualify or conflict
with the duties imposed by the provisions of the TIA, the TIA will control.
(c) As more fully set forth in, and subject to the provisions of, the
Security Documents and the Collateral Agency Agreement, the Holders, and
the Trustee on behalf of such Holders will have rights in and to the
Collateral that are subject to the rights that have been or may be created
in favor of the holders of other Debt and obligations of the Company and
the Guarantors.
(d) As among the Holders, the Collateral shall be held for the equal and
ratable benefit of the Holders without preference, priority or distinction
of any thereof over any other.
(e) With respect to Wilmington Trust Company acting as Collateral Agent,
Wilmington Trust Company (i) shall not be deemed to have breached its
fiduciary duty as Trustee to the Holders as a result of the performance of
its duties as Collateral Agent to the extent it acts in compliance with the
Collateral Agency Agreement and (ii) shall not be liable to the Holders for
any such action or inaction. The rights and interests created under this
Indenture shall be subject to the terms of the Collateral Agency Agreement.
SECTION 11.02. Release of Collateral. Collateral may be released from the
security interest created by the Security Documents at any time or from time to
time, and the Security Documents may be terminated, in accordance with the
provisions of the Security Documents and the Collateral Agency Agreement. The
release of any Collateral from the terms hereof and of the Security Documents
or the release of, in whole or in part, the Liens created by the Security
Documents, or the termination of the Security Documents, will not be deemed to
impair the Lien on the Collateral in
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contravention of the provisions hereof if and to the extent the Collateral or
Liens are released, or the Security Documents are terminated, pursuant to the
applicable Security Documents and the Collateral Agency Agreement. The Trustee
and each of the Holders acknowledge that a release of Collateral or a Lien
strictly in accordance with the terms of the Security Documents and the
Collateral Agency Agreement will not be deemed for any purpose to be an
impairment of the Lien on the Collateral in contravention of the terms of this
Indenture. To the extent applicable, the Company and each obligor on the
Securities shall cause ss. 314(d) of the TIA relating to the release of
property or securities from the Lien hereof and of the Security Documents to be
complied with. Any certificate or opinion required by ss. 314(d) of the TIA may
be made by an officer of the Company, except in cases which ss. 314(d) of the
TIA requires that such certificate or opinion be made by an independent person.
SECTION 11.03. Opinions as to Recording. The Company shall deliver to the
Trustee:
(i) promptly after the issuance of the Exchange Securities, an Opinion
of Counsel either stating that in the opinion of such counsel the Indenture
and the Security Documents (or including financing statements or other
instruments, as applicable) have been properly recorded and filed so as to
make effective the Lien intended to be created for the benefit of the
Securityholders, and reciting the details of such action, or stating that
in the opinion of such counsel no such action is necessary to make such
Lien effective; and
(ii) on or before December 1 of each year, an Opinion of Counsel either
stating that in the opinion of such counsel such action has been taken with
respect to the recording, filing, re-recording and re-filing of the
Indenture and the Security Documents (or financing statements or other
instruments, as applicable) as is necessary to maintain the Lien intended
to be created thereby for the benefit of the Securityholders, and reciting
the details of such action, or stating that in the opinion of such counsel
no such action is necessary to maintain such Lien.
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To obtain additional copies of the Offer to Purchase and the accompanying
Letter of Transmittal, please contact the Information Agent.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
48 WALL STREET
22ND FLOOR
NEW YORK, NEW YORK 10005
BANKS AND BROKERAGE FIRMS, PLEASE CALL COLLECT AT: (212) 269-5550
TOLL-FREE (800) 949-2583
The Depositary for the Offer is:
U.S. BANK NATIONAL ASSOCIATION
By Regular or Certified Mail and
By Hand or Overnight Courier:
U.S. Bank National Association
60 Livingston Avenue
St. Paul, MN 55107
Attention: Specialized Finance Department
By Facsimile:
(For Eligible Institutions Only)
(651) 495-8158
Confirmation:
(800) 934-6802
Any questions about the Tender Offer and the Consent Solicitation or
procedures for accepting the Tender Offer and submitting a Consent may be
directed to the Dealer Manager.
The Dealer Manager for the Tender Offer and Consent Solicitation is:
CITIGROUP GLOBAL MARKETS INC.
Liability Management Group
390 Greenwich Street, 4th Floor
New York, New York 10013
(212) 723-6106 (collect)
(800) 558-3745 (toll-free)