AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 25, 2002
REGISTRATION STATEMENT NO. 333-
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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REVLON CONSUMER PRODUCTS CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 2844 13-3662953
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification No.)
incorporation or organization) Classification Code Number)
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625 MADISON AVENUE
NEW YORK, NEW YORK 10022
(212) 527-4000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
--------------
ROBERT K. KRETZMAN, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
REVLON CONSUMER PRODUCTS CORPORATION
625 MADISON AVENUE
NEW YORK, NEW YORK 10022
(212) 527-4000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
--------------
COPY TO:
STACY J. KANTER, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
FOUR TIMES SQUARE
NEW YORK, NEW YORK 10036
(212) 735-3000
FAX: (212) 735-2000
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Approximate date of commencement of proposed sale to the public: As soon
as practicable after this registration statement becomes effective.
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If the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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CALCULATION OF REGISTRATION FEE
======================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------------
12% Senior Secured Exchange Notes
due 2005 ............................ $363,000,000 100% $363,000,000 $33,396
- ----------------------------------------------------------------------------------------------------------------------
Guarantees related to the 12% Senior
Secured Exchange Notes due 2005 ..... N/A N/A N/A N/A(2)
======================================================================================================================
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(f) under the Securities Act of 1933, as amended.
(2) No separate consideration received for the guarantees and therefore,
pursuant to Rule 457(n), no additional fee is required.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
================================================================================
TABLE OF ADDITIONAL REGISTRANTS
PRIMARY STANDARD
NAME OF ADDITIONAL STATE OF INCORPORATION INDUSTRIAL CLASSIFICATION I.R.S. EMPLOYER
REGISTRANT* OR FORMATION CODE NUMBER IDENTIFICATION NUMBER
- ---------------------------------- ------------------------ --------------------------- ----------------------
Revlon, Inc. Delaware 2844 13-3662955
Almay, Inc. Delaware 2844 13-3721920
Charles of the Ritz Group Ltd. Delaware 2844 22-2813207
Charles Revson Inc. New York 2844 13-2577534
Cosmetics & More Inc. Delaware 2844 22-3697113
North America Revsale Inc. New York 2844 13-1953730
Pacific Finance &
Development Corp. California Inactive 22-2821767
PPI Two Corporation Delaware 2844 13-3298307
Revlon Consumer Corp. Delaware 2844 13-3745413
Revlon Government Sales, Inc. Delaware 2844 13-2893624
Revlon International Corporation Delaware 2844 13-6157771
Revlon Products Corp. Delaware 2844 06-1519065
Revlon Real Estate Corporation Delaware 2844 06-1519063
RIROS Corporation New York 2844 13-4030700
RIROS Group Inc. Delaware 2844 13-4034499
RIT Inc. Delaware 2844 13-3742139
- ----------
* Addresses and telephone numbers of principal executive offices are the same
as that of Revlon Consumer Products Corporation.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED FEBRUARY 25, 2002
PROSPECTUS
[REVLON LOGO]
OFFER TO EXCHANGE $363,000,000 12% SENIOR SECURED NOTES DUE 2005 FOR
$363,000,000 12% SENIOR SECURED EXCHANGE NOTES DUE 2005,
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, OF
REVLON CONSUMER PRODUCTS CORPORATION
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 2002, UNLESS EXTENDED.
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Terms of the exchange offer:
o The exchange notes are being registered with the Securities and
Exchange Commission and are being offered in exchange for the original
notes that were previously issued in an offering exempt from the
Securities and Exchange Commission's registration requirements. The
terms of the exchange offer are summarized below and more fully
described in this prospectus.
o We will exchange all original notes that are validly tendered and not
withdrawn prior to the expiration of the exchange offer.
o You may withdraw tenders of original notes at any time prior to the
expiration of the exchange offer.
o The exchange of original notes will not be a taxable event for U.S.
federal income tax purposes. See "Certain United States Federal Income
Tax Consequences" on page 90 of this prospectus for more information.
o We will not receive any proceeds from the exchange offer.
o The terms of the exchange notes are substantially identical to the
original notes, except that the exchange notes are registered under the
Securities Act of 1933, as amended, and the transfer restrictions and
registration rights applicable to the original notes do not apply to the
exchange notes.
------------
SEE "RISK FACTORS" BEGINNING ON PAGE 18 FOR A DISCUSSION OF THE RISKS THAT
SHOULD BE CONSIDERED BY HOLDERS PRIOR TO TENDERING THEIR ORIGINAL NOTES.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
------------
The date of this prospectus is , 2002.
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER
CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY REVLON
CONSUMER PRODUCTS CORPORATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF REVLON CONSUMER PRODUCTS CORPORATION
SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR
A SOLICITATION OF AN OFