Exhibit 2.1
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INVESTMENT AGREEMENT
by and among
Revlon, Inc.,
Revlon Consumer Products Corporation
and
MacAndrews & Forbes Holdings Inc.
Dated February 5, 2003
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TABLE OF CONTENTS
PAGE
Section 1. Definitions..................................................2
Section 2. The Rights Offering..........................................5
2.1 BASIC SUBSCRIPTION PRIVILEGE.......................................5
2.2 SUBORDINATION OF OVER-SUBSCRIPTION PRIVILEGE.......................5
2.3 BACK-STOP..........................................................5
2.4 REGISTRATION RIGHTS................................................5
2.5 THE RIGHTS OFFERING................................................6
2.6 ADVANCE PURCHASE OF PREFERRED STOCK PENDING RIGHTS OFFERING........7
2.7 OFFSET AGAINST THE RIGHTS OFFERING.................................9
Section 3. Representations and Warranties of the Investor...............9
3.1 ORGANIZATION.......................................................9
3.2 DUE AUTHORIZATION..................................................9
3.3 DUE EXECUTION; ENFORCEABILITY......................................9
3.4 INVESTMENT REPRESENTATIONS AND WARRANTIES..........................9
Section 4. Representations and Warranties of the Company and RCPC......10
4.1 ORGANIZATION......................................................10
4.2 DUE AUTHORIZATION.................................................10
4.3 DUE EXECUTION; ENFORCEABILITY.....................................10
4.4 CONSENTS..........................................................11
4.5 NO CONFLICTS......................................................11
4.6 BOARD OF DIRECTORS................................................11
4.7 DUE ISSUANCE AND AUTHORIZATION OF CAPITAL STOCK...................11
Section 5. Additional Covenants........................................12
5.1 LISTING OBLIGATION................................................12
5.2 COOPERATION WITH THE RIGHTS OFFERING..............................12
5.3 FILE THE CERTIFICATE OF DESIGNATIONS..............................12
5.4 LEGENDS...........................................................12
5.5 RESERVATION OF SHARES OF PREFERRED STOCK..........................13
5.6 FURTHER ASSURANCES................................................13
Section 6. Miscellaneous...............................................13
6.1 NOTICES...........................................................13
6.2 INDEMNIFICATION...................................................14
6.3 FEES AND EXPENSES.................................................14
6.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES ETC....................14
6.5 ASSIGNMENT........................................................15
6.6 ENTIRE AGREEMENT..................................................15
6.7 WAIVERS AND AMENDMENTS............................................15
6.8 GOVERNING LAW; JURISDICTION; VENUE; PROCESS.......................15
6.9 COUNTERPARTS......................................................16
6.10 HEADINGS..........................................................16
EXHIBIT A (FORM OF TERM LOAN)
EXHIBIT B (FORM OF SUPPLEMENTAL LINE OF CREDIT)
EXHIBIT C (TERMS OF SERIES C PREFERRED STOCK)
INVESTMENT AGREEMENT
THIS INVESTMENT AGREEMENT (this "AGREEMENT") is made this 5th day of
February, 2003 by and among Revlon, Inc., a Delaware corporation (the
"COMPANY"), Revlon Consumer Products Corporation, a Delaware corporation
("RCPC"), and MacAndrews & Forbes Holdings Inc., a Delaware corporation (the
"INVESTOR").
W I T N E S S E T H:
WHEREAS, in connection with, and as part of, the Company's plan to meet
its need for additional liquidity to fund the Company's accelerated growth plan,
the Investor desires to make additional investments in the Company, or its
wholly-owned operating subsidiary, RCPC, of up to an aggregate of $150 million,
comprised of the investments contemplated by this Agreement and a $100 million
senior unsecured multiple-draw term loan (the "TERM LOAN") pursuant to an
agreement substantially in the form attached hereto as Exhibit A, and in
connection therewith, to enter into this Agreement;
WHEREAS, the parties hereto acknowledge and agree that the investments
contemplated by this Agreement will constitute the financial support
contemplated by the Investor's letter dated November 12, 2001 to provide up to
$40 million of additional financial support to the Company;
WHEREAS, the Company will effect a rights offering (the "RIGHTS
OFFERING") to distribute, on a pro rata basis and at no charge, transferable
rights (the "RIGHTS") to each holder of record of Class A Common Stock and Class
B Common Stock (together, the "COMMON STOCK"), as of a record date (the "RIGHTS
OFFERING RECORD DATE") to be set by the Board of Directors, to purchase shares
("RIGHTS SHARES") of Class A Common Stock;
WHEREAS, each holder of Rights will be entitled to purchase its pro
rata number of Rights Shares (the "BASIC SUBSCRIPTION PRIVILEGE") at a price per
Rights Share equal to the greater of (x) $2.30 and (y) 80% of the closing price
per share of the Class A Common Stock on the New York Stock Exchange ("NYSE") on
the Rights Offering Record Date (either (x) or (y), as appropriately adjusted
for any stock split, combination, reorganization, recapitalization, stock
dividend, stock distribution or similar event, the "SUBSCRIPTION PRICE"), such
that the aggregate number of Rights Shares to be offered in the Rights Offering
multiplied by the Subscription Price, will equal $50 million (the "AGGREGATE
OFFERING AMOUNT"); provided that such number may be adjusted in an equitable
manner to avoid fractional Rights and/or Rights Shares and to ensure that the
gross proceeds from the Rights Offering equal $50 million;
WHEREAS, each holder of Rights, other than the Investor, who exercises
in full its Basic Subscription Privilege will be entitled, on a pro rata basis,
to subscribe for additional Rights Shares at the Subscription Price (the
"OVER-SUBSCRIPTION PRIVILEGE"), to the extent that other holders of Rights do
not exercise all of their Rights in the Basic Subscription Privilege;
WHEREAS, in order to facilitate the Rights Offering and to enhance the
Over-subscription Privilege of the other holders of Class A Common Stock, the
Investor is
willing, as set forth herein, to purchase, upon consummation of the Rights
Offering and at the Subscription Price, such number of shares of Class A Common
Stock as equals all of the Rights Shares that are not purchased by other holders
of Rights in the Rights Offering as part of their Basic Subscription Privilege
and their Over-Subscription Privilege;
WHEREAS, in addition to the Term Loan and prior to the consummation of
the Rights Offering, subject to RCPC having fully drawn the Term Loan, the
Investor has agreed to purchase shares of Series C Preferred for an aggregate
purchase price of up to $50 million (the "ADVANCE PURCHASE") from time to time,
at the request of the Company;
WHEREAS, following the consummation of the Rights Offering, subject to
RCPC having fully drawn the Term Loan and the Company having exhausted the
Advance Purchase (or, alternatively, the Company having consummated the Rights
Offering and redeemed any outstanding shares of Series C Preferred), the
Investor will make available to RCPC a senior unsecured supplemental line of
credit providing RCPC with up to $40 million during 2003, increasing up to $65
million during 2004 (the "SUPPLEMENTAL LINE OF CREDIT") pursuant to an agreement
substantially in the form attached hereto as Exhibit B; and
WHEREAS, the Board of Directors of the Company (the "BOARD OF
DIRECTORS"), pursuant to the recommendation of a special committee of
independent directors of the Company established on December 17, 2002 (the
"SPECIAL COMMITTEE"), has determined that the Rights Offering, the Term Loan,
the Supplemental Line of Credit, the issuance of the Series C Preferred in the
Advance Purchase, this Agreement and the transactions contemplated hereby and
thereby are advisable and in the best interests of the Company and its
stockholders;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained in this Agreement, the parties hereto hereby
agree as follows:
Section 1. Definitions. For purposes of this Agreement, the following
terms will have the meaning set forth below:
"ADJUSTED MULTI-CURRENCY COMMITMENT" means the Aggregate Multi-Currency
Commitment (excluding any undrawn portions of the Currency Sublimits in an
aggregate amount not to exceed the amount reasonably determined by RCPC to be
advisable to be maintained in order to provide the flexibility the Local
Borrowers require from time to time to borrow in non-Dollar currencies).
"ADVANCE PURCHASE" has the meaning assigned to it in the Preamble.
"ADVANCE PURCHASE AMOUNT" has the meaning assigned to it in Section
2.6(b) hereof.
"ADVANCE PURCHASE DATE" has the meaning assigned to it in Section
2.6(b) hereof.
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"ADVANCE PURCHASE NOTICE" has the meaning assigned to it in Section
2.6(b) hereof.
"AFFILIATE" of any Person means any Person that directly or indirectly
controls, or is under common control with, or is controlled by, such Person. As
used in this definition, "control" (including with its correlative meanings,
"controlled by" and "under common control with") shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of a Person (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise).
"AGGREGATE MULTI-CURRENCY COMMITMENT" has the meaning set forth in the
Bank Credit Agreement.
"AGGREGATE OFFERING AMOUNT" has the meaning assigned to it in the
Preamble.
"AGREEMENT" means this Investment Agreement.
"AVAILABLE TERM LOAN COMMITMENT" means, at any time, the difference
equal to (a) the "Commitment" as defined in the Term Loan agreement minus (b)
the aggregate original principal amount of loans issued under the Term Loan
agreement.
"BANK CREDIT AGREEMENT" means the Second Amended and Restated Credit
Agreement, dated as of November 30, 2001, by and among RCPC, certain Local
Borrowing Subsidiaries from time to time parties thereto, certain financial
institutions from time to time parties thereto, the Co-Agents names therein, the
Arranger named therein, the Documentation Agent and Syndication Agent named
therein, and JPMorgan Chase Bank, as Administrative Agent, as amended,
supplemented and otherwise modified from time to time.
"BANK LETTER OF CREDIT" means a letter of credit issued under the Bank
Credit Agreement.
"BANK REVOLVING LOAN" means a Revolving Credit Loan, a Swing Line Loan,
a Local Loan or an Acceptance made under (and as such terms are defined in) the
Bank Credit Agreement.
