Delaware

1-11178

13-3662955

(State or Other Jurisdiction
of Incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

237 Park Avenue

New York, New York

10017

(Address of Principal Executive Offices)

(Zip Code)

Exhibit No.

Description

REVLON, INC.

/s/ Robert K. Kretzman

Robert K. Kretzman

Executive Vice President, Chief Legal

Officer and  General Counsel

Date: March 5, 2010

Exhibit No.

Description

I. AMOUNT AND TERMS OF THE TERM LOAN FACILITY

The final maturity date for the Term Loans will be five years from the Closing Date.

I. CERTAIN PAYMENT PROVISIONS

The Company may make optional prepayments of the Term Loans at a discount; provided, that such discounted prepayments shall be (a) made from the proceeds of (i) internally generated funds (other than any Available Amount) or (ii) the Available Amount or Available Contributions, in the case of this clause (ii), minus the aggregate amount of all investments, restricted payments and prepayments of other indebtedness made therefrom and (b) pursuant to customary procedures for open market discounted purchases of indebtedness from lenders.

(a) 100% of the net proceeds of any sale, lease or other disposition (including as a result of casualty or condemnation) by the Company or any of its subsidiary guarantors of any assets constituting Term Loan Collateral, subject to exceptions, baskets and reinvestment rights to be agreed;

(b) 100% of the net proceeds of any indebtedness for borrowed money incurred after the Closing Date by the Parent, the Company or any of the restricted subsidiaries of the Company, other than indebtedness permitted pursuant to the debt covenant and subject to exceptions and baskets to be agreed; and

(c) 50% of annual excess cash flow (to be defined in the operative documents), commencing with the excess cash flow for fiscal year 2011.

Each such prepayment of the Term Loans shall be applied to the installments thereof in the direct order of maturity, unless otherwise specified by the Company, and may thereafter not be reborrowed.

II. GUARANTEES AND COLLATERAL

The obligations of each Loan Party in respect of the Term Loan Facility shall be secured by a perfected security interest in (i) substantially all of the tangible and intangible assets of the Company and its domestic subsidiaries (including, without limitation, accounts receivable, inventory, equipment, intellectual property and other general intangibles, material owned real property, deposit accounts, instruments, chattel paper and investment property, including all of the capital stock of the direct and indirect domestic subsidiaries and 66% of the voting capital stock and 100% of all non-voting stock of direct first tier foreign subsidiaries of the Company or any Guarantor, but excluding 34% of the voting capital stock of such foreign subsidiaries, leased real property and certain other non-material assets to be agreed) and (ii) all of the capital stock of the Company (collectively, the “Collateral”).

Such security interests will have the following priority:

(a) first priority, if such security interests attach to Collateral consisting of (i) trademarks, trade names, patents, licenses with respect thereto and goodwill associated therewith, (ii) capital stock of the Company and its subsidiaries and (iii) any other Collateral other than assets constituting Revolving Facility Collateral (as defined below) (collectively, the “Term Loan Collateral”); and

(b) second priority (junior only to the security interests securing obligations in respect of the Company’s Senior Secured Revolving Credit Facility (the “Revolving Credit Facility”) and Designated Eligible Obligations (as defined in the Revolving Credit Facility)), if such security interests attach to Collateral consisting of (i) accounts, inventory, equipment, chattel paper, documents, instruments, deposit accounts, real estate and investment property (excluding any capital stock of the Company or any of its subsidiaries), (ii) any general intangibles (other than trademarks, trade names, patents, licenses with respect thereto and goodwill associated therewith), supporting obligations and proceeds, in each case relating to any of the Collateral identified in clause (i) above and (iii) any real property (the “Revolving Facility Collateral”).

