UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 


FORM 8-K



CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
 
Date of Report: June 23, 2022
(Date of earliest event reported: June 16, 2022)
 


Commission File Number
 
Registrant; State of
Incorporation; Address and
Telephone Number
 
IRS Employer Identification No.
 
 
 
 
 
1-11178
 
Revlon, Inc.
Delaware
One New York Plaza
New York, New York, 10004
212-527-4000
 
13-3662955
 
 
 
 
 
33-59650
 
Revlon Consumer Products Corporation
Delaware
One New York Plaza
New York, New York, 10004
212-527-4000
 
13-3662953



Former Name or Former Address, if Changed Since Last Report: None
 
Check the appropriate box below if the Form 8‑K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) or 12(g) of the Act:
 
 
Title of each class
 
Trading
Symbol(s)
 
Name of each
exchange on which
registered
Revlon, Inc.
Class A Common Stock
 
REV
 
New York Stock Exchange
Revlon Consumer Products Corporation
None
 
N/A
 
N/A

Indicate by check mark whether each registrant is an “emerging growth company” as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter) in Rule 12b-2 of the Exchange Act.
 
 
Emerging Growth Company
Revlon, Inc.

Revlon Consumer Products Corporation


If an emerging growth company, indicate by check mark if the registrants have elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.


Item 1.01.
Entry into a Material Definitive Agreement.

As previously disclosed, on June 15, 2022 (the “Petition Date”), Revlon, Inc. (the “Company”) and certain subsidiaries, including Revlon Consumer Products Corporation (“Products Corporation”) (together with the Company, the “Debtors”), filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Court”).  The cases are being administered under the caption In re Revlon, Inc., et al. (Case No. 22-10760 (DSJ)) (the “Cases”).The Debtors continue to operate their businesses as “debtors-in-possession” under the jurisdiction of the Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Court.

On June 17, 2022, all or certain of the Debtors entered into (i) a superpriority, senior secured and priming debtor-in-possession asset-based revolving credit facility (the “DIP ABL Facility”) in the maximum aggregate principal amount of $400 million, with certain financial institutions party thereto as lenders and MidCap Funding IV Trust, as administrative agent and collateral agent, (ii) a superpriority, senior secured and priming debtor-in-possession term loan credit facility (the “DIP Term Loan Facility”), in the aggregate principal amount of $575 million, with certain financial institutions party thereto as lenders and Jefferies Finance, LLC, as administrative agent and collateral agent, and (iii) a superpriority junior secured debtor-in-possession intercompany credit facility (the “Intercompany DIP Facility” and, together with the DIP ABL Facility and the DIP Term Loan Facility, the “DIP Facilities”) with the Debtors that are BrandCos (as defined in the BrandCo Credit Agreement, dated as of May 7, 2020 (as amended, modified or supplemented from time to time, the “BrandCo Credit Agreement”), by and among Products Corporation, the Company, the other loan parties and lenders party thereto and Jefferies Finance LLC, as administrative agent and each collateral agent) (the “BrandCos”). On June 17, 2022, the Court approved the DIP Facilities on an interim basis pursuant to the Interim Order for the DIP Facilities (as defined herein) and the closing of these facilities occurred. Borrowings of $375 million under the DIP Term Loan Facility and borrowings under the DIP ABL Facility are being used to, among other things, refinance certain obligations under (i) that certain Asset-Based Revolving Credit Agreement, dated as of September 7, 2016 (as amended, modified or supplemented from time to time prior to the Petition Date, the “ABL Credit Agreement”), by and among Products Corporation, certain local borrowing subsidiaries from time to time party thereto, the Company, certain lenders party thereto and MidCap Funding IV Trust, as administrative agent and collateral agent and (ii) that certain Asset-Based Term Loan Credit Agreement, dated as of March 2, 2021 (as amended, modified or supplemented from time to time, the “Foreign ABL Credit Agreement”), by and among Revlon Finance LLC, as the borrower, the guarantors party thereto, the lenders party thereto and Blue Torch Finance LLC, as administrative agent and collateral agent.

The DIP ABL Facility, among other things, provides for (i) an asset-based revolving credit facility in the maximum aggregate amount of $270 million (the “Tranche A DIP ABL Facility”), the initial proceeds of which were used to refinance the Tranche A Revolving Secured Obligations (as defined in the ABL Credit Agreement), and (ii) an asset-based term loan facility in the amount of $130 million (the “SISO DIP ABL Facility”), the proceeds of which were used to refinance the SISO Secured Obligations (as defined in the ABL Credit Agreement). The remaining proceeds of the DIP ABL Facility will be used for general corporate purposes of the Debtors, including to pay expenses in connection with the Cases, in accordance with the terms of the Interim Order for the DIP Facilities.  The borrowing base in respect of the Tranche A DIP ABL Facility is consistent with the borrowing base under the ABL Credit Agreement (without giving effect to the accommodation provided for in Amendment No. 9 thereto and subject to an availability reserve of $25 million and a carve-out reserve for certain professional fees).
 
The maturity date of the DIP ABL Facility is the earliest of (i) June 17, 2023 (the “Stated Maturity Date”), with an option to extend to the earlier of 180 days after the Stated Maturity Date and the extended maturity date of the DIP Term Loan Facility following the exercise by Products Corporation of its option to extend the maturity date thereunder; (ii) July 22, 2022, if a final order approving the DIP ABL Facility has not been entered by the Court on or before such date; (iii) the effective date of any chapter 11 plan for the reorganization of any Debtor; (iv) the consummation of any sale or other disposition of all or substantially all of the assets of the Debtors pursuant to Bankruptcy Code §363; (v) the date of the acceleration of the DIP ABL Facility and termination of the corresponding commitments in accordance with the definitive documents governing the DIP ABL Facility; (vi) the date the Court orders the conversion of the Cases of any of the Debtors to a chapter 7 liquidation, (vii) the rejection or termination of the BrandCo License Agreements (as defined in the BrandCo Credit Agreement) and (viii) the dismissal of the Cases of any Debtor without the consent of the holders of more than 50% of the loans and commitments under the Tranche A DIP ABL Facility. The outstanding principal of the DIP ABL Facility is due and payable in full on the maturity date.

The DIP ABL Facility is secured by a perfected (i) first priority priming security interest and lien on substantially all assets of the Debtors (other than the BrandCos and Beautyge I, an exempted company incorporated in the Cayman Islands (“Beautyge I”)) constituting ABL Facility First Priority Collateral (as defined in the ABL Credit Agreement), (ii) junior priority priming security interest and lien on substantially all assets of the Debtors (other than the BrandCos and Beautyge I) constituting Term Facility First Priority Collateral (as defined in the ABL Credit Agreement), and (iii) security interests and liens on substantially all assets of the Debtors (other than the BrandCos and Beautyge I) that was not, on the Petition Date, subject to valid, unavoidable and perfected security interests and liens, pursuant to Bankruptcy Code §364(c)(2), with the following priority: if such collateral is of the same nature, scope and type as (a) ABL Facility First Priority Collateral, on a first priority basis, and (b) Term Facility First Priority Collateral, on a junior priority basis subject to the liens in favor of the DIP Term Loan Facility, the Intercompany DIP Facility and any adequate protection liens granted to certain of Products Corporation’s secured creditors (the collateral for the DIP ABL Facility, the “Opco DIP Collateral”). The DIP ABL Facility is subject to certain customary and appropriate conditions for financings of similar type.

1

Loans under the Tranche A DIP ABL Facility bear interest at a rate equal to an adjusted base rate plus 2.50% per annum, and loans under the SISO DIP ABL Facility bear interest at a rate equal to an adjusted base rate plus 4.75% per annum.  In addition, the DIP ABL Facility requires payment of the following fees: (i) a closing fee equal to 1.00% of the amount of the commitments in respect of the Tranche A DIP ABL Facility, payable upon the closing of the DIP ABL Facility; (ii) a collateral management fee equal to 1.00% per annum of the average daily amount of outstanding loans under the Tranche A DIP ABL Facility; (iii) a commitment fee equal to 0.50% per annum of the average daily amount of unused commitments under the Tranche A DIP ABL Facility; and (iv) an exit fee equal to 0.50% of the principal amount of the commitments in respect of the Tranche A DIP ABL Facility plus the aggregate principal amount of the SISO DIP ABL Facility, payable upon the termination of the DIP ABL Facility.

The DIP ABL Facility is subject to customary affirmative and negative covenants and events of default for postpetition financing of this type, including, without limitation, customary “milestones” for progress in the Cases (including, without limitation, the filing of a disclosure statement to solicit votes on a plan of reorganization and the entry of an order by the Court confirming such plan of reorganization) and a covenant requiring that actual receipts, disbursements and net cash flow do not deviate from the amounts set forth in the applicable budget of the Debtors by more than certain specified amounts.

The DIP Term Loan Facility, among other things, provides for a term loan facility in the maximum aggregate amount of $1,025 million, $575 million of which is committed and a portion of the proceeds of which are being used to refinance obligations under the Foreign ABL Credit Agreement.  The remainder of the proceeds will be used for general corporate purposes of the Debtors, including to pay expenses in connection with the Cases, in accordance with the terms of the Interim Order for the DIP Facilities.
 
The maturity date of the DIP Term Loan Facility is the earliest of (i) June 17, 2023, with an option to extend by up to 180 days at the option of Products Corporation; (ii) July 22, 2022, if a final order approving the DIP Term Loan Facility has not been entered by the Court on or before such date; (iii) the effective date of any chapter 11 plan for the reorganization of any Debtor; (iv) the consummation of any sale or other disposition of all or substantially all of the assets of the Debtors pursuant to Bankruptcy Code §363; and (v) the date of acceleration or termination of the DIP Term Loan Facility in accordance with the definitive documents governing the DIP Term Loan Facility. The outstanding principal of the DIP Term Loan Facility is due and payable in full on the maturity date.

The DIP Term Loan Facility is secured by a perfected (i) first priority priming security interest and lien on the Term Facility First Priority Collateral, (ii) junior priority priming security interest and lien on the ABL Facility First Priority Collateral, (iii) a first priority security interest and lien on substantially all the assets of the BrandCos and Beautyge I, and (iv) security interests and liens on substantially all assets of the Debtors that were not, on the Petition Date, subject to valid, unavoidable and perfected security interests and liens, pursuant to Bankruptcy Code §364(c)(2), with the following priority: if such collateral is of the same nature, scope and type as (a) Term Facility First Priority Collateral, on a first priority basis, and (b) ABL Facility First Priority Collateral, on a junior priority priming basis subject to the liens in favor of the ABL DIP Facility and any adequate protection liens granted to certain of Products Corporation’s secured creditors. The DIP Term Loan Facility includes certain customary and appropriate conditions for financings of similar type.

Loans under the DIP Term Loan Facility bear interest at a rate equal to, at the option of Products Corporation, the secured overnight financing rate plus 7.75% per annum or an adjusted base rate plus 6.75% per annum.  In addition, the DIP Term Loan Facility provides for the following discounts and premiums: (i) an upfront discount equal to 1.00% of the amount of each borrowing thereunder, payable at the time of such borrowing; (ii) a backstop premium equal to 1.50% of the total commitments under the DIP Term Loan Facility, payable upon the closing of the DIP Term Loan Facility; (iii) a maturity extension premium equal to 0.50% of the amounts of the loans and commitments outstanding at the time of such extension, payable in the event the maturity date of the DIP Term Loan Facility is extended as described above; and (iv) a repayment premium equal to 1.00% of the principal amount of any loans under the DIP Term Loan Facility that are repaid, payable at the time of such repayment.

2

The DIP Term Loan Facility is subject to customary affirmative and negative covenants and events of default for postpetition financings of this type, including, without limitation, customary “milestones” for progress in the Cases (including, without limitation, the filing of a disclosure statement to solicit votes on a plan of reorganization and the entry of an order by the Court confirming such plan of reorganization), a covenant to maintain minimum liquidity and a covenant requiring that actual receipts, disbursements and net cash flow do not deviate from the amounts set forth in the applicable budget of the Debtors by more than certain specified amounts.

Pursuant to the Intercompany DIP Facility, the term loans are automatically deemed to be provided by the BrandCos to Products Corporation in the amount of, and in satisfaction of the obligation of Products Corporation to pay, amounts payable from time to time by Products Corporation to the BrandCos under the BrandCo License Agreements. The loans under the Intercompany DIP Facility are secured by a fully perfected security interest and lien on all of the Opco DIP Collateral, immediately junior to the liens and security interests on the Opco DIP Collateral securing the DIP Term Loan Facility. The loans under the Intercompany DIP Facility (i) bear interest at a rate equal to an adjusted base rate plus 6.75%, which interest is payable in kind, and (ii) mature on the maturity date of the DIP Term Loan Facility.

The foregoing description of the DIP Facilities does not purport to be complete and is qualified in its entirety by reference to (i) the term sheet for the DIP ABL Facility and the credit agreement for the DIP Term Loan Facility, which are attached hereto as Exhibits 10.1 and 10.2, respectively and (ii) the Interim Order (i) authorizing the debtors to (a) obtain postpetition financing and (b) use cash collateral, (ii) granting liens and providing superpriority administrative expense status, (iii) granting adequate protection to the prepetition secured parties, (iv) modifying the automatic stay, (v) scheduling a final hearing, and (vi) granting related relief (the “Interim Order for the DIP Facilities”).  The DIP ABL Facility will be further documented on substantially similar terms as the ABL Credit Agreement, as modified to reflect the terms set forth in the term sheet attached hereto as Exhibit 10.1.

Item 2.03.
Creation of a Direct Financial Obligation or Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 above with respect to the DIP Facilities is incorporated herein by reference.

Item 3.01.
Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

On June 16, 2022, the Company was notified by the New York Stock Exchange (the “NYSE”) that, as a result of the Cases, and in accordance with Section 802.01D of the NYSE Listed Company Manual, the NYSE has commenced proceedings to delist the Company’s Class A common stock from the NYSE. Under NYSE delisting procedures, the Company has the right to appeal this determination. The Company is currently considering whether to appeal this delisting decision, and will make that determination prior to the expiration of the appeal period.

Item 8.01.
Other Events.

On June 21, 2022, a portion of the proceeds of the initial borrowing under the DIP Term Loan Facility were used to repay in full and terminate the Foreign ABL Credit Agreement.

3

Cautionary Note Regarding Forward-Looking Statements

This Form 8‑K includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Some of the forward-looking statements in this Form 8-K can be identified by the use of forward-looking terms such as “believes,” “expects,” “projects,” “forecasts,” “may,” “will,” “estimates,” “should,” “would,” “anticipates,” “plans,” “intends” or other comparable terms. Forward-looking statements speak only as of the date they are made and, except for the Company’s ongoing obligations under the U.S. federal securities laws, the Company does not undertake any obligation to publicly update any forward-looking statement, whether to reflect actual results of operations; changes in financial condition; changes in results of operations and liquidity, changes in general U.S. or international economic or industry conditions; changes in estimates, expectations or assumptions; or other circumstances, conditions, developments or events arising after the date of this Form 8-K. You should not rely on forward-looking statements as predictions of future events. The Company’s actual results may differ materially from those anticipated in these forward-looking statements as a result of certain risks and other factors, which could include the following: risks and uncertainties relating to the bankruptcy petitions, including but not limited to, the Company’s ability to obtain Court approval with respect to motions in the bankruptcy petitions, the effects of the bankruptcy petitions on the Company and on the interests of various stakeholders, Court rulings on the bankruptcy petitions and the outcome of the bankruptcy petitions in general, the length of time the Company will operate under the bankruptcy petitions, risks associated with any third-party motions in the bankruptcy petitions, the potential adverse effects of the bankruptcy petitions on the Company’s liquidity or results of operations and increased legal and other professional costs necessary to execute the Company’s reorganization; the conditions to which the Company’s debtor-in-possession financing is subject and the risk that these conditions may not be satisfied for various reasons, including for reasons outside of the Company’s control; whether the Company will emerge, in whole or in part, from insolvency proceedings as a going concern; the consequences of the acceleration of the Company’s debt obligations; trading price and volatility of the Company’s common stock, indebtedness and other claims as well as other risk factors set forth in the Company’s Annual Report on Form 10‑K and Quarterly Reports on Form 10‑Q filed with the SEC. The Company therefore cautions readers against relying on these forward-looking statements. All forward-looking statements attributable to the Company or persons acting on the Company’s behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made, and, except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Item 9.01.
Financial Statements and Exhibits.
 
(d) Exhibits:
 
Exhibit
Description
Summary of Terms and Conditions of Revlon Consumer Products Corporation’s Senior Secured Super-Priority Debtor-in-Possession Asset-Based Revolving Credit Facility, among Revlon Consumer Products Corporation, as Borrower, Revlon, Inc., as Holdings, the subsidiaries of Revlon Consumer Products Corporation party thereto, MidCap Funding IV Trust, as DIP ABL Agent and the lenders party thereto.
   
Superpriority Senior Secured Debtor-in-Possession Credit Agreement, dated as of June 17, 2022, by and among Revlon Consumer Products Corporation, a debtor and debtor-in-possession under chapter 11 of the Bankruptcy Code, as the Borrower, Revlon, Inc., a debtor and debtor-in-possession under chapter 11 of the Bankruptcy Code, as Holdings, the lenders party thereto and Jefferies Finance LLC, as Administrative Agent and Collateral Agent.
 
 
104
Exhibit 104 Cover page from this Current Report on Form 8‑K, formatted in Inline XBRL (included as Exhibit 101).

4

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date:
June 23, 2022

 
REVLON, INC.
 
 
 
By:
/s/ Victoria Dolan
 
 
Name:
Victoria Dolan
 
 
Title:
Chief Financial Officer
 
 
 
 
 
REVLON CONSUMER PRODUCTS CORPORATION
 
 
 
By:
/s/ Victoria Dolan
 
 
Name:
Victoria Dolan
 
 
Title:
Chief Financial Officer


 

 

Exhibit 10.1

  

EXECUTION VERSION

 

SUMMARY OF TERMS AND CONDITIONS (“TERM SHEET”) 

REVLON CONSUMER PRODUCTS CORPORATION 

SENIOR SECURED SUPER-PRIORITY DEBTOR-IN-POSSESSION ASSET-BASED REVOLVING CREDIT FACILITY

 

This Term Sheet is a binding agreement by the DIP ABL Lenders (as defined below) with respect to the DIP ABL Commitments (as defined below) to provide the DIP ABL Loans (as defined below). Such obligation of the DIP ABL Lenders (as defined below) to provide the DIP ABL Facility (as defined below) pursuant to this Term Sheet is conditioned upon the execution and delivery of signature pages to this Term Sheet by each of the DIP ABL Lenders (as defined below) and the Loan Parties (as defined below) and shall be subject to the terms and conditions set forth herein. This Term Sheet does not purport to summarize all of the terms, conditions, representations warranties and other provisions with respect to the transactions referred to herein.

 

Borrower: Revlon Consumer Products Corporation (the “Borrower”, and together with its affiliated debtors in the Cases, the “Debtors”), a Delaware corporation, in its capacity as debtor and debtor-in-possession in connection with the cases (collectively, the “Cases”) under chapter 11 of title 11 of the United States Code (as amended, the “Bankruptcy Code”) to be commenced on June 15, 2022 (the “Petition Date”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”)1.
Guarantors: Revlon, Inc. (“Holdings”), each “Subsidiary Guarantor” as defined under the Prepetition ABL Credit Agreement and each other Subsidiary of the Borrower who is, on or after the Petition Date, a debtor in the Cases other than any BrandCo Entities (collectively, the “Guarantors”, and together with the Borrower, the “Loan Parties”). All obligations of the Borrower under the DIP ABL Facility shall be unconditionally guaranteed on a joint and several basis by the Guarantors.

 

 

1 Holdings, in its capacity as foreign representative on behalf of the Debtors (as defined herein) intends to file or cause to be filed an application for relief (the proceedings commenced by such application, the “Canadian Recognition Proceedings”) pursuant to Part IV of the Companies’ Creditors Arrangement Act (Canada), R.S.C. 1985, c. C-36, as amended (the “CCAA”), in the Ontario Superior Court of Justice (Commercial List) (the “Canadian Court”) to, among other things, recognize the Cases as “foreign main proceedings” and grant certain customary relief.

 

 

 

 

Prepetition ABL Credit Agreement

The Asset-Based Revolving Credit Agreement dated as of September 7, 2016 (as amended and restated as of April 17, 2020, as further amended and restated as of May 7, 2020, as further amended and restated as of October 23, 2020, as further amended and restated as of December 21, 2020, as further amended and restated as of March 8, 2021, as further amended and restated as of May 7, 2021, and as further amended and restated as of March 31, 2022, the “Prepetition ABL Credit Agreement2, and the Tranche A Revolving Secured Obligations and SISO Secured Obligations under the Prepetition ABL Credit Agreement, collectively, the “Prepetition ABL Obligations”), by and among the Borrower, Holdings, the other loan parties party thereto, the several banks and financial institutions or entities parties thereto as lenders, and MidCap Funding IV Trust, as administrative agent and collateral agent (in such capacity, the “Prepetition ABL Agent”).

 

Effective as of the Petition Date, there will be no additional loans or other extensions of credit, financial or other accommodations to the Borrower under the Prepetition ABL Credit Agreement.

 

Type and Amount of the DIP Facility:

A senior secured superpriority priming debtor-in-possession credit facility (the “DIP ABL Facility” and the loans outstanding under the DIP ABL Facility from time to time, the “DIP ABL Loans” and the commitments outstanding under the DIP ABL Facility from time to time, the “DIP ABL Commitments”) comprised of a roll-up and conversion of all Prepetition ABL Obligations (excluding, for the avoidance of doubt, any Tranche B Secured Obligations) and any unused Revolving Commitments or SISO Term Commitments under the Prepetition ABL Credit Agreement, on a cashless, dollar-for-dollar basis, into new loans or commitments (the “Roll-Up” and the Roll-Up relating to the Tranche A DIP Facility, the “Tranche A Roll-Up” and the Roll-Up relating to the SISO DIP Facility, the “SISO Roll-Up”)) that repay all such Prepetition ABL Obligations in full on the Closing Date and become indebtedness and obligations under the DIP ABL Facility (the “DIP ABL Obligations”).

 

The portion of the DIP ABL Facility consisting of the Roll-Up and conversion of SISO Secured Obligations shall constitute the “SISO DIP Facility” and the portion of the DIP ABL Facility consisting of the Roll-Up and conversion of Revolving Secured Obligations shall constitute the “Tranche A DIP Facility”.

 

The DIP ABL Loans may be incurred, subject to the satisfaction or waiver of all conditions thereto set forth in the DIP ABL Documents (as defined below), as follows: (a) following the entry by the Bankruptcy Court of an order (the “Interim DIP Order”), in form and substance acceptable to the Required Tranche A DIP ABL Lenders, authorizing the Roll-Up in full, subject to the rights of third parties with respect to a Challenge and (b) on and after the entry by the Bankruptcy Court of a final order (the “Final DIP Order” and together with the Interim DIP Order, the “DIP Order”), in form and substance acceptable to the Required Tranche A DIP ABL Lenders, authorizing the DIP ABL Facility on a final basis, subject to the rights of third parties with respect to a Challenge.

 

 

 

2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Prepetition ABL Credit Agreement.

 

- 2 - 

 

 

All DIP ABL Loans will be advanced or deemed advanced under the DIP ABL Facility as ABR Loans. All such DIP ABL Obligations shall accrue interest in accordance with Section 2.15 of the Prepetition ABL Credit Agreement at the non-default rate; provided that clause (a)(ii) of the definition of “Applicable Margin” shall be modified for the Tranche A DIP Loans to change “2.75% per annum” to “2.50% per annum.”

 

The definitions of “Tranche A Borrowing Base” and “Tranche A Revolving Borrowing Base” (and any component definitions thereof) shall be consistent with the Prepetition ABL Credit Agreement in effect immediately prior to giving effect to Amendment No. 9 to the ABL Credit Agreement (i.e. prior to giving effect to the Accommodation Period).

 

In addition to a Carve-Out reserve, there will be an Availability Reserve of $25,000,000 in effect on the Closing Date. The ability to impose additional Availability Reserves, Dilution Reserves, Eligibility Reserves, Push Down Reserves (for the avoidance of doubt, the Tranche B Borrowing Base shall be calculated solely for the purposes of determining the Push Down Reserve and the Push Down Reserve shall be calculated on the assumption of $50,000,000 of outstanding Tranche B Term Loans) and Specified Reserves shall remain consistent with the Prepetition ABL Credit Agreement in effect, except that any such reserves will take immediate effect to the extent the Borrower requests to borrow any DIP ABL Loans during the 5 Business Day notice period normally required for the imposition of such reserves.

 

DIP ABL Lenders:

The Tranche A Revolving Lenders under the Prepetition ABL Credit Agreement shall be the lenders under the Tranche A DIP Facility (in such capacity as lenders under the DIP ABL Facility, the “Tranche A DIP ABL Lenders” and the commitments of the Tranche A DIP ABL Lenders thereunder, the “Tranche A DIP ABL Commitments” and the loans made by the Tranche A DIP ABL Lenders under the DIP ABL Facility, the “Tranche A DIP Loans”).

 

The SISO Term Lenders under the Prepetition ABL Credit Agreement shall be the lenders under the SISO DIP Facility (in such capacity as lenders under the DIP ABL Facility, the “SISO DIP Lenders” and, together with the Tranche A DIP ABL Lenders, the “DIP ABL Lenders” and the loans made by the SISO DIP Lenders under the DIP ABL Facility, the “SISO DIP Loans”).

 

 

 

- 3 - 

 

 

Required Tranche A DIP ABL Lenders” shall mean the holders of more than 50% of the Tranche A DIP ABL Commitments then in effect, or if the Tranche A DIP ABL Commitments have been terminated, the Tranche A DIP Loans then outstanding.

 

DIP ABL Agents:

MidCap Funding IV Trust will act as administrative agent and collateral agent (in such capacity, the “DIP ABL Agent”) and will perform the duties customarily associated with such roles. The DIP ABL Agent shall be afforded substantially similar rights, protections, immunities and indemnities afforded to it as administrative agent and collateral agent under the Prepetition ABL Credit Agreement.

 

Crystal Financial LLC, d/b/a SLR Credit Solutions will act as administrative agent for the SISO DIP Lenders so long as Crystal or any of its Affiliates is a SISO DIP Lender. From and after the date that Crystal or any of its Affiliates ceases to be a SISO DIP Lender, there shall be no SISO DIP Term Loan Agent (the “SISO DIP Term Loan Agent”).

 

Maturity: All obligations under the DIP ABL Facility shall be due and payable in full in cash on the earliest of (i) 365 calendar days after the Closing Date (as defined in the BrandCo DIP Facility) (the “Stated Maturity Date”); provided that the Stated Maturity Date may be extended, at the Borrower’s sole option, to the earlier of (x) 180 days following the Stated Maturity Date and (y) the extended maturity date of the BrandCo DIP Facility following the exercise of the extension option under the BrandCo DIP Credit Agreement (the “Extension Option”) (ii) July 22, 2022, if the Final DIP Order has not been entered by the Bankruptcy Court on or before such date; (iii) the effective date of any chapter 11 plan for the reorganization of any Debtor; (iv) the consummation of any sale or other disposition of all or substantially all of the assets of the Debtors pursuant to Bankruptcy Code §363; (v) the date of the acceleration of the DIP ABL Loans and the termination of the DIP ABL Commitments in accordance with the DIP ABL Documents; (vi) the date the Bankruptcy Court orders the conversion of the Cases of any of the Debtors to a chapter 7 liquidation, (vii) the rejection or termination of the BrandCo License Agreements and (viii) the dismissal of the Cases of any of the Debtors without the consent of the Required Tranche A DIP ABL Lenders (such earliest date, the “DIP Termination Date”). The principal of, and accrued interest on, the DIP ABL Loans and all other amounts owing to the DIP ABL Agent and the DIP ABL Lenders under the DIP ABL Facility shall be payable on the DIP Termination Date.  

 

 

- 4 - 

 

Fees:

Each of the following fees, earned upon entry of the Interim DIP Order:

 

DIP ABL Facility Closing Fee shall be 1% of the aggregate Tranche A DIP ABL Commitments as of the Petition Date, earned upon entry of the Interim DIP Order.

 

Commitment Fee Rate for the Tranche A DIP ABL Commitments shall be a rate equal to 0.50% per annum.

 

Collateral Management Fee shall be 1% per annum on the average daily aggregate principal amount of outstanding Tranche A DIP Loans.

 

DIP ABL Documents Control: The provisions of the DIP ABL Documents shall, upon execution, supersede the provisions of this Term Sheet; provided that,  the provisions of this Term Sheet and the Interim DIP Order shall govern the DIP ABL Facility prior to the execution of the DIP ABL Documents. The provisions of the DIP ABL Documents shall be consistent with this Term Sheet, the Interim DIP Order and, once entered, the Final DIP Order, except as otherwise agreed by the Required Tranche A DIP ABL Lenders.
Use of Proceeds:

In accordance with the then current Approved Budget and the Budget Variance (each as defined below), the proceeds of the DIP ABL Loans under the DIP ABL Facility shall be used only for the following purposes: (i) the Roll-Up, (ii) payment of certain prepetition amounts in accordance with the then current Approved Budget (including prepetition payments to certain critical vendors identified by the Debtors, to the extent set forth in the Approved Budget) and as authorized by the Bankruptcy Court pursuant to orders approving the first day motions filed by the Debtors, which orders shall be in form and substance reasonably satisfactory to the Required Tranche A DIP ABL Lenders (for the avoidance of doubt, other than the Interim DIP order, which shall be in form and substance acceptable to Required Tranche A DIP ABL Lenders), (iii) to the extent set forth in the then current Approved Budget and in accordance with the terms of the DIP ABL Facility and the DIP Order, (iv) payment of working capital and other general corporate needs of the Debtors in the ordinary course of business, and (v)  payment of the costs and expenses of administering the Cases (including payments benefiting from the Carve-Out) and the Canadian Recognition Proceedings incurred in the Cases, including professional fees.

 

 

 

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  Notwithstanding the foregoing, no portion or proceeds of the DIP ABL Loans, the Carve-Out or the DIP ABL Collateral (as defined below) may be used in connection with the investigation (including discovery proceedings), initiation or prosecution of any claims, causes of action, adversary proceedings or other litigation against the Prepetition ABL Agent and/or lenders in connection with the Facilities existing under the Prepetition ABL Credit Agreement as of the Petition Date (the “Prepetition ABL Facilities”), subject to a customary carve out of up to $50,000 of the proceeds of the SISO DIP Facility, the Tranche A DIP Facility, the DIP ABL Collateral and/or the Carve Out, which may be used by any statutory creditors’ committee to investigate (but not prosecute or initiate the prosecution of, including the preparation of any complaint or motion on account of) the claims and liens of the Prepetition ABL Facilities and the Prepetition ABL Secured Parties.

 

Priority and Security under DIP ABL Facility:

Subject in all respects to the Carve Out, the provisions of the ABL Intercreditor Agreement, the Agreement Among Lenders and Section 10.19 of the Prepetition ABL Credit Agreement, all indebtedness and/or obligations of the Loan Parties to the DIP ABL Lenders and to the DIP ABL Agent under or in connection with the DIP ABL Facility, including without limitation all principal and accrued interest, costs, fees, expenses, and any exposure of any DIP ABL Lender or any of its affiliates in respect of cash management incurred on behalf of the Loan Parties shall be secured by valid, binding, continuing, enforceable, fully-perfected, non-avoidable liens (the “DIP ABL Liens”) on and security interests in:

 

a)    All DIP ABL Collateral of each Loan Party that is of the same nature, scope and type as ABL Facility First Priority Collateral (as defined in the ABL Intercreditor Agreement) on a first priority senior priming basis pursuant to Bankruptcy Code § 364(d)(1) (the “DIP ABL Facility Priority Collateral”);

 

b)    All DIP ABL Collateral of each Loan Party that is of the same nature, scope and type as Term Facility First Priority Collateral (as defined in the ABL Intercreditor Agreement) on a junior priority basis pursuant to Bankruptcy Code § 364(c)(3), subject to the liens in favor of the BrandCo DIP Facility, the Prepetition BrandCo Secured Parties and the Prepetition Term Loan Secured Parties; and

 

 

 

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c)    All DIP ABL Collateral of each Loan Party that was not, on the Petition Date, subject to valid, unavoidable and perfected security interests and liens, pursuant to Bankruptcy Code § 364(c)(2), with the following priority: if such DIP ABL Collateral is of the same nature, scope and type as (i) ABL Facility First Priority Collateral, on a first priority senior priming basis, and (ii) Term Facility First Priority Collateral, on a junior priority basis subject to the liens in favor of the BrandCo DIP Facility and any adequate protection liens granted to the Prepetition BrandCo Secured Parties and the Prepetition Term Loan Secured Parties.

 

DIP ABL Collateral” means, collectively, all assets of each Loan Party and its bankruptcy estate of any nature whatsoever and wherever located, whether first arising prior to or following the Petition Date, now owned or hereafter acquired, and subject to entry of the Final DIP Order, proceeds of all claims and causes of action including avoidance actions under Chapter 5 of the Bankruptcy Code, and to the extent not otherwise included, all proceeds, products, accessions rents and profits of any and all of the foregoing.

 

All of the liens described herein with respect to the assets of the Loan Parties shall be effective and perfected by the Interim DIP Order and the Final DIP Order and without the necessity of the execution of mortgages, security agreements, pledge agreements, financing statements or other agreements. Notwithstanding the foregoing, the Loan Parties shall take all action that may be reasonably necessary or desirable, or that the Required Tranche A DIP ABL Lenders or the DIP ABL Agent may reasonably request, to at all times maintain the validity, perfection, enforceability and priority of the security interest and liens of the DIP ABL Agent in the DIP ABL Collateral, or to enable the DIP ABL Agent to protect, exercise or enforce its rights hereunder, under the DIP Orders and in the DIP ABL Collateral.

 

All obligations under the DIP ABL Facility shall also constitute claims entitled to the benefits of Bankruptcy Code § 364(c)(1) and § 503(b), having, subject to the Carve-Out, a super-priority over any and all administrative expenses of the kind that are specified in Bankruptcy Code §§ 105, 326, 328, 330, 331, 503(b), 506(c), 507(a), 507(b), 546(c), 552(b), 726, 1113, 1114 or any other provisions of the Bankruptcy Code (“Superpriority Claims”) other than the superpriority claims of the BrandCo DIP Facility.

 

All such Superpriority Claims, security interests and liens will survive any conversion of any of the Cases to a case under chapter 7 of the Bankruptcy Code, or the dismissal of any of the Cases.

 

 

 

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Carve-Out:

(i) All fees required to be paid to the Clerk of the Bankruptcy Court and to the Office of the United States Trustee (the “U.S. Trustee”) under section 1930(a) of title 28 of the United States Code plus interest at the statutory rate, if any, pursuant to 31 U.S.C. § 3717 (without regard to the notice set forth in (iii) below); (ii) all reasonable fees and expenses up to $100,000 incurred by a trustee under section 726(b) of the Bankruptcy Code (without regard to the notice set forth in (iii) below); (iii) to the extent allowed at any time, whether by interim order, procedural order, final order or otherwise, all unpaid fees and expenses (the “Allowed Professional Fees”) incurred by persons or firms retained by the Debtors pursuant to section 327, 328 or 363 of the Bankruptcy Code and any statutory committee pursuant to section 328 or 1103 of the Bankruptcy Code (the “Committee”) (collectively, the “Estate Professionals”) (in each case, other than any restructuring, sale, success or other transaction fee of any investment bankers or financial advisors) at any time before or on the first business day following delivery by any DIP Agent of a Carve-Out Trigger Notice (as defined below), and without regard to whether such fees and expenses are in excess of amounts contained in any Approved Budget, whether allowed by the Bankruptcy Court prior to or after delivery of a Carve-Out Trigger Notice (the amounts set forth in this clause (iii) being the “Pre-Carve-Out Trigger Notice Cap”); and (iv) Allowed Professional Fees of Estate Professionals in an aggregate amount not to exceed $20,000,000 incurred after the first business day following delivery by any DIP Agent of the Carve-Out Trigger Notice, to the extent allowed at any time, whether by interim order, procedural order, final order or otherwise (the amounts set forth in this clause (iv) being the “Post-Carve-Out Trigger Notice Cap” and, together with the Pre-Carve-Out Trigger Notice Cap and the amounts set forth in clauses (i) and (ii), the “Carve-Out Cap”).

 

 

 

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Immediately upon the delivery of a Carve-Out Trigger Notice (as defined below), and prior to the payment of any DIP obligations or any Adequate Protection Payments, the Loan Parties shall be required to deposit into a separate account not subject to the control of the DIP Agents, the BrandCo Agents, the 2016 Term Loan Agent or the ABL Facility Agent (the “Carve-Out Account”) an amount equal to the Carve-Out Cap. Notwithstanding anything to the contrary herein or in the DIP Documents, following delivery of a Carve-Out Trigger Notice, the DIP Agents shall not sweep or foreclose on cash (including cash received as a result of the sale or other disposition of any assets) of the Debtors until the Carve-Out Account has been fully funded in an amount equal to all obligations benefitting from the Carve-Out; provided, however, at such time as funds totaling the Carve-Out Cap have been deposited into the Carve-Out Account, the Carve-Out shall be deemed satisfied and no further collateral of the DIP ABL Lenders or Prepetition ABL Lenders or proceeds thereof may be used and no party in interest may assert any further claim or interest in collateral of the DIP ABL Lenders or Prepetition ABL Lenders. The amounts in the Carve-Out Account shall be available only to satisfy Allowed Professional Fees and other amounts included in the Carve-Out Cap until such amounts are paid in full. The amount in the Carve-Out Account shall be reduced on a dollar-for-dollar basis for Allowed Professional Fees that are paid after the delivery of the Carve-Out Trigger Notice, and the Carve-Out Account shall not be replenished for such amounts so paid. The failure of the Carve-Out Account to satisfy in full the amount set forth in the Carve-Out shall not affect the priority of the Carve-Out. For the avoidance of doubt, (i) to the extent the Carve-Out is funded from borrowings under the DIP Facilities, such borrowed amounts shall constitute DIP Obligations, and (ii) the incurrence or payment of any Carve-Out Account or amounts included in the Carve-Out shall not be restricted by the Approved Budget. In no way shall the Carve-Out, the Carve-Out Account, or any Approved Budget be construed as a cap or limitation on the amount of the Allowed Professional Fees due and payable by the Debtors or that may be allowed by the Bankruptcy Court at any time (whether by interim order, final order, or otherwise).

 

For purposes of the foregoing, “Carve-Out Trigger Notice” shall mean a written notice delivered by email by a DIP Agent (or, after the applicable DIP Obligations have been indefeasibly paid in full and the DIP Commitments terminated, the applicable Prepetition Agent) to the Debtors, their lead restructuring counsel (Paul, Weiss, Rifkind, Wharton & Garrison LLP), the U.S. Trustee, lead counsel to the Committee (if any) and lead counsel to any other DIP Agent, which notice may be delivered following the occurrence and during the continuation of an Event of Default (as defined herein) and acceleration of the obligations under either the BrandCo DIP Facility or the DIP ABL Facility (or, after the DIP Obligations have been indefeasibly paid in full and the DIP Commitments terminated, any occurrence that would constitute an Event of Default hereunder) or the occurrence of a Maturity Date (as defined in the DIP ABL Credit Agreement and the BrandCo DIP Credit Agreement), stating that the Post-Carve-Out Trigger Notice Cap has been invoked.

 

On the day on which a Carve-Out Trigger Notice is received by the Debtors (the “Carve-Out Trigger Notice Date”), the Carve-Out Trigger Notice shall constitute a demand to the Debtors to utilize cash on hand to transfer to the Carve-Out Account cash in an amount equal to all obligations benefitting from the Carve-Out.

 

 

 

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  For the avoidance of doubt, to the extent that professional fees and expenses of the Estate Professionals have been incurred by the Debtors at any time before or on the first business day after delivery by a DIP Agent or Prepetition Agent, as applicable, of a Carve-Out Trigger Notice but have not yet been allowed by the Bankruptcy Court, such professional fees and expenses of the Estate Professionals shall constitute Allowed Professional Fees benefiting from the Carve-Out pursuant to clause (iii) of the definition thereof upon their allowance by the Bankruptcy Court, whether by interim or final compensation order and whether before or after delivery of the Carve-Out Trigger Notice, and the Debtors shall fund the Carve-Out Account in the amount of such professional fees and expenses.

  

All funds in the Carve-Out Account shall be used first to pay all obligations benefitting from the Pre-Carve-Out Trigger Notice Cap, until paid in full, and then the obligations benefitting from the Post-Carve-Out Trigger Notice Cap. If, after paying all amounts set forth in the definition of Carve-Out, the Carve-Out Account has not been reduced to zero, all remaining funds in the Carve-Out Account that are funded pursuant to paragraph 29(b) out of DIP Collateral that constitutes (i) Prepetition Shared Term Priority Collateral or proceeds thereof shall be distributed to the Term DIP Agent on account of the DIP Term Loans, and (ii) Prepetition ABL Priority Collateral or proceeds thereof shall be distributed to the ABL DIP Agent on account of the ABL DIP Loans.

 

Approved Budget:

The Loan Parties shall deliver:

 

●     a rolling 13-week cash flow forecast (the “Budget”) in a form satisfactory to the Required Tranche A DIP ABL Lenders delivered on or prior to the Petition Date (the “Initial Budget”) and updated as described below, setting forth, among other things, the Debtors’ projected operating receipts, vendor disbursements, liquidity, net operating cash flow, and net cash flow during such 13-week period initially, covering the period commencing on or about the Petition Date. A proposed updated Budget shall be delivered every fourth Thursday after the Petition Date beginning on the fifth Thursday thereafter (i.e., July 14, 2022) (or if any such Thursday is not a Business Day, the next Business Day thereafter) covering the period commencing on the Saturday of the prior week, which proposed updated Budget shall modify and supersede any prior agreed Budget (each, an “Approved Budget”) unless the DIP ABL Agent, acting at the direction of the Required Tranche A DIP ABL Lenders, notifies the Loan Parties in writing that such proposed Budget is not in form and substance satisfactory to the Required Tranche A DIP ABL Lenders within five days after receipt thereof, in which case the existing Approved Budget shall remain in effect until superseded by an updated Budget in form and substance satisfactory to the Required Tranche A DIP ABL Lenders;

 

 

 

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●     budget variance reporting (each such report, a “Budget Variance Report”) to be provided on Thursday of every week beginning with the third Thursday (i.e. June 30, 2022) after the Petition Date with respect to each rolling four-week period (or, if a four-week period has not elapsed since the Petition Date, the cumulative period since the Petition Date) most recently ended on the last Saturday prior to the delivery of such Budget Variance Report (such period, the “Test Period”; (provided that the initial Test Period will comprise the period beginning on the Petition Date through the fifth Saturday after the Petition Date (i.e. July 16, 2022)), comparing for each applicable test period actual results against anticipated results under the applicable Approved Budget, on an aggregate basis and in the same level of detail set forth in the Approved Budget, together with a written explanation for all variances of greater than the applicable permitted variance for any given testing period and such other information as the DIP ABL Agent or the Required Tranche A DIP ABL Lenders may reasonably request; and  

 

●     A certification of the liquidity of the Debtors as of the last day of the most recent Test Period to be provided on Wednesday of every week beginning with the first Wednesday after the Petition Date.  

 

Budget variance covenant (the “Budget Variance”), tested every week, beginning on the sixth Thursday (i.e., July 21, 2022) after the Petition Date (each such date, a “Testing Date”), on a cumulative basis over a rolling four-week period and requiring that (i) actual receipts for the Test Period shall not be less than 80% of the forecasted actual receipts for such Test Period, (ii) actual disbursements for the Test Period (excluding professional fees and expenses) shall not be greater than 120% of the forecasted actual disbursements for such Test Period, and (iii) actual net cash flow for the Test Period shall not be less than (x) if the forecasted net cash flow (excluding professional fees and expenses) for such Test Period is greater than $10,000,000, 85% of such forecasted results in the applicable Approved Budget, (y) if the forecasted net cash flow (excluding professional fees and expenses) for such Test Period is less than or equal to $10,000,000 but greater than or equal to negative $10,000,000, $1,500,000 less than such forecasted results in the applicable Approved Budget and (z) if the forecasted net cash flow (excluding professional fees and expenses) for such Test Period is less than negative $10,000,000, 115% of such forecasted results in the applicable Approved Budget.

 

 

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Exit Fee:

0.50% on the aggregate Tranche A DIP ABL Commitments as of the Petition Date, payable in cash on the DIP Termination Date.

 

0.50% on the aggregate SISO DIP Facility, payable in cash on the DIP Termination Date.

 

Additionally, the outstanding balance of any fees payable pursuant to the Amendment Fee Letters (as defined in Amendment No. 9) entered into by the Borrower and the Prepetition ABL Agent and the MidCap Fee Letter (as defined in Amendment No. 8) shall be payable in full in cash on the DIP Termination Date.

 

Cash Management: The Loan Parties and their subsidiaries shall establish or maintain, as the case may be, cash management procedures reasonably acceptable to the DIP ABL Agent, consistent with the requirements of the Prepetition ABL Credit Agreement (subject to any modifications to the definition of “Cash Dominion Period”). Subject to exceptions to be mutually agreed, all deposit accounts and securities accounts of the Loan Parties shall be subject to control agreements in favor of the DIP ABL Agent.
Prepayments:

Voluntary: Prepayments under the DIP ABL Facility may be made at any time without premium or penalty, consistent with the requirements of Section 2.11 of the Prepetition ABL Credit Agreement.

 

Mandatory: Prepayments under the DIP ABL Facility shall be made consistent with the requirements of Section 2.12(b)(i) and (iii) of the Prepetition ABL Credit Agreement; provided that such prepayments shall be made within 1 Business Day of the delivery of the relevant Borrowing Base Certificate reflecting such overadvance; provided, further that the definition of Specified Excluded Cash shall be modified to exclude the proceeds of the BrandCo DIP Facility. The DIP ABL Documents shall also require mandatory prepayments customarily found in loan documents for similar debtor-in-possession financings and other mandatory prepayments deemed by the Required Tranche A DIP ABL Lenders appropriate to the specific transaction, including, without limitation, prepayments (which, for the avoidance of doubt, shall not require a permanent commitment reduction) from proceeds of (i) non-ordinary course sales of DIP ABL Facility Priority Collateral, (ii) insurance and condemnation proceeds in respect of DIP ABL Facility Priority Collateral and (iii) other extraordinary receipts (including tax refunds and indemnity payments) of any Debtor in respect of DIP ABL Facility Priority Collateral.

 

 

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No reinvestment of the proceeds of any non-ordinary course sales of DIP ABL Facility Priority Collateral or other proceeds described above shall be permitted in lieu of mandatory prepayment without the prior written consent of the DIP ABL Lenders.

 

Conditions Precedent to the Closing:

The closing of the DIP ABL Facility (the “Closing Date”) shall occur as promptly as is practical after the entry of the Interim DIP Order by the Bankruptcy Court, subject to the conditions precedent set forth on Part A of Schedule 1 hereto.

 

The continued availability of the DIP ABL Facility on and after the DIP ABL Documentation Deadline (as defined in Part B on Schedule I attached hereto) will be subject to the satisfaction of usual and customary conditions precedent for debtor-in-possession credit facilities of this size, type and purpose to be agreed among the Borrower, the DIP ABL Agent and the DIP ABL Lenders, including, without limitation, those set forth on Part B of Schedule 1 attached hereto.

 

Conditions Precedent to Each DIP ABL Loan:

(i) Compliance of each advance of a DIP ABL Loan with the Approved Budget then in effect (subject to the Budget Variance), (ii) no default or event of default, (iii) accuracy of representations and warranties in all material respects, (iv) delivery of a notice of borrowing, (v) after giving effect to any DIP ABL Loans request to be made, the aggregate outstanding DIP ABL Loans shall not exceed the Tranche A Availability (defined consistently with the Prepetition ABL Credit Agreement as of the Amendment No. 8 Effective Date) then in effect (after giving effect to any Push Down Reserve), (vi) compliance with each Case Milestone that is required to be complied with on or prior to such date of borrowing and (vii) the DIP Order shall not have been reversed, amended, stayed, vacated, terminated or otherwise modified in any manner without the prior written consent of the DIP ABL Lenders in their sole discretion.

 

 

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The DIP ABL Credit Agreement, may contain additional conditions precedent customarily found in loan documents for similar debtor-in-possession financings and other conditions precedent deemed by the Required Tranche A DIP ABL Lenders appropriate to the specific transaction.  

 

No DIP ABL Loans shall be advanced (other than those deemed advanced as part of the Roll-Up) prior to the delivery and execution of the DIP ABL Credit Agreement in accordance with the DIP ABL Documentation Deadline on Part A of Schedule 1 hereto.  

 

For the avoidance of doubt, such conditions precedent shall not apply to any DIP ABL Loan deemed made as a result of the Roll-Up, but such DIP ABL Loans shall be subject to the limitations on advances set forth in Section 2.4(a)(i)(A) of the Prepetition ABL Credit Agreement.

 

Representations and Warranties:

The DIP ABL Documents shall contain representations and warranties consistent with the Prepetition ABL Credit Agreement (modified as necessary to reflect the commencement of the Cases and modified to include a representation that the BrandCo License Agreements are in full force and effect and have not been amended, modified, revoked or repealed since the Petition Date), customarily found in loan documents for similar debtor-in-possession ABL financings, and/or as required by the Required Tranche A DIP ABL Lenders.

 

Without limiting the foregoing, on the Closing Date and until the execution and delivery of the DIP ABL Credit Agreement, each of the Loan Parties makes the representations and warranties set forth in the Prepetition ABL Credit Agreement and, in addition, that:

 

(a)   the DIP Orders remain in effect and have not been reversed, modified, amended, stayed or vacated and are not subject to a stay pending appeal (or, in the case of any modification, amendment or stay pending appeal, such modification, amendment or stay is not materially adverse to the interests of the Tranche A DIP ABL Lenders; and

 

(b)   the Debtors have not failed to disclose any material assumptions with respect to the Initial Budget.

 

 

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Reporting Covenants, Affirmative Covenants and Negative Covenants:

The DIP ABL Documents shall contain the reporting requirements, affirmative covenants and negative covenants set forth in the Prepetition ABL Credit Agreement (modified as necessary to reflect the commencement of the Cases) and customarily found in loan documents for similar debtor-in-possession ABL financings, and/or as required by the Required Tranche A DIP ABL Lenders, including without limitation: (i) compliance with the Approved Budget (subject to the Budget Variance) and with provisions of this Term Sheet, (ii) timely delivery to the DIP ABL Agent of the Approved Budget and Approved Variance Reports, (iii) a prohibition on transferring any cash or Cash Equivalents that constitutes DIP ABL Collateral to a non-Loan Party except as otherwise provided for by an Approved Budget, (iv) compliance with the Case Milestones (as defined below), (v) compliance with the DIP Orders, (vi) a prohibition on filing, proposing, or supporting any plan of reorganization that does not indefeasibly satisfy the DIP ABL Obligations in full in cash, (vii) maintaining its cash management system in a manner reasonably acceptable to the DIP ABL Agent (which shall be deemed satisfied if the cash management system is substantially the same as the cash management system in existence on the Petition Date, but removing the $10,000,000 dollar exception for accounts not required to be subject to deposit account control agreements and with such other modifications as permitted under the cash management order, as entered), (viii) causing the Debtors’ senior management and legal and financial advisors to be available to conduct a telephonic conference at least bi-weekly (with additional calls at least once per week with the Debtors’ professional advisors) during normal business hours and upon reasonable notice to discuss the Approved Budget, the Approved Variance Report, the Cases and the financial condition, performance and business affairs of the Debtors, (ix) a prohibition on amending or modifying the BrandCo DIP Facility without the consent of the Required Tranche A DIP ABL Lenders, (x) delivery of weekly Borrowing Base Certificates, which for the avoidance of doubt, shall be based upon weekly updated Receivable and Inventory balances, (xi) delivery of monthly flash reports, which shall be modified to include EBITDA adjustments, a break-out of operating cash flow, and a break-out of sales by region by product line and weekly sales flash reports, in each case in form acceptable to the Required Tranche A DIP ABL Lenders, (xii) delivery of a weekly summary of detailed aging on Receivables and a detailed aging of accounts payable, in each case, describing the respective invoice and due dates or terms thereof, in each case in form reasonably acceptable to the Required Tranche A DIP ABL Lenders, (xiii) delivery of a weekly inventory roll forward, (xiv) delivery of such financial and other information as may be requested by the DIP ABL Lenders and (xv) delivery of all notices provided to the DIP ABL Lenders under the DIP ABL Credit Agreement (which shall be consistent with the notices delivered under Section 6.7 of the Prepetition ABL Credit Agreement) to the BrandCo DIP Agent and delivery of all notices provided to the BrandCo DIP Lenders under the BrandCo DIP Facility to the DIP ABL Agent.

 

 

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The DIP ABL Agent shall be permitted to conduct four (4) field examinations and four (4) inventory appraisals (at the expense of the Loan Parties) during the term of the DIP ABL Facility, and additional field examinations and inventory appraisals during the continuance of an event of default (at the expense of the Loan Parties); provided that the DIP ABL Agent shall be permitted to conduct an additional two (2) field examinations and two (2) inventory appraisals (at the expense of the Loan Parties) if the Borrower exercises the Extension Option. The Loan Parties shall cooperate with and use commercially reasonable efforts to provide such liquidation agents, advisors (including the DIP ABL Agent’s Advisor (as defined below)), appraisers and the DIP ABL Agent with updated information as may be requested by them from time to time.

 

Milestones:

The Debtors shall achieve each of the following milestones (the “Case Milestones”), in accordance with the applicable timing referred to below (or such later dates as approved in writing by the Required Tranche A DIP ABL Lenders):

 

●      June 15, 2022: Petition Date

●      June 16, 2022: Filing of the DIP Motion

●      June 17, 2022: Entry of Interim DIP Order

●      July 22, 2022: Entry of Final DIP Order

●      November 1, 2022: Entry into a Restructuring Support Agreement

●      November 30, 2022: Filing of an Acceptable Plan of Reorganization3 and a related disclosure statement

●      April 1, 2023: Entry of an order confirming an Acceptable Plan of Reorganization

●      April 15, 2023: Substantial consummation of an Acceptable Plan of Reorganization

 

DIP ABL Agent Advisor: The DIP ABL Agent may retain (directly or through counsel), for the benefit of the DIP ABL Lenders and their related parties, one financial advisor or consultant (the “DIP ABL Agent’s Advisor”) to provide advice, analysis and reporting with respect to such matters relating to the Debtors as the DIP ABL Agent may determine in its sole and absolute discretion.  All costs, fees and expenses incurred by the DIP ABL Agent on account of such DIP ABL Agent’s Advisor, whether incurred pre-petition or post-petition, shall be expenses payable by the Loan Parties promptly upon written demand.  For the avoidance of doubt, the DIP ABL Agent’s Advisor shall constitute an Indemnified Person (as defined below).

 

 

3Acceptable Plan of Reorganization” means a chapter 11 plan for each of the Cases that, upon the consummation thereof, provides for the termination of all unused DIP ABL Commitments and the indefeasible payment in full in cash of all of the DIP ABL Obligations.

 

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Cash Collateral: The DIP Order shall authorize the Debtors to use prepetition and postpetition cash collateral subject to the terms set forth in the DIP Order, the Approved Budget and the Budget Variance.
Adequate Protection for Prepetition ABL Facilities:

Adequate protection for any diminution in the value of the interests of the Secured Parties under the Prepetition ABL Credit Agreement (the “Prepetition ABL Secured Parties”) in the ABL Facility First Priority Collateral, and the security interests and liens securing the Obligations, the Prepetition ABL Secured Parties will receive, subject to the Carve Out: (a) replacement liens on all ABL Facility First Priority Collateral, in each case subject and subordinate to the Carve Out and liens of the DIP ABL Agent and with the priority set forth on Exhibit A; (b) superpriority claims as provided for in section 507(b) of the Bankruptcy Code junior only to the super priority claim status applicable to the DIP ABL Facility and pari passu with the superpriority claims provided to the Prepetition BrandCo Secured Parties and (c) adequate protection payments in the form of interest in the amount due under the Prepetition ABL Credit Agreement (assuming Loans that are ABR Loans) at the times required therein solely with respect to any Obligations consisting of (i) SISO Secured Obligations and (ii) Revolving Secured Obligations that are not part of the Roll-Up, in each case subject to Section 10.19 of the Prepetition ABL Credit Agreement (collectively, “Adequate Protection Payments”).

 

The DIP Order shall also provide the Prepetition ABL Facilities (to the extent outstanding) adequate protection acceptable to the lenders thereunder in the form of current cash payment of reasonable fees and expenses including attorneys’ fees and expenses.

 

Marshalling; 552(b) Waiver and Waiver of 506(c) Claims: Waiver of the equitable doctrine of “marshalling,” claims for necessary costs and expenses of preserving or disposing of property securing an allowed secured claim pursuant to section 506(c), and section 552 “equities of the case” exception as set forth in the DIP Order.

 

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Events of Default: The DIP ABL Documents shall contain events of default consistent with those set forth in the Prepetition ABL Credit Agreement (with no grace period for any payment default and reduced grace periods for all other defaults) as well as additional events of default customarily found in loan documents for similar debtor-in-possession financing and other events of default reasonably agreed among the Borrower and the Required Tranche A DIP ABL Lenders, including without limitation (a) non-compliance with the Case Milestones and the covenants set forth in this Term Sheet, (b) any request made by the Debtors for, or the reversal, modification, amendment, stay, reconsideration or vacatur of a DIP Order, as entered by the Bankruptcy Court, without the prior written consent of the Required Tranche A DIP ABL Lenders, (c) the occurrence and/or continuance of an “Event of Default” under the  debtor-in-possession term loan facility entered into by the Borrower with the Prepetition BrandCo Lenders (in such capacity, the “BrandCo DIP Lenders” and together with the DIP ABL Lenders, the “DIP Lenders”) and the Prepetition BrandCo Agent (in such capacity, the “BrandCo DIP Agent”) (such facility, the “BrandCo DIP Facility”) provided, that an Event of Default shall cease to be continuing if such “Event of Default” under the BrandCo DIP Facility is cured or waived within 5 business days, (d) the allowance of any superpriority claim arising under section 507(b) of the Bankruptcy Code in excess of $100,000 which is pari passu with (other than the superpriority claims of the BrandCo DIP Facility) or senior to those of the DIP ABL Agent and the DIP ABL Lenders, (e) the rejection or termination of the BrandCo License Agreements and (f) the dismissal of the Cases, or conversion of the Cases to cases under chapter 7 of the Bankruptcy Code.
Intellectual Property Rights: The Loan Parties and the DIP Lenders shall negotiate in good faith to reach agreement on a mutually acceptable amendment to the BrandCo License Agreements, which such amendment shall be agreed to and documented on or prior to the DIP ABL Documentation Deadline.
Remedies:

The DIP ABL Agent (acting at the direction of the Required Tranche A DIP ABL Lenders) and the DIP Lenders shall have customary remedies, including, without limitation, the right (after providing prior notice as set forth below), to realize on all DIP ABL Collateral.

 

 

- 18 - 

 

 

The automatic stay pursuant to section 362 of the Bankruptcy Code shall be modified to permit, upon the occurrence of an event of default or a DIP Termination Date, the DIP ABL Agent to deliver a notice of such event of default or DIP Termination Date (a “Remedies Notice”) to the Debtors, their lead restructuring counsel, the U.S. Trustee and counsel to any statutory committee. The Debtors may seek an emergency hearing before the Bankruptcy Court during the three (3) business days following the date a Remedies Notice is delivered (the “Remedies Notice Period”), which hearing shall be limited to whether an event of default or a DIP Termination Date has occurred. Upon the earlier of (i) expiration of the Remedies Notice Period or (ii) entry of an order by the Bankruptcy Court finding that an event of default or DIP Termination Date has occurred, the automatic stay shall automatically terminate, and the DIP ABL Agent shall be authorized to exercise all rights and remedies available under the DIP Documents, including with respect to the DIP ABL Collateral, set forth in the Interim DIP Order or the Final DIP Order, as applicable, and the DIP ABL Facility, and as otherwise available at law. If, prior to the expiration of the Remedies Notice Period, the Bankruptcy Court enters and order finding that no event of default or DIP Termination Date has occurred, then the automatic stay shall not terminate.  

 

During the Remedies Notice Period and until an order determining that no event of default or DIP Termination Date has occurred has been entered by the Bankruptcy Court, the Debtors shall be entitled to continue to use Cash Collateral only to make payroll at such times and in such amounts as set forth in the Approved Budget.

 

Indemnification and Expenses:

The Loan Parties, jointly and severally, shall indemnify and hold harmless the DIP ABL Agent, the DIP ABL Lenders, their respective affiliates, successors and assigns and the officers, directors, employees, agents, advisors, controlling persons and members of each of the foregoing (each, an “Indemnified Person”) from and against all costs, expenses (including reasonable and documented fees, disbursements and other charges of all outside counsel) and liabilities of such Indemnified Person arising out of or relating to any claim or any litigation or other proceeding (regardless of whether such Indemnified Person is a party thereto and regardless of whether such matter is initiated by a third party or by the Company or any of its affiliates) that relates to the DIP ABL Facility or the transactions contemplated thereby; provided that, no Indemnified Person shall be indemnified for any cost, expense or liability to the extent determined in the final, non-appealable judgment of a court of competent jurisdiction to have resulted solely from its gross negligence or willful misconduct.

 

 

- 19 - 

 

 

No Indemnified Person shall have any liability (whether direct or indirect, in contract, tort or otherwise) to the Debtors or any of their subsidiaries or any shareholders or creditors of the foregoing for or in connection with the transactions contemplated hereby, except to the extent such liability is found in a final non-appealable judgment by a court of competent jurisdiction to have resulted solely from such Indemnified Person’s fraud, bad faith, gross negligence or willful misconduct. In no event, however, shall any Indemnified Person be liable on any theory of liability for any special, indirect, consequential or punitive damages.  

 

In addition, (a) all out-of-pocket expenses (including, without limitation, reasonable and documented fees, disbursements and other charges of outside counsel, one local counsel in each applicable jurisdiction, and one financial advisor (collectively, the “DIP Professionals”)) of the DIP ABL Agent and the DIP ABL Lenders in connection with the DIP ABL Facility and the transactions contemplated thereby shall be paid by the Loan Parties from time to time, whether or not the Closing Date occurs, and (b) all out-of-pocket expenses (including, without limitation, fees, disbursements and other charges of the DIP Professionals) of the DIP ABL Agent and the DIP ABL Lenders, for enforcement costs associated with the DIP ABL Facility and the transactions contemplated thereby shall be paid by the Loan Parties.  

 

The Final DIP Order shall contain releases and exculpations for the DIP ABL Agent and each DIP ABL Lender (in any capacity) and, subject to the Challenge Period, the Prepetition ABL Secured Parties, in form and substance satisfactory to such party, respectively, including, without limitation, releases from any avoidance actions.