"BASIC SUBSCRIPTION PRIVILEGE" has the meaning assigned to it in the
Preamble.
"BOARD OF DIRECTORS" has the meaning assigned to it in the Preamble.
"BUSINESS DAY" means a day other than a Saturday, Sunday or other day
on which commercial banks in New York, New York are authorized or required by
law to close.
"CLASS A COMMON STOCK" means the Company's Class A Common Stock, par
value $0.01 per share.
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"CLASS B COMMON STOCK" means the Company's Class B Common Stock, par
value $0.01 per share.
"COMMON STOCK" has the meaning assigned to it in the Preamble.
"COMPANY" has the meaning assigned to it in the Preamble.
"COMPANY'S BANK ACCOUNT" has the meaning set forth in Section 2.6(b)
hereof.
"CURRENCY SUBLIMIT" has the meaning set forth in the Bank Credit
Agreement.
"DOLLARS" and "$" mean dollars in lawful currency of the United States
of America.
"INDEMNITEES" has the meaning assigned to it in Section 6.2 hereof.
"INVESTOR" has the meaning assigned to it in the Preamble.
"INVESTOR OBLIGATIONS" has the meaning assigned to it in Section 2.7
hereof.
"LOCAL BORROWER" has the meaning set forth in the Bank Credit
Agreement.
"NYSE" has the meaning assigned to it in the Preamble.
"OVER-SUBSCRIPTION PRIVILEGE" has the meaning assigned to it in the
Preamble.
"PERSON" includes all natural persons, corporations, business trusts,
limited liability companies, associations, companies, partnerships, joint
ventures and other entities, as well as governments and their respective
agencies and political subdivisions.
"RCPC" has the meaning assigned to it in the Preamble.
"REDEMPTION PRICE" has the meaning assigned to it in Section 2.7
hereof.
"REGISTRATION RIGHTS AGREEMENT" has the meaning assigned to it in
Section 2.4 hereof.
"REGISTRATION STATEMENT" has the meaning assigned to it in Section
2.5(a) hereof.
"RIGHTS" has the meaning assigned to it in the Preamble.
"RIGHTS OFFERING" has the meaning assigned to it in the Preamble.
"RIGHTS OFFERING RECORD DATE" has the meaning assigned to it in the
Preamble.
"RIGHTS SHARES" has the meaning assigned to it in the Preamble.
"SEC" means the Securities and Exchange Commission.
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"SERIES C PREFERRED" means the Company's Series C Preferred Stock, par
value $0.01 per share, containing substantially the terms set forth in the term
sheet attached hereto as Exhibit C.
"SPECIAL COMMITTEE" has the meaning assigned to it in the Preamble.
"SUBSCRIPTION PRICE" has the meaning assigned to it in the Preamble.
"SUPPLEMENTAL LINE OF CREDIT" has the meaning assigned to it in the
Preamble.
"TERM LOAN" has the meaning assigned to it in the Preamble.
Section 2. The Rights Offering.
2.1 Basic Subscription Privilege. The Investor agrees, upon the
consummation of the Rights Offering and at the Subscription Price, to acquire
the number of shares of Class A Common Stock as equals the number of Rights
Shares that the Investor would otherwise have been entitled to purchase in the
Rights Offering, and agrees, and will cause REV Holdings LLC, not to exercise
its Basic Subscription Privilege in the Rights Offering.
2.2 Subordination of Over-subscription Privilege. The Investor agrees
to subordinate and not exercise the Over-subscription Privilege to which it
would otherwise be entitled in the Rights Offering.
2.3 Back-stop. Within three (3) Business Days following the expiration
of the Rights Offering, pursuant to the terms and subject to the conditions of
this Agreement and the Rights Offering as set forth in the Registration
Statement, the Investor shall, on the same terms as the Rights Offering,
purchase such number of shares of Class A Common Stock as equals all of the
Rights Shares that are not otherwise subscribed for by the other holders of
Rights under either their Basic Subscription Privilege or their
Over-subscription Privilege. The Investor's obligation to purchase the shares of
Class A Common Stock pursuant to this Section 2.3 is conditioned upon
consummation of the Rights Offering in accordance with its terms.
2.4 Registration Rights. The Company hereby acknowledges to the
Investor that with respect to any shares of Class A Common Stock acquired by the
Investor pursuant to Sections 2.1 or 2.3, the Investor shall be deemed to be a
"Holder" and such shares of Class A Common Stock shall be deemed to be
"Registrable Securities" for all purposes under the Registration Rights
Agreement (as amended, the "REGISTRATION RIGHTS AGREEMENT") dated as of March 5,
1996, between Revlon Worldwide Corporation and the Company, as amended by the
First Amendment to the Registration Rights Agreement, dated as of July 31, 2001,
between REV Holdings Inc. (formerly known as Revlon Worldwide Corporation and
now a limited liability company known as REV Holdings LLC) and the Company;
provided, that, the Investor shall execute a joinder to the Registration Rights
Agreement upon consummation of the Rights Offering (after giving effect to
compliance by the Investor with its obligations under Section 2.3 hereof).
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2.5 The Rights Offering.