The lenders under the Revolving Credit Facility and holders of the Company’s 9.75% Senior Secured Notes due 2015 (the “Senior Secured Notes”) and certain other permitted junior secured debt referred to below will have second priority security interests in the Term Loan Collateral and the holders of the Senior Secured Notes and certain other permitted junior secured debt referred to below will have third priority security interests in the Revolving Facility Collateral. Such security interests and relative priorities shall be evidenced through an intercreditor agreement reasonably satisfactory to the Administrative Agent and the administrative agent under the Revolving Credit Facility (the “Revolving Facility Administrative Agent”).

Provisions will be made to permit the Company to secure Eligible Obligations (as defined below) of the Company and its subsidiaries with local assets (other than intellectual property) and/or to designate such Eligible Obligations to share in some or all of the Collateral, on a pari passu basis with the Term Loan Facility or the Revolving Credit Facility, as designated by the Company to the Administrative Agent and the Revolving Facility Administrative Agent.

“Eligible Obligations” shall mean (i) indebtedness in an aggregate principal amount outstanding not to exceed $60,000,000 at any time, and any refinancing or replacement of any such indebtedness (including any such indebtedness owing to Citi or any of its affiliates and guaranteed by the Company), (ii) obligations not to exceed $20,000,000 in respect of letters of credit not issued under the Revolving Credit Facility (the “Additional Letters of Credit”), (iii) foreign exchange obligations and interest rate hedging obligations set forth on a schedule and outstanding on the Closing Date, (iv) foreign exchange obligations and interest rate hedging obligations provided by Lenders or Revolving Facility Lenders, any affiliate of a Lender or Revolving Facility Lender or any other entity reasonably acceptable to the Administrative Agent or the Revolving Facility Administrative Agent, as applicable, after the Closing Date, in each case to the extent such obligations are permitted under the operative documents and the operative documents for the Revolving Credit Facility, and (v) overdrafts and related liabilities owing to any Lenders or Revolving Facility Lenders, any affiliate of a Lender or Revolving Facility Lender or any other entity reasonably acceptable to the Administrative Agent or the Revolving Facility Administrative Agent, as applicable, arising from treasury, depository and cash management services and in connection with Automated Clearinghouse transfers of funds.

IV. CERTAIN CONDITIONS

V. CERTAIN REPRESENTATIONS AND WARRANTIES

VI. CERTAIN COVENANTS AND EVENTS OF DEFAULT

A. Limitations on indebtedness and liens, subject to certain exceptions, including, without limitation, the following:

● indebtedness under the Revolving Credit Facility not to exceed $200,000,000 (including $140,000,000 committed on the Closing Date);

● indebtedness under the Senior Secured Notes indenture or additional indebtedness not to exceed $450,000,000 (including $330,000,000 outstanding on the Closing Date) secured by the Collateral on a pari passu or lien subordinated basis to the existing Senior Secured Notes;

● foreign subsidiary indebtedness not to exceed $110,000,000 ($50,000,000 of which shall be offset or secured by cash deposits and $60,000,000 of which may be secured as Eligible Obligations and secured by certain assets owned by foreign subsidiares);

● subordinated affiliate indebtedness outstanding on the Closing Date plus additional affiliate indebtedness not to exceed $75,000,000 (which shall be unsecured and subordinated to the Term Loan Facility);

● capital lease and purchase money indebtedness not to exceed $75,000,000 (which may be secured by the acquired assets);

● indebtedness in respect of the Additional Letters of Credit not to exceed $20,000,000, which may be secured as Eligible Obligations (plus up to $30,000,000 of letters of credit not issued under the Revolving Credit Facility to the extent cash collateralized);

● subordinated unsecured debt to finance permitted acquisitions;

● other indebtedness not to exceed $250,000,000, which, subject to a total secured leverage ratio (excluding the Revolving Credit Facility and the amount in excess of $20,000,000 of balance sheet cash, the “Total Secured Leverage Ratio”) of 5.5:1.0, may be secured by the Collateral on a lien subordinated basis to the Term Loan Facility;

● other indebtedness if the total leverage ratio (excluding the Revolving Credit Facility and the amount in excess of $20,000,000 of balance sheet cash) is less than 6.0:1.0, which, subject to a Total Secured Leverage Ratio of 5.5:1.0, may be secured by the Collateral on a lien subordinated basis to the Term Loan Facility;

● non-speculative hedging agreements; and

● liens securing other obligations not to exceed $15,000,000 and other customary permitted debt and liens.