DIP Orders Govern: To the extent of any conflict or inconsistency between this Term Sheet and the DIP Orders, the DIP Orders shall govern.
Amendment and Waiver: No provision of this Term Sheet or the DIP Orders may be amended other than by an instrument in writing signed by the DIP ABL Agent, the Required Tranche A DIP ABL Lenders and the Loan Parties.
Assignments and Participations: Usual and customary assignment and participation provisions for debtor-in-possession credit facilities of this size, type and purpose, which shall be consistent with the Prepetition ABL Credit Agreement, including requiring the consent of the Borrower over any assignments of the DIP ABL Loans (other than any assignment to any other DIP ABL Lender or BrandCo DIP Lender, for which no consent of the Borrower will be required), provided that (i) no consent of the Borrower to any assignment shall be required after the occurrence and during the continuance of an event of default, (ii) no assignments may be made to any Loan Party or any affiliate or subsidiary of any Loan Party, any defaulting lender or any natural person, and (iii) assignments to any person other than a DIP ABL Lender or an affiliate or controlled fund of a DIP ABL Lender shall be subject to the consent of the DIP ABL Agent.

 

- 20 - 

 

Governing Law: State of New York, except as governed by the Bankruptcy Code or the CCAA, as applicable.
Miscellaneous:

The DIP Order shall, among other things:

 

a)    contain a ‘good faith finding’ under Bankruptcy Code § 364(e);

 

b)    (1) set a time limit of no less than (the “Challenge Period”) (a) with respect to any party in interest other than any statutory committee, 75 calendar days after entry of the Final DIP Order and (b) with respect to any statutory committee, if one has been formed, 60 calendar days after such committee is formed, or such longer period as is acceptable to the DIP ABL Agent, for challenges by third parties to any indebtedness, obligations, and/or liens under the Prepetition ABL Facility and to the assertion by third parties of any other claims and causes of action against the Prepetition ABL Agent and/or lenders under the Prepetition ABL Facility arising from or related thereto (any of the foregoing, a “Challenge”), and (2) contain usual and customary stipulations, admissions, waivers, and releases, by the Debtors, with respect to such indebtedness, obligations, liens, challenges, claims, and causes of action;

 

c)    provide that the DIP ABL Lenders shall have the unconditional right to credit bid their outstanding DIP ABL Obligations and Prepetition ABL Obligations on a dollar-for-dollar basis in connection with any disposition of estate property that is ABL Facility First Priority Collateral (or the postpetition equivalent thereof) other than in the ordinary course of business, whether pursuant to Bankruptcy Code § 363, a plan of reorganization, or otherwise (a “Disposition”), subject to the provisions of the ABL Intercreditor Agreement and the Agreement Among Lenders;

 

d)    provide that no obligations of the Debtors under any Prepetition Term Loan Facility and/or BrandCo DIP Facility may be credit bid in any Disposition of any ABL Facility First Priority Collateral except for indefeasible payment in full in cash to the DIP ABL Agent and the DIP ABL Lenders of all DIP ABL Obligations;

 

 

- 21 - 

 

 

e)    provide that if any Disposition includes both ABL Facility First Priority Collateral and Term Facility First Priority Collateral (as defined in the ABL Intercreditor Agreement), and the DIP ABL Agent and any term loan agents or term loan lenders are unable, after negotiating in good faith, to agree on the allocation of the purchase price between the prepetition or postpetition ABL Facility First Priority Collateral and Term Facility First Priority Collateral, any of such agents may apply to the Bankruptcy Court to make a determination of such allocation, and the Bankruptcy Court’s determination in a final order shall be binding upon the parties.  

 

Prepetition Term Loan Facilities:

Credit Agreement, dated as of September 7, 2016 (as amended, restated, replaced, supplemented or otherwise modified prior to the Petition Date, the “Prepetition Term Loan Credit Agreement” and the term loan credit facility thereunder, the “Initial Prepetition Term Loan Facility”), by and among the Borrower, Holdings, Citibank, N.A., as administrative agent and collateral agent (in such capacity, the “Prepetition Term Loan Agent”), and the lenders party thereto from time to time (the “Prepetition Term Loan Lenders” and together with the Prepetition First Lien Agent, collectively, the “Prepetition Term Loan Secured Parties”) and the other financial institutions party thereto.

 

BrandCo Credit Agreement, dated as of May 7, 2020 (as amended, restated, replaced, supplemented or otherwise modified prior to the Petition Date, the “Prepetition BrandCo Credit Agreement” and the term loan credit facility thereunder, the “Prepetition BrandCo Facility” and, together with the Initial Prepetition Term Loan Facility, the “Prepetition Term Loan Facilities” and each a “Prepetition Term Loan Facility”), by and among the Borrower, Holdings, Jefferies Finance LLC, as administrative agent and collateral agent (in such capacity, the “Prepetition BrandCo Agent”), and the lenders party thereto from time to time (the “Prepetition BrandCo Lenders” and together with the Prepetition BrandCo Agent, collectively, the “Prepetition BrandCo Secured Parties”) and the other financial institutions party thereto.

 

DIP ABL Documentation: The DIP ABL Documents shall be consistent with this Term Sheet and, except as otherwise provided herein, shall be based upon the Prepetition ABL Credit Agreement; it being understood and agreed that the DIP ABL Documents shall in any event be no less restrictive than the Prepetition ABL Credit Agreement and the definitive credit agreement documenting the BrandCo DIP Facility (the “BrandCo DIP Credit Agreement”).

 

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Agreement Among Lenders Pursuant to Section 510 of the Bankruptcy Code, the Agreement Among Lenders shall remain in full force and effect and shall continue to govern the relative priorities, rights and remedies of the DIP ABL Lenders under the DIP ABL Facility and the Prepetition ABL Secured Parties under the Prepetition ABL Credit Agreement; provided however, that Section 10 (Buy-Out Option) is hereby waived by the Last Out Lenders (as defined therein) upon the entry by the Bankruptcy Court of the Interim DIP Order.
Counsel to DIP ABL Agent and DIP ABL Lenders:

Proskauer Rose LLP, counsel to the DIP ABL Agent and Tranche A DIP ABL Lenders

 

Morgan Lewis & Bockius LLP, counsel to the SISO DIP Term Loan Agent.

 

 

[Remainder of page intentionally left blank]

 

- 23 - 

IN WITNESS WHEREOF, the parties hereto hereby agree to be bound by the terms and conditions in this Term Sheet and have caused this Term Sheet to be duly executed by their respective authorized officers as of the day and year first above written.

 

  Loan Parties:
   
  REVLON CONSUMER PRODUCTS CORPORATION, as Borrower
   
  By: /s/ Victoria Dolan
    Name: Victoria Dolan
    Title: Chief Financial Officer
     
  REVLON, INC., as Holdings
   
  By: /s/ Victoria Dolan
    Name: Victoria Dolan
    Title: Chief Financial Officer

 

[Signature Page to ABL DIP Term Sheet]

 

 

 

  ALMAY, INC.
  ART & SCIENCE, LTD.
  BARI COSMETICS, LTD.
  BEAUTYGE BRANDS USA, INC.
  BEAUTYGE U.S.A., INC.
  CHARLES REVSON INC.
  CREATIVE NAIL DESIGN, INC.
  CUTEX, INC.
  DF ENTERPRISES, INC.
  ELIZABETH ARDEN (FINANCING), INC.
  ELIZABETH ARDEN INVESTMENTS, LLC
  ELIZABETH ARDEN NM, LLC
  ELIZABETH ARDEN TRAVEL RETAIL, INC.
  ELIZABETH ARDEN USC, LLC
  ELIZABETH ARDEN, INC.
  FD MANAGEMENT, INC.
  NORTH AMERICA REVSALE INC.
  OPP PRODUCTS, INC.
  RDEN MANAGEMENT, INC.
  REALISTIC ROUX PROFESSIONAL
  PRODUCTS INC.
  REVLON DEVELOPMENT CORP.
  REVLON GOVERNMENT SALES, INC.
  REVLON INTERNATIONAL CORPORATION
  REVLON PROFESSIONAL HOLDING COMPANY LLC
  RIROS CORPORATION
  RIROS GROUP INC.
  ROUX LABORATORIES, INC.
  ROUX PROPERTIES JACKSONVILLE, LLC
  SINFULCOLORS INC.
  PPI TWO CORPORATION
  RML, LLC
   
  By: /s/ Victoria Dolan
    Name: Victoria Dolan
    Title:   Vice President

 

[Signature Page to ABL DIP Term Sheet]

 

 

 


 
ELIZABETH ARDEN (CANADA) LIMITED REVLON CANADA, INC.
 
 
 
 
 
By:
/s/ Victoria Dolan
 
 
Name:
Victoria Dolan
 
 
Title:
Chief Financial Officer

 

[Signature Page to ABL DIP Term Sheet]




 



ELIZABETH ARDEN (UK) LTD
 
 
 
 
 
By:
/s/ Victoria Dolan
 
 
Name:
Victoria Dolan
 
 
Title:
Director

 

[Signature Page to ABL DIP Term Sheet]

 

  DIP ABL AGENT:
   
  MIDCAP FUNDING IV TRUST, as DIP ABL Agent
   
  By:
 Apollo Capital Management, L.P., its investment manager
        
  By:  Apollo Capital Management GP, LLC, its General Partner
     
  By:  /s/ Maurice Amsellem
     Name:  Maurice Amsellem
     Title:   Authorized Signatory

 

[Signature Page to ABL DIP Term Sheet]

 

 

 

 

  TRANCHE A DIP ABL LENDERS:
   
  MIDCAP FINANCIAL TRUST, as a Tranche A DIP ABL Lender
   
  By: Apollo Capital Management, L.P., its investment manager
        
  By: Apollo Capital Management GP, LLC, its General Partner
     
  By: /s/ Maurice Amsellem
    Name:  Maurice Amsellem
    Title:   Authorized Signatory
     
  MIDCAP FUNDING IV TRUST, as a Tranche A DIP ABL Lender
   
  By: 
Apollo Capital Management, L.P., its investment manager
      
  By: 
Apollo Capital Management GP, LLC, its General Partner
     
  By: /s/ Maurice Amsellem
    Name:  Maurice Amsellem
    Title:   Authorized Signatory

 

[Signature Page to ABL DIP Term Sheet]

 

 

 

  

  ATHORA LUX INVEST S.C.Sp., a reserved alternative investment fund in the form of a Luxembourg special limited partnership (société en commandite spéciale), acting in respect of its compartment, Athora Lux Invest – Loan Origination, acting through its managing general partner Athora Lux Invest Management and represented by its delegate portfolio manager, Apollo Management International LLP, as a Tranche A DIP ABL Lender
   
  By: Apollo Management International LLP, its Portfolio Manager
      
  By: 
AMI (Holdings), LLC, its Member
     
  By: /s/ Joseph D. Glatt
    Name:  Joseph D. Glatt
    Title:   Vice President
     
  APOLLO LINCOLN FIXED INCOME FUND, L.P., as a Tranche A DIP ABL Lender
    
  By:
Apollo Lincoln Fixed Income Management, LLC, its investment manager
     
  By: /s/ Joseph D. Glatt
    Name:  Joseph Glatt
    Title:   Vice President
     
  APOLLO CENTRE STREET PARTNERSHIP, L.P., as a Tranche A DIP ABL Lender
        
  By: Apollo Centre Street Management, LLC, its investment manager
     
  By: /s/ Joseph D. Glatt
    Name:  Joseph Glatt
    Title:   Vice President

 

[Signature Page to ABL DIP Term Sheet]

  

 

 

 

  CIBC BANK USA, as a Tranche A DIP ABL Lender
   
  By:  /s/ Susan Hamilton Lanz
     Name:  Susan Hamilton Lanz
     Title:   Managing Director

 

[Signature Page to ABL DIP Term Sheet]

 

 

 

 

  siso dip lenders:
   
  Crystal Financial SPV LLC, as a SISO DIP Lender
   
  By:  /s/ Mirko Andric
     Name: Mirko Andric
     Title:   Senior Managing Director

 

[Signature Page to ABL DIP Term Sheet]

 

 

 

 

     
  SCP Private Credit Income Fund spv llc, as a SISO DIP Lender
   
  By:  /s/ Cedric Henley
     Name: Cedric Henley
     Title: Authorized Signatory
     
  SCP Private Credit Income BDC spv LLC, as a SISO DIP Lender
   
  By:  /s/ Cedric Henley
     Name: Cedric Henley
     Title: Authorized Signatory
     
  SCP SF Debt Fund L.P., as a SISO DIP Lender
   
  By:  /s/ Cedric Henley
     Name: Cedric Henley
     Title: Authorized Signatory

 

[Signature Page to ABL DIP Term Sheet]

 

 

 

 

  SCP Private Corporate Lending Fund SPV LLC, as a SISO DIP Lender
   
  By:  /s/ Richard Peteka
     Name: Richard Peteka  
     Title: CFO
     
  SCP cayman debt master fund spv llc, as a SISO DIP Lender
   
  By:  /s/ Richard Peteka
     Name: Richard Peteka  
     Title: CFO
     
  Callodine Commercial Finance SPV, LLC, as a SISO DIP Lender
   
  By:  /s/ Michael Watson
     Name: Michael Watson
     Title: Principal

 

[Signature Page to ABL DIP Term Sheet]

 

 

 

 

  First Eagle Alternative Capital BDC, Inc., as a SISO DIP Lender
   
  By:  /s/ Michelle Handy
    Name: Michelle Handy
    Title: Managing Director
     
  First Eagle Direct Lending Fund IV, LLC, as a SISO DIP Lender
       
  By:  First Eagle Alternative Credit, LLC, its Manager
     
  By:  
/s/ Michelle Handy
    Name: Michelle Handy
    Title: Managing Director
     
  First Eagle Direct Lending Fund IV Co-Invest, LLC, as a SISO DIP Lender
        
  By: First Eagle Alternative Credit, LLC, its Manager
     
  By: /s/ Michelle Handy
    Name: Michelle Handy
    Title: Managing Director

   
  First Eagle Direct Lending Levered Fund IV SPV, LLC, as a SISO DIP Lender
     
  By:
First Eagle Direct Lending Levered Fund IV, LLC, its Manager
     
  By:  /s/ Michelle Handy
     Name: Michelle Handy
     Title: Managing Director

 

[Signature Page to ABL DIP Term Sheet]

 

 

 

 

     
  First Eagle Direct Lending V-A, LLC, as a SISO DIP Lender
      
  By:  
First Eagle Alternative Credit, LLC, its Manager
     
  By: /s/ Michelle Handy
    Name: Michelle Handy
    Title: Managing Director
     
  First Eagle Direct Lending V-B, LLC, as a SISO DIP Lender
   
  By: First Eagle Alternative Credit, LLC, its Manager
     
  By: /s/ Michelle Handy
    Name: Michelle Handy
    Title: Managing Director
     
  First Eagle Direct Lending V-B spv, LLC, as a SISO DIP Lender
       
  By: First Eagle Direct Lending V-B, LLC, its designated manager
        
  By:
First Eagle Alternative Credit, LLC, its Manager
     
  By: /s/ Michelle Handy
    Name: Michelle Handy
    Title: Managing Director

 

[Signature Page to ABL DIP Term Sheet]

 

 

 

 

  First Eagle Direct Lending V-C, SCSP, as a SISO DIP Lender
   
 
By: 
 First Eagle Alternative Credit, LLC, its Portfolio Manager
     
  By:

 /s/ Michelle Handy
     Name: Michelle Handy
     Title: Managing Director
     
  First Eagle Credit Opportunities Fund, as a SISO DIP Lender
   
  By:  First Eagle Alternative Credit, LLC, its Sub-Adviser
     
  By:  /s/ Michelle Handy
     Name: Michelle Handy
     Title: Managing Director

 

[Signature Page to ABL DIP Term Sheet]

 

 

 

 

SCHEDULE 1: CONDITIONS PRECEDENT

 

Part A

 

1. Interim DIP Order/Bankruptcy Matters

 

(a) On or prior to the Closing Date, all accrued interest on outstanding Tranche A Revolving Obligations and SISO Secured Obligations and the balance of all unpaid fees and expenses due and payable shall be paid by the Borrower.

 

(b) The Cases shall have been commenced in the Bankruptcy Court, and all of the “first day orders” (other than, for the avoidance of doubt, the Interim DIP Order) and all related pleadings to be entered at the time of commencement of the Cases or shortly thereafter shall have been reviewed in advance by the DIP ABL Lenders and the DIP ABL Agent and shall be reasonably acceptable in form and substance to the Required Tranche A DIP ABL Lenders and the DIP ABL Agent.

 

(c) The Bankruptcy Court shall have entered the Interim DIP Order approving the DIP ABL Facility and the BrandCo DIP Facility, all provisions thereof and the priorities and liens granted under Bankruptcy Code section 364(c) and (d), as applicable, in form and substance acceptable to the Required Tranche A DIP ABL Lenders and the Debtors, which Interim DIP Order shall not have been reversed, amended, stayed, vacated, terminated or otherwise modified in any manner without the prior written consent of the Required Tranche A DIP ABL Lenders in their sole discretion.

 

(d) The Debtors shall be in compliance in all respects with the Interim DIP Order.

 

(e) Each other Case Milestone that is required to be complied with on or prior to the Closing Date shall have been complied with.

 

(f) No trustee or examiner with enlarged powers (beyond those set forth in Bankruptcy Code sections 1106(a)(3) and (4)) shall have been appointed with respect to the Debtors or their respective properties.

 

(g) A cash management order encompassing the cash management arrangements currently in place under the Prepetition ABL Credit Agreement and otherwise reasonably acceptable to the Required Tranche A DIP ABL Lenders and the DIP ABL Agent shall be in full force and effect.

 

(h) The DIP ABL Agent shall have a fully perfected lien on the DIP ABL Collateral with the priorities set forth on Exhibit A, including, without limitation, a fully perfected first priority lien on the DIP ABL Facility Priority Collateral.

 

2. Financial Statements, Budgets and Reports

 

(a) The DIP ABL Lenders and the DIP ABL Agent shall have received the initial Approved Budget, and such other information (financial or otherwise) as may be reasonably requested by the Required Tranche A DIP ABL Lenders or the DIP ABL Agent, in each case, shall be acceptable in form and substance to the Required Tranche A DIP ABL Lenders and the DIP ABL Agent.

 

 

 

 

(b) The Borrower shall have entered into the BrandCo DIP Facility or shall have provided the latest draft of a term sheet or other documents evidencing the BrandCo DIP Facility, which, in either case, shall be acceptable in form and substance to the Required Tranche A DIP ABL Lenders and the DIP ABL Agent.

 

(c) The DIP ABL Agent shall have received a Borrowing Base Certificate relating to the most recent calendar week ended prior to the Closing Date (calculated as of the close of business of the Friday of such week), in form and substance reasonably satisfactory to the DIP ABL Agent and the Required Tranche A DIP ABL Lenders.

 

3. Performance of Obligations

 

(a) The DIP ABL Agent, for the account of itself and the DIP ABL Lenders entitled thereto, shall have received payment by the Borrower of all reasonable and documented fees that are due and payable on or prior to the Closing Date in connection with the transactions contemplated hereby, and the Borrower shall have paid all reasonable and documented out-of-pocket expenses (and reasonable estimates therefor) of the DIP ABL Agent and the DIP ABL Lenders that are invoiced prior to the Closing Date in connection with the transactions contemplated hereby, in each case to the extent invoiced at least one (1) Business Day prior to the Closing Date.

 

(b) No default or event of default shall have occurred under the DIP ABL Facility or the BrandCo DIP Facility.

 

(c) The representations and warranties under the DIP ABL Facility shall be true and correct in all material respects.

 

(d) Upon entry of the Interim DIP Order, the entry into this Term Sheet shall not violate any requirement of law and shall not be enjoined, temporarily, preliminarily, or permanently.

 

(e) Subject to Bankruptcy Court approval, (i) each Loan Party shall have the corporate power and authority to make, deliver and perform its obligations under this Term Sheet and the Interim DIP Order, and (ii) no consent or authorization of, or filing with, any person (including, without limitation, any governmental authority) shall be required in connection with the execution, delivery or performance by each Loan Party, or for the validity or enforceability in accordance with its terms against such Loan Party, of this Term Sheet and the Interim DIP Order except for consents, authorizations and filings which shall have been obtained or made and are in full force and effect and except for such consents, authorizations and filings, the failure to obtain or perform, could not reasonably be expected to cause a Material Adverse Effect.

 

 

 

 

4. Customary Closing Documents

 

(a) Satisfaction of customary closing conditions, including customary officer’s closing certificates (including, without limitation, as to the satisfaction of closing conditions set forth herein); an updated perfection certificate; corporate records and documents from public officials; organizational documents or, at the option of the Borrower, an officer’s certificate stating that no changes to the organizational documents of the Loan Parties have occurred since the Amendment No. 9 Effective Date except as set forth in such certificate; customary evidence of authority, authorization, execution and delivery; good standing certificates; obtaining of any material third party and governmental consents necessary; “know your customer” and anti-money laundering rules and regulations, including the USA Patriot Act and beneficial ownership regulations.

 

PART B

 

1. Full Documentation and Other Conditions

 

(a) within eight (8) Business Days after the date of entry of the Interim DIP Order by the Bankruptcy Court (the “DIP ABL Documentation Deadline”), execution and delivery of an amendment and restatement to the Prepetition ABL Credit Agreement (the “DIP ABL Credit Agreement”), and other definitive documentation evidencing the DIP ABL Facility including all required collateral documents, in each case, which shall be in form and substance substantially consistent with this Term Sheet and otherwise acceptable to the Required Tranche A DIP ABL Lenders and the Debtors (the “DIP ABL Documents”).

 

(b) Delivery of an executed credit agreement documenting the terms of the BrandCo DIP Facility consistent in all material respects with the term sheet previously delivered in respect thereof, with such changes as shall be reasonably acceptable, in form and substance, to the Required Tranche A DIP ABL Lenders and the DIP ABL Agent.

 

(c) The delivery of customary legal opinions as to the Loan Parties (provided that customary corporate opinions shall be limited to those Loan Parties organized in New York or Delaware) with respect to the DIP ABL Documents; customary corporate records and documents from public officials; and officer’s certificates.

 

(d) The representations and warranties under the DIP ABL Facility shall be true and correct in all material respects.

 

(e) No default or event of default shall have occurred under the DIP ABL Facility or the BrandCo DIP Facility.

 

(f) The Loan Parties shall have paid the balance of all fees and expenses then payable as referenced herein, subject to the limitations on such amounts set forth in the Approved Budget (subject to the Budget Variance).

 

 

 

 

(g) The Bankruptcy Court shall have entered the Final DIP Order, in form and substance acceptable to the Required Tranche A DIP ABL Lenders and the Debtors, which Final DIP Order shall not have been reversed, amended, stayed, vacated, terminated or otherwise modified in any manner without the prior written consent of the Required Tranche A DIP ABL Lenders in their sole discretion, and the Debtors shall be in compliance in all respects with the Final DIP Order.

 

 

 

 

Exhibit A

 

Lien Priorities1

 

 

 

 

 

 

 

 

 

 

1 The Tranche A DIP ABL Liens shall be senior in all respects to the SISO DIP Liens with respect to all DIP ABL Collateral.

 

 

 

 

Exhibit 10.2

 

Execution Copy

 

 

 

SUPERPRIORITY SENIOR SECURED DEBTOR-IN-POSSESSION CREDIT AGREEMENT

 

among

 

REVLON CONSUMER PRODUCTS CORPORATION,
a debtor and debtor-in-possession under chapter 11 of the Bankruptcy Code,
as the Borrower,

 

REVLON, INC., 

a debtor and debtor-in-possession under chapter 11 of the Bankruptcy Code, 

as Holdings,

 

THE LENDERS PARTY HERETO and

 

Jefferies Finance LLC,
as Administrative Agent and Collateral Agent

 

Dated as of June 17, 2022

 

JEFFERIES FINANCE LLC,
as Lead Arranger and Bookrunner 

 

 

 

 

TABLE OF CONTENTS

 

        Page
         
SECTION I. DEFINITIONS   1
         
  1.1 Defined Terms   1
  1.2 Other Definitional Provisions   37
  1.3 [Reserved]   37
  1.4 Exchange Rates; Currency Equivalents   37
  1.5 [Reserved]   37
  1.6 Accounting Terms   37
  1.7 Divisions   38
         
SECTION II. AMOUNT AND TERMS OF COMMITMENTS   38
         
  2.1 Commitments   38
  2.2 Procedure for Borrowing, Conversions and Continuations of Loans   38
  2.3 [Reserved]   39
  2.4 [Reserved]   39
  2.5 [Reserved]   39
  2.6 Maturity Extension   39
  2.7 [Reserved]   40
  2.8 Repayment of Loans   40
  2.9 Discounts, Fees and Premiums   40
  2.10 Incremental Commitments   41
  2.11 Optional Prepayments   42
  2.12 Mandatory Prepayments   43
  2.13 [Reserved]   44
  2.14 [Reserved]   44
  2.15 Interest Rates and Payment Dates   44
  2.16 Computation of Interest and Fees   45
  2.17 Alternate Rate of Interest   45
  2.18 Pro Rata Treatment and Payments   47
  2.19 Repayment Premium   49
  2.20 Taxes   49
  2.21 Indemnity   52
  2.22 Break Funding Payments   52
  2.23 Change of Lending Office   52
  2.24 Replacement of Lenders   53
  2.25 Priority and Liens; No Discharge.   54
         
SECTION III. [Reserved]   56
         
SECTION IV. REPRESENTATIONS AND WARRANTIES   56
         
  4.1 Financial Condition   56
  4.2 No Change   56
  4.3 Existence; Compliance with Law   56
  4.4 Corporate Power; Authorization; Enforceable Obligations   57

 

i 

 

  4.5 No Legal Bar   57
  4.6 No Material Litigation   58
  4.7 No Default   58
  4.8 Ownership of Property; Leasehold Interests; Liens   58
  4.9 Intellectual Property   58
  4.10 Taxes   58
  4.11 Federal Regulations   58
  4.12 ERISA   59
  4.13 Investment Company Act   59
  4.14 Subsidiaries   59
  4.15 Environmental Matters   59
  4.16 Accuracy of Information, etc.   59
  4.17 Security Documents   60
  4.18 [Reserved]   61
  4.19 Anti-Terrorism   61
  4.20 Use of Proceeds   61
  4.21 Labor Matters   61
  4.22 [Reserved]   61
  4.23 OFAC   61
  4.24 Anti-Corruption Compliance   62
  4.25 Cases; Orders   62
         
SECTION V. CONDITIONS PRECEDENT   63
         
  5.1 Conditions to Initial Draw T-1 Availability Date   63
  5.2 Conditions to Delayed Draw T-2 Availability Date   66
         
SECTION VI. AFFIRMATIVE COVENANTS   67
         
  6.1 Financial Information   67
  6.2 Certificates; Other Information   69
  6.3 Payment of Taxes   70
  6.4 Conduct of Business and Maintenance of Existence, etc.; Compliance   70
  6.5 Maintenance of Property; Insurance   70
  6.6 Inspection of Property; Books and Records; Discussions   71
  6.7 Notices   72
  6.8 Additional Collateral, etc.   72
  6.9 Use of Proceeds   76
  6.10 [Post-Closing   76
  6.11 [Reserved]   76
  6.12 Line of Business   76
  6.13 Credit Ratings   76
  6.14 Changes in Jurisdictions of Organization; Name   76
  6.15 Delivery of Formulas   76
  6.16 BrandCo Support Obligations   77
  6.17 Certain Case Milestones   77
  6.18 Certain Bankruptcy Matters   78
  6.19 Bankruptcy Notices   78
  6.20 Certain Litigation   78
  6.21 Repatriation of Cash   78

 

ii 

 

SECTION VII. NEGATIVE COVENANTS   79
         
  7.1 Executive Compensation   79
  7.2 Indebtedness   79
  7.3 Liens   81
  7.4 Fundamental Changes   85
  7.5 Dispositions of Property   86
  7.6 Restricted Payments   89
  7.7 Investments   90
  7.8 Prepayments, Etc. of Indebtedness; Amendments   94
  7.9 Transactions with Affiliates   94
  7.10 Sales and Leasebacks   96
  7.11 Changes in Fiscal Periods   96
  7.12 Negative Pledge Clauses   96
  7.13 Clauses Restricting Subsidiary Distributions   98
  7.14 Limitation on Hedge Agreements   99
  7.15 Amendment of Company Tax Sharing Agreement   99
  7.16 Additional Bankruptcy Matters   100
  7.17 Budget Variance Covenant   100
  7.18 Liquidity   101
  7.19 Subrogation   101
         
SECTION 7A. HOLDINGS NEGATIVE COVENANTS   101
         
SECTION 7B. BRANDCO ENTITIES PASSIVE COVENANT   101
         
SECTION 7C. BRANDCO REPRESENTATIONS AND COVENANTS   102
         
SECTION VIII. EVENTS OF DEFAULT   102
         
  8.1 Events of Default   102
         
SECTION IX. THE AGENTS   110
         
  9.1 Appointment   110
  9.2 Delegation of Duties   110
  9.3 Exculpatory Provisions   110
  9.4 Reliance by the Agents   111
  9.5 Notice of Default   111
  9.6 Non-Reliance on Agents and Other Lenders   111
  9.7 Indemnification   112
  9.8 Agent in Its Individual Capacity   112
  9.9 Successor Agents   112
  9.10 Certain Collateral Matters   113
  9.11 Agents May File Proofs of Claim   114
  9.1 Lead Arranger and Bookrunner   115
  9.2 Erroneous Payments   115
         
SECTION X. MISCELLANEOUS   118

 

iii 

 

  10.1 Amendments and Waivers   118
  10.2 Notices; Electronic Communications   120
  10.3 No Waiver; Cumulative Remedies   122
  10.4 Survival of Representations and Warranties   122
  10.5 Payment of Expenses; Indemnification   122
  10.6 Successors and Assigns; Participations and Assignments   124
  10.7 Adjustments; Set off   128
  10.8 Counterparts   128
  10.9 Severability   128
  10.10 Integration   128
  10.11 GOVERNING LAW   129
  10.12 Submission to Jurisdiction; Waivers   129
  10.13 Acknowledgments   130
  10.14 Confidentiality   131
  10.15 Release of Collateral and Guarantee Obligations; Subordination of Liens   132
  10.16 [Reserved]   133
  10.17 WAIVERS OF JURY TRIAL   133
  10.18 USA PATRIOT ACT   133
  10.19 Orders Control   133
  10.20 Interest Rate Limitation   133
  10.21 Payments Set Aside   134
  10.22 Electronic Execution of Assignments and Certain Other Documents   134
  10.23 Acknowledgement and Consent to Bail-In of Affected Financial Institutions   134
  10.24 Tax Treatment   135

 

iv 

 

SCHEDULES:

 

1.1(a) Backstop Lenders
2.1(T-1) Initial Draw T-1 Commitments
2.1(T-2) Delayed Draw T-2 Commitments
2.9 [Reserved]
4.8 Real Property
4.14 Subsidiaries
4.17 UCC Filing Jurisdictions
6.10 Post Closing Matters
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
7.7 Existing Investments
7.9 Transactions with Affiliates
7.12 Existing Negative Pledge Clauses
7.13 Clauses Restricting Subsidiary Distributions

 

  EXHIBITS:
   
A Form of Committed Loan Notice
B Form of Compliance Certificate
C [Reserved]
D Form of Assignment and Assumption
E [Reserved]
F Form of Exemption Certificate
G Form of Interim Order
H Form of Initial Budget
I Form of Prepayment Option Notice
J [Reserved]
K Form of Guarantee and Collateral Agreement
L Form of Holdings Guarantee and Pledge Agreement
M Form of BrandCo Security Agreement
N Form of BrandCo Stock Pledge Agreement

 

v 

 

SUPERPRIORITY SENIOR SECURED DEBTOR-IN-POSSESSION CREDIT AGREEMENT, dated as of June 17, 2022, among REVLON CONSUMER PRODUCTS CORPORATION, a Delaware corporation and a debtor and debtor-in-possession under chapter 11 of the Bankruptcy Code (the “Company” or the “Borrower”), REVLON, INC., a Delaware corporation and a debtor and debtor-in-possession under chapter 11 of the Bankruptcy Code (“Holdings”), the financial institutions or other entities from time to time parties to this Agreement as lenders (the “Lenders”) and Jefferies Finance LLC, as Administrative Agent and Collateral Agent.

 

WHEREAS, on June 15, 2022 (the “Petition Date”), Holdings, the Borrower and certain of the Borrower’s Subsidiaries (each, a “Debtor” and collectively, the “Debtors”) filed voluntary petitions with the Bankruptcy Court initiating their respective cases that are pending under chapter 11 of the Bankruptcy Code (each case of the Borrower and each other Debtor, a “Case” and collectively, the “Cases”) and have continued in the possession of their assets and the management of their business pursuant to Section 1107 and 1108 of the Bankruptcy Code;

 

WHEREAS, Holdings, in its capacity as foreign representative on behalf of the Debtors, will file an application with the Ontario Superior Court of Justice (Commercial List) in Toronto, Ontario, Canada (the “Canadian Court”) under Part IV of the Companies’ Creditors Arrangement Act (Canada), R.S.C. 1985, c. C-36, as amended (the “CCAA”) to recognize the Cases as “foreign main proceedings” and grant certain customary related relief (the “Canadian Recognition Proceedings”);

 

WHEREAS, the Borrower has requested that the Lenders provide a superpriority senior secured debtor-in-possession term loan credit facility in an aggregate principal amount not to exceed $575,000,000 (the “DIP Facility”), consisting of $375,000,000 in term loan commitments in respect of Initial Draw T-1 Loans to be made in a single draw on the Initial Draw T-1 Availability Date and $200,000,000 in delayed draw term loan commitments in respect of Delayed Draw T-2 Loans, with all of the Borrower’s obligations under the DIP Facility to be guaranteed by each Guarantor, and the Lenders are willing to extend such credit to Borrower on the terms and subject to the conditions set forth herein;

 

WHEREAS, the relative priority of the DIP Facility with respect to the Collateral granted as security for the payment and performance of the Obligations shall be as set forth in the Interim Order and the Final Order, in each case, upon entry thereof by the Bankruptcy Court, and in the Security Documents;

 

WHEREAS, all of the claims and the Liens granted under the Orders and the Loan Documents to the Agents, the Lenders and the other Secured Parties in respect of the DIP Facility shall be subject to the Carve-Out; and

 

WHEREAS, the Borrower and the Guarantors are engaged in related businesses, and each Guarantor will derive substantial direct and indirect benefit from the making of the extensions of credit to the Borrower under this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

 

SECTION I.     DEFINITIONS

 

1.1       Defined Terms. As used in this Agreement, the terms listed in this Section 1.1 shall have the respective meanings set forth in this Section 1.1.

 

1 

 

ABR”: for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus ½ of 1% and (c) the Adjusted Term SOFR Rate for a one month Interest Period as published two (2) U.S. Government Securities Business Days prior to such day plus 1.00%; provided that, for purposes of this definition, the Adjusted Term SOFR Rate for any day shall be based on the Term SOFR Reference Rate at approximately 5:00 a.m. Chicago time on such day (or any amended publication time for the Term SOFR Reference Rate, as specified by the Term SOFR Administrator in the Term SOFR Reference Rate methodology). Any change in the ABR due to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted Term SOFR Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted Term SOFR Rate, respectively. If the ABR is being used as an alternate rate of interest pursuant to Section 2.17 (for the avoidance of doubt, only until the Benchmark Replacement has been determined pursuant to Section 2.17(b)), then the ABR shall be the greater of clause (a) and (b) above and shall be determined without reference to clause (c) above. For the avoidance of doubt, if the ABR as determined pursuant to the foregoing would be less than 1.00%, such rate shall be deemed to be 1.00% for purposes of this Agreement.

 

ABR Borrowing”: a Borrowing comprised of ABR Loans.

 

ABR Loan”: each Loan bearing interest based on the ABR.

 

ABR Term SOFR Determination Day”: as defined in the definition of “Term SOFR”.

 

Acceptable Confirmation Order”: an order of the Bankruptcy Court confirming an Acceptable Plan of Reorganization, in form and substance satisfactory to the Required Lenders and (solely with respect to its own treatment) the Administrative Agent in their sole discretion (as the same may be amended, supplemented, or modified from time to time after entry thereof with the consent of the Required Lenders and the (solely with respect to its own treatment) Administrative Agent in their sole discretion).

 

Acceptable Disclosure Statement”: the disclosure statement relating to an Acceptable Plan of Reorganization in form and substance acceptable to the Required Lenders and (solely with respect to its own treatment) the Administrative Agent.

 

Acceptable Disclosure Statement Order”: an order of the Bankruptcy Court approving an Acceptable Disclosure Statement, in form and substance satisfactory to the Required Lenders and (solely with respect to its own treatment) the Administrative Agent in their sole discretion (as the same may be amended, supplemented, or modified from time to time after entry thereof with the consent of the Required Lenders and (solely with respect to its own treatment) the Administrative Agent in their sole discretion).

 

Acceptable Plan of Reorganization”: a Chapter 11 Plan for each of the Cases that, upon the consummation thereof, provides for (a) the termination of all unused Commitments hereunder and the indefeasible payment in full in cash of all of the Obligations under the Loan Documents and (b) the indefeasible payment in full in cash of all of the “First Lien Obligations” under and as defined in the Prepetition BrandCo Facility Agreement or such other treatment as is agreed to by holders of at least two-thirds in aggregate principal amount of such claims.

 

Acceptable Restructuring Support Agreement”: a restructuring support agreement that contemplates the consummation of an Acceptable Plan of Reorganization in compliance with all Milestones relating to such Acceptable Plan of Reorganization.

 

2 

 

Ad Hoc Group”: the group of lenders party to the Prepetition BrandCo Facility Agreement identified on Schedule 1.1(a) (including Affiliates and commonly advised or managed funds and institutions).

 

Ad Hoc Group Advisors”: Davis Polk, Centerview Partners LLC, Kobre & Kim LLP and each local or special counsel to the Ad Hoc Group.

 

Additional BrandCo Contribution Agreements”: the Additional BrandCo Upper Tier Contribution Agreement and the Additional BrandCo Lower Tier Contribution Agreements.

 

Additional BrandCo License Agreements”: the following agreements, each dated as of May 7, 2020: (i) Almay Intellectual Property License Agreement, by and among Almay BrandCo and the Borrower, (ii) Charlie Intellectual Property License Agreement, by and among Charlie BrandCo and the Borrower, (iii) CND Intellectual Property License Agreement, by and among CND BrandCo and the Borrower, (iv) Curve Intellectual Property License Agreement, by and among Curve BrandCo and the Borrower, (v) Elizabeth Arden Intellectual Property License Agreement, by and among Elizabeth Arden BrandCo and the Borrower, (vi) Giorgio Beverly Hills Intellectual Property License Agreement, by and among Giorgio Beverly Hills BrandCo and the Borrower, (vii) Halston Intellectual Property License Agreement, by and among Halston BrandCo and the Borrower, (viii) Jean Nate Intellectual Property License Agreement, by and among Jean Nate BrandCo and the Borrower, (ix) Mitchum Intellectual Property License Agreement, by and among Mitchum BrandCo and the Borrower, (x) Multicultural Group Intellectual Property License Agreement, by and among Multicultural Group BrandCo and the Borrower, (xi) PS Intellectual Property License Agreement, by and among PS BrandCo and the Borrower and (xii) White Shoulders Intellectual Property License Agreement, by and among White Shoulders BrandCo and the Borrower, in each case, as the same may be amended, supplemented, waived or otherwise modified from time to time.

 

Additional BrandCo Lower Tier Contribution Agreements”: the following agreements, each dated as of May 7, 2020: (i) Almay Lower Tier Transfer and Contribution Agreement, by and among BrandCo Cayman Holdings and Almay BrandCo, (ii) Charlie Lower Tier Transfer and Contribution Agreement, by and among BrandCo Cayman Holdings and Charlie BrandCo, (iii) CND Lower Tier Transfer and Contribution Agreement, by and among BrandCo Cayman Holdings and CND BrandCo, (iv) Curve Lower Tier Transfer and Contribution Agreement, by and among BrandCo Cayman Holdings and Curve BrandCo, (v) Elizabeth Arden Lower Tier Transfer and Contribution Agreement, by and among BrandCo Cayman Holdings and Elizabeth Arden BrandCo, (vi) Giorgio Beverly Hills Lower Tier Transfer and Contribution Agreement, by and among BrandCo Cayman Holdings and Giorgio Beverly Hills BrandCo, (vii) Halston Lower Tier Transfer and Contribution Agreement, by and among BrandCo Cayman Holdings and Halston BrandCo, (viii) Jean Nate Lower Tier Transfer and Contribution Agreement, by and among BrandCo Cayman Holdings and Jean Nate BrandCo, (ix) Mitchum Lower Tier Transfer and Contribution Agreement, by and among BrandCo Cayman Holdings and Mitchum BrandCo, (x) Multicultural Group Lower Tier Transfer and Contribution Agreement, by and among BrandCo Cayman Holdings and Multicultural Group BrandCo, (xi) PS Lower Tier Transfer and Contribution Agreement, by and among BrandCo Cayman Holdings and PS BrandCo and (xii) White Shoulders Lower Tier Transfer and Contribution Agreement, by and among BrandCo Cayman Holdings and White Shoulders BrandCo, in each case, as the same may be amended, supplemented, waived or otherwise modified from time to time.

 

Additional BrandCo Upper Tier Contribution Agreement”: the Upper Tier Transfer and Contribution Agreement by and among the transferor entities party thereto and BrandCo Cayman Holdings, dated as of May 7, 2020, as the same may be amended, supplemented, waived or otherwise modified from time to time.

 

3 

 

Adjusted Term SOFR Rate”: for (a) an Interest Period of one month or less, an interest rate per annum equal to (i) Term SOFR for such Interest Period, plus (ii) 0.10%, (b) an Interest Period of greater than one month but less than or equal to three months, an interest rate per annum equal to (i) Term SOFR for such Interest Period, plus (ii) 0.10%, and (c) an Interest Period of greater than three but less than or equal to six months, an interest rate per annum equal to (i) Term SOFR for such Interest Period, plus (ii) 0.10%; provided that in the case of each of the foregoing clauses (a), (b) and (c), if the Adjusted Term SOFR Rate as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.

 

Administrative Agent”: Jefferies Finance LLC, as the administrative agent for the Lenders under this Agreement and the other Loan Documents, together with any of its successors and permitted assigns in such capacity in accordance with Section 9.9.

 

Affected Financial Institution”: (a) any EEA Financial Institution or (b) any UK Financial Institution.

 

Affiliate”: as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, to direct or cause the direction of the management and policies of such Person, in either case whether by contract or otherwise. For purposes of this Agreement and the other Loan Documents, Jefferies LLC and its Affiliates shall be deemed to be Affiliates of Jefferies Finance LLC and its Affiliates.

 

Agents”: the collective reference to the Collateral Agent, the Administrative Agent, the Lead Arranger and the Bookrunner.

 

Agreed Purposes”: as defined in Section 10.14.

 

Agreement”: this Superpriority Senior Secured Debtor-In-Possession Credit Agreement, as amended, supplemented, waived or otherwise modified from time to time.

 

American Crew License Agreement”: the Amended and Restated Intellectual Property License Agreement, dated as of May 7, 2020, by and among American Crew BrandCo as licensor and the Borrower as licensee, as the same may be amended, supplemented, waived or otherwise modified from time to time.

 

American Crew Lower Tier Contribution Agreement”: the Lower Tier Transfer and Contribution Agreement by and among BrandCo Cayman Holdings and American Crew BrandCo, dated as of August 6, 2019, as the same may be amended, supplemented, waived or otherwise modified from time to time.

 

American Crew Non-Exclusive License”: the Amended and Restated Non-Exclusive License Agreement, dated as of May 7, 2020, by and among the Borrower as licensor and American Crew BrandCo as licensee, as the same may be amended, supplemented, waived or otherwise modified from time to time.

 

American Crew Products”: the consumer good products sold under the brand name “American Crew”.

 

American Crew Upper Tier Contribution Agreement”: the Upper Tier Transfer and Contribution Agreement by and among Beautyge Brands USA, Inc. as transferor, the Borrower and BrandCo Cayman Holdings, dated as of August 6, 2019, as the same may be amended, supplemented, waived or otherwise modified from time to time.

 

4 

 

Anti-Corruption Law”: the United States Foreign Corrupt Practices Act of 1977, as amended, the U.K. Bribery Act 2010, or any applicable law or regulation implementing the OECD Convention on Combatting Bribery of Foreign Public Officials.

 

Applicable Margin”: (a) for SOFR Loans, 7.75% and (b) for ABR Loans, 6.75%.

 

Approved Bankruptcy Court Order”: (a) each of the Orders, as such order is amended and in effect from time to time in accordance with this Agreement, (b) any other order entered by the Bankruptcy Court regarding, relating to or impacting (i) any rights or remedies of any Secured Party, (ii) the Loan Documents (including the Loan Parties’ obligations thereunder), (iii) the Collateral, any Liens thereon or any Superpriority Claims (including, without limitation, any sale or other disposition of Collateral or the priority of any such Liens or Superpriority Claims), (iv) use of cash collateral, (v) debtor-in-possession financing, (vi) adequate protection or otherwise relating to any Prepetition Secured Indebtedness or (vii) any Chapter 11 Plan, in the case of each of the foregoing clauses (i) through (vii), that (x) is in form and substance satisfactory to the Administrative Agent (with respect to its own treatment) and the Required Lenders, (y) has not been vacated, reversed or stayed and (z) has not been amended or modified in a manner adverse to the rights of the Lenders except as agreed in writing by Administrative Agent (solely with respect to its own treatment) and the Required Lenders in their sole discretion, and (c) any other order entered by the Bankruptcy Court that (i) is in form and substance reasonably satisfactory to the Administrative Agent (solely with respect to its own treatment) and the Required Lenders, (ii) has not been vacated, reversed or stayed and (iii) has not been amended or modified except in a manner reasonably satisfactory to the Administrative Agent (solely with respect to its own treatment) and the Required Lenders.

 

Approved Budget”: as defined in Section 6.1(d).

 

Approved Fund”: as defined in Section 10.6(b).

 

Asset Sale”: any Disposition of Property or exclusive licenses or series of related Dispositions of Property or exclusive licenses by the Borrower or any of its Subsidiaries, other than any such Disposition or series of related Dispositions of inventory in the ordinary course of business.

 

Assignee”: as defined in Section 10.6(b).

 

Assignment and Assumption”: an Assignment and Assumption, substantially in the form of Exhibit D or such other form reasonably acceptable to the Administrative Agent and the Borrower.

 

Available Tenor” shall mean, as of any date of determination and with respect to the then-current Benchmark, as applicable, any tenor for such Benchmark or payment period for interest calculated with reference to such Benchmark, as applicable, that is or may be used for determining the length of an Interest Period pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to clause (f) of Section 2.17.

 

Backstop Lender”: at any time, any Lender (a) that is a Person listed on Schedule 1.1(a), (b) that is an Affiliate of or under common management with a Person listed on Schedule 1.1(a), (c) that is an entity or an Affiliate of an entity that administers or manages a Person listed on Schedule 1.1(a) or (d) that is an entity or an Affiliate of an entity that is the investment advisor to a Person listed on Schedule 1.1(a).

 

5 

 

Backstop Premium”: as defined in Section 2.9(b).

 

Bail-In Action”: the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.

 

Bail-In Legislation”: (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).

 

Bankruptcy Code”: Title 11, U.S.C., as now or hereafter in effect, or any successor thereto.

 

Bankruptcy Court”: the United States Bankruptcy Court for the Southern District for New York or any other court having jurisdiction over the Cases from time to time.

 

Bankruptcy Law”: each of (i) the Bankruptcy Code, (ii) any domestic or foreign law relating to liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, administration, insolvency, reorganization, debt adjustment, receivership or similar debtor relief from time to time in effect and affecting the rights of creditors generally (including without limitation any plan of arrangement provisions of applicable corporation statutes), and (iii) any order made by a court of competent jurisdiction in respect of any of the foregoing.

 

Benchmark” shall mean, initially, Term SOFR; provided that if a replacement of the Benchmark has occurred pursuant to Section 2.17, then “Benchmark” shall mean the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to clause (b) of Section 2.17.

 

Benchmark Replacement”: for any Available Tenor, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable Benchmark Replacement Date:

 

(1)       the sum of: (a) Daily Simple SOFR and (b) the related Benchmark Replacement Adjustment;

 

(2)       the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for syndicated credit facilities denominated in the applicable currency at such time and (b) the related Benchmark Replacement Adjustment;

 

If the Benchmark Replacement as determined pursuant to clause (1) or (2) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents. If the Benchmark Replacement is Daily Simple SOFR plus the related Benchmark Replacement Adjustment, all interest payments will be payable on a quarterly basis.

 

6 

 

Benchmark Replacement Adjustment”: with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for syndicated credit facilities denominated in the applicable currency at such time.

 

Benchmark Replacement Conforming Changes”: with respect to either the use or administration of Term SOFR or the use, administration, adoption or implementation of any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “ABR”, the definition of “Business Day”, the definition of “U.S. Government Securities Business Day”, the definition of “Interest Period” or any similar or analogous definition, timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Administrative Agent decides in its reasonable discretion may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides in its reasonable discretion that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines in its reasonable discretion that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

 

Benchmark Replacement Date”: the earliest to occur of the following events with respect to the then-current Benchmark:

 

(1)       in the case of clause (1) or (2) of the definition of “Benchmark Transition Event”, the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or

 

(2)       in the case of clause (3) of the definition of “Benchmark Transition Event”, the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by or on behalf of the administrator of such Benchmark (or such component thereof) or the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be non-representative or non-compliant with or non-aligned with the International Organization of Securities Commissions (IOSCO) Principles for Financial Benchmarks; provided that such non-representativeness, non-compliance or non-alignment will be determined by reference to the most recent statement or publication referenced in such clause (3) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.

 

7 

 

For the avoidance of doubt, the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).

 

Benchmark Transition Event”: with respect to any Benchmark, the occurrence of one or more of the following events with respect to the then-current Benchmark:

 

(1)       a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);

 

(2)       a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Board, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or

 

(3)       a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer representative or in compliance with or aligned with the International Organization of Securities Commissions (IOSCO) Principles for Financial Benchmarks.

 

For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).

 

Benchmark Unavailability Period”: with respect to any Benchmark, the period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.17 and (y) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.17.

 

Benefited Lender”: as defined in Section 10.7(a).

 

8 

 

Board”: the Board of Governors of the Federal Reserve System of the United States (or any successor).

 

Board of Directors”: (a) with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board; (b) with respect to a partnership, the board of directors of the general partner of the partnership, or any committee thereof duly authorized to act on behalf of such board or the board or committee of any Person serving a similar function; (c) with respect to a limited liability company, the managing member or members or any controlling committee of managing members thereof or any Person or Persons serving a similar function; and (d) with respect to any other Person, the board or committee of such Person serving a similar function.

 

Bookrunner”: Jefferies Finance LLC, in its capacity as sole bookrunner.

 

Borrower”: as defined in the preamble hereto.

 

Borrower Materials”: as defined in Section 10.2(c).

 

Borrowing”: Loans made, converted or continued on the same date and, in the case of SOFR Loans, as to which a single Interest Period is in effect.

 

Borrowing Date”: any Business Day specified by the Borrower as a date on which the Borrower requests the relevant Lenders to make Loans hereunder.

 

BrandCo(s)”: each of (i) Beautyge II, LLC, a Delaware limited liability company (“American Crew BrandCo”), (ii) BrandCo Almay 2020 LLC, a Delaware limited liability company (“Almay BrandCo”), (iii) BrandCo Charlie 2020 LLC, a Delaware limited liability company (“Charlie BrandCo”), (iv) BrandCo CND 2020 LLC, a Delaware limited liability company (“CND BrandCo”), (v) BrandCo Curve 2020 LLC, a Delaware limited liability company (“Curve BrandCo”), (vi) BrandCo Elizabeth Arden 2020 LLC, a Delaware limited liability company (“Elizabeth Arden BrandCo”), (vii) BrandCo Giorgio Beverly Hills 2020 LLC, a Delaware limited liability company (“Giorgio Beverly Hills BrandCo”), (viii) BrandCo Halston 2020 LLC, a Delaware limited liability company (“Halston BrandCo”), (ix) BrandCo Jean Nate 2020 LLC, a Delaware limited liability company (“Jean Nate BrandCo”), (x) BrandCo Mitchum 2020 LLC, a Delaware limited liability company (“Mitchum BrandCo”), (xi) BrandCo Multicultural Group 2020 LLC, a Delaware limited liability company (“Multicultural Group BrandCo”), (xii) BrandCo PS 2020 LLC, a Delaware limited liability company (“PS BrandCo”) and (xiii) BrandCo White Shoulders 2020 LLC, a Delaware limited liability company (“White Shoulders BrandCo”).

 

BrandCo Cayman Holdings”: Beautyge I, an exempted company incorporated in the Cayman Islands.

 

BrandCo Collateral”: (i) all the “Collateral” as defined in any BrandCo Security Document, (ii) 100% of the Capital Stock of any BrandCo, (iii) all the “Collateral” as defined in the BrandCo Stock Pledge Agreement, and (iv) any other Property of any BrandCo Entity that constitutes Collateral.

 

BrandCo Contribution Agreements”: the American Crew Upper Tier Contribution Agreement, the American Crew Lower Tier Contribution Agreement and the Additional BrandCo Contribution Agreements.

 

BrandCo Entities”: each BrandCo and BrandCo Cayman Holdings.

 

9 

 

BrandCo License Agreements”: the American Crew License Agreement and the Additional BrandCo License Agreements.

 

BrandCo License Documents” the BrandCo License Agreements and the American Crew Non-Exclusive License.

 

BrandCo Lower Tier Contribution Agreements”: the American Crew Lower Tier Contribution Agreement and the Additional BrandCo Lower Tier Contribution Agreements.

 

BrandCo Permitted Liens”: (a) Liens arising under or permitted by the Loan Documents, (b) Liens arising under law or pursuant to documentation governing permitted accounts in connection with each BrandCo’s cash management in the ordinary course and (c) Liens on assets of the BrandCo Entities permitted pursuant to Section 7.3(y).

 

BrandCo Security Agreement”: the BrandCo Guarantee and Security Agreement, substantially in the form of Exhibit M, among the BrandCo Entities and the Collateral Agent, as the same may be amended, supplemented, waived or otherwise modified from time to time.

 

BrandCo Security Documents”: the BrandCo Security Agreement, the BrandCo Stock Pledge Agreement and all other security documents (including any Mortgages) hereafter delivered to the Administrative Agent or the Collateral Agent purporting to grant a Lien on any Property by any BrandCo Entity.

 

BrandCo Stock Pledge Agreement”: the BrandCo Stock Pledge Agreement, substantially in the form of Exhibit N, among the Loan Parties party thereto and the Collateral Agent, as the same may be amended, supplemented, waived or otherwise modified from time to time.

 

BrandCo Transaction Documents”: collectively, the BrandCo Contribution Agreements, the BrandCo Security Documents and the BrandCo License Documents.

 

BrandCo Upper Tier Contribution Agreements”: the American Crew Upper Tier Contribution Agreement and the Additional BrandCo Upper Tier Contribution Agreement.

 

Budget”: the Initial Budget, as amended, modified, supplemented or replaced from time to time in accordance with Section 6.1(d).

 

Budget Variance Report”: a weekly variance report prepared by a Responsible Officer of the Borrower, comparing for each applicable Test Period the actual results against anticipated results under the applicable Approved Budget(s), on an aggregate basis and in the same level of detail set forth in the Approved Budget(s), together with a written explanation for all variances of greater than the applicable permitted variance for any given testing period and such other information as the Administrative Agent or the Required Lenders may reasonably request.

 

Budget Variance Test Date”: as defined in Section 6.1(e).

 

Business”: the business activities and operations of the Borrower and/or its Subsidiaries on the Closing Date, after giving effect to the Transactions.

 

Business Day”: any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the laws of, or are in fact closed in, the state where the Administrative Agent’s office is located.

 

10 

 

Canadian Collateral”: the Collateral of the Debtors located in Canada.

 

Canadian Court”: as defined in the recitals to this Agreement.

 

Canadian Debtor”: any Subsidiary that is a Debtor located in Canada.

 

Canadian DIP Recognition Order”: the Canadian Interim DIP Recognition Order, unless the Canadian Final DIP Recognition Order shall have been issued by the Canadian Court, in which case it means the Canadian Final DIP Recognition Order.

 

Canadian Final DIP Recognition Order”: an order of the Canadian Court in the Canadian Recognition Proceedings, which order shall recognize the Final Order and shall be reasonably satisfactory in form and substance to the Administrative Agent and the Required Lenders, each acting reasonably, and as the same shall be amended, supplemented, or modified from time to time after entry thereof with the consent of the Administrative Agent and the Required Lenders, each acting reasonably.

 

Canadian Initial Recognition Order”: an order of the Canadian Court, which order shall, among other things, recognize the Cases as “foreign main proceedings” under Part IV of the CCAA, grant a stay of proceedings in Canada and commence the Canadian Recognition Proceedings, such order to be in form and substance reasonably satisfactory to the Administrative Agent and the Required Lenders, each acting reasonably, and as the same may be amended, supplemented or modified from time to time after entry thereof with the consent of the Administrative Agent and the Required Lenders, each acting reasonably.

 

Canadian Interim DIP Recognition Order”: an order of the Canadian Court in the Canadian Recognition Proceedings, which order shall, among other things, recognize the Interim Order and provide for a super priority charge over the Canadian Collateral in respect of the Collateral Agent’s Liens consistent with the liens and charges created by or set forth in the Interim DIP Order and shall be reasonably satisfactory in form and substance to the Administrative Agent and the Required Lenders, each acting reasonably, and as the same may be amended, supplemented, or modified from time to time after entry thereof with the consent of the Administrative Agent and the Required Lenders, each acting reasonably. For the avoidance of doubt, the Canadian Interim DIP Recognition Order may be part of the Canadian Supplemental Order.

 

Canadian Recognition Proceedings”: as defined in the recitals to this Agreement.

 

Canadian Supplemental Order”: an order of the Canadian Court in the Recognition Proceedings, which order shall grant such additional relief as is customary in the proceedings under Part IV of the CCAA and shall be reasonably satisfactory in form and substance to the Administrative Agent and the Required Lenders, each acting reasonably, and as the same may be amended, supplemented, or modified from time to time after entry thereof with the consent of the Administrative Agent and the Required Lenders, each acting reasonably.

 

Capital Lease Obligations”: as to any Person, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal Property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP and, for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP, provided, that for the purposes of this definition, “GAAP” shall mean generally accepted accounting principles in the United States as in effect on the Closing Date.

 

11 

 

Capital Stock”: any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, and any and all equivalent ownership interests in a Person (other than a corporation).

 

Carve-Out”: as defined in the Interim Order or the Final Order, as applicable.

 

Cases”: as defined in the recitals to this Agreement.

 

Cash Equivalents”:

 

(a)       direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within 18 months from the date of acquisition thereof;

 

(b)       certificates of deposit, time deposits and eurodollar time deposits with maturities of 18 months or less from the date of acquisition, bankers’ acceptances with maturities not exceeding 18 months and overnight bank deposits, in each case, with any domestic commercial bank having capital and surplus at the date of acquisition thereof in excess of $250,000,000;

 

(c)       repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clauses (a) and (b) above entered into with any financial institution meeting the qualifications specified in clause (b) above;

 

(d)       commercial paper having a rating of at least A-1 from S&P or P-1 from Moody’s (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another rating agency) and maturing within 18 months after the date of acquisition and Indebtedness and preferred stock issued by Persons with a rating of “A” or higher from S&P or “A2” or higher from Moody’s with maturities of 18 months or less from the date of acquisition;

 

(e)       readily marketable direct obligations issued by or directly and fully guaranteed or insured by any state of the United States or any political subdivision thereof having one of the two highest rating categories obtainable from either Moody’s or S&P with maturities of 18 months or less from the date of acquisition;

 

(f)        marketable short-term money market and similar securities having a rating of at least P-1 or A-1 from Moody’s or S&P, respectively (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another rating agency) and in each case maturing within 18 months after the date of creation or acquisition thereof;

 

(g)       Investments with average maturities of 12 months or less from the date of acquisition in money market funds rated AA- (or the equivalent thereof) or better by S&P or Aa3 (or the equivalent thereof) or better by Moody’s;

 

(h)       (x) such local currencies in those countries in which the Borrower and its Subsidiaries transact business from time to time in the ordinary course of business and (y) investments of comparable tenor and credit quality to those described in the foregoing clauses (a) through (g) or otherwise customarily utilized in countries in which the Borrower and its Subsidiaries operate for short term cash management purposes; and

 

12 

 

(i)        Investments in funds which invest substantially all of their assets in Cash Equivalents of the kinds described in clauses (a) through (h) of this definition.

 

Cash Management Obligations”: obligations in respect of any overdraft or other liabilities arising from treasury, depository and cash management services, credit or debit card, or any automated clearing house transfers of funds.

 

Cash Management Order”: an order of the Bankruptcy Court entered in the Cases, together with all extensions, modifications and amendments thereto, in form and substance acceptable to the Required Lenders, which among other matters authorizes the Debtors to maintain their existing cash management and treasury arrangements or such other arrangements as shall be reasonably acceptable to the Required Lenders in all material respects.

 

CCAA Charges”: (a) the administration charge in the maximum amount of CDN$1,500,000 granted by the Canadian Court in the Canadian Recognition Proceedings against the Canadian Collateral to secure the fees of Canadian professionals; and (b) the charges granted by the Canadian Court in the Canadian Recognition Proceedings against the Canadian Collateral in respect of the DIP Facility, the DIP ABL Facility and the Intercompany DIP Facility.

 

Certificated Security”: as defined in the Guarantee and Collateral Agreement.

 

Chapter 11 Plan”: a plan of reorganization in any or all of the Cases.

 

Charges”: as defined in Section 10.20.

 

Chattel Paper”: as defined in the Guarantee and Collateral Agreement.

 

Closing Date”: June 17, 2022.

 

Code”: the Internal Revenue Code of 1986, as amended from time to time (unless otherwise indicated).

 

Collateral”: as the term “Term DIP Collateral” is defined in the Interim Order (and, when applicable, the Final Order) and words of similar intent, and in any of the Security Documents, and shall include all present and after acquired assets and property, whether real, personal, tangible, intangible or mixed of the Loan Parties, wherever located, on which Liens are or are purported to be granted pursuant to the Orders, in the case of such collateral located in Canada, the Canadian DIP Recognition Order and/or the Security Documents to secure the payment and performance of the Obligations.

 

Collateral Agent”: Jefferies Finance LLC, in its capacity as collateral agent for the Secured Parties under this Agreement and the Security Documents, together with any of its successors and permitted assigns in such capacity in accordance with Section 9.9.

 

Commitment”: an Initial Draw T-1 Commitment, a Delayed Draw T-2 Commitment and/or an Incremental Commitment, as the context may require.

 

Committed Loan Notice”: a request by the Borrower in accordance with the terms of Section 2.2 and substantially in the form of Exhibit A or another form approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent).

 

13 

 

Commodity Exchange Act”: the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

 

Commonly Controlled Entity”: an entity, whether or not incorporated, that is under common control with any Loan Party within the meaning of Section 4001 of ERISA or is part of a group that includes any Loan Party and that is treated as a single employer under Section 414(b), (c), (m) or (o) of the Code.

 

Company”: as defined in the preamble hereto.

 

Company Tax Sharing Agreement”: the Tax Sharing Agreement, dated as of March 26, 2004, among Holdings, the Company and certain of its Subsidiaries, as amended, supplemented or otherwise modified from time to time in accordance with the provisions of Section 7.15.

 

Compliance Certificate”: a certificate duly executed by a Responsible Officer substantially in the form of Exhibit B or such other form reasonably acceptable to the Administrative Agent and the Borrower.

 

Confidential Information”: as defined in Section 10.14.

 

Contractual Obligation”: as to any Person, any provision of any security issued by such Person or of any written or recorded agreement, instrument or other undertaking to which such Person is a party or by which it or any of its Property is bound.

 

Core Products”: styling and grooming products, color cosmetics, skin care products, hair care products and accessories, or other beauty and personal care products, including fragrances.

 

Corresponding Tenor”: with respect to any Available Tenor, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.

 

Daily Simple SOFR” shall mean, for any day, SOFR, with the conventions for this rate (which will include a lookback) being established by the Administrative Agent in accordance with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for syndicated business loans; provided, that if the Administrative Agent decides that any such convention is not administratively feasible for the Administrative Agent, then the Administrative Agent may establish another convention in its reasonable discretion.

 

Davis Polk”: Davis Polk & Wardwell LLP.

 

Debtor” or “Debtors”: as defined in the recitals to this Agreement.

 

Debtor Relief Laws”: (a) the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect; and (b) the CCAA, the Bankruptcy and Insolvency Act (Canada), RSC 1985, c. B-3, as amended, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of Canada or the provinces or territories thereof.

 

14 

 

Default”: any of the events specified in Section 8.1, whether or not any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

 

Default Rate”: as defined in Section 2.15(c).

 

Defaulting Lender”: any Lender that (a) has failed, within two (2) Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans or (ii) pay over to any Loan Party any other amount required to be paid by it hereunder, unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, (b) has notified the Administrative Agent or the Borrower in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement or generally under other agreements in which it commits to extend credit (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after request by the Administrative Agent or the Borrower, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans under this Agreement, unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable Default or Event of Default, shall be specifically identified in such writing) has not been satisfied; provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon the Administrative Agent’s or the Borrower’s, as applicable, receipt of such certification in form and substance satisfactory to the Borrower or the Administrative Agent, as applicable, or (d) has become, or is a direct or indirect Subsidiary of any Person that is, the subject of (i) a Bail-In Action or (ii) a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business or assets appointed for it, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such capacity, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment; provided that, none of the foregoing events or circumstances under this clause (ii) shall result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, unless such ownership interest results in or provides such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of the foregoing clauses shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender.

 

Delayed Draw T-2 Availability Date”: the first date on which the conditions set forth in Section 5.2 are satisfied.

 

Delayed Draw T-2 Commitment”: with respect to any Lender, the commitment (if any) of such Lender to make Delayed Draw T-2 Loans to the Borrower in an aggregate principal amount not to exceed the amount set forth opposite such Lender’s name on Schedule 2.1(T-2), as such commitment may be (a) terminated pursuant to Section VIII, (b) terminated or reduced pursuant to Section 2.1(b) or (c) modified from time to time to reflect any assignments permitted by Section 10.6. The aggregate amount of the Lenders’ Delayed Draw T-2 Commitments on the Closing Date is $200,000,000.

 

15 

 

Delayed Draw T-2 Lenders”: the Persons listed on Schedule 2.1(T-2) and any other Person that shall have become a party to this Agreement pursuant to an Assignment and Assumption in accordance with the terms of Section 10.6, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption in accordance with the terms of Section 10.6.

 

Delayed Draw T-2 Loans”: any Loan made pursuant to Section 2.1(b).

 

Designated Jurisdiction”: any country or territory that is the target of comprehensive Sanctions (as of the date of this Agreement, Iran, Syria, Cuba, North Korea, and Crimea, the so-called Donetsk People’s Republic and the so-called Luhansk People’s Republic regions of Ukraine).

 

DIP ABL Facility”: the senior secured superpriority debtor-in-possession asset-based credit facility made available to the Borrower pursuant to the DIP ABL Facility Agreement.

 

DIP ABL Facility Agreement”: a senior secured superpriority debtor-in-possession asset-based revolving credit agreement (if any) by and among the Borrower, as the borrower, the guarantors from time to time party thereto, the several banks and financial institutions or entities parties thereto as lenders, and MidCap Funding IV Trust, as administrative agent and collateral agent, as amended, restated, replaced, supplemented or otherwise modified from time to time, including, as the context may require, any extensions of credit made from time to time thereunder in accordance with the Loan Documents.

 

DIP Facility”: as defined in the recitals to this Agreement.

 

Disinterested Director”: as defined in Section 7.9.

 

Disposition”: with respect to any Property, any sale, sale and leaseback, assignment, conveyance, transfer, exclusive license or other disposition thereof, in each case, to the extent the same constitutes a complete sale, sale and leaseback, assignment, conveyance, transfer or other disposition, as applicable. The terms “Dispose” and “Disposed of” shall have correlative meanings.

 

Disqualified Capital Stock”: Capital Stock that (a) requires the payment of any dividends (other than dividends payable solely in shares of non-Disqualified Capital Stock), (b) matures or is mandatorily redeemable or subject to mandatory repurchase or redemption or repurchase at the option of the holders thereof (other than solely for non-Disqualified Capital Stock), in each case in whole or in part and whether upon the occurrence of any event, pursuant to a sinking fund obligation on a fixed date or otherwise (including as the result of a failure to maintain or achieve any financial performance standards) or (c) are convertible or exchangeable, automatically or at the option of any holder thereof, into any Indebtedness, Capital Stock or other assets other than non-Disqualified Capital Stock (other than (i) upon payment in full of the Obligations (other than indemnification and other contingent obligations not yet due and owing) or (ii) upon a “change in control”; provided, that any payment required pursuant to this clause (ii) is subject to the prior repayment in full of the Obligations (other than indemnification and other contingent obligations not yet due and owing) that are then accrued and payable and the termination of the Commitments); provided, further, however, that if such Capital Stock is issued to any employee or to any plan for the benefit of employees of Holdings, the Borrower or the Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Capital Stock solely because it may be required to be repurchased by Holdings, the Borrower or a Subsidiary in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability.

 

16 

 

Disqualified Institution”: (i) those institutions identified by the Borrower in writing to the Administrative Agent prior to the Petition Date and (ii) business competitors of Holdings and its Subsidiaries identified by Borrower in writing to the Administrative Agent from time to time and, in the case of clauses (i) and (ii) any known Affiliates readily identifiable by name. A list of the Disqualified Institutions will be posted by the Administrative Agent on the Platform and available for inspection by all Lenders. Any designation of Disqualified Institutions by the Borrower at any time after the Closing Date in accordance with the foregoing shall not apply retroactively to disqualify any Person that has previously acquired an assignment or participation interest in the Loans or Commitments.

 

Dollars” and “$”: dollars in lawful currency of the United States.

 

Domestic Subsidiary”: any direct or indirect Subsidiary that (i) is organized under the laws of any jurisdiction within the United States and (ii) is not a direct or indirect Subsidiary of a Foreign Subsidiary.

 

EEA Financial Institution”: (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

 

EEA Member Country”: any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

 

EEA Resolution Authority”: any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

 

Elizabeth Arden Licensed Products”: as defined in Section 6.16.

 

Environmental Laws”: any and all laws, rules, orders, regulations, statutes, ordinances, codes or decrees (including principles of common law) of any international authority, foreign government, the United States, or any state, provincial, local, municipal or other Governmental Authority, regulating, relating to or imposing liability or standards of conduct concerning pollution, the preservation or protection of the environment, natural resources or human health and safety (as related to Releases of or exposure to Materials of Environmental Concern), as have been, are now, or at any time hereafter are, in effect.

 

Environmental Liability”: any liability, claim, action, suit, judgment or order under or relating to any Environmental Law for any damages, injunctive relief, losses, fines, penalties, fees, expenses (including reasonable fees and expenses of attorneys and consultants) or costs, whether contingent or otherwise, to the extent arising from or relating to: (a) non-compliance with any Environmental Law or any permit, license or other approval required thereunder, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Materials of Environmental Concern, (c) exposure to any Materials of Environmental Concern, (d) the Release or threatened Release of any Materials of Environmental Concern, (e) any investigation, remediation, removal, clean-up or monitoring required under Environmental Laws or required by a Governmental Authority (including without limitation Governmental Authority oversight costs that the party conducting the investigation, remediation, removal, clean-up or monitoring is required to reimburse) or (f) any contract, agreement or other consensual arrangement pursuant to which any Environmental Liability under clause (a) through (e) above is assumed or imposed.

 

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ERISA”: the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

EU Bail-In Legislation Schedule”: the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

 

Event of Default”: any of the events specified in Section 8.1; provided, that any requirement set forth therein for the giving of notice, the lapse of time, or both, has been satisfied.

 

Exchange Act”: the Securities Exchange Act of 1934, as amended.

 

Excluded Collateral”: as defined in Section 6.8(e); provided that the Borrower may designate in a written notice to the Administrative Agent any asset not to constitute “Excluded Collateral”, whereupon the Borrower shall be obligated to comply with the applicable requirements of Section 6.8 as if it were newly acquired.

 

Excluded Equity Securities”: (i) to the extent applicable law requires that any Subsidiary issue directors’ qualifying shares, such shares or nominee or other similar shares and (ii) any Capital Stock in joint ventures or other entities in which the Loan Parties directly own 50% or less of the Capital Stock, but only in the case of this clause (ii) if, and to the extent that, and for so long as granting a security interest or other Liens therein would violate applicable law or regulation or a shareholder agreement or other contractual obligation (in each case, after giving effect to Section 9-406(d), 9-407(a) or 9-408 of the Uniform Commercial Code, if and to the extent applicable, and other applicable law) binding on such Capital Stock and in effect on the Petition Date; provided that, in no event shall any equity securities or other Capital Stock be Excluded Equity Securities under any Loan Document if the issuer thereof is a Debtor.

 

Excluded Subsidiary”: any Subsidiary that is

 

(a)       for as long as the Foreign ABTL Facility is outstanding, any Foreign ABTL Loan Party and any Subsidiary of any Foreign ABTL Loan Party,

 

(b)       not wholly owned directly by the Borrower or one or more of its wholly owned Subsidiaries, but only if, and to the extent that, and for so long as the guaranteeing or granting of a Lien on its assets to secure obligations in respect of the DIP Facility would violate applicable law or regulation or a binding shareholder agreement or other contractual obligation in effect on the Petition Date (in each case, after giving effect to Section 9-406(d), 9-407(a) or 9-408 of the Uniform Commercial Code, if and to the extent applicable, and other applicable law),

 

(c)       any Subsidiary that is a Foreign Subsidiary or any Domestic Subsidiary of a Foreign Subsidiary on the Petition Date (other than, in each case, (i) a BrandCo Entity, (ii) a Foreign ABTL Loan Party or a Person that would be required to become a Foreign ABTL Loan Party pursuant to the Foreign ABTL Credit Agreement as in effect on the Petition Date, (iii) any other Subsidiary not identified as an Excluded Subsidiary on Schedule 4.14 and (iv) any other Subsidiary if, at any time after the Closing Date, the Administrative Agent (acting on the instructions of the Required Lenders, acting reasonably and in good faith), shall have notified the Borrower that such Subsidiary shall no longer constitute an Excluded Subsidiary pursuant to this clause (c)) or any other future Foreign Subsidiary or any Domestic Subsidiary of a Foreign Subsidiary if agreed by the Required Lenders,

 

(d)       [reserved],

 

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(e)       [reserved],

 

(f)        a Subsidiary that (i) is prohibited by any applicable Requirement of Law from guaranteeing or granting of a Lien on its assets to secure obligations in respect of the DIP Facility, but only if, and to the extent that, and for so long as, such prohibition remains in effect and applicable to such Subsidiary or (ii) which would require governmental (including regulatory) consent, approval, license or authorization to provide a guarantee or grant any Lien unless, such consent, approval, license or authorization has been received, but only if, and to the extent that, and for so long as such consent, approval, license or authorization has not been received and continues to be required,

 

(g)       a Subsidiary (other than, for the avoidance of doubt, any Debtor) that is prohibited from guaranteeing or granting a Lien on its assets to secure obligations in respect of the DIP Facility by any Contractual Obligation in existence on the Petition Date (or, in the case of any newly-acquired Subsidiary, in existence at the time of acquisition thereof but not entered into in contemplation thereof and not created in contemplation of such guarantee), provided, that this clause (g) shall not be applicable if (1) the other party to such Contractual Obligation is a Loan Party, a wholly-owned Subsidiary of the Borrower or a Debtor or (2) consent has been obtained to provide such guarantee or such prohibition is otherwise no longer in effect, or

 

(h)       a Subsidiary (other than a BrandCo Entity) with respect to which a guarantee by it of, or granting a Lien on its assets to secure obligations in respect of, the DIP Facility would reasonably be expected to result in material adverse tax consequences (including as a result of Section 956 of the Code or any related provision) to Holdings, the Borrower and their respective Subsidiaries, taken as a whole, as agreed by the Borrower and the Required Lenders,

 

provided, that (x) if a Subsidiary executes the Guarantee and Collateral Agreement as a “Guarantor,” then it shall not constitute an “Excluded Subsidiary” and (y) the Borrower may designate in a written notice to the Administrative Agent a Subsidiary not to constitute an “Excluded Subsidiary” whereupon such Subsidiary shall be obligated to comply with the applicable requirements of Section 6.8 as if it were newly acquired; provided, further, that no Loan Party that is a Debtor or a Loan Party on the Closing Date may be designated an Excluded Subsidiary and each such Loan Party shall remain a Guarantor hereunder.

 

Notwithstanding the foregoing or anything else to the contrary, no Subsidiary that is a Debtor or a Loan Party or a BrandCo Entity shall be an Excluded Subsidiary under the Loan Documents.

 

Excluded Taxes”: any of the following Taxes imposed on or with respect to any Recipient or required to be withheld or deducted from a payment to any Recipient, (i) net income Taxes (however denominated), net profits Taxes, franchise Taxes, and branch profits Taxes (and net worth Taxes and capital Taxes imposed in lieu of net income Taxes), in each case, (A) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, if such Recipient is a Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (B) as a result of a present or former connection between such Recipient and the jurisdiction of the Governmental Authority imposing such Tax or any political subdivision or taxing authority thereof or therein (other than a connection arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document), (ii) any U.S. federal withholding Taxes (including backup withholding) imposed on amounts payable to or for the account of such Recipient with respect to an applicable interest in a Loan or Commitment or this Agreement pursuant to a law in effect on the date on which (A) such Recipient becomes a party to this Agreement (other than pursuant to an assignment requested by the Borrower under Section 2.24) or (B) if such Recipient is a Lender, such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.20, amounts with respect to such Taxes were payable either to such Recipient’s assignor immediately before such Recipient became a party hereto or, if such Recipient is a Lender, to such Lender immediately before it changed its lending office, (iii) Taxes attributable to such Recipient’s failure to comply with paragraphs (e) or (g), as applicable, of Section 2.20 and (iv) any withholding Taxes imposed under FATCA.

 

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Extraordinary Receipts”: an amount equal to (a) any cash payments or proceeds (including permitted Investments) received (directly or indirectly) by or on behalf of the Borrower or any of its Subsidiaries not in the ordinary course of business (and other than consisting of Net Cash Proceeds from an Asset Sale or any Recovery Event or in connection with any issuance or sale of debt securities or instruments or the incurrence of Indebtedness) in respect of (i) foreign, U.S. federal, state or local tax refunds (excluding for the avoidance of doubt, tariff refunds and value added tax refunds to the extent reflected in the Budget), (ii) pension plan reversions, (iii) judgments, proceeds of settlements or other consideration of any kind in connection with any cause of action (other than receipts from settlements with customers), (iv) indemnity payments (other than to the extent such indemnity payments are (A) immediately payable to a Person that is not an Affiliate of the Borrower or any of its Subsidiaries or (B) received by the Borrower or its Subsidiaries as reimbursement for any payment previously made to such Person) and (v) any purchase price adjustment received in connection with any purchase agreement to the extent not constituting Net Cash Proceeds, minus (b) any selling and settlement costs and out-of-pocket expenses (including reasonable broker’s fees or commissions and legal fees) and any taxes paid or reasonably estimated to be payable by the Borrower or any of its Subsidiaries (after taking into account any tax credits or deductions actually realized by the Borrower or any of its Subsidiaries with respect to the transactions described in clause (a) of this definition) in connection with the transactions described in clause (a) of this definition.

 

Facility Extension Option”: as defined in Section 2.6.

 

Fair Market Value”: with respect to any asset (including any Capital Stock of any Person), the fair market value thereof as determined in good faith by the Borrower, the price at which a willing buyer, not an Affiliate of the seller, and a willing seller who does not have to sell, would agree to purchase and sell such asset; provided that with respect to any such asset determined to have a Fair Market Value in excess of (i) $1,000,000, such Fair Market Value shall be determined in good faith by the board of directors or, pursuant to a specific delegation of authority by such board of directors or a designated senior executive officer, of the Borrower, or the Subsidiary of the Borrower which is selling or owns such asset and (ii) $2,500,000, such Fair Market Value shall be determined by (x) a nationally recognized investment banking firm which determination shall be documented in a letter delivered to the Administrative Agent stating that such transaction is fair to the Borrower or such Subsidiary from a financial point of view or (y) a written valuation of such asset from a recognized independent third party appraiser reasonably acceptable to the Administrative Agent; provided, further, that the foregoing proviso shall not apply to any Disposition made in reliance on Section 7.5(e).

 

Fair Value”: the amount at which the assets (both tangible and intangible), in their entirety, of the Borrower and its Subsidiaries taken as a whole and after giving effect to the consummation of the Transactions would change hands between a willing buyer and a willing seller, within a commercially reasonable period of time, each having reasonable knowledge of the relevant facts, with neither being under any compulsion to act.

 

FATCA”: Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any intergovernmental agreements (together with any law implementing such agreements).

 

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Federal Funds Effective Rate”: for any day, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day of such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it; provided, that if the Federal Funds Effective Rate is less than zero, it shall be deemed to be zero hereunder for all instances.

 

Final Non-Appealable Order”: a final order of the Bankruptcy Court as to which no stay is pending and which has not been reversed, vacated or overturned, and as to which the time to appeal or move to reconsider has expired, and from which no appeal or motion to reconsider has been timely filed, or if timely filed, such appeal or motion to reconsider has been dismissed or denied with prejudice.

 

Final Order”: a final order of the Bankruptcy Court in substantially the form of the Interim Order, with only such modifications thereto as are reasonably necessary to convert the Interim Order to a final order and such other modification as are satisfactory in form and substance to the Borrower, the Required Lenders, and (solely with respect to its own treatment) the Administrative Agent in their sole discretion.

 

Final Order Entry Date”: the date on which the Final Order is entered by the Bankruptcy Court and has become a Final Non-Appealable Order.

 

First Day Orders”: the orders entered by the Bankruptcy Court in respect of first day motions and applications in respect of the Cases.

 

Floor”: the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to any Benchmark. With respect to Adjusted Term SOFR, the “Floor” shall be 1.00%.

 

Foreign ABTL Credit Agreement”: the asset-based term loan credit agreement, dated as of March 2, 2021, by and among Revlon Finance LLC, as the borrower, the parent guarantors, borrowing base guarantors and other guarantors from time to time party thereto, the lenders from time to time party thereto and Blue Torch Finance LLC, as administrative agent and collateral agent, as amended, restated, replaced, supplemented or otherwise modified prior to the Petition Date.

 

Foreign ABTL Facility”: the asset-based term loan credit facility made available to Revlon Finance LLC pursuant to the Foreign ABTL Credit Agreement, including, as the context may require, any extensions of credit made from time to time thereunder.

 

Foreign ABTL Forbearance”: as defined in Section 5.1(t).

 

Foreign ABTL Loan Party”: any Subsidiary that is a “Loan Party” (as defined in the Foreign ABTL Credit Agreement) on the Petition Date.

 

Foreign Subsidiary”: any Subsidiary of the Borrower that is not a Domestic Subsidiary in accordance with clause (i) of such definition and each direct or indirect Subsidiary of another Foreign Subsidiary.

 

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Funding Office”: the office of the Administrative Agent specified in Section 10.2 or such other office as may be specified from time to time by the Administrative Agent as its funding office by written notice to the Borrower and the Lenders.

 

GAAP”: generally accepted accounting principles in the United States as in effect from time to time.

 

Governmental Authority”: any nation or government, any state, province or other political subdivision thereof and any governmental entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and, as to any Lender, any securities exchange, any self-regulatory organization (including the National Association of Insurance Commissioners) and any supranational bodies (including the European Union and the European Central Bank).

 

Guarantee”: collectively, the guarantee made by the Guarantors under the Guarantee and Collateral Agreement in favor of the Secured Parties, together with each other guarantee delivered pursuant to Section 6.8.

 

Guarantee and Collateral Agreement”: the Guarantee and Collateral Agreement, substantially in the form of Exhibit K, among the Borrower, each Subsidiary Guarantor from time to time party thereto and the Collateral Agent, as the same may be amended, restated, supplemented, waived or otherwise modified from time to time.

 

Guarantee Obligation”: as to any Person (the “guaranteeing person”), any obligation of (a) the guaranteeing person or (b) another Person (including any bank under any letter of credit) pursuant to which the guaranteeing person has issued a guarantee, reimbursement, counterindemnity or similar obligation, in either case guaranteeing or by which such Person becomes contingently liable for any Indebtedness (the “primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any Property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase Property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business and reasonable indemnity obligations in effect on the Closing Date or entered into in connection with any acquisition or disposition of assets or any Investment permitted under this Agreement. The amount of any Guarantee Obligation of any guaranteeing Person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case, the amount of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof (assuming such person is required to perform thereunder) as determined by such Person in good faith.

 

Guarantors”: the collective reference to Holdings and the Subsidiary Guarantors.

 

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Hedge Agreements”: all agreements with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions, in each case, entered into by the Borrower or any Subsidiary; provided, that no phantom stock, deferred compensation or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of Holdings, the Borrower or any of its Subsidiaries shall be a Hedge Agreement.

 

Holdings”: as defined in the introductory paragraph of this Agreement.

 

Holdings Guarantee and Pledge Agreement”: the Holdings Guarantee and Pledge Agreement, substantially in the form of Exhibit L, among Holdings and the Collateral Agent, as the same may be amended, supplemented, waived or otherwise modified from time to time.

 

Incremental Commitment”: as defined in Section 2.10(a).

 

Incremental Commitment Date”: as defined in Section 2.10(a).

 

Incremental Commitment Election”: as defined in Section 2.10(b).

 

Incremental Commitment Request”: as defined in Section 2.10(a).

 

Incremental Lender”: as defined in Section 2.10(a).

 

Incremental Loans”: any Loan made in respect of an Incremental Commitment incurred pursuant to Section 2.10.

 

Indebtedness”: of any Person: without duplication, (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person evidenced by (i) bonds (excluding surety bonds), debentures, notes or similar instruments, and (ii) surety bonds, (c) all obligations of such Person for the deferred purchase price of Property or services already received, (d) all Guarantee Obligations by such Person of Indebtedness of others, (e) all Capital Lease Obligations of such Person, (f) [reserved], (g) the principal component of all obligations, contingent or otherwise, of such Person (i) as an account party in respect of letters of credit (other than any letters of credit, bank guarantees or similar instrument in respect of which a back-to-back letter of credit has been issued under or permitted by this Agreement) and (ii) in respect of bankers’ acceptances and (h) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Disqualified Capital Stock of such Person or any other Person, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; provided, that Indebtedness shall not include (A) trade and other payables, accrued expenses and liabilities and intercompany liabilities arising in the ordinary course of business, (B) prepaid or deferred revenue arising in the ordinary course of business, (C) purchase price holdbacks arising in the ordinary course of business in respect of a portion of the purchase price of an asset to satisfy unperformed obligations of the seller of such asset, (D) earn-out and other contingent obligations until such obligations become a liability on the balance sheet of such Person in accordance with GAAP and (E) obligations owing under any Hedge Agreements or in respect of Cash Management Obligations. The Indebtedness of any Person shall include the Indebtedness of any partnership in which such Person is a general partner, other than to the extent that the instrument or agreement evidencing such Indebtedness expressly limits the liability of such Person in respect thereof (or provides for reimbursement to such Person).

 

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Indebtedness for Borrowed Money”: (a) to the extent the following would be reflected on a consolidated balance sheet of the Borrower and its Subsidiaries prepared in accordance with GAAP, the principal amount of all Indebtedness of the Borrower and its Subsidiaries with respect to (i) borrowed money, evidenced by debt securities, debentures, acceptances, notes or other similar instruments and (ii) Capital Lease Obligations, (b) reimbursement obligations for letters of credit and financial guarantees (without duplication) (other than ordinary course of business contingent reimbursement obligations) and (c) Hedge Agreements; provided, that the Obligations shall not constitute Indebtedness for Borrowed Money.

 

Indemnified Liabilities”: as defined in Section 10.5.

 

Indemnified Taxes”: (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any Obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in the immediately preceding clause (a), Other Taxes.

 

Indemnitee”: as defined in Section 10.5.

 

Initial Budget”: the initial 13-week consolidated weekly operating budget of the Debtors setting forth projected operating receipts, vendor disbursements, net operating cash flow and Liquidity for the periods described therein prepared by the Borrower’s management, covering the period commencing on or about the Petition Date in form and substance acceptable to the Required Lenders, a copy of which is attached as Exhibit H.

 

Initial Draw T-1 Availability Date”: the date on which the conditions set forth in Section 5.1 are satisfied.

 

Initial Draw T-1 Commitment”: with respect to any Lender, the commitment (if any) of such Lender to make Initial Draw T-1 Loans to the Borrower in an aggregate principal amount not to exceed the amount set forth opposite such Lender’s name on Schedule 2.1(T-1), as such commitment may be (a) terminated pursuant to Section VIII, (b) terminated or reduced pursuant to Section 2.1(a) or (c) modified from time to time to reflect any assignments permitted by Section 10.6. The aggregate amount of the Lenders’ Initial Draw T-1 Commitments on the Closing Date is $375,000,000.

 

Initial Draw T-1 Lenders”: the Persons listed on Schedule 2.1(T-1) and any other Person that shall have become a party to this Agreement pursuant to an Assignment and Assumption in accordance with the terms of Section 10.6, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption in accordance with the terms of Section 10.6.

 

Initial Draw T-1 Loans”: any Loan made pursuant to Section 2.1(a).

 

Insolvency”: with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA.

 

Insolvent”: pertaining to a condition of Insolvency.

 

Instrument”: as defined in the Guarantee and Collateral Agreement.

 

Intellectual Property”: the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including copyrights, copyright licenses, domain names, trade secrets, patents, patent licenses, trademarks, trademark licenses, trade names, technology, know-how and processes, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.

 

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Intercompany DIP Facility”: as defined in the Orders.

 

Interest Payment Date”: (a) with respect to any SOFR Loan, (i) the last day of the Interest Period applicable to the Borrowing of which such Loan is a part, (ii) in the case of a SOFR Borrowing with an Interest Period of more than three months’ duration, each day that would have been an Interest Payment Date had successive Interest Periods of three months’ duration been applicable to such Borrowing and (iii) in addition, the date of any refinancing or conversion of such Borrowing with or to a Borrowing of a different Type and (b) with respect to any ABR Loan, the last Business Day of each calendar quarter.

 

Interest Period”: as to any SOFR Borrowing, the period commencing on the date of such Borrowing or on the last day of the immediately preceding Interest Period applicable to such Borrowing, as applicable, and ending on the numerically corresponding day (or, if there is no numerically corresponding day, on the last day) in the calendar month that is 1, 3 or 6 months thereafter (in each case for so long as such period is available for such SOFR Borrowing), as the Borrower may elect; provided, that if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day. Interest shall accrue from and including the first day of an Interest Period to but excluding the last day of such Interest Period.

 

Interim Order”: an interim order of the Bankruptcy Court (and as the same may be amended, supplemented, or modified from time to time after entry thereof with the consent of (solely with respect to its own treatment) the Administrative Agent and the Required Lenders in their sole discretion) in the form set forth as Exhibit G, with changes to such form as are satisfactory to the Administrative Agent (solely with respect to its own treatment) and the Required Lenders, in their sole discretion, approving the Loan Documents and related matters.

 

Interim Order Entry Date”: the date on which the Interim Order is entered by the Bankruptcy Court.

 

Investments”: as defined in Section 7.7.

 

IRS”: the United States Internal Revenue Service.

 

Jefferies Engagement Letter”: means the letter agreement, dated as of June 16, 2022, by and between Jefferies Finance LLC and Holdings, as the same may be amended, supplemented, waived or otherwise modified from time to time, pursuant to which Jefferies Finance LLC, is engaged as sole lead arranger, sole bookrunner, sole administrative agent, and sole collateral agent for the DIP Facility.

 

Jefferies Fee Letter”: means the Fee Letter, dated as of June 16, 2022 by and between Jefferies Finance LLC and Holdings, as the same may be amended, supplemented, waived or otherwise modified from time to time.

 

Latest Initial Draw T-1 Date”: as defined in Section 2.1(a).

 

Lead Arranger”: Jefferies Finance LLC, in its capacity as sole lead arranger.

 

Lenders”: the Initial Draw T-1 Lenders, the Delayed Draw T-2 Lenders and/or the Incremental Lenders, as the context may require.

 

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Liabilities”: the recorded liabilities (including contingent liabilities that would be recorded in accordance with GAAP) of the Borrower and its Subsidiaries taken as a whole, as of the date hereof after giving effect to the consummation of the Transactions determined in accordance with GAAP consistently applied.

 

Lien”: any mortgage, pledge, hypothecation, collateral assignment, encumbrance, lien (statutory or other), charge or other security interest or any other security agreement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any capital lease having substantially the same economic effect as any of the foregoing).

 

Liquidity”: at any time, the sum of (i) all Unrestricted Cash of the Debtors and (ii) the aggregate amount permitted and available to be borrowed (after giving effect to all conditions thereunder) under the DIP ABL Facility Agreement and any other then-existing revolving credit facility or line of credit of the Debtors; provided, that the general availability reserve of $25,000,000 established on the Closing Date under the DIP ABL Facility Agreement shall be deemed available to be borrowed for so long as such availability reserve is in place.

 

Loan”: any loan made by any Lender to the Borrower pursuant to this Agreement, including for the avoidance of doubt, the Initial Draw T-1 Loans, the Delayed Draw T-2 Loans and/or the Incremental Loans, as the context may require.

 

Loan Documents”: the collective reference to this Agreement, the Orders, the Security Documents, the BrandCo Transaction Documents, the Jefferies Fee Letter, the Jefferies Engagement Letter, the organizational documents of each BrandCo Entity and the Amended and Restated Memorandum of Association of BrandCo Cayman Holdings, together with any amendment, supplement, waiver, or other modification to any of the foregoing.

 

Loan Parties”: the Borrower and each Subsidiary Guarantor, and “Loan Party” means any one of them.

 

Mafco”: MacAndrews & Forbes Incorporated and its successors.

 

Mandatory Prepayment Date”: as defined in Section 2.12(e).

 

Material Adverse Effect”: a material adverse effect on (a) the business, operations, assets, financial condition or results of operations of the Borrower and its Subsidiaries, taken as a whole (other than by virtue of the commencement of the Cases and the events and circumstances giving rise thereto, and the commencement of the Canadian Recognition Proceedings), or (b) the material rights and remedies available to the Administrative Agent and the Lenders, taken as a whole, or on the ability of the Loan Parties, taken as a whole, to perform their payment obligations to the Lenders, in each case, under the Loan Documents; provided that Material Adverse Effect shall expressly exclude the effect of the filing of the Cases, the events and conditions resulting from or leading up thereto, the commencement of the Canadian Recognition Proceedings, and any action required to be taken under the Loan Documents or the Orders.

 

Materials of Environmental Concern”: any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products, polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants, contaminants, radioactivity and any other substances that are defined, listed or regulated as hazardous, toxic (or words of similar regulatory intent or meaning) under any Environmental Law, or that are regulated pursuant to Environmental Law or which may give rise to any Environmental Liability.