(a) As promptly as practicable after the date of this
Agreement, the Company will prepare and file with the SEC a
registration statement (including each amendment and supplement
thereto, the "REGISTRATION STATEMENT") on Form S-3 (or, if Form S-3 is
not then available to the Company, on such form of registration
statement as is then available to effect a registration of securities),
covering the issuance of the Rights and the Rights Shares. The Company
will not permit any securities other than the Rights and the Rights
Shares to be included in the Registration Statement. The Registration
Statement (and each amendment or supplement thereto, and each request
for acceleration of effectiveness thereof) will be provided to the
Investor and its counsel prior to its filing with or other submission
to the SEC. The Registration Statement will comply in all material
respects with the provisions of applicable federal securities laws. The
Company promptly will correct any information provided by it for use in
the Registration Statement if, and to the extent, that such information
becomes false or misleading in any material respect, and the Company
will take all steps necessary to cause the Registration Statement, as
so corrected, to be filed with the SEC and, upon its effectiveness, to
be disseminated to the distributees of the Rights, in each case as and
to the extent required by applicable federal securities laws. The
Investor and its counsel will be given a reasonable opportunity to
review and comment upon the Registration Statement in each instance
before it is filed with the SEC. In addition, the Company will provide
the Investor and its counsel with any written comments or other written
communications that the Company or its counsel receives from time to
time from the SEC or its staff with respect to the Registration
Statement promptly after the receipt of such comments or other
communications. The Company will use its commercially reasonable best
efforts to cause the Registration Statement to be filed pursuant to
this Section 2.5(a) and to be declared effective by the SEC as soon as
possible after the Registration Statement is filed with the SEC.
(b) Promptly following the effective date of the Registration
Statement, the Company will commence the Rights Offering. In the Rights
Offering, the Company will distribute, on a pro rata basis and at no
charge, Rights to each holder of record of Common Stock as of the
Rights Offering Record Date. In accordance with the terms of the Rights
Offering, each such Right shall be transferable. The Rights will
entitle the holder to purchase, at the election of the holder thereof,
its pro rata number of Rights Shares at the Subscription Price;
provided, that, the Subscription Price multiplied by the aggregate
number of Rights Shares offered shall not exceed the Aggregate Offering
Amount; provided that such number may be adjusted in an equitable
manner to avoid fractional Rights and/or Rights Shares and to ensure
that the gross proceeds of the Rights Offering equal $50 million. The
Rights Offering will remain open for at least thirty (30) days. The
Rights shall expire at 5:00 p.m., New York City time on the day
following such thirtieth (30th) day, except as such expiration date or
time may be extended by the Company or otherwise as may be required by
applicable law or NYSE listing rule.
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(c) Each holder of Rights, other than the Investor, who
exercises in full its Basic Subscription Privilege will be entitled to
subscribe for additional Rights Shares at the Subscription Price to the
extent that other holders of Rights do not exercise all of their Rights
in the Basic Subscription Privilege. If the number of Rights Shares
remaining after the exercise of all Basic Subscription Privileges is
not sufficient to satisfy all Over-subscription Privileges, the Rights
holders who exercised their Basic Subscription Privileges in full,
other than the Investor, will be allocated Rights Shares pro rata and
in proportion to the number of Rights Shares purchased through the
Basic Subscription Privilege. If the pro rata allocation exceeds the
number of Rights Shares requested on the subscription certificate, then
each Rights holder only will receive the number of Rights Shares
requested, and the remaining Rights Shares from such Rights holder's
pro rata allocation will be divided among other Rights holders
exercising their Over-subscription Privileges. If the pro rata
allocation is less than the number of Rights Shares requested on the
subscription certificate, then the excess funds paid by that Rights
holder as the Subscription Price for the Rights Shares not issued will
be returned to such Rights holder without interest or deduction.
(d) The closing of the purchase of the Over-subscription
Privilege by each Rights holder will occur at the time, for the
Subscription Price, in the manner, and on the terms and conditions of
the Rights Offering as will be set forth in the Registration Statement.
(e) The Company will pay all expenses associated with the
Registration Statement and the Rights Offering, including, without
limitation, filing and printing fees, fees and expenses of any
subscription and information agents, counsel and accounting fees and
expenses, costs associated with clearing the Rights Shares for sale
under applicable state securities laws, listing fees and the Investor's
reasonable fees in connection with the registration, including, without
limitation, the reasonable attorneys' fees of counsel to the Investor.
(f) The Company shall, within three (3) Business Days of
consummating the Rights Offering (after giving effect to compliance by
the Investor with its obligations under Section 2.3 hereof), contribute
the net proceeds of the Rights Offering to RCPC in the form of a
capital contribution or in such other form as RCPC and the Company may
agree and as may be permitted under the Bank Credit Agreement.