B. Limitations on asset sales, subject to certain exceptions, including, without limitation, asset sales not to exceed $50,000,000 in any calendar year (provided, that any unused amounts may be used in subsequent years to the extent the aggregate fair market value of all asset sales in any calendar year shall not exceed $100,000,000).

C. Limitations on restricted payments, subject to certain exceptions, including, without limitation, the following:

● subject to a First Lien Leverage Ratio of 2.75:1.0, restricted payments (together with investments and prepayments of other indebtedness) not to exceed the Available Amount (as defined below);

● restricted payments (together with investments and prepayments of other indebtedness) not to exceed 100% of Available Contributions (as defined below) made in cash and, subject to a First Lien Leverage Ratio of 2.75:1.0, the fair market value of Available Contributions made in property other than cash;

● restricted payments to (i) the Parent for certain taxes and ordinary course expenses, (ii) the Parent to purchase or redeem equity of Parent held by directors, officers or employees not to exceed $8,000,000 per annum ($15,000,000 in 2010) and (iii) the Parent or other affiliates for additional amounts not to exceed $5,000,000 per annum ($10,000,000 in 2010); and

● other restricted payments in an aggregate amount not to exceed $20,000,000.

“Available Amount” means, as of any date of determination, 50% of the consolidated net income (to be defined) accrued during the period (treated as one accounting period) beginning on January 1, 2010 to the end of the most recent fiscal quarter for which financial statements have been delivered.

“Available Contributions” means capital contributions made in cash or in other property after the Closing Date.

D. Limitations on investments (other than permitted acquisitions of entities that become guarantors), subject to certain exceptions, including, without limitation, the following:

● investments (together with restricted payments and prepayments of other indebtedness) not to exceed the Available Amount;

● investments (together with restricted payments and prepayments of other indebtedness) not to exceed the Available Contributions;

● investments in unrestricted subsidiaries not to exceed $20,000,000;

● permitted acquisitions of non-guarantor subsidiaries not to exceed $100,000,000; and

● other investments not to exceed $150,000,000 (with a $50,000,000 sub-limit for investments in permitted joint ventures).

E. Limitations on optional prepayments of other indebtedness prior to maturity other than permitted refinancings thereof, subject to certain exceptions, including, without limitation, the following:

● the existing affiliate debt contributed to the Parent;

● subject to a First Lien Leverage Ratio of 2.75:1.0, prepayments (together with restricted payments and investments) not to exceed the Available Amount;

● prepayments (together with restricted payments and investments) not to exceed 100% of Available Contributions made in cash, and subject to a First Lien Leverage Ratio of 2.75:1.0, the fair market value of Available Contributions made in property other than cash;

● other prepayments not to exceed $50,000,000; and

● other customary exceptions (including, without limitation, prepayments of the Revolving Credit Facility, capital leases and purchase money indebtedness and certain permitted foreign subsidiary indebtedness and additional letters of credit).

F. Limitations on fundamental changes, transactions with affiliates, hazardous materials, accounting changes, negative pledges, amendment of tax sharing agreement in a manner that is materially adverse to the Lenders or the Company or its subsidiaries, restrictions on subsidiary distributions, activities of Revlon Professional Holding Company LLC and speculative hedging transactions, subject to certain exceptions.

The operative documents will contain a financial covenant to maintain a ratio of all indebtedness secured by a first priority lien on the Term Loan Collateral to EBITDA (the “First Lien Leverage Ratio”) not to exceed 4.0:1.0, to be measured on a rolling four quarter basis commencing with the fiscal quarter ending March 31, 2010.