 

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Maturity Date”: the earliest of (a) the Scheduled Maturity Date, (b) the effective date of any Chapter 11 Plan for the Borrower or any other Debtor, (c) the consummation of a sale or other disposition of all or substantially all assets of the Debtors, taken as a whole, under section 363 of the Bankruptcy Code, (d) the date of acceleration or termination of the DIP Facility in accordance with the terms hereof and (e) July 22, 2022 (or such later date as agreed to by the Required Lenders), unless the Final Order has been entered by the Bankruptcy Court on or prior to such date.

 

Maximum Incremental Commitment Amount”: $450,000,000.

 

Maximum Rate”: as defined in Section 10.20.

 

Milestones”: as defined in Section 6.17.

 

Moody’s”: Moody’s Investors Service, Inc. or any successor to the rating agency business thereof.

 

Mortgage”: any mortgage, deed of trust, hypothec, assignment of leases and rents or other similar document delivered on or after the Closing Date in favor of, or for the benefit of, the Collateral Agent for the benefit of the Secured Parties, with respect to Mortgaged Properties, each in form and substance reasonably acceptable to the Administrative Agent and the Borrower (taking into account the law of the jurisdiction in which such mortgage, deed of trust, hypothec or similar document is to be recorded), as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.

 

Mortgaged Properties”: all Real Property owned by the Borrower or any Subsidiary Guarantor that is, or is required to be, subject to a Mortgage pursuant to the terms of this Agreement.

 

Multiemployer Plan”: a Plan that is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

 

Net Cash Proceeds”: (a) in connection with any Asset Sale or any Recovery Event occurring on or after the Closing Date, (I) the proceeds thereof in the form of cash and Cash Equivalents (including any such proceeds received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but only as and when received) received by any Loan Party or any Subsidiary and (II) the proceeds in the form of cash and Cash Equivalents received by any Loan Party or any Subsidiary from any sale or other disposition of any non-cash consideration received by any Loan Party or any Subsidiary in connection with any such Asset Sale or Recovery Event, net of (i)(x) selling expenses, attorneys’ fees, accountants’ fees, investment banking fees, brokers’ fees and consulting fees, (y) the principal amount, premium or penalty, if any, interest and other amounts required to be applied to the repayment of Indebtedness (other than any Prepetition Indebtedness) secured by a Lien permitted hereunder on any asset which is the subject of such Asset Sale or Recovery Event (other than any Lien pursuant to a Security Document or an order of the Bankruptcy Court or the Canadian Court) and (z) other customary fees and expenses actually incurred by any Loan Party or any Subsidiary in connection therewith; (ii) Taxes paid or reasonably estimated to be payable by any Loan Party or any Subsidiary as a result thereof and, without duplication, any tax distribution that is required as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements); (iii) the amount of any liability paid or to be paid or reasonable reserve established in accordance with GAAP against any liabilities (other than any Taxes deducted pursuant to clause (ii) above) (A) associated with the assets that are the subject of such event and (B) retained by the Borrower or any of its Subsidiaries, provided, that the amount of any subsequent reduction of such reserve (other than in connection with a payment in respect of any such liability) shall be deemed to be Net Cash Proceeds of such event occurring on the date of such reduction and (iv) the pro rata portion of the Net Cash Proceeds thereof (calculated without regard to this clause (iv)) attributable to minority interests and not available for distribution to or for the account of the Borrower or any Domestic Subsidiary as a result thereof and (b) in connection with any issuance or sale of debt securities or instruments or the incurrence of Indebtedness, the cash proceeds received from such issuance or incurrence, net of attorneys’ fees, investment banking fees, accountants’ fees, consulting fees, underwriting discounts and commissions and other customary fees and expenses actually incurred in connection therewith.

 

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Net Sales”: has the meaning assigned to such term in each BrandCo License Agreement.

 

Non-BrandCo Entity”: Holdings and each of its Affiliates and Subsidiaries (other than the BrandCo Entities).

 

Non-Debtor”: any Subsidiary of the Borrower that is not a Debtor.

 

Non-Excluded Subsidiary”: any Subsidiary of the Borrower which is not an Excluded Subsidiary.

 

Non-Guarantor Subsidiary”: any Subsidiary of the Borrower which is not a Subsidiary Guarantor.

 

Non-US Lender”: as defined in Section 2.20(e).

 

Obligations”: the unpaid principal of and interest on (including interest accruing after maturity) the Loans and all other obligations and liabilities (including fees, premiums and make-whole) of the Borrower or any Guarantor to the Agents or to any Lender, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, in each case, which may arise under, out of, or in connection with, this Agreement, any other Loan Document or any other document made, delivered or given in connection herewith or therewith, whether on account of principal, premiums, interest, reimbursement obligations, fees, indemnities, costs, expenses (including all fees, charges and disbursements of Ad Hoc Group Advisors and counsel to the Agents or any Lender that are required to be paid by the Borrower pursuant hereto) or otherwise and including all indemnity claims of the Ad Hoc Group, the Agents and the Lenders pursuant to Section 10.5.

 

OFAC”: the Office of Foreign Assets Control of the United States Department of the Treasury.

 

OID”: on any applicable date, a payment of any discount, fee or premium in the form of net settled payment, to be paid by deducting the amount of such discount, fee or premium from the proceeds of the Loan to be made on such date.

 

Orders”: collectively, the Interim Order and the Final Order.

 

Other Affiliate”: the Sponsor and any Affiliate of the Sponsor, other than Holdings, any Subsidiary of Holdings and any natural person.

 

Other Goods and Services”: any products or services other than the design, development, manufacture, marketing, distribution, and/or sale of Core Products, that at all times are both (a) ancillary to the Business and not competitive with such Core Products and (b) intended to enhance the Business and maximize the royalties payable to the Borrower and/or its Subsidiaries.

 

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Other Product Percentage Spend”: as defined in Section 6.16.

 

Other Products”: as defined in Section 6.16.

 

Other Taxes”: any and all present or future stamp, court, intangible, recording, filing or documentary Taxes or any other excise or property Taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

 

Parent Company”: any direct or indirect parent of Holdings.

 

Participant”: as defined in Section 10.6(c)(i).

 

Participant Register”: as defined in Section 10.6(c)(iii).

 

PBGC”: the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any successor).

 

Periodic Term SOFR Determination Day”: as defined in the definition of “Term SOFR”.

 

Permitted Business”: (i) the Business or (ii) any business that is a natural outgrowth or a reasonable extension, development or expansion of any such Business or any business similar, reasonably related, incidental, complementary or ancillary to any of the foregoing.

 

Permitted Investors”: the collective reference to (i) the Sponsor and any Affiliates of any Person included in the definition of “Sponsor” (but excluding any operating portfolio companies of the foregoing) that have ownership interests in any Parent Company or Holdings as of the Closing Date, (ii) the members of management of any Parent Company, Holdings or any of its Subsidiaries that have ownership interests in any Parent Company or Holdings as of the Closing Date and (iii) the directors of Holdings or any of its Subsidiaries or any Parent Company as of the Closing Date.

 

Permitted Transferees”: with respect to any Person that is a natural person (and any Permitted Transferee of such Person), (a) such Person’s immediate family, including his or her spouse, ex-spouse, children, step-children and their respective lineal descendants, (b) the estate of Ronald O. Perelman and (c) any other trust or other legal entity the primary beneficiary of which is such Person and/or such Person’s immediate family, including his or her spouse, ex-spouse, children, stepchildren or their respective lineal descendants.

 

Person”: an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

 

Petition Date”: as defined in the recitals to this Agreement.

 

PIK Interest”: as defined in Section 2.15(c).

 

Plan”: at a particular time, any employee benefit plan as defined in Section 3(3) of ERISA and in respect of which any Loan Party or any other Commonly Controlled Entity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA or has any liability, including a Multiemployer Plan.

 

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Plan Effective Date”: the date of the substantial consummation (as defined in section 1101(2) of the Bankruptcy Code, which for purposes hereof shall be no later than the effective date) of one or more Chapter 11 Plans confirmed pursuant to an order entered by the Bankruptcy Court.

 

Platform”: as defined in Section 10.2(c).

 

Pledged Securities”: as defined in the Guarantee and Collateral Agreement or the BrandCo Stock Pledge Agreement.

 

Pledged Stock”: as defined in the Guarantee and Collateral Agreement or the BrandCo Stock Pledge Agreement.

 

Prepayment Option Notice”: as defined in Section 2.12(e).

 

Prepetition 2016 Term Loan Agreement”: the Term Credit Agreement, dated as of September 7, 2016, among the Borrower, Holdings, the lenders from time to time party thereto and Citibank, N.A., as administrative agent and collateral agent, as amended pursuant to Amendment No. 1 thereto, dated as of May 7, 2020, and as further amended, restated, replaced, supplemented or otherwise modified from time to time, including, as the context may require, any extensions of credit made from time to time thereunder.

 

Prepetition 2024 Notes”: the Borrower’s 6.250% senior notes due 2024 pursuant to the Prepetition 2024 Note Indenture.

 

Prepetition 2024 Notes Indenture”: that certain Indenture, dated as of August 4, 2016, among the Borrower, the Guarantors (as defined therein) party thereto and U.S. Bank National Association, as trustee, as amended, restated, supplemented or otherwise modified from time to time in accordance with the requirements thereof.

 

Prepetition ABL Facility”: the asset-based revolving credit facility made available to the Borrower pursuant to the Prepetition ABL Facility Agreement.

 

Prepetition ABL Facility Agreement”: the Asset-Based Revolving Credit Agreement originally dated as of September 7, 2016, among the Borrower, the local borrowing subsidiaries party thereto, Holdings, the lenders and issuing lenders from time to time party thereto and Citibank, N.A., as administrative agent, collateral agent, issuing lender and swingline lender, as the same may be amended, restated, replaced, supplemented or otherwise modified prior to the Petition Date.

 

Prepetition ABL Priority Collateral”: the “ABL Facility First Priority Collateral” under and as defined in the Prepetition ABL Facility Agreement.

 

Prepetition BrandCo Facility Agreement”: the BrandCo Credit Agreement dated as of May 7, 2020, among the Borrower, Holdings, the lenders from time to time party thereto and Jefferies Finance LLC, as administrative agent and each collateral agent, as amended, restated, replaced, supplemented or otherwise modified prior to the Petition Date.

 

Prepetition BrandCo Secured Parties”: the “Secured Parties” under and as defined in the Prepetition BrandCo Facility Agreement.

 

Prepetition Indebtedness”: collectively, the indebtedness in respect of the Prepetition 2024 Notes, the Prepetition BrandCo Facility Agreement, the Prepetition 2016 Term Loan Agreement, the Prepetition ABL Facility Agreement and any other Indebtedness (whether secured or unsecured) of each Debtor.

 

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Prepetition Payment”: any payment, prepayment or repayment made on account of, or with respect to, any Prepetition Indebtedness.

 

Prepetition Secured Credit Agreements”: collectively, the Prepetition 2016 Term Loan Agreement, the Prepetition BrandCo Facility Agreement and the Prepetition ABL Facility Agreement.

 

Prepetition Secured Indebtedness”: the indebtedness in respect of the Prepetition Secured Credit Agreements.

 

Prepetition Secured Parties”: the “Secured Parties” under and as defined in the Prepetition Secured Credit Agreements.

 

Prime Rate”: the “U.S. Prime Lending Rate” published in The Wall Street Journal; provided that if The Wall Street Journal ceases to publish for any reason such rate of interest, “Prime Rate” shall mean the highest per annum interest rate published by the Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent) or any similar release by the Board (as determined by the Administrative Agent); each change in the Prime Rate shall be effective on the date such change is publicly announced as effective. The prime rate is not necessarily the lowest rate charged by any financial institution to its customers.

 

Prior Tax Sharing Agreement”: the Tax Sharing Agreement entered into as of June 24, 1992, as amended and restated, among the Company and certain of its Subsidiaries, Holdings and Mafco.

 

Proceeding”: as defined in Section 10.5(c).

 

Property”: any right or interest in or to property or assets of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including Capital Stock.

 

Public Information”: as defined in Section 10.2(c)

 

Public Lender”: as defined in Section 10.2(c).

 

Real Property”: collectively, all right, title and interest of the Borrower or any of its Subsidiaries in and to any and all parcels of real property owned or leased by the Borrower or any such Subsidiary together with all improvements and appurtenant fixtures, easements and other property and rights incidental to the ownership, lease or operation thereof.

 

Real Property Deliverables”: With respect to any Real Property as to which a Mortgage is requested pursuant to Section 2.25(b)(iii) (whether owned on the Closing Date or acquired after the Closing Date) (other than any Excluded Collateral) if requested by the Collateral Agent:

 

(i) a Mortgage (subject to liens permitted by Section 7.3 or other encumbrances or rights acceptable to the Collateral Agent) in favor of the Collateral Agent, for the benefit of the Secured Parties, covering such Real Property;

 

(ii) a lenders’ title insurance policy with extended coverage covering such Real Property in an amount equal to the purchase price (if applicable) or the Fair Value of the applicable Real Property, as determined in good faith by the Borrower and reasonably acceptable to the Administrative Agent, as well as an ALTA survey thereof, together with a surveyor’s certificate unless the title insurance policy referred to above shall not contain an exception for any matter shown by a survey (except to the extent an existing survey has been provided and specifically incorporated into such title insurance policy or if the Administrative Agent reasonably determines in consultation with the Borrower that the costs of obtaining such survey are excessive in relation to the value of the security to be afforded thereby), each in form and substance reasonably satisfactory to the Collateral Agent; and

 

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(iii) customary legal opinions regarding the enforceability, due authorization, execution and delivery of the Mortgage and such other matters reasonably requested by the Collateral Agent, which opinions shall be in form and substance reasonably satisfactory to the Collateral Agent.

 

Recipient”: (a) any Lender, (b) the Administrative Agent and (c) the Collateral Agent, as applicable.

 

Recovery Event”: any settlement of or payment in respect of any Property or casualty insurance claim or any condemnation proceeding relating to any asset of the Borrower or any Subsidiary, in an amount for each such event exceeding $1,000,000.

 

Register”: as defined in Section 10.6(b)(iv).

 

Related Parties”: with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.

 

Related Person”: as defined in Section 10.5.

 

Release”: any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the environment or within or upon any building, structure or facility.

 

Relevant Governmental Body”: the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.

 

Repayment Premium”: as defined in Section 2.19.

 

Replaced Lender”: as defined in Section 2.24.

 

Reportable Event”: any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty day notice period is waived by the PBGC in accordance with the regulations thereunder.

 

Representatives”: as defined in Section 10.14.

 

Required Backstop Lenders”: at any time, Backstop Lenders holding more than 50% of the sum of (a) the aggregate amount of unused Commitments then in effect of all Backstop Lenders and (b) the aggregate unpaid principal amount of the Loans then outstanding of all Backstop Lenders (in each case excluding any unused Commitments and outstanding Loans of Defaulting Lenders).

 

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Required Lenders”: at any time, (a) the Required Backstop Lenders and (b) Lenders holding more than 50% of the sum of (i) the unused Commitments then in effect and (ii) the aggregate unpaid principal amount of the Loans then outstanding (in the case of this clause (b), excluding any unused Commitments and outstanding Loans of Defaulting Lenders).

 

Requirement of Law”: as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject.

 

Resolution Authority”: an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.

 

Responsible Officer”: any officer at the level of Vice President or higher of the relevant Person or, with respect to financial matters, the Chief Financial Officer, Treasurer, Controller or any other Person in the Treasury Department at the level of Vice President or higher of the relevant Person.

 

Restricted Payments”: as defined in Section 7.6.

 

S&P”: Standard & Poor’s Ratings Group, Inc., or any successor to the rating agency business thereof.

 

Sanction(s)”: any international economic sanction administered or enforced by the U.S. government, including OFAC and the U.S. Department of State, the United Nations Security Council, the European Union or Her Majesty’s Treasury.

 

Scheduled Maturity Date”: June 17, 2023, as such date may be extended pursuant to the Facility Extension Option; provided that, if such date is not a Business Day, the Scheduled Maturity Date shall be the immediately preceding Business Day.

 

SEC”: the Securities and Exchange Commission (or successors thereto or an analogous Governmental Authority).

 

Secured Parties”: collectively, the Lenders, the Administrative Agent, the Collateral Agent, any other holder from time to time of any of the Obligations and, in each case, their respective successors and permitted assigns.

 

Security”: as defined in the Guarantee and Collateral Agreement.

 

Security Documents”: the collective reference to the Orders, the Guarantee and Collateral Agreement, the Holdings Guarantee and Pledge Agreement, the BrandCo Security Agreement, the BrandCo Stock Pledge Agreement, the Mortgages (if any), and all other security documents hereafter delivered to the Administrative Agent or the Collateral Agent, as applicable, purporting to grant a Lien on any Property of any Loan Party to secure the Obligations.

 

Shortfall Amount”: as defined in Section 6.16.

 

Single Employer Plan”: any Plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA and in respect of which any Loan Party or any other Commonly Controlled Entity is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA or has any liability.

 

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SOFR”: a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.

 

SOFR Administrator”: the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).

 

SOFR Borrowing”: a Borrowing comprised of SOFR Loans.

 

SOFR Loan”: any Loan bearing interest at a rate determined by reference to the Adjusted Term SOFR Rate in accordance with the provisions of Section II, other than pursuant to clause (c) of the definition of “ABR”.

 

Sponsor”: (a) Mafco, (b) each of Mafco’s direct and indirect Subsidiaries and Affiliates, (c) Ronald O. Perelman, (d) any of the directors or executive officers of Mafco or (e) any of their respective Permitted Transferees.

 

Subsidiary”: as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the Board of Directors of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person; provided, that Beautyge Rus Joint Stock Company shall be deemed not to be a Subsidiary of the Borrower so long as any Sanctions are imposed on Russia and the Borrower and its subsidiaries do not exercise control over such Person. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a direct or indirect Subsidiary or Subsidiaries of the Borrower.

 

Subsidiary Guarantors”: (a) each Subsidiary other than any Excluded Subsidiary, (b) any other Subsidiary of the Borrower that is a party to the Guarantee and Collateral Agreement and (c) the BrandCo Entities.

 

Superpriority Claims”: as defined in Section 2.25(a)(i).

 

Tax Payments”: payments pursuant to the Prior Tax Sharing Agreement.

 

Taxes”: all present and future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, including any interest, fines, additions to tax or penalties applicable thereto.

 

Term Prepayment Amount”: as defined in Section 2.12(e).

 

Term SOFR”:

 

(a)       for any calculation with respect to a SOFR Loan, the Term SOFR Reference Rate for a tenor comparable to the applicable Interest Period on the day (such day, the “Periodic Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to the first day of such Interest Period, as such rate is published by the Term SOFR Administrator; provided, that if as of 5:00 p.m. (New York City time) on any Periodic Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Periodic Term SOFR Determination Day, and

 

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(b)       for any calculation with respect to an ABR Loan on any day, the Term SOFR Reference Rate for a tenor of one month on the day (such day, the “ABR Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to such day, as such rate is published by the Term SOFR Administrator; provided, that if as of 5:00 p.m. (New York City time) on any ABR Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such ABR Term SOFR Determination Day.

 

Term SOFR Administrator” shall mean CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the Administrative Agent in its reasonable discretion).

 

Term SOFR Reference Rate” shall mean the forward-looking term rate based on SOFR.

 

Test Period”: the rolling cumulative 4-week period most recently ended on the last Saturday prior to the delivery of each Budget Variance Report.

 

Transactions”: (a) with respect to the Borrower, the execution, delivery and performance by the Borrower of this Agreement, and each other Loan Document to which it is a party, the borrowing of Loans, the use of the proceeds thereof, and the granting of Liens by the Borrower on Collateral pursuant to the Security Documents, (b) with respect to each Guarantor, the execution, delivery and performance by such Guarantor of each Loan Document to which it is a party, the guaranteeing of the Indebtedness and the other obligations under the Guaranty and Collateral Agreement by such Guarantor, and the granting of Liens by such Guarantor on Collateral pursuant to the Security Documents (for the avoidance of doubt, excluding Excluded Collateral) and (c) the payment of fees, costs, premiums and expenses in connection with the foregoing.

 

Type”: shall mean, when used in respect of any Loan or Borrowing, the Rate by reference to which interest on such Loan or on the Loans comprising such Borrowing is determined. For purposes hereof, the term “Rate” shall include the Term SOFR and the ABR.

 

U.S. Government Securities Business Day”: any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.

 

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UK Financial Institution”: any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended form time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.

 

UK Resolution Authority”: the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.

 

Unadjusted Benchmark Replacement”: the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.

 

United States” or “U.S.”: the United States of America.

 

Unrestricted Cash”: as at any date of determination, the aggregate amount of cash and Cash Equivalents included in the cash accounts of the Debtors that would be listed on the consolidated balance sheet of the Borrower and its Subsidiaries as at such date, to the extent such cash and Cash Equivalents are not (a) subject to a Lien securing any Indebtedness or other obligations, other than (i) obligations with respect to Prepetition Secured Indebtedness, (ii) the Obligations or (iii) obligations with respect to the DIP ABL Facility (unless such cash or Cash Equivalents are held in a “lockbox”, escrow, reserve or similar account or otherwise not readily available to be used by the Debtors) or (b) classified as “restricted” (other than solely as a result of such cash or Cash Equivalents being so classified as a result of being subject to a Lien securing the Obligations or obligations with respect to the DIP ABL Facility).

 

Upfront Discount”: an Upfront T-1 Discount and/or Upfront T-2 Discount, as the context may require.

 

Upfront T-1 Discount”: as defined in Section 2.9(a)(i).

 

Upfront T-2 Discount”: as defined in Section 2.9(a)(ii).

 

US Lender”: as defined in Section 2.20(g).

 

USA Patriot Act”: as defined in Section 10.18.

 

Wages Order”: The interim and final orders of the Bankruptcy Court approving the Debtors’ Motion for Entry of Interim and Final Orders (i) Authorizing the Debtors to (a) Pay Prepetition Wages, Salaries, Other Compensation, and Reimbursable Expenses and (b) Continue Employee Benefits Programs, and (ii) Granting Related Relief [Docket No. 8].

 

Write-Down and Conversion Powers”: (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that Person or any other Person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.

 

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1.2       Other Definitional Provisions.

 

(a)      Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Loan Documents or any certificate or other document made or delivered pursuant hereto or thereto.

 

(b)      As used herein and in the other Loan Documents, and any certificate or other document made or delivered pursuant hereto or thereto, (i) accounting terms relating to the Borrower and its Subsidiaries not defined in Section 1.1 and accounting terms partly defined in Section 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP, (ii) the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation,” and (iii) references to agreements or other Contractual Obligations shall, unless otherwise specified, be deemed to refer to such agreements or Contractual Obligations as amended, supplemented, restated or otherwise modified from time to time.

 

(c)       The words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.

 

(d)       The term “license” shall include sub-license. The term “documents” includes any and all documents whether in physical or electronic form.

 

(e)       The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

 

(f)        Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made (i) without giving effect to any election under Accounting Standards Codification 825-10-25 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Borrower or any Subsidiary at “fair value”, as defined therein, and (ii) without giving effect to any treatment of Indebtedness in respect of convertible debt instruments under Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof.

 

1.3       [Reserved].

 

1.4       Exchange Rates; Currency Equivalents. If any basket is exceeded solely as a result of fluctuations in applicable currency exchange rates after the last time such basket was utilized, such basket will not be deemed to have been exceeded solely as a result of such fluctuations in currency exchange rates.

 

1.5       [Reserved].

 

1.6       Accounting Terms. For purposes of determining compliance with any provision of this Agreement, the determination of whether a lease is to be treated as an operating lease or capital lease shall be made without giving effect to any change in accounting for leases pursuant to GAAP resulting from the implementation of proposed Accounting Standards Update (ASU) Leases (Topic 840) issued August 17, 2010, or any successor proposal.

 

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1.7       Divisions. For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized on the first date of its existence by the holders of its equity interests at such time.

 

SECTION II.     AMOUNT AND TERMS OF COMMITMENTS

 

2.1       Commitments.

 

(a)       Initial Draw T-1 Loans. Subject to the terms and conditions set forth in Section 5.1 hereof and in the Orders, each Lender severally, and not jointly, agrees to make Loans denominated in Dollars to the Borrower on the Initial Draw T-1 Availability Date in an aggregate principal amount not to exceed such Lender’s Initial Draw T-1 Commitment (if any); provided that, if the Initial Draw T-1 Availability Date shall not have occurred on or prior to the date that is 5 Business Days after the Petition Date (the “Latest Initial Draw T-1 Date”), the Initial Draw T-1 Commitments of all Lenders shall automatically and permanently terminate on and as of the Latest Initial Draw T-1 Date. For the avoidance of doubt, the Initial Draw T-1 Commitment of each Lender shall be automatically and permanently reduced to $0 upon the making of such Lender’s Initial Draw T-1 Loans on the Initial Draw T-1 Availability Date. Initial Draw T-1 Loans borrowed and repaid or prepaid may not be reborrowed.

 

(b)       Delayed Draw T-2 Loans. Subject to the terms and conditions set forth in Section 5.2 hereof and in the Orders, each Lender severally, and not jointly, agrees to make Loans denominated in Dollars to the Borrower on the Delayed Draw T-2 Availability Date in an aggregate principal amount not to exceed such Lender’s Delayed Draw T-2 Commitment; provided, that the unused Delayed Draw T-2 Commitments of all Lenders shall automatically and permanently terminate on the Maturity Date. For the avoidance of doubt, the Delayed Draw T-2 Commitment of each Lender shall be automatically and permanently reduced to $0 upon the making of such Lender’s Delayed Draw T-2 Loans on the Delayed Draw T-2 Availability Date. Delayed Draw T-2 Loans borrowed and repaid or prepaid may not be reborrowed. If the Delayed Draw T-2 Loans are not fungible for U.S. federal income tax purposes with the Initial Draw T-1 Loans, the Delayed Draw T-2 Loans shall be identified separately (whether by a separate CUSIP number or otherwise).

 

2.2       Procedure for Borrowing, Conversions and Continuations of Loans.

 

(a)       Each Borrowing, each conversion of loans from one Type to the other, and each continuation of Loans shall be made upon irrevocable notice by the Borrower to the Administrative Agent. Each such notice must be in writing and must be received by the Administrative Agent not later than (i) 11:00 a.m. (New York City time) three Business Days prior to the requested date of conversion of ABR Loans to, or continuation of, SOFR Loans, (ii) 11:59 pm (New York City time) one Business Day prior to the requested date of any Borrowing on the Initial Draw T-1 Availability Date (or such later time acceptable to the Administrative Agent) and (iii) 11:00 a.m. (New York City time) five Business Days for all other Borrowings (but not conversion) of Loans. Each notice by the Borrower pursuant to this Section 2.2(a) shall be delivered to the Administrative Agent in the form of a written Committed Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Each conversion to or continuation of SOFR Loans shall be in a principal amount equal to $1,000,000 or a whole multiple of $1,000,000 in excess thereof or such other multiple as the Administrative Agent may agree from time to time. Each Committed Loan Notice shall specify (i) whether the Borrower is requesting a Borrowing, a conversion of Loans from one Type to the other or a continuation of SOFR Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which an existing Loans are to be converted and (v) if applicable, the duration of the Interest Period with respect thereto. If the Borrower fails to specify a Type of Loan in a Committed Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Loans shall be made as, or converted to ABR Loans. Any such automatic conversion or continuation of SOFR Loans pursuant to the immediately preceding sentence shall be effective as of the last day of the Interest Period then in effect with respect to such SOFR Loans. If the Borrower requests a Borrowing of, conversion to, or continuation of SOFR Loans in any such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month.

 

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(b)       Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each applicable Lender of the amount of its ratable share of the applicable Loans, and if no timely notice of a conversion or continuation of a SOFR Loan is provided by the Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to ABR Loans or SOFR Loans with an Interest Period of one month, as applicable, described in Section 2.2(a). Each Lender shall make the amount of its Loan available to the Administrative Agent in same day funds at the Funding Office not later than (i) 1:00 p.m. (New York City time) on the Business Day specified in the applicable Committed Loan Notice for any Borrowing of SOFR Loans and (ii) 1:00 p.m. (New York City time) on the Business Day specified in the applicable Committed Loan Notice for any Borrowing of ABR Loans. Upon satisfaction of the applicable conditions set forth in Section 5.2 or Section 5.3, as applicable (or, if such Borrowing is on the Initial Draw T-1 Availability Date, Section 5.1), the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the books of the Administrative Agent with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to the Administrative Agent by the Borrower.

 

(c)       Except as otherwise provided herein, a SOFR Loan may be continued or converted only on the last day of an Interest Period for such SOFR Loan unless the Borrower pays the amount due under Section 2.22 in connection therewith. During the existence of an Event of Default which is continuing, at the election of the Required Lenders, no Loans may be requested as, converted to or continued as SOFR Loans.

 

2.3       [Reserved].

 

2.4       [Reserved].

 

2.5       [Reserved].

 

2.6       Maturity Extension. The Borrower may elect to extend the Scheduled Maturity Date to a date that is no later than 180 days following the initial Scheduled Maturity Date (or if such day is not a Business Day, the immediately preceding Business Day) (the “Facility Extension Option”), and the Scheduled Maturity Date shall be so extended upon the satisfaction (or waiver, in writing by the Required Lenders) of the following conditions precedent:

 

(a)       the Borrower shall have provided written notice to the Administrative Agent not less than 15 days and not more than 60 days prior to the initial Scheduled Maturity Date of its intention to exercise the Facility Extension Option;

 

(b)      the Borrower shall have paid, or caused to be paid, to the Administrative Agent for the account of each Lender on the Scheduled Maturity Date, an extension premium in the amount of 0.50% of the sum of (i) the unused Commitments of such Lender then in effect (if any), and (ii) the aggregate unpaid principal amount of the Loans of such Lender then outstanding on the initial Scheduled Maturity Date; and

 

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(c)       as of the initial Scheduled Maturity Date, (i) no Default or Event of Default shall have occurred and is continuing, (ii) each of the representations and warranties made by any Loan Party in or pursuant to any of the Loan Documents shall be true and correct in all material respects (and in all respects if any such representation or warranty is already qualified by materiality or a Material Adverse Effect) except to the extent that such representations and warranties expressly relate to an earlier date or period, in which case such representations and warranties shall have been true and correct in all material respects (and in all respects if any such representation or warranty is already qualified by materiality or a Material Adverse Effect) as of such earlier date or respective period, and (iii) the Borrower shall have delivered to the Administrative Agent a certificate, dated the Scheduled Maturity Date and signed by a Responsible Officer of the Borrower, confirming compliance with the conditions set forth in this clause.

 

2.7       [Reserved].

 

2.8       Repayment of Loans.

 

(a)      The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of the appropriate Lender, the principal amount of each outstanding Loan of such Lender made to the Borrower on the Maturity Date (or on such earlier date on which the Loans become due and payable pursuant to Section 8.1). The Borrower hereby further agrees to pay interest on the unpaid principal amount of the Loans made to the Borrower from time to time outstanding from the date made until payment in full thereof at the rates per annum, and on the dates, set forth in Section 2.15.

 

(b)      Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of the Borrower to such Lender resulting from each Loan of such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement.

 

(c)      The Administrative Agent, on behalf of the Borrower, shall maintain the Register pursuant to Section 10.6(b)(iv), and a subaccount therein for each Lender, in which shall be recorded (i) the amount of each Loan made hereunder and each Interest Period applicable thereto, (ii) the amount of any principal, interest and fees, as applicable, due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder from the Borrower and each Lender’s share thereof.

 

(d)      The entries made in the Register and the accounts of each Lender maintained pursuant to Section 2.8(c) shall, to the extent permitted by applicable law, be presumptively correct absent demonstrable error of the existence and amounts of the obligations of the Borrower therein recorded; provided, however, that the failure of the Administrative Agent or any Lender to maintain the Register or any such account, or any error therein, shall not in any manner affect the obligation of the Borrower to repay (with applicable interest) the Loans made to the Borrower by such Lender in accordance with the terms of this Agreement.