2.6 Advance Purchase of Preferred Stock Pending Rights Offering.
(a) Prior to the consummation of the Rights Offering and
satisfaction by the Investor of its obligations pursuant to Sections
2.1 and 2.3 hereof, and subject to the terms and conditions hereof, the
Investor agrees to make one or more Advance Purchases from time to
time, at a purchase price of $100,000 per share of Series C Preferred,
in an aggregate amount of up to $50 million; provided, that no Advance
Purchase shall be made unless, as of the Advance Purchase Date, (i) the
Adjusted Multi-Currency Commitment has been
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substantially drawn after giving effect to any Bank Revolving Loans to
be made, and any Bank Letters of Credit to be issued, under the Bank
Credit Agreement substantially concurrently with such Advance Purchase,
(ii) the Available Term Loan Commitment is zero, after giving effect to
any loans to be made under the Term Loan agreement substantially
concurrently with such Advance Purchase, (iii) all approvals necessary
for the consummation of the transactions contemplated by this
Agreement, including the issuance of the Series C Preferred, shall have
been obtained, (iv) the Company shall have performed each of its
obligations hereunder required to be performed by it at or prior to the
applicable Advance Purchase Date and the representations and warranties
of the Company contained in this Agreement shall be true and correct in
all material respects at and as of the applicable Advance Purchase Date
as if made at and as of such applicable Advance Purchase Date, and (v)
there shall not have occurred and be occurring an Event of Default (as
such term is defined in the Term Loan agreement), either before or
after giving effect to such Advance Purchase, under the Term Loan.
(b) The Company may request that the Investor purchase, and
the Investor shall purchase, on any Business Day, shares of Series C
Preferred; provided, that the Company shall deliver to the Investor a
written notice (an "ADVANCE PURCHASE NOTICE") which must (i) specify
the date on which such Advance Purchase is to be made (the "ADVANCE
PURCHASE DATE"), the aggregate purchase price for the shares of Series
C Preferred to be purchased by the Investor on such Advance Purchase
Date (the "ADVANCE PURCHASE AMOUNT"), and the bank account and other
pertinent wire transfer instructions of the Company to which the
Advance Purchase Amount is to be deposited by the Investor (the
"COMPANY'S BANK ACCOUNT"), (ii) certify that all applicable conditions
to such Advance Purchase hereunder have been satisfied and (iii) be
received by the Investor prior to 1:00 P.M., New York City time, no
less than three (3) Business Days prior to such Advance Purchase Date.
(c) On each Advance Purchase Date set forth in an Advance
Purchase Notice, the Investor will make an Advance Purchase equal to
the lesser of (i) the Advance Purchase Amount set forth in such Advance
Purchase Notice, and (ii) $50 million less the aggregate purchase price
of all previous Advance Purchases, by making the proceeds thereof
available to the Company in immediately available funds in Dollars not
later than 4:00 p.m., New York City time, on such Advance Purchase Date
to the Company's Bank Account.
(d) At the closing of each Advance Purchase, the Company shall
deliver to the Investor one or more certificates evidencing the Series
C Preferred, in exchange for payment therefor, purchased by the
Investor at such closing (in such denomination as shall be specified in
writing by the Investor) each of which shall be registered in the name
of the Investor or its designee, against delivery to the Company of the
Advance Purchase Amount (or such lesser amount pursuant to Section
2.6(c)).
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(e) The net proceeds of each Advance Purchase shall be
contributed to RCPC in the form of a capital contribution or in such
other form as the Company and RCPC may agree and as may be permitted by
the Bank Credit Agreement.
2.7 Offset Against the Rights Offering. In lieu of paying cash to
satisfy its obligations under Sections 2.1 and 2.3 hereof (together, the
"INVESTOR OBLIGATIONS"), at the consummation of the Rights Offering, the
Investor may elect, by written notice delivered to the Company, to satisfy all
or part of the Investor Obligations by offsetting such obligations against the
Investor's right to receive from the Company the cash redemption proceeds of
$100,000 per share (the "REDEMPTION PRICE") with respect to the Series C
Preferred (such shares being mandatorily redeemable upon the consummation of the
Rights Offering) the Investor then holds, if any, and if such notice is given,
(i) the Company shall credit an amount equal to the aggregate Redemption Price
specified in the notice for all shares of Series C Preferred held by the
Investor, if any, against, and reduce accordingly, the Investor Obligations to
the extent specified in such notice and (ii) to the extent the aggregate
Redemption Price payable to the Investor exceeds the amount of Investor
Obligations offset as specified in such notice, the Company shall pay cash in
the amount of such excess to the Investor upon the consummation of the Rights
Offering.
Section 3. Representations and Warranties of the Investor. The Investor
represents and warrants to the Company as of the date hereof as follows:
3.1 Organization. The Investor (a) is duly organized, validly existing
and in good standing under the laws of the State of Delaware and (b) has all
corporate power and authority to consummate the transactions contemplated by
this Agreement, the Advance Purchase, the Term Loan and the Supplemental Line of
Credit.
3.2 Due Authorization. The Investor has the requisite corporate power
and authority to enter into, execute and deliver this Agreement, the Term Loan
and the Supplemental Line of Credit and to perform its obligations hereunder and
thereunder and has taken all necessary corporate action required for the due
authorization, execution, delivery and performance by it of this Agreement, the
Advance Purchase, the Term Loan and the Supplemental Line of Credit.