The Company will have the right to cure financial covenant defaults (the “Cure Right”) through the issuance of additional cure securities (to be defined) to the Parent or other equity capital contributions by the Parent to the Company, which amount will be added to EBITDA upon their contribution to the Company, subject to conditions to be agreed; provided, however, that the Company may not exercise the Cure Right more than 2 times in any consecutive 4 fiscal quarter period.

VII. CERTAIN OTHER TERMS

Amendments and waivers with respect to the operative documents shall require the approval of Lenders holding more than 50% of the loans then outstanding under the Term Loan Facility (the “Required Lenders”), except for provisions customarily requiring approval by affected Lenders.

If any of the matters requiring approval by affected Lenders is consented to by the Required Lenders, the Company shall have the right to substitute any non-consenting Lender by having its Term Loans assigned to one or more other Lenders.

The operative documents shall contain customary provisions (a) protecting the Lenders against increased costs or loss of yield resulting from changes in reserve, tax, capital adequacy and other requirements of law and from the imposition of or changes in withholding or other taxes and (b) indemnifying the Lenders for “breakage costs” incurred in connection with, among other things, any prepayment of a Eurodollar Loan (as defined in Annex A) on a day other than the last day of an interest period with respect thereto.

The Company shall pay (a) all reasonable out-of-pocket costs and expenses of the Agents and the Arrangers associated with the syndication of the Term Loan Facility and the preparation, execution, delivery and administration of the operative documents and any amendment or waiver with respect thereto (including the reasonable and documented fees, disbursements and other charges of a single primary counsel to the Agents and the Arrangers and any special counsel and local counsel to the Agents and the Arrangers) and (b) all reasonable costs and expenses (including the reasonable fees, disbursements and other charges of counsel) of the Agents and each of the Lenders in connection with (i) the enforcement of the operative documents; (ii) any refinancing or restructuring of the Term Loan Facility in the nature of a “work-out” or any insolvency or bankruptcy proceeding; and (iii) any legal proceeding relating to or arising out of the Term Loan Facility or the other transactions contemplated by the operative documents.

The Agents, the Arrangers and the Lenders (and their affiliates and their respective officers, directors, employees, advisors and agents) will have no liability for, and will be indemnified and held harmless against, any losses, claims, damages, liabilities or expenses incurred in respect of the financing contemplated hereby or the use or the proposed use of proceeds thereof, except to the extent they are found by a final, non-appealable judgment of a court to arise from the gross negligence or willful misconduct of the indemnified party or related persons.

The Company may elect that the Term Loans comprising each borrowing bear interest at a rate per annum equal to (i) the ABR plus the Applicable Margin or (ii) the Eurodollar Rate plus the Applicable Margin.

As used herein:

“ABR” means the higher of (i) the rate of interest publicly announced by Citibank, N.A. as its prime rate in effect at its principal office in New York City (the “Prime Rate”) and (ii) the federal funds effective rate from time to time plus 0.5%; provided, that in no event shall the ABR be less than 3.00%.

“Applicable Margin” means (i) 3.00% in the case of ABR Loans and (ii) 4.00% in the case of Eurodollar Loans.

“Eurodollar Rate” means the rate (adjusted for statutory reserve requirements for eurocurrency liabilities) for eurodollar deposits for a period equal to one, two, three, six, or, if available to all applicable Lenders, nine or twelve months (as selected by the Company) appearing on Page 3750 of the Telerate screen; provided, that in no event shall the Eurodollar Rate be less than 2.00%.

In the case of Term Loans bearing interest based upon the ABR (“ABR Loans”), quarterly in arrears.

In the case of Term Loans bearing interest based upon the Eurodollar Rate (“Eurodollar Loans”), on the last day of each relevant interest period and, in the case of any interest period longer than three months, on the last day of each fiscal quarter during such interest period.