 

2.9       Discounts, Fees and Premiums.

 

(a)       Upfront Discounts.

 

(i)        On the Initial Draw T-1 Availability Date, the Borrower shall pay to the Administrative Agent for the account of each applicable Lender making an Initial Draw T-1 Loan (other than a Defaulting Lender), an upfront discount (the “Upfront T-1 Discount”) in an amount equal to 1.00% of the aggregate principal amount of each such Lender’s Initial Draw T-1 Commitment on the Closing Date, which Upfront T-1 Discount shall be payable in the form of OID.

 

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(ii)       On the Delayed Draw T-2 Availability Date, the Borrower shall pay to the Administrative Agent for the account of each applicable Lender making a Delayed Draw T-2 Loan (other than a Defaulting Lender), an upfront discount (the “Upfront T-2 Discount”) in an amount equal to 1.00% of the aggregate principal amount of each such Lender’s Delayed Draw T-2 Commitment immediately prior to the funding of the Delayed Draw T-2 Loans on the Delayed Draw T-2 Availability Date, which Upfront T-2 Discount shall be payable in the form of OID.

 

(b)       On the Closing Date, the Borrower shall pay to the Administrative Agent a backstop premium (the “Backstop Premium”) in an amount equal to 1.50% of the aggregate amount of all Initial Draw T-1 Commitments and Delayed Draw T-2 Commitments in effect on the Closing Date, which Backstop Premium shall be payable from the proceeds of the Initial Draw T-1 Loans.

 

(c)       The Borrower agrees to pay (i) to the Administrative Agent, for the account of each Agent, fees payable in the amounts and on the dates separately agreed upon in writing between the Borrower and such Agents, including pursuant to the Jefferies Fee Letter, and (ii) such other fees as separately agreed upon in writing to be paid by the Borrower to the Lenders (after giving effect to clause (a) above).

 

(d)       All fees and premiums payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent for distribution (i) to the applicable Agent for its own account or (ii) to the Lenders, in the case of fees and premiums due to the Lenders hereunder, as applicable. Fees or premiums paid hereunder shall not be refundable under any circumstances.

 

2.10     Incremental Commitments.

 

(a)       The Borrower may, at any time on or after the Final Order Entry Date and prior to the Maturity Date, by written notice to the Administrative Agent (who shall provide a copy of such written notice to each of the Lenders), request to establish additional Commitments (each, an “Incremental Commitment”) in an aggregate amount for all such Incremental Commitments so established pursuant to this Section 2.10 not in excess of the Maximum Incremental Commitment Amount and not less than $10,000,000 individually (or such lesser amount as (x) may be approved by the Required Lenders or (y) shall constitute the unused Maximum Incremental Commitment Amount at such time) (an “Incremental Commitment Request”); provided, that no more than three (3) Incremental Commitment Requests may be made during the term of the Agreement. Each such Incremental Commitment Request shall (A) specify the aggregate amount of Incremental Commitments so requested and the date on which the Borrower proposes that such Incremental Commitments shall become effective (an “Incremental Commitment Date”), which Incremental Commitment Date shall be no less than five Business Days following the date of such Incremental Commitment Request and (B) offer each Lender an equal opportunity to provide its pro rata share of such Incremental Commitments (determined based on the sum of (x) the unused Commitments of each Lender and (y) the aggregate unpaid principal amount of the Loans of each Lender, in each case, as of the date of such Incremental Commitment Request (excluding for such purposes any unused Commitments and outstanding Loans of Defaulting Lenders)); provided, that no Lender shall have any obligation to provide any Incremental Commitments and may elect or decline, in its sole discretion, to provide such Incremental Commitment; provided, further, that, in the event that one or more Lenders declines to provide its pro rata share of such Incremental Commitments, the Borrower may offer any other Lender who has elected to provide its pro rata share of such Incremental Commitments (each such Lender, an “Incremental Lender”) an opportunity to provide all or any portion of such Incremental Commitments so declined.

 

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(b)       Any Lender wishing to elect to provide its pro rata share of the applicable Incremental Commitments (an “Incremental Commitment Election”) shall notify the Administrative Agent of such Incremental Commitment Election on or prior to the date that is three Business Days following the date of such Incremental Commitment Request.

 

(c)       The terms and provisions of any Incremental Commitments and the related Incremental Loans thereunder shall be the same as the terms and provisions of all other Commitments and Loans outstanding hereunder as of the applicable Incremental Commitment Date, including without limitation, the interest rate, margin, commitment fees, upfront discount, repayment premium and similar fees applicable thereto. If any Incremental Loans are not fungible for U.S. federal income tax purposes with any Loans then outstanding, such Incremental Loans shall be identified separately (whether by a separate CUSIP number or otherwise).

 

(d)       Any such Incremental Commitments shall become effective as of the applicable Incremental Commitment Date; provided, that (1) the Required Lenders (determined prior to giving effect to such Incremental Commitments) shall have provided their consent thereto, (2) no Default or Event of Default shall have occurred and be continuing immediately prior to and immediately after giving effect to such Incremental Commitments and (3) all representations and warranties of the Loan Parties contained in this Agreement and in the other Loan Documents shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on and as of the Incremental Commitment Date, except to the extent that such representations and warranties expressly relate to an earlier date or period, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date or respective period.

 

2.11     Optional Prepayments.

 

(a)       The Borrower may at any time and from time to time prepay the Loans (subject to Section 2.11(b) below), in whole or in part, without premium or penalty except as specifically provided in Section 2.19, upon irrevocable written notice delivered to the Administrative Agent no later than 12:00 Noon, New York City time, three Business Days prior thereto, which notice shall specify the date and amount of prepayment; provided, that if a SOFR Loan is prepaid on any day other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.21. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein (provided, that any such notice may state that such notice is conditioned upon the occurrence or non-occurrence of any transaction or the receipt of proceeds to be used for such payment, in each case specified therein (including the effectiveness of other credit facilities), in which case such notice may be revoked by the Borrower (by written notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied), together with accrued interest to such date on the amount prepaid. Partial prepayments of Loans shall be in an aggregate principal amount of $1,000,000 or a whole multiple of $100,000 in excess thereof, and in each case shall be subject to the provisions of Section 2.18.

 

(b)       In connection with any optional prepayments by the Borrower of the Loans pursuant to Section 2.11(a), such prepayment shall be applied to the then outstanding Loans being repaid on a pro rata basis.

 

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2.12     Mandatory Prepayments.

 

(a)       Unless the Required Lenders shall otherwise agree, if any Indebtedness (excluding any Indebtedness permitted to be incurred in accordance with Section 7.2) shall be incurred by the Borrower or any Subsidiary, an amount equal to 100% of the Net Cash Proceeds thereof shall be applied not later than one (1) Business Day after the date of receipt of such Net Cash Proceeds toward the prepayment of the Loans as set forth in Section 2.12(d).

 

(b)       Unless the Required Lenders shall otherwise agree, if on any date the Borrower or any Subsidiary shall for its own account receive Net Cash Proceeds from any Asset Sale or Recovery Event (except to the extent such Asset Sale or Recovery Event, as applicable, relates to any Prepetition ABL Priority Collateral so long as such Prepetition ABL Priority Collateral secures obligations under the DIP ABL Facility or the Prepetition ABL Facility) with respect to any assets or Property (including, for the avoidance of doubt, any Intellectual Property licenses in respect thereof), then such Net Cash Proceeds shall be applied not later than one (1) Business Day after such date toward the prepayment of the Loans as set forth in Section 2.12(d).

 

(c)       Unless the Required Lenders shall otherwise agree, if on any date the Borrower or any Subsidiary shall for its own account receive Extraordinary Receipts, then such Extraordinary Receipts shall be applied not later than one (1) Business Day after such date toward the prepayment of the Loans as set forth in Section 2.12(d).

 

(d)       Amounts to be applied in connection with prepayments of Loans pursuant to this Section 2.12 shall, subject to the Orders, be applied to the prepayment of the Loans in accordance with Section 2.18 until paid in full. In connection with any mandatory prepayments by the Borrower of the Loans pursuant to this Section 2.12, such prepayments shall be applied on a pro rata basis to the then outstanding Loans being prepaid Each prepayment of the Loans under this Section 2.12 shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid.

 

(e)       Notwithstanding anything to the contrary in Section 2.12 or 2.18, with respect to the amount of any mandatory prepayment pursuant to Section 2.12(b) or (c) (such amount, the “Term Prepayment Amount”), the Borrower may, in its sole discretion, in lieu of applying such amount to the prepayment of Loans as provided in paragraph (d) above, not later than 12:00 p.m. (New York City time) on the Business Day prior to the date specified in this Section 2.12 for such prepayment, give the Administrative Agent telephonic notice (promptly confirmed in writing) requesting that the Administrative Agent prepare and provide to each Lender a notice (each, a “Prepayment Option Notice”) as described below. As promptly as practicable after receiving such notice from the Borrower, the Administrative Agent will send to each Lender a Prepayment Option Notice, which shall be in the form of Exhibit I (or such other form approved by the Administrative Agent and the Borrower), and shall include an offer by the Borrower to prepay, on the date (each a “Mandatory Prepayment Date”) that is ten Business Days after the date of the Prepayment Option Notice, the Loans of such Lender by an amount equal to the portion of the Term Prepayment Amount indicated in such Lender’s Prepayment Option Notice as being applicable to such Lender’s Loans. Each Lender may reject all or a portion of its Term Prepayment Amount by providing written notice to the Administrative Agent and the Borrower no later than 5:00 p.m. (New York City time) five (5) Business Days after such Lender’s receipt of the Prepayment Option Notice (which notice shall specify the principal amount of the Term Prepayment Amount to be rejected by such Lender); provided, that any Lender’s failure to so reject such Term Prepayment Amount shall be deemed an acceptance by such Lender of such Prepayment Option Notice and the amount to be prepaid in respect of Loans held by such Lender. On the Mandatory Prepayment Date, the Borrower shall pay to the relevant Lenders the aggregate amount necessary to prepay that portion of the outstanding Loans in respect of which such Lenders have (or are deemed to have) accepted prepayment as described above.

 

(f)        [Reserved].

 

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(g)      Notwithstanding any other provisions of this Section 2.12, (A) to the extent that any or all of the Net Cash Proceeds of any Asset Sale by a Foreign Subsidiary (other than the BrandCo Entities) (a “Foreign Asset Sale”) or the Net Cash Proceeds of any Recovery Event with respect to a Foreign Subsidiary (other than the BrandCo Entities) (a “Foreign Recovery Event”), in each case giving rise to a prepayment event pursuant to Section 2.12(b), are or is prohibited, restricted or delayed by applicable local law from being repatriated to the United States, the portion of such Net Cash Proceeds so affected will not be required to be applied to repay Loans at the times provided in this Section 2.12 but may be retained by the applicable Foreign Subsidiary so long, but only so long, as the applicable local law will not permit or restricts repatriation to the United States (the Borrower hereby agreeing to use commercially reasonable efforts to cause the applicable Foreign Subsidiary to promptly take all actions reasonably required by the applicable local law to permit such repatriation), and once such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law, such repatriation will be immediately effected and such repatriated Net Cash Proceeds will be promptly (and in any event not later than five Business Days after such repatriation) applied (net of additional taxes payable or reserved against as a result thereof including, without duplication, any repatriation costs associated with repatriation of such proceeds from the applicable recipient to the Borrower) to the repayment of the Loans in accordance with this Section 2.12 and (B) to the extent that the Borrower has determined in good faith that repatriation of any or all of the Net Cash Proceeds of any Foreign Asset Sale or any Foreign Recovery Event derived from a Foreign Subsidiary (other than the BrandCo Entities) could reasonably be expected to result in a material adverse tax consequence (taking into account any foreign tax credit or benefit, in the Borrower’s reasonable judgment, expected to be realized in connection with such repatriation) with respect to such Net Cash Proceeds, the Net Cash Proceeds so affected may be retained by the applicable Foreign Subsidiary, provided, that, in the case of this clause (B), on or before the date on which any Net Cash Proceeds so retained would otherwise have been required to be applied to prepayments pursuant to this Section 2.12, (x) the Borrower shall apply an amount equal to such Net Cash Proceeds to such prepayments as if such Net Cash Proceeds had been received by the Borrower rather than such Foreign Subsidiary, less the amount of additional taxes that would have been payable or reserved against if such Net Cash Proceeds had been repatriated (or, if less, the Net Cash Proceeds that would be calculated if received by such Foreign Subsidiary) or (y) such Net Cash Proceeds shall be applied to the repayment of Indebtedness of a Foreign Subsidiary, in each case, other than as mutually agreed by the Borrower and the Administrative Agent (acting on the instructions of the Required Lenders).

 

2.13     [Reserved].

 

2.14     [Reserved].

 

2.15     Interest Rates and Payment Dates.

 

(a)      The unpaid principal amount of each ABR Loan shall bear interest from the date of the Borrowing thereof until maturity (whether by acceleration or otherwise) at a rate per annum that shall at all times be the Applicable Margin for ABR Loans plus the ABR, in each case, in effect from time to time.

 

(b)      The unpaid principal amount of each SOFR Loan shall bear interest from the date of the Borrowing thereof until maturity thereof (whether by acceleration or otherwise) at a rate per annum that shall at all times be the Applicable Margin for SOFR Loans plus the Adjusted Term SOFR Rate.

 

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(c)       Upon the occurrence and during the continuance of an Event of Default, the principal amount of outstanding Loans, any fees and/or any other amount outstanding or payable by the Borrower or any other Loan Party hereunder shall automatically bear interest (after as well as before judgment) at a rate per annum (the “Default Rate”) equal to (i) in the case of the principal amount of any Loan, 2.00% per annum plus the rate otherwise applicable to such Loan and (ii) in the case of any other amount, 2.00% per annum plus the rate applicable to ABR Loans, in each case, from the date of such nonpayment until such amount is paid in full (after as well as before judgment). Such interest shall be payable in cash by the Borrower from time to time on demand; provided that, at the direction, or with the prior written consent, of the Required Lenders (in their sole discretion), all or any portion of the interest accruing hereunder at the Default Rate shall be payable in kind by the Borrower at any time in arrears by increasing the aggregate principal amount of the Loans (any such interest payable in kind being referred to herein as “PIK Interest”). Such interest (other than any PIK Interest) shall be payable in cash by the Borrower from time to time on demand. PIK Interest shall be capitalized by increasing the principal amount of the Loans in an amount equal to such PIK Interest. Each Loan shall bear interest on the increased amount thereof from and after the applicable date on which a payment of PIK Interest is made. All such PIK Interest so capitalized pursuant to this Section 2.15(c) shall be treated as principal of the Loans for all purposes of this Agreement and the other Loan Documents. The obligation of the Borrower to pay all such PIK Interest so capitalized shall be automatically evidenced by this Agreement. Upon request of the Administrative Agent or any Lender, the Borrower shall confirm in writing the principal amount then outstanding on any Loans, including all PIK Interest so capitalized. Notwithstanding anything to the contrary, and for the avoidance of doubt, it is understood and agreed that (i) the PIK Interest is calculated based on the then outstanding aggregate principal amount of the Loans and (ii) all accrued and unpaid PIK Interest shall be due and payable in cash on the Maturity Date.

 

(d)       All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the ABR at times when the ABR is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable ABR, Adjusted Term SOFR Rate or Term SOFR shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

 

2.16     Computation of Interest and Fees.

 

(a)       Interest and fees payable pursuant hereto shall be calculated on the basis of a 360-day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of each determination of a SOFR Rate. The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of the effective date and the amount of each such change in interest rate.

 

(b)       Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be presumptively correct in the absence of demonstrable error. The Administrative Agent shall, at the request of the Borrower, deliver to the Borrower a statement showing the quotations used by the Administrative Agent in determining any interest rate pursuant to Section 2.15(a) and Section 2.15(b).

 

2.17     Alternate Rate of Interest.

 

(a)       [Reserved]:

 

(b)       If prior to the commencement of any Interest Period for a SOFR Borrowing:

 

(i)        the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted Term SOFR Rate for such Interest Period; or

 

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(ii)       the Administrative Agent is advised by the Required Lenders that the Adjusted Term SOFR Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining their Loans included in such Borrowing for such Interest Period;

 

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or electronic means as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Committed Loan Notice that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a SOFR Borrowing shall be ineffective and such Borrowing shall be converted to or continued as on the last day of the Interest Period applicable thereto an ABR Borrowing, and (ii) if any Committed Loan Notice requests a SOFR Borrowing, such Borrowing shall be made as an ABR Borrowing.

 

(c)       Upon the occurrence of a Benchmark Transition Event and its related Benchmark Replacement Date prior to any setting of the then-current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (1) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document and (y) if a Benchmark Replacement is determined in accordance with clause (2) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document; provided that, solely if the Administrative Agent and the Borrower determine that (x) the Relevant Governmental Body has not made any selection or recommendation for a replacement benchmark rate or the mechanism for determining such a rate and (y) there is no evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark, so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders.

 

(d)       In connection with the implementation of a Benchmark Replacement, the Administrative Agent will have the right, in consultation with the Borrower, to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document.

 

(e)       The Administrative Agent will promptly notify the Borrower and the Lenders of (i) any occurrence of a Benchmark Transition Event and its related Benchmark Replacement Date, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming Changes, (iv) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (e) below and (v) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section 2.17, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section 2.17.

 

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(f)        At any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including the Term SOFR Reference Rate) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (B) the administrator of such Benchmark or the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is not or will not be representative or in compliance with or aligned with the International Organization of Securities Commissions (IOSCO) Principles for Financial Benchmarks, then the Administrative Agent may modify the definition of “Interest Period” (or any similar or analogous definition) for any Benchmark settings at or after such time to remove such unavailable, non-representative, non-compliant or non-aligned tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is not or will not be representative or in compliance with or aligned with the International Organization of Securities Commissions (IOSCO) Principles for Financial Benchmarks for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify the definition of “Interest Period” (or any similar or analogous definition) for all Benchmark settings at or after such time to reinstate any such previously removed tenor for Benchmark (including Benchmark Replacement) settings.

 

(g)       Upon the Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrower may revoke any request for a Borrowing of, conversion to or continuation of Loans to be made, converted or continued during any Benchmark Unavailability Period and, failing that, the Borrower will be deemed to have converted any such request for a SOFR Loan into a request for a Borrowing of or conversion to ABR Loans. During any Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of ABR based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of ABR.

 

(h)       Furthermore, if any Loan is outstanding on the date of the Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period with respect to the rate applicable to such Loan, then on the last day of the Interest Period applicable to such Loan (or the next succeeding Business Day if such day is not a Business Day), such Loan shall be converted by the Administrative Agent to, and shall constitute an ABR Loan on such day.

 

2.18     Pro Rata Treatment and Payments.

 

(a)       Except as expressly otherwise provided herein (including as expressly provided in Sections 2.12, 2.20, 2.21, 2.24, 10.5 and 10.7), each payment (other than prepayments) in respect of principal or interest in respect of any Loans and each payment in respect of fees payable hereunder with respect to the Loans shall be applied to the amounts of such obligations owing to the Lenders, pro rata according to the respective amounts then due and owing to such Lenders.

 

(b)       Each optional and mandatory prepayment of the Loans shall be allocated among the Loans then outstanding pro rata; provided, that, any mandatory prepayment of Loans shall be subject to the opt-out provision under Section 2.12(e). Amounts repaid or prepaid on account of the Loans may not be reborrowed.

 

(c)       [Reserved].

 

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(d)       All payments (including prepayments) to be made by the Borrower hereunder, whether on account of principal, interest, fees or otherwise, shall be made without setoff, deduction or counterclaim and shall be made prior to 3:00 p.m., New York City time, on the due date thereof to the Administrative Agent, for the account of the relevant Lenders, at the Funding Office, in immediately available funds. Any payment received by the Administrative Agent after 3:00 p.m., New York City time may be considered received on the next Business Day in the Administrative Agent’s sole discretion. The Administrative Agent shall distribute such payments to the relevant Lenders promptly upon receipt in like funds as received. If any payment hereunder (other than payments on the SOFR Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day. If any payment on a SOFR Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day. In the case of any extension of any payment of principal pursuant to the preceding sentence, interest thereon shall be payable at the then applicable rate during such extension.

 

(e)       Unless the Administrative Agent shall have been notified in writing by any Lender prior to a borrowing that such Lender will not make the amount that would constitute its share of such borrowing available to the Administrative Agent, the Administrative Agent may assume that such Lender is making such amount available to the Administrative Agent, and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower a corresponding amount. If such amount is not made available to the Administrative Agent by the required time on the Borrowing Date therefor, such Lender shall pay to the Administrative Agent on demand, such amount with interest thereon, at a rate equal to the greater of (i) the Federal Funds Effective Rate and (ii) a rate reasonably determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, for the period until such Lender makes such amount immediately available to the Administrative Agent. A certificate of the Administrative Agent submitted to any Lender with respect to any amounts owing under this paragraph shall be presumptively correct in the absence of demonstrable error. If such Lender’s share of such borrowing is not made available to the Administrative Agent by such Lender within three Business Days after such Borrowing Date, the Administrative Agent shall give notice of such fact to the Borrower and the Administrative Agent shall also be entitled to recover such amount with interest thereon at the rate per annum applicable to SOFR Loans with an Interest Period of one month, on demand, from the Borrower.

 

(f)        Unless the Administrative Agent shall have been notified in writing by the Borrower prior to the date of any payment due to be made by the Borrower hereunder that the Borrower will not make such payment to the Administrative Agent, the Administrative Agent may assume that the Borrower is making such payment, and the Administrative Agent may, but shall not be required to, in reliance upon such assumption, make available to the relevant Lenders their respective pro rata shares of a corresponding amount. If such payment is not made to the Administrative Agent by the Borrower within three Business Days after such due date, the Administrative Agent shall be entitled to recover, on demand, from each relevant Lender to which any amount which was made available pursuant to the preceding sentence, such amount with interest thereon at the rate per annum equal to the daily average Federal Funds Effective Rate. Nothing herein shall be deemed to limit the rights of the Administrative Agent or any Lender against the Borrower.

 

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2.19     Repayment Premium. In the event that all or any portion of the Loans is repaid or prepaid or required to be repaid or prepaid in any manner and for any reason, whether pursuant to Section 2.11(a), Section 2.12(a), Section 2.12(b), Section 2.12(c), Section 2.24, on the Maturity Date or following acceleration of the Loans or otherwise, such prepayment or repayment shall be accompanied by a premium (the “Repayment Premium”) in an amount equal to 1.00% multiplied by the aggregate principal amount of the Loans so prepaid or repaid or required to be repaid or prepaid. If the Loans are accelerated or otherwise become due prior to their maturity date, in each case as a result of an Event of Default (including the acceleration of claims by operation of law), the amount of principal of and premium on the Loans that becomes due and payable shall automatically equal 100% of the principal amount of the Loans plus the Repayment Premium as if such acceleration or other occurrence were a voluntary prepayment of the Loans or otherwise becoming due, and such Repayment Premium shall constitute part of the Obligations, in view of the impracticability and extreme difficulty of ascertaining actual damages and by mutual agreement of the parties as to a reasonable calculation of each Lender’s loss as a result thereof. Any premium payable above shall be presumed to be the liquidated damages sustained by each Lender and the Borrower agrees that it is reasonable under the circumstances currently existing. THE BORROWER EXPRESSLY WAIVES (TO THE FULLEST EXTENT IT MAY LAWFULLY DO SO) THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE APPLICABLE PREMIUM IN CONNECTION WITH ANY SUCH ACCELERATION. The Borrower expressly agrees (to the fullest extent it may lawfully do so) that: (A) the Repayment Premium is reasonable and is the product of an arm’s length transaction between sophisticated business people, ably represented by counsel; (B) the Repayment Premium shall be payable notwithstanding the then prevailing market rates at the time payment is made; and (C) there has been a course of conduct between the Lenders and the Borrower giving specific consideration in this transaction for such agreement to pay the Repayment Premium and (D) the Borrower shall be estopped hereafter from claiming differently than as agreed to in this paragraph and in Sections 2.9 of this Agreement.

 

2.20     Taxes.

 

(a)       Except as otherwise required by law, all payments made by or on account of the Borrower or any Loan Party under this Agreement and the other Loan Documents to any Recipient under this Agreement shall be made free and clear of, and without deduction or withholding for or on account of, any Taxes. If applicable law requires withholding or deduction of any Tax from any such payment, the Borrower, any other Loan Party or other withholding agent shall make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law. If any Indemnified Taxes or Other Taxes are required to be deducted or withheld from any such payments, the amounts so payable to the applicable Recipient shall be increased to the extent necessary so that after deduction or withholding of such Indemnified Taxes and Other Taxes (including Indemnified Taxes or Other Taxes attributable to amounts payable under this Section 2.20(a)) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

 

(b)       In addition, the Borrower or any Loan Party under this Agreement and the other Loan Documents shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

 

(c)       Whenever any Taxes are payable by the Borrower or any Loan Party under this Agreement or the other Loan Documents, as promptly as possible thereafter the Borrower shall send to the Administrative Agent for the account of the Administrative Agent or Lender, as the case may be, a certified copy of an original official receipt received by the Borrower or Loan Party showing payment thereof if such receipt is obtainable, or, if not, such other evidence of payment as may reasonably be required by the Administrative Agent or such Lender.

 

(d)       The Borrower shall indemnify each Recipient, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes, including any amounts payable pursuant to this Section 2.20, payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any incremental Taxes and reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability prepared in good faith and delivered to the Borrower by a Recipient (with a copy to the Administrative Agent if applicable) shall be conclusive absent manifest error.

 

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(e)       Each Lender that is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) (a “Non-US Lender”) shall deliver to the Borrower and the Administrative Agent (or, in the case of a Participant, to the Lender from which the related participation shall have been purchased) (A) (i) two accurate and complete copies of IRS Form W-8ECI, W-8BEN or W-8BEN-E, as applicable, (ii) in the case of a Non-US Lender claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest”, a statement substantially in the form of Exhibit F and two accurate and complete copies of IRS Form W-8BEN or W-8BEN-E, or any subsequent versions or successors to such forms, in each case properly completed and duly executed by such Non-US Lender claiming complete exemption from, or reduced rate of, U.S. federal withholding tax on all payments by the Borrower or any Loan Party under this Agreement and the other Loan Documents, or (iii) IRS Form W-8IMY (or any applicable successor form) and all necessary attachments (including the forms described in clauses (i) and (ii) above, provided that if the Non-US Lender is a partnership, and one or more of the partners is claiming portfolio interest treatment, the certificate in the form of Exhibit F may be provided by such Non-US Lender on behalf of such partners) and (B) any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding tax duly completed together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made. Such forms shall be delivered by each Non-US Lender on or about the date it becomes a party to this Agreement (or, in the case of any Participant, on or about the date such Participant purchases the related participation). In addition, each Non-US Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by such Non-US Lender, and from time to time thereafter if reasonably requested by the Borrower or the Administrative Agent. Each Non-US Lender shall promptly notify the Borrower and the Administrative Agent at any time it determines that it is no longer in a position to provide any previously delivered certificate to the Borrower and the Administrative Agent (or any other form of certification adopted by the United States taxing authorities for such purpose). Notwithstanding any other provision of this paragraph, a Non-US Lender shall not be required to deliver any form pursuant to this paragraph that such Non-US Lender is not legally able to deliver provided that it shall promptly notify the Borrower and the Administrative Agent in writing of such inability.

 

(f)        [reserved]

 

(g)       Each Lender that is a United States person (as such term is defined in Section 7701(a)(30) of the Code) (a “US Lender”) shall deliver to the Borrower and the Administrative Agent two accurate and complete copies of IRS Form W-9, or any subsequent versions or successors to such form and certify that such Lender is not subject to backup withholding. Such forms shall be delivered by each US Lender on or about the date it becomes a party to this Agreement. In addition, each US Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by such US Lender, and from time to time thereafter if reasonably requested by the Borrower or the Administrative Agent. Each US Lender shall promptly notify the Borrower at any time it determines that it is no longer in a position to provide any previously delivered certifications to the Borrower (or any other form of certification adopted by the United States taxing authorities for such purpose).

 

(h)       If any Recipient determines, in its sole discretion exercised in good faith, that it has received a refund of any Indemnified Taxes or Other Taxes as to which it has been indemnified pursuant to this Section 2.20 (including by the payment of additional amounts pursuant to this Section 2.20), it shall promptly pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid under this Section 2.20, with respect to the Indemnified Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such Recipient and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that such indemnifying party, upon the request of such Recipient, agrees to repay the amount paid over to the indemnifying party (plus any penalties, interest or other charges imposed by the relevant Governmental Authority other than any such penalties, interest or other charges resulting from the gross negligence or willful misconduct of the relevant Recipient (as determined by a final and non-appealable judgment of a court of competent jurisdiction)) to such Recipient in the event such Recipient is required to repay such refund to such Governmental Authority; provided, further, that such Recipient shall, at the indemnifying party’s request, provide a copy of any notice of assessment or other evidence of the requirement to pay such refund received from the relevant Governmental Authority (provided that the Recipient may delete any information therein that it deems confidential). This paragraph shall not be construed to require any Recipient to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other Person. In no event will any Recipient be required to pay any amount to an indemnifying party the payment of which would place such Recipient in a less favorable net after-Tax position than such Recipient would have been in if the indemnification payments or additional amounts giving rise to such refund of any Indemnified Taxes or Other Taxes had never been paid.

 

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(i)        [reserved]

 

(j)        If a payment made to a Lender under any Loan Document would be subject to withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or Administrative Agent as may be necessary for the Borrower and Administrative Agent to comply with their obligations under FATCA and to determine that, if any, such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 2.20(j), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

(k)       To the extent required by any applicable laws, the Administrative Agent may withhold from any payment to any Lender an amount equivalent to any applicable withholding Tax. Without limiting the provisions of this Section 2.20, each Lender shall severally indemnify the Administrative Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 10.6(c)(iii) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this paragraph (k).

 

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(l)        The agreements in this Section 2.20 shall survive the termination of this Agreement and payment of the Loans and all other amounts payable under any Loan Document, the resignation of the Administrative Agent and any assignment of rights by, or replacement of, any Lender.

 

(m)      For purposes of this Section 2.20, for the avoidance of doubt, applicable law includes FATCA.

 

2.21     Indemnity. Other than with respect to Taxes, which shall be governed solely by Section 2.20, the Borrower agrees to indemnify each Lender for, and to hold each Lender harmless from, any loss or expense (other than lost profits, including the loss of the interest rate margin) that such Lender actually sustains or incurs as a consequence of (a) any failure by the Borrower in making a borrowing of or continuation of SOFR Loans after the Borrower has given notice requesting the same in accordance with the provisions of this Agreement, (b) any failure by the Borrower in making any prepayment of SOFR Loans after the Borrower has given a notice thereof in accordance with the provisions of this Agreement or (c) the making of a prepayment or continuation of SOFR Loans on a day that is not the last day of an Interest Period with respect thereto. A reasonably detailed certificate as to (showing in reasonable detail the calculation of) any amounts payable pursuant to this Section 2.21 submitted to the Borrower by any Lender shall be presumptively correct in the absence of demonstrable error. This covenant shall survive the termination of this Agreement and the payment of the Obligations.

 

2.22     Break Funding Payments. In the event of (a) the payment of any principal of any SOFR Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any SOFR Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow (other than due to the default of the relevant Lender), convert, continue or prepay any SOFR Loan on the date specified in any notice delivered pursuant hereto or (d) the assignment of any SOFR Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.24, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. In the case of a SOFR Loan, such loss, cost or expense to any Lender shall be deemed to be the amount determined by such Lender (it being understood that the deemed amount shall not exceed the actual amount) to be the excess, if any, of (i) the amount of interest that would have accrued on the principal amount of such Loan had such event not occurred, at the Term SOFR, as applicable, that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue a SOFR Loan, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest that would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for deposits in Dollars of a comparable amount and period from other banks in the eurocurrency market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section 2.22 shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

 

2.23     Change of Lending Office. Each Lender agrees that, upon the occurrence of any event giving rise to the payment of additional amounts pursuant to Section 2.20(a) with respect to such Lender, it will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) that would, in the Lender’s judgment, avoid or minimize any amounts payable pursuant to such Section (including by designating another lending office for any Loans affected by such event with the object of avoiding the consequences of such event); provided, that such designation is made on terms that, in the good faith judgment of such Lender, cause such Lender and its lending office(s) to suffer no economic, legal or regulatory disadvantage or unreimbursed cost or expense; provided, further, that nothing in this Section 2.23 shall affect or postpone any of the obligations of the Borrower or the rights of any Lender pursuant to Section 2.20(a). The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with such designation or assignment.

 

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2.24     Replacement of Lenders. The Borrower shall be permitted to replace with a financial entity or financial entities any Lender (each such Lender, a “Replaced Lender”) that (i) requests reimbursement for amounts owing or otherwise results in increased costs imposed on the Borrower or on account of which the Borrower is required to pay additional amounts to any Governmental Authority, in each case, pursuant to Section 2.20 or 2.21 (to the extent a request made by a Lender pursuant to the operation of Section 2.21 is materially greater than requests made by other Lenders), (ii) is a Disqualified Institution, (iii) has refused to consent to any waiver or amendment with respect to any Loan Document that requires such Lender’s consent and has been consented to by the Required Lenders, or (iv) is a Defaulting Lender; provided, that, in the case of a replacement pursuant to clause (a) above:

 

(a)       such replacement does not conflict with any Requirement of Law;

 

(b)       the replacement financial entity or financial entities shall purchase, at par plus the applicable Repayment Premium, all Loans and other amounts owing to such Replaced Lender on or prior to the date of replacement;

 

(c)       the Borrower shall be liable to such Replaced Lender under Section 2.21 (as though Section 2.21 were applicable) if any SOFR Loan owing to such Replaced Lender shall be purchased other than on the last day of the Interest Period relating thereto;

 

(d)       the replacement financial entity or financial entities, (x) if not already a Lender, shall be reasonably satisfactory to the Administrative Agent to the extent that an assignment to such replacement financial institution of the rights and obligations being acquired by it would otherwise require the consent of the Administrative Agent pursuant to Section 10.6(b)(i)(2) and (y) shall pay (unless otherwise paid by the Borrower) any processing and recordation fee required under Section 10.6(b)(ii)(2);

 

(e)       the Administrative Agent and any replacement financial entity or entities shall execute and deliver, and such Replaced Lender shall thereupon be deemed to have executed and delivered, an appropriately completed Assignment and Assumption to effect such substitution;

 

(f)        the Borrower shall pay all additional amounts (if any) required pursuant to Section 2.20, as the case may be, in respect of any period prior to the date on which such replacement shall be consummated;

 

(g)       in respect of a replacement pursuant to clause (iii) above, the replacement financial entity or financial entities shall consent to such amendment or waiver;

 

(h)       any such replacement shall not be deemed to be a waiver of any rights that the Borrower, the Administrative Agent or any other Lender shall have against the Replaced Lender; and

 

(i)        in the case of any such replacement resulting from a requirement that the Borrower pay additional amounts pursuant to Section 2.20 or 2.21, such replacement will result in a reduction in such payments thereafter.

 

In connection with any such replacement under this Section 2.24, if the Replaced Lender does not execute and deliver to the Administrative Agent a duly completed Assignment and Assumption and/or any other documentation necessary to reflect such replacement by the later of (x) the date on which the replacement Lender executes and delivers such Assignment and Assumption and/or such other documentation and (y) the date as of which all obligations of the Borrower owing to the Replaced Lender relating to the Loans and Commitments so assigned shall be paid in full to such Replaced Lender, then such Replaced Lender shall be deemed to have executed and delivered such Assignment and Assumption and/or such other documentation as of such date and the Borrower shall be entitled (but not obligated) to execute and deliver such Assignment and Assumption and/or such other documentation on behalf of such Replaced Lender, and the Administrative Agent shall record such assignment in the Register.

 

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2.25      Priority and Liens; No Discharge.

 

(a)       Each Loan Party that is a Debtor hereby covenants, represents, warrants and agrees that upon the execution on this Agreement and entry of the Interim Order (and, when applicable, the Final Order), the obligations hereunder and under the Loan Documents shall, subject to the Carve-Out and the CCAA Charges, at all times:

 

(i)        be entitled to superpriority administrative expense claim status in the Cases having a priority over all administrative expenses and any claims of any kind or nature whatsoever, specified in or ordered pursuant to section 105, 326, 327, 328, 330, 331, 361, 362, 363, 364, 365, 503, 506, 507(a), 507(b), 546, 552, 726, 1113 or 1114 or any other provisions of the Bankruptcy Code (the “Superpriority Claims”);

 

(ii)       be secured by a fully perfected security interest in and lien on all Collateral of each Debtor, as provided in and with the priority contemplated by the Interim Order (and, when applicable, the Final Order) and, in the case of the Canadian Collateral, the Canadian DIP Recognition Order.

 

(b)                

 

(i)        Each Loan Party that is a Debtor hereby confirms and acknowledges that, pursuant to the Interim Order (and, when entered, the Final Order) and, in the case of the Canadian Collateral, the Canadian DIP Recognition Order, Liens in favor of the Collateral Agent on behalf of and for the benefit of the Secured Parties in all of the Debtors’ Collateral, which includes, without limitation, all of such Debtor’s Real Property, now existing or hereafter acquired, shall be created and perfected without the recordation or filing in any land records or filing offices of any Mortgage, assignment or similar instrument.

 

(ii)       Further to Section 2.25(b)(i) and the Interim Order (and, when entered, the Final Order) and, in the case of the Canadian Collateral, the Canadian DIP Recognition Order, to secure the full and timely payment and performance of the Obligations, each Loan Party that is a Debtor hereby MORTGAGES, GRANTS, BARGAINS, ASSIGNS, SELLS, CONVEYS and CONFIRMS, to the Collateral Agent, for the ratable benefit of the Secured Parties, all of its right, title and interest in and to any Real Property (which, for the avoidance of doubt, shall include all of such Loan Party’s right, title and interest now or hereafter acquired in and to (a) all land and improvements (including fixtures, as defined in the UCC) now owned (or leased) or hereafter acquired by such Loan Party, (b) all materials, supplies, equipment, apparatus and other items of personal property now owned or hereafter acquired by such Loan Party and now or hereafter attached to, installed in or used in connection with the Real Property, (c) all utilities whether or not situated in easements, (d) all equipment, inventory and other goods in which such Loan Party now has or hereafter acquires, (e) all general intangibles, instruments, documents, contract rights and chattel paper relating to the Real Property, (f) all reserves, escrows or impounds and all deposit accounts maintained by such Loan Party with respect to the Real Property, (g) all leases, licenses, concessions, occupancy agreements or other agreements (written or oral, now or at any time in effect) which grant to any Person a possessory interest in, or the right to use, all or any part of the Real Property, together with all related security and other deposits, (h) all of the rents, revenues, royalties, income, proceeds, profits, accounts receivable, security and other types of deposits, and other benefits paid or payable by parties to the leases for using, leasing, licensing possessing, operating from, residing in, selling or otherwise enjoying the Real Property, (i) all other agreements, such as construction contracts, architects’ agreements, engineers’ contracts, utility contracts, maintenance agreements, management agreements, service contracts, listing agreements, guaranties, warranties, permits, licenses, certificates and entitlements in any way relating to the construction, use, occupancy, operation, maintenance, enjoyment or ownership of the Real Property, (j) all rights, privileges, tenements, hereditaments, rights-of-way, easements, appendages and appurtenances appertaining to the foregoing, (k) all property tax refunds payable with respect to the Real Property, (l) all accessions, replacements and substitutions for any of the foregoing and all proceeds thereof, (m) all insurance policies, unearned premiums therefor and proceeds from such policies covering any of the above property now or hereafter acquired by such Loan Party as an insured party, and (n) all awards, damages, remunerations, reimbursements, settlements or compensation heretofore made or hereafter to be made to such Loan Party by any governmental authority pertaining to any condemnation or other taking (or any purchase in lieu thereof), TO HAVE AND TO HOLD to the Collateral Agent, and such Loan Party does hereby bind itself, its successors and assigns to WARRANT AND FOREVER DEFEND the title to such property, assets and interests unto the Collateral Agent) other than Excluded Collateral.

 

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(iii)      All of the Liens described in this Section 2.25 (x) shall be effective and perfected upon entry of the Interim Order (and, when entered, the Final Order) and, in the case of the Canadian Collateral, the Canadian DIP Recognition Order, without the necessity of the execution, recordation or filings by any Debtor of mortgages, security agreements, control agreements, pledge agreements, financing statements or other similar documents, or the possession or control by the Collateral Agent of, or over, any Collateral, as set forth in the Orders and, in the case of the Canadian Collateral, the Canadian DIP Recognition Order and (y) for the avoidance of doubt, shall in no way limit the Liens and security interests granted by any Loan Party pursuant to the Orders, and, in the case of the Canadian Collateral, the Canadian DIP Recognition Order, or the Security Documents, provided that, upon the request of the Collateral Agent, each Loan Party shall execute and deliver to the Collateral Agent, as soon as reasonably practicable following such request but in any event within 60 days following such request (as extended by the Collateral Agent), a Mortgage in recordable form with respect to any Real Property constituting Collateral owned by such Loan Party and identified by the Collateral Agent on terms reasonably satisfactory to the Collateral Agent, and, with respect to each Mortgage, the Real Property Deliverables as requested by the Collateral Agent.

 

(iv)      Each of the Loan Parties agrees that (i) its obligations under the Credit Documents shall not be discharged by the entry of an order confirming a Chapter 11 Plan (and each of the Loan Parties, pursuant to Section 1141(d)(4) of the Bankruptcy Code, hereby irrevocably waives any such discharge) and (ii) the Superpriority Claim granted to the Administrative Agent and the Lenders pursuant to the Orders and the Liens granted to the Collateral Agent and the Lenders pursuant to the Orders shall not be affected in any manner by the entry of an order confirming a Chapter 11 Plan.

 

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SECTION III.     [Reserved]

 

SECTION IV.     REPRESENTATIONS AND WARRANTIES

 

To induce the Agents and the Lenders to enter into this Agreement and to make the Loans, the Borrower hereby represents and warrants (as to itself and each of its Subsidiaries) to the Agents and each Lender, which representations and warranties shall be deemed made on the Closing Date (after giving effect to the Transactions) and on the date of each borrowing of Loans hereunder that:

 

4.1       Financial Condition.

 

(a)      The audited consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at December 31, 2021, and the related statements of income, stockholders’ equity and of cash flows for the fiscal year ended on such date, reported on by and accompanied by an unqualified report from KPMG LLP, present fairly in all material respects the financial condition of the Borrower and its consolidated Subsidiaries as at such date and the results of their operations, their cash flows and their changes in stockholders’ equity for the respective fiscal year then ended. All such financial statements, including the related schedules and notes thereto and year-end adjustments, have been prepared in accordance with GAAP (except as otherwise noted therein).

 

(b)      The financial projections (including the Initial Budget) and estimates and information of a general economic nature prepared by or on behalf of the Borrower or any of its representatives, and that have been made available to any Lenders or the Administrative Agent in connection with the DIP Facility or the other transactions contemplated hereby (i) have been prepared in good faith based upon assumptions believed by the Borrower to be reasonable as of the date thereof (it being understood that actual results may vary materially from such projections and estimates), as of the date such projections and estimates were furnished to the Lenders and as of the Closing Date, and (ii) as of the Closing Date, have not been modified in any material respect by the Borrower.

 

4.2       No Change. Since the Closing Date, there has been no event, development or circumstance that has had or would reasonably be expected to have a Material Adverse Effect.

 

4.3       Existence; Compliance with Law. Each of the Borrower and its Subsidiaries, subject in the case of the Borrower and each Subsidiary that is a Debtor, to the entry of the Orders and the terms thereof, (a) (i) is duly organized (or incorporated), validly existing and in good standing (or, only where applicable, the equivalent status in any foreign jurisdiction) under the laws of the jurisdiction of its organization or incorporation, except in each case (other than with respect to the Borrower) to the extent such failure to do so would not reasonably be expected to have a Material Adverse Effect, (ii) has the corporate or other organizational power and authority, and the legal right, to own and operate its Property, to lease the Property it operates as lessee and to conduct the business in which it is currently engaged, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect and (iii) is duly qualified as a foreign corporation or other entity and in good standing (where such concept is relevant) under the laws of each jurisdiction where its ownership, lease or operation of Property or the conduct of its business requires such qualification except, in each case, to the extent that the failure to be so qualified or in good standing (where such concept is relevant) would not have a Material Adverse Effect and (b) is in compliance with all Requirements of Law except to the extent that any such failure to comply therewith would not reasonably be expected to have a Material Adverse Effect.

 

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4.4       Corporate Power; Authorization; Enforceable Obligations.

 

(a)       Each Loan Party and, subject in the case of each Loan Party that is a Debtor, to the entry of the Orders and, in the case of the Canadian Collateral, the Canadian DIP Recognition Order and terms thereof, has the corporate or other organizational power and authority to execute and deliver, and perform its obligations under, the Loan Documents to which it is a party and, in the case of the Borrower, to borrow hereunder, except in each case (other than with respect to the Borrower) to the extent such failure to do so would not reasonably be expected to have a Material Adverse Effect. Each Loan Party and, subject in the case of each Loan Party that is a Debtor, to the entry of the Orders and, in the case of the Canadian Collateral, the Canadian DIP Recognition Order and the terms thereof, each Loan Party has taken all necessary corporate or other action to authorize the execution and delivery of, and the performance of its obligations under, the Loan Documents to which it is a party and, in the case of the Borrower, to authorize the extensions of credit on the terms and conditions of this Agreement, except in each case (other than with respect to the Borrower) to the extent such failure to do so would not reasonably be expected to have a Material Adverse Effect.

 

(b)       Subject in the case of each Loan Party that is a Debtor, to the entry of the Orders and, in the case of the Canadian Collateral, the Canadian DIP Recognition Order and the terms thereof, no consent or authorization of, filing with, or notice to, any Governmental Authority is required to be obtained or made by any Loan Party for the extensions of credit hereunder or such Loan Party’s execution and delivery of, or performance of its obligations under, or validity or enforceability of, this Agreement or any of the other Loan Documents to which it is party, as against or with respect to such Loan Party, except (i) consents, authorizations, filings and notices which have been obtained or made and are in full force and effect, (ii) consents, authorizations, filings and notices the failure of which to obtain would not reasonably be expected to have a Material Adverse Effect and (iii) the filings referred to in Section 4.17.

 

(c)       Subject in the case of the Borrower and each Subsidiary that is a Debtor to entry of the Orders and, in the case of the Canadian Collateral, the Canadian DIP Recognition Order and the terms thereof, each Loan Document has been duly executed and delivered on behalf of each Loan Party that is a party thereto. Assuming the due authorization of, and execution and delivery by, the parties thereto (other than the applicable Loan Parties) and, subject in the case of each Loan Party that is a Debtor, to the entry of the Orders and, in the case of the Canadian Collateral, the Canadian DIP Recognition Order and the terms thereof, this Agreement constitutes, and each other Loan Document upon execution and delivery by each Loan Party that is a party thereto will constitute, a legal, valid and binding obligation of each such Loan Party that is a party thereto, enforceable against each such Loan Party in accordance with its terms (provided, that, with respect to the creation and perfection of security interests with respect to the Capital Stock of Foreign Subsidiaries, only to the extent enforceability thereof is governed by the Uniform Commercial Code or the Bankruptcy Code, as applicable), except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law) and the implied covenants of good faith and fair dealing.

 

4.5       No Legal Bar. Assuming the consents, authorizations, filings and notices referred to in Section 4.4(b) are obtained or made and in full force and effect, the execution, delivery and performance of this Agreement and the other Loan Documents by the Loan Parties thereto, the borrowings hereunder and the use of the proceeds thereof will not (a) violate the organizational or governing documents of (i) the Borrower, (ii) any BrandCo Entity or (iii) except as would not reasonably be expected to have a Material Adverse Effect, any other Loan Party, (b) other than violations arising as a result of the commencement of the Cases and the Canadian Recognition Proceedings and except as otherwise excused by the Bankruptcy Court, violate any Requirement of Law binding on Holdings, the Borrower or any of its Subsidiaries that would not reasonably be expected to have a Material Adverse Effect, (c) other than violations arising as a result of the commencement of the Cases and the Canadian Recognition Proceedings and except as otherwise excused by the Bankruptcy Court, violate any material Contractual Obligation of Holdings, the Borrower or any of its Subsidiaries or (d) except as would not have a Material Adverse Effect, result in or require the creation or imposition of any Lien on any of their respective properties or revenues pursuant to any Requirement of Law or any such Contractual Obligation (other than the Liens created by the Loan Documents or Liens created under the Orders and, in the case of the Canadian Collateral, the Canadian DIP Recognition Order).

 

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4.6       No Material Litigation. Except for the Cases and the Canadian Recognition Proceedings, no litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Borrower, threatened against the Borrower or any of its Subsidiaries or against any of their Properties which, taken as a whole, would reasonably be expected to have a Material Adverse Effect.

 

4.7       No Default. No Default or Event of Default has occurred and is continuing.

 

4.8       Ownership of Property; Leasehold Interests; Liens. Each of the Borrower and its Subsidiaries has good title in fee simple to, or a valid leasehold interest in, all of its Real Property, and good title to, or a valid leasehold interest in, all of its other Property (other than Intellectual Property), in each case, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect, and none of such Real Property or other Property is subject to any Lien, except as permitted by the Loan Documents. Schedule 4.8 lists all Real Property owned in fee simple by any Loan Party that is a Debtor as of the Closing Date.

 

4.9       Intellectual Property. Each of the Borrower and its Subsidiaries owns, or has a valid license or right to use, all Intellectual Property necessary for the conduct of its business as currently conducted free and clear of all Liens, except as permitted by the Loan Documents and except where the failure to do so would not reasonably be expected to have a Material Adverse Effect. To the Borrower’s knowledge, neither the Borrower nor any of its Subsidiaries is infringing, misappropriating, diluting or otherwise violating any Intellectual Property rights of any Person in a manner that would reasonably be expected to have a Material Adverse Effect. The Borrower and its Subsidiaries take all reasonable actions that in the exercise of their reasonable business judgment should be taken to protect their Intellectual Property, including Intellectual Property that is confidential in nature, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect.

 

4.10     Taxes. Subject to Bankruptcy Law, the terms of the applicable Orders and any required approval by the Bankruptcy Court or the Canadian Court, each of the Borrower and its Subsidiaries (a) has filed or caused to be filed all federal, state, provincial and other Tax returns that are required to be filed and (b) has paid or caused to be paid all taxes shown to be due and payable on said returns and all other taxes, fees or other charges imposed on it or on any of its Property by any Governmental Authority (other than (i) any returns or amounts that are not yet due or (ii) amounts the validity of which are currently being contested in good faith by appropriate proceedings and with respect to which any reserves required in conformity with GAAP have been provided on the books of the Borrower or such Subsidiary, as the case may be), except in each case where the failure to do so would not reasonably be expected to have a Material Adverse Effect.

 

4.11     Federal Regulations. No part of the proceeds of any Loans, and no other extensions of credit hereunder, will be used for any purpose that violates the provisions of the regulations of the Board.

 

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4.12     ERISA.

 

(a)      Except as would not reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect: (i) neither a Reportable Event nor a failure to meet the minimum funding standards under Section 412 of the Code or Section 302 of ERISA has occurred during the five-year period prior to the date on which this representation is made with respect to any Single Employer Plan, and each Single Employer Plan has complied with the applicable provisions of ERISA and the Code; (ii) no termination of a Single Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan has arisen on the assets of any Loan Party or any other Commonly Controlled Entity, during such five-year period; the present value of all accrued benefits under each Single Employer Plan (based on those assumptions used to fund such Plans) did not, as of the last annual valuation date prior to the date on which this representation is made or deemed made, exceed the value of the assets of such Single Employer Plan allocable to such accrued benefits; (iii) no Loan Party or any other Commonly Controlled Entity has had a complete or partial withdrawal from any Multiemployer Plan that has resulted or would reasonably be expected to result in a liability under ERISA; (iv) no Loan Party or any other Commonly Controlled Entity would become subject to any liability under ERISA if such Loan Party or such Commonly Controlled Entity were to withdraw completely from all Multiemployer Plans as of the valuation date most closely preceding the date on which this representation is made; and (v) no Multiemployer Plan is Insolvent or is in endangered or critical status (within the meaning of Section 432 of the Code or Section 305 of ERISA).

 

(b)      The Borrower and its Subsidiaries have not incurred, and do not reasonably expect to incur, any liability under ERISA or the Code with respect to any Plan which is subject to Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA that is maintained or contributed to by a Commonly Controlled Entity (other than the Borrower and its Subsidiaries) merely by virtue of being treated as a single employer under Title IV of ERISA with the sponsor of such plan that would reasonably be likely to have a Material Adverse Effect.

 

4.13     Investment Company Act. No Loan Party is an “investment company,” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.

 

4.14     Subsidiaries. Schedule 4.14 sets forth a list of all of the Subsidiaries of the Borrower as of the Closing Date, together with the name and jurisdiction of incorporation of each such Subsidiary, the breakdown of ownership of each class of Capital Stock of such Subsidiary and whether any such Subsidiary is an Excluded Subsidiary.

 

4.15     Environmental Matters. Other than exceptions to any of the following that would not reasonably be expected to have a Material Adverse Effect, (A) none of the Borrower or any of its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law for the operation of the Business; or (ii) has become subject to any pending or threatened Environmental Liability and (B) to the Borrower’s knowledge, there are no existing facts or circumstances (including any presence or Release of Materials of Environmental Concern at any Real Property or any real property formerly owned or operated by Borrower or its Subsidiaries) that are reasonably likely to give rise to any Environmental Liability of the Borrower or any of its Subsidiaries.

 

4.16     Accuracy of Information, etc. As of the Closing Date, no statement or written information (excluding the projections and pro forma financial information referred to below) contained in this Agreement, any other Loan Document or otherwise furnished to the Administrative Agent or the Lenders or any of them (in their capacities as such), by or on behalf of any Loan Party for use in connection with the transactions contemplated by this Agreement or the other Loan Documents, including the Transactions, when taken as a whole, contained as of the date such statement, information or certificate was so furnished, any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements contained herein or therein, in light of the circumstances under which they were made, not materially misleading. As of the Closing Date, the projections and pro forma financial information contained in the materials referenced above are based upon good faith estimates and assumptions believed by management of the Borrower to be reasonable at the time made, in light of the circumstances under which they were made, it being recognized by the Agents and the Lenders that such financial information as it relates to future events is not to be viewed as fact and that actual results during the period or periods covered by such financial information may differ from the projected results set forth therein by a material amount.

 

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4.17     Security Documents.

 

(a)       Upon entry of the Interim Order (and, if entered, the Final Order), the Liens granted thereunder by the Debtors to the Collateral Agent on any Collateral shall be valid and automatically perfected with the priority set forth herein and in the Orders, and no filing or other action will be necessary to perfect or protect such Liens and security interests with respect to the Debtors’ Obligations under the Loan Documents and such Order.

 

(b)       (i) With respect to each Loan Party that is not a Debtor, (A) the Guarantee and Collateral Agreement is effective to create in favor of the Collateral Agent, for the benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral described therein (other than Excluded Collateral) of a type in which a security interest can be created under Article 9 of the UCC (including any proceeds of any such item of Collateral) and (B) the BrandCo Security Agreement is effective to create in favor of the Collateral Agent, for the benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral described therein (other than, to the extent applicable, any Excluded Collateral) of a type in which a security interest can be created under Article 9 of the UCC (including any proceeds of any such item of Collateral) and (ii) with respect to each Loan Party that is a Debtor and subject to and upon entry of, the applicable Order, the Guarantee and Collateral Agreement and the BrandCo Security Agreement are legally binding on such Loan Party.

 

(c)       (i) With respect to each Loan Party that is not a Debtor, the Pledged Securities described in any Security Document (other than Excluded Collateral), when any stock certificates or notes, as applicable, representing such Pledged Securities are delivered to, or deemed held by a gratuitous bailee for, the Collateral Agent together with any proper indorsements executed in blank and such other actions have been taken with respect to the Pledged Securities of Foreign Subsidiaries as are required under the applicable Requirement of Law of the jurisdiction of organization of the applicable Foreign Subsidiary and (ii) the other Collateral described in the Security Documents (other than Excluded Collateral and Real Property), when financing statements in appropriate form are filed in the offices specified on Schedule 4.17 (or, in the case of other Collateral not in existence on the Closing Date, such other offices as may be appropriate) (which financing statements have been duly completed and executed (as applicable) and delivered to the Collateral Agent) and such other filings as are specified on Schedule 4.17 are made (or, in the case of other Collateral not in existence on the Closing Date, such other filings as may be appropriate), shall be subject to legal, valid, enforceable and perfected security interests in and Liens on such Collateral in favor of the Collateral Agent for the benefit of the Secured Parties. Subject to the terms and conditions of this Section 4.17(c), the Collateral Agent shall have a fully perfected Lien in such Collateral (including any proceeds of any item of such Collateral) described in the Security Documents to which the Collateral Agent is a party, (in each case, to the extent a security interest in such Collateral can be perfected through the filing of such documents and financing statements in the offices specified on Schedule 4.17 (or, in the case of other Collateral not in existence on the Closing Date, such other offices as may be appropriate) and the other filings specified on Schedule 4.17 (or, in the case of other Collateral not in existence on the Closing Date, such other filings as may be appropriate) and (ii) with respect to each Loan Party that is a Debtor and subject to, and upon entry of, the applicable Order, the Orders shall be effective to create in favor of the Collateral Agent for the benefit of the Secured Parties a legal, valid, enforceable and perfected Lien on the Pledged Securities and all other Collateral to secure the Obligations under the DIP Facility, with the priority as set forth in the Orders.

 

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(d)       With respect to any Loan Party that is a Debtor, subject to, and upon entry of the Orders, the Orders shall be effective to create in favor of the Collateral Agent for the benefit of the Secured Parties a legal, valid, enforceable and perfected Lien on the Real Property located in the United States in which the Borrower or any other Debtor that is a Domestic Subsidiary has an interest and proceeds thereof, in each case subject only to Liens permitted by Section 7.3. With respect to any Loan Party that is not a Debtor, upon the execution and delivery of any Mortgage to be executed and delivered pursuant to Section 2.25(b)(iii), such Mortgage shall be effective to create in favor of the Collateral Agent for the benefit of the Secured Parties a legal, valid and enforceable Lien on the Mortgaged Property described in such Mortgage and proceeds thereof, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law) and the implied covenants of good faith and fair dealing; and when such Mortgage is filed in the appropriate recording office and all relevant mortgage taxes and recording charges are duly paid, such Mortgage shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the applicable Loan Party in such Mortgaged Property and the proceeds thereof, as security for the Obligations, in each case subject only to Liens permitted by Section 7.3 or other encumbrances or rights permitted by the relevant Mortgage.

 

(e)       Notwithstanding the foregoing clauses of this Section 4.17, the representations and warranties made in this Section 4.17 shall be deemed not to apply to Elizabeth Arden (UK) Ltd.

 

4.18     [Reserved].

 

4.19     Anti-Terrorism. As of the Closing Date, Holdings, the Borrower and its Subsidiaries are in compliance with the USA Patriot Act, except as would not reasonably be expected to have a Material Adverse Effect.

 

4.20     Use of Proceeds. The Borrower will use the proceeds of the Loans solely in compliance with Section 6.9 of this Agreement and the Orders.

 

4.21     Labor Matters.  Except as, in the aggregate, would not reasonably be expected to have a Material Adverse Effect: (a) there are no strikes or other labor disputes against the Borrower or its Subsidiaries pending or, to the knowledge of the Borrower, threatened; (b) hours worked by and payment made to employees of the Borrower or its Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable Requirement of Law dealing with such matters; and (c) all payments due from the Borrower or any of its Subsidiaries on account of employee health and welfare insurance have been paid or accrued as a liability on the books of the Borrower or such Subsidiary, as applicable.

 

4.22     [Reserved].  

 

4.23     OFAC.  No Loan Party, nor, to the knowledge of any Loan Party, any Related Party, (i) is currently the target of any Sanctions, (ii) is located, organized or residing in any Designated Jurisdiction, or (iii) is or has been (within the previous five years) engaged in any transaction with any Person who is now or was then the target of Sanctions or who is located, organized or residing in any Designated Jurisdiction; in each case in violation of any applicable Sanctions. No Loan, nor the proceeds from any Loan, has been or will be used by any Loan Party, directly or indirectly, to lend, contribute, provide or has been or will be otherwise made available to fund any activity or business in any Designated Jurisdiction or to fund any activity or business of any Person located, organized or residing in any Designated Jurisdiction or who is the target of any Sanctions, or in any other manner that will, in each case, result in any violation by any party hereto (including any Lender, the Administrative Agent, the Lead Arranger or the Bookrunner) of Sanctions.

 

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4.24     Anti-Corruption Compliance.  The Borrower and each of its Subsidiaries (and all Persons acting on behalf of the Borrower and each of its Subsidiaries) is in compliance with applicable Anti-Corruption Laws and has implemented and maintains in effect policies and procedures reasonably designed to facilitate continued compliance. No part of the proceeds of the Loans has been or will be used by the Borrower or its Subsidiaries, directly or indirectly, for any payments to any Person, governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of any applicable Anti-Corruption Law.

 

4.25     Cases; Orders.

 

(a)       The Cases were commenced on the Petition Date and the Canadian Recognition Proceedings were commenced thereafter, duly authorized in accordance with applicable laws, and proper notice thereof has been or will be given, as will proper notice of (i) the motion seeking approval of the Loan Documents, the Interim Order, the Final Order, the Canadian Interim DIP Recognition Order and the Canadian Final DIP Recognition Order, and (ii) the hearing for the entry of the Final Order and the Canadian Final DIP Recognition Order. Proper notices of the motions for entry of the Interim Order and the Canadian Interim DIP Recognition Order and the hearings thereon have been given.

 

(b)       The Loan Parties are in compliance in all material respects with the terms and conditions of the Orders and, in the case of the Canadian Collateral, the Canadian DIP Recognition Order. Each of the Interim Order (with respect to the period prior to the entry of the Final Order) and the Final Order (from and after the date on which the Final Order is entered) is in full force and effect and has not been vacated or reversed, is not subject to a stay and has not been modified or amended other than as acceptable to the Required Lenders and (solely with respect to its own treatment) the Administrative Agent. Each of the Canadian Interim DIP Recognition Order (with respect to the period prior to the entry of the Canadian Final DIP Recognition Order) and the Canadian Final DIP Recognition Order (from and after the date on which the Canadian Final DIP Recognition Order is entered) is in full force and effect and has not been vacated or reversed, is not subject to a stay and has not been modified or amended other than as acceptable to the Required Lenders and (solely with respect to its own treatment) the Administrative Agent.

 

(c)       From and after the entry of the Interim Order, pursuant to and to the extent permitted in the Interim Order, the Obligations (i) will constitute allowed joint and several Superpriority Claims and (ii) will be secured by a valid, binding, continuing, enforceable, fully perfected Lien on all of the Collateral pursuant to Sections 364(c)(2), (c)(3) and (d) of the Bankruptcy Code, subject only to the Carve-Out. In the case of the Canadian Collateral, after entry of the Canadian DIP Recognition Order, and pursuant to and to the extent permitted therein, the Obligations of the Debtors will be secured