3.3 Due Execution; Enforceability. Each of this Agreement, the Term
Loan and the Supplemental Line of Credit has been duly and validly executed and
delivered by the Investor and constitutes its valid and binding obligation,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and subject, as
to enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
3.4 Investment Representations and Warranties.
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(a) The shares of Series C Preferred being acquired by it
hereunder are being acquired for its own account, for the purpose of
investment and not with a view to or for sale in connection with any
public resale or distribution thereof in violation of applicable
securities laws.
(b) It is an "accredited investor" within the meaning of Rule
501(a) promulgated under the Securities Act of 1933, as amended.
Section 4. Representations and Warranties of the Company and RCPC. Each
of the Company and RCPC separately represent and warrant to the Investor as to
each of themselves as of the date hereof as follows:
4.1 Organization. Each of the Company and RCPC (a) is duly organized,
validly existing and in good standing under the laws of the State of Delaware,
(b) is duly qualified or licensed to do business as a foreign corporation and is
in good standing under the laws of each jurisdiction where the nature of the
property owned or leased by it or the nature of the business conducted by it
makes such qualification or license necessary, except where the failure to be so
qualified or licensed would not reasonably be expected to either prevent or
materially delay its ability to perform its obligations hereunder, and (c) has
all corporate power and authority to carry on its business as it now is being
conducted and to consummate the transactions contemplated by this Agreement,
including the issuance of the Series C Preferred, and, in the case of RCPC, the
Term Loan and the Supplemental Line of Credit.
4.2 Due Authorization. Each of the Company and RCPC has the requisite
corporate power and authority to enter into, execute and deliver this Agreement,
in the case of the Company, including the issuance of the Series C Preferred,
and, in the case of RCPC, the Term Loan and the Supplemental Line of Credit, and
to perform its respective obligations hereunder and thereunder, and has taken
all necessary corporate action required for the due authorization, execution,
delivery and performance by it of this Agreement, including the issuance of the
Series C Preferred, and, in the case of RCPC, the Term Loan and the Supplemental
Line of Credit.
4.3 Due Execution; Enforceability.
(a) This Agreement has been duly and validly executed and
delivered by the Company and constitutes its valid and binding
obligation, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights
and remedies generally and subject, as to enforceability, to general
principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
(b) Each of this Agreement, the Term Loan and the Supplemental
Line of Credit has been duly and validly executed and delivered by RCPC
and constitutes its valid and binding obligation, enforceable against
it in accordance
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with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
4.4 Consents. Except for the consents required under the Bank Credit
Agreement, filings, permits, authorizations, consents and approvals as may be
required under, and other applicable requirements of, federal securities laws,
applicable state securities or blue sky laws and the rules and regulations of
the NYSE, to its best knowledge, neither the execution, delivery or performance
of this Agreement, including the issuance of the Series C Preferred, and, in the
case of RCPC, the Term Loan and the Supplemental Line of Credit, by it, nor the
consummation by it of its respective obligations and the transactions
contemplated by this Agreement, including the issuance of the Series C
Preferred, and, in the case of RCPC, the Term Loan and the Supplemental Line of
Credit requires any consent of, authorization by, exemption from, filing with,
or notice to any governmental entity or any other Person.
4.5 No Conflicts. The execution, delivery and performance of this
Agreement, including the issuance of the Series C Preferred, and, in the case of
RCPC, the Term Loan and the Supplemental Line of Credit and the consummation of
the transactions contemplated hereunder and thereunder will not (a) conflict
with or result in any breach of any provision of its certificate of
incorporation or by-laws, (b) subject to obtaining the consents required under
the Bank Credit Agreement, conflict with or result in the breach of the terms,
conditions or provisions of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give rise to
any right of termination, acceleration or cancellation under, any material
agreement, lease, mortgage, license, indenture, instrument or other contract to
which it is a party or by which any of its properties or assets are bound, or
(c) result in a violation of any law, rule, regulation, order, judgment or
decree (including, without limitation, federal and state securities laws and
regulations) applicable to it or by which any of its properties or assets are
bound or affected, except in the case of clauses (b) or (c), where such
conflicts or violations would not prevent or materially delay its ability to
consummate the transactions contemplated by this Agreement, including the
issuance of the Series C Preferred, and, in the case of RCPC, the Term Loan and
the Supplemental Line of Credit.
4.6 Board of Directors. The Board of Directors, pursuant to the
recommendation of the Special Committee, has determined that the Rights
Offering, the Term Loan, the Supplemental Line of Credit, the issuance of the
Series C Preferred, this Agreement and the transactions contemplated hereby and
thereby, including the terms of issuance of the Series C Preferred, are
advisable and in the best interests of the Company and its stockholders.
4.7 Due Issuance and Authorization of Capital Stock. No shares of
capital stock of the Company are subject to preemptive rights or any other
similar rights of any or all of the stockholders of the Company. The Series C
Preferred and the shares of Class
11
A Common Stock issued and delivered to the Investor pursuant to the terms hereof
will be, upon issuance, duly authorized, validly issued, fully paid and
non-assessable, and will not be subject to preemptive rights or other similar
rights of any or all stockholders of the Company and will not impose personal
liability upon the Investor thereof. The Series C Preferred will have the
rights, preferences and privileges set forth in a certificate of designations,
powers, preferences and rights which will contain substantially the terms set
forth in the term sheet attached hereto as Exhibit C.
Section 5. Additional Covenants. The Company and the Investor hereby
agree to do the following:
5.1 Listing Obligation. Prior to commencing the Rights Offering, the
Company will take all reasonable steps necessary, and pay all reasonable fees
required, to list all of the Rights on the NYSE or such other stock exchanges in
the United States of America on which the Class A Common Stock then is listed,
to the extent required by the NYSE or such other stock exchanges. So long as the
Company has Class A Common Stock listed on the NYSE or any other stock exchange,
prior to consummating the Rights Offering, the Company will take all reasonable
steps necessary, and pay all reasonable fees required, to list all of the shares
of Class A Common Stock acquired by the Investor hereunder and the Rights Shares
on the NYSE or such other stock exchanges in the United States of America on
which the Class A Common Stock then is listed. Following the initial listing of
such shares, the Company, consistent with the Board of Directors' fiduciary
duties, will use its commercially reasonable best efforts to maintain the
listing of such shares whenever the Class A Common Stock is listed on any such
exchange.
5.2 Cooperation with the Rights Offering. The Investor will cooperate
with the Company and use its commercially reasonable best efforts and take all
commercially reasonable actions in order to facilitate the successful
consummation of the Rights Offering. In particular, the Company is undertaking
the Rights Offering in reliance on the Investor's commitment under Section 2.3
hereof to provide the Company with funds up to the Aggregate Offering Amount as
contemplated by this Agreement, including, without limitation, Sections 2.1 and
2.3 hereof, subject to the provisions of Section 2.6 hereof. The Company will
cooperate with the Investor and use its commercially reasonable best efforts and
take all commercially reasonable actions in order to facilitate the successful
consummation of the Rights Offering.
5.3 File the Certificate of Designations. Prior to the Company's
initial request pursuant to Section 2.6(b), the Company shall properly file a
certificate of designations, powers, preferences and rights with the Secretary
of State of the State of Delaware, which will contain substantially the terms
set forth in the term sheet attached hereto as Exhibit C and which shall be in
form and substance reasonably satisfactory to the Investor.
5.4 Legends. The Investor agrees with the Company that the certificates
evidencing the shares of Series C Preferred to be purchased hereunder will bear
the following legends:
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"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED UNLESS
THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH
SECURITIES OR THE SECURITIES ARE SOLD AND TRANSFERRED IN A TRANSACTION THAT IS
EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT."
"A STATEMENT OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES
THEREOF AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES
AND/OR RIGHTS WILL BE FURNISHED BY THE CORPORATION, WITHOUT CHARGE, TO EACH
STOCKHOLDER WHO SO REQUESTS."
5.5 Reservation of Shares of Preferred Stock. The Board of Directors
shall have reserved for issuance the maximum number of shares of its preferred
stock, and, upon filing the applicable certificate of designations, powers,
preferences and rights, Series C Preferred issuable in the Advance Purchase.
5.6 Further Assurances. From time to time after the date of this
Agreement, the parties hereto shall execute, acknowledge and deliver to the
other parties such other instruments, documents, and certificates and will take
such other actions as the other parties may reasonably request in order to
consummate the transactions contemplated by this Agreement.
Section 6. Miscellaneous
6.1 Notices. Any notice or other communication required or which may be
given pursuant to this Agreement will be in writing and either delivered
personally to the addressee, telecopied to the addressee, sent via electronic
mail or mailed, certified or registered mail, postage prepaid, and will be
deemed given when so delivered personally, telecopied, or sent via electronic
mail, or, if mailed, five (5) days after the date of mailing, as follows:
(i) if to the Investor, to:
MacAndrews & Forbes Holdings Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
13
(ii) if to the Company, to:
Revlon, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
(iii) if to RCPC, to:
Revlon Consumer Products Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
6.2 Indemnification. The Company and RCPC, jointly and severally, will
indemnify, save and hold harmless the Investor, and all of its respective
directors, officers, stockholders, employees, partners, members, managers,
representatives, Affiliates, attorneys and agents and all of its respective
heirs, successors, legal administrators and permitted assigns (the
"INDEMNITEES") from and against any and all liability, loss, cost, damage,
reasonable attorneys' and accountants' fees and expenses, court costs and all
other out-of-pocket expenses incurred by any or all of the Indemnitees in
connection with or arising from the execution, delivery and performance by the
Company or RCPC of this Agreement, the Rights Offering, the Advance Purchase,
the Term Loan and the Supplemental Line of Credit and any other related
transaction, except to the extent of any willful misconduct or gross negligence
of the Indemnitees. This indemnification provision will be in addition to the
rights of each and all of the Indemnitees to bring an action against the Company
or RCPC for breach of any term of this Agreement. The Company and RCPC
acknowledge and agree that each and all of the Indemnitees shall be treated as
third party beneficiaries with rights to bring an action against the Company or
RCPC under this Section 6.2.
6.3 Fees and Expenses. The Company will pay and hold the Investor
harmless from liability for the payment of all reasonable legal and other
expenses incurred by the Investor in connection with the preparation and
negotiation of this Agreement, the Advance Purchase, the Term Loan and the
Supplemental Line of Credit or any other transaction related hereto or thereto,
and the consummation of all such transactions.
6.4 Survival of Representations and Warranties etc. All representations
and warranties made in, pursuant to or in connection with this Agreement will
survive the execution and delivery of this Agreement indefinitely,
notwithstanding any investigation at any time made by or on behalf of any party
hereto; and all statements contained in any certificate, instrument or other
writing delivered by or on behalf of any party hereto
14
required to be made pursuant to the terms of this Agreement or required to be
made in connection with or in contemplation of the transactions contemplated by
this Agreement will constitute representations and warranties by such party
pursuant to this Agreement.
6.5 Assignment. This Agreement will be binding upon and inure to the
benefit of each and all of the parties to this Agreement, and, except as set
forth below, neither this Agreement nor any of the rights, interests or
obligations hereunder will be assigned by any of the parties to this Agreement
without the prior written consent of the other parties. This Agreement, or the
Investor's obligations hereunder, may be assigned, delegated or transferred, in
whole or in part, by the Investor to any Affiliate of the Investor (other than
REV Holdings LLC) over which the Investor or any of its Affiliates exercises
investment authority, including, without limitation, with respect to voting and
dispositive rights; provided, any such assignee assumes the obligations of the
Investor hereunder and agrees in writing to be bound by the terms of this
Agreement in the same manner as the Investor. Notwithstanding the foregoing, no
such assignment shall relieve the Investor of its obligations hereunder if such
assignee fails to perform such obligations. Without complying with the
provisions of this Section 6.5, the Investor may satisfy its obligations under
Sections 2.1, 2.2, 2.3, or 2.6 hereof by causing an Affiliate of the Investor
(other than REV Holdings LLC) to satisfy its obligations under such Sections.
6.6 Entire Agreement. This Agreement, the Term Loan and the
Supplemental Line of Credit contain the entire agreement by and among the
Company, RCPC and the Investor with respect to the transactions contemplated by
this Agreement, the Term Loan and the Supplemental Line of Credit and supersede
all prior agreements and representations, written or oral, with respect thereto.
6.7 Waivers and Amendments. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions of this
Agreement may be waived, only by a written instrument signed by the parties or,
in the case of a waiver, by the party waiving compliance. No delay on the part
of any party in exercising any right, power or privilege pursuant to this
Agreement will operate as a waiver thereof, nor will any waiver on the part of
any party of any right, power or privilege pursuant to this Agreement, nor will
any single or partial exercise of any right, power or privilege pursuant to this
Agreement, preclude any other or further exercise thereof or the exercise of any
other right, power or privilege pursuant to this Agreement. The rights and
remedies provided pursuant to this Agreement are cumulative and are not
exclusive of any rights or remedies which any party otherwise may have at law or
in equity.
6.8 Governing Law; Jurisdiction; Venue; Process. THIS AGREEMENT WILL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE THAT
WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE
OF NEW YORK. Any legal or equitable action or proceeding arising out of or in
connection with this Agreement or in any certificate, report or other instrument
delivered
15
under or pursuant to any term of this Agreement will be brought only in the
courts of the State of New York, in the County and City of New York or of the
United States District Court for the Southern District of New York, and by
execution and delivery of this Agreement, each of the parties hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the exclusive jurisdiction of the aforesaid courts. Each of the
parties hereby irrevocably waives any objection which it may now or hereafter
have to laying of jurisdiction or venue of any actions or proceedings arising
out of or in connection with this Agreement or in any certificate, report or
other instrument delivered under or pursuant to any term of this Agreement
brought in the courts referred to above and hereby further irrevocably waive and
agree, not to plead or claim in any such court that any such action or
proceeding has been brought in an inconvenient forum. Each of the parties
further agrees that the mailing by certified or registered mail, return receipt
requested, of any process required by any such court will constitute valid and
lawful service of process against it, without necessity for service by any other
means provided by statute or rule of court.
6.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original but all of which together
will constitute one and the same instrument. All such counterparts will be
deemed an original, will be construed together and will constitute one and the
same instrument.
6.10 Headings. The headings in this Agreement are for reference
purposes only and will not in any way affect the meaning or interpretation of
this Agreement.
[Execution Page Follows]
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
REVLON, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President, General
Counsel and Secretary
REVLON CONSUMER PRODUCTS
CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President, General
Counsel and Secretary
MACANDREWS & FORBES HOLDINGS INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer
and Executive Vice President
17
Exhibit A
[FORM OF TERM LOAN]
Exhibit B
[FORM OF SUPPLEMENTAL LINE OF CREDIT]
Exhibit C
[TERMS OF SERIES C PREFERRED STOCK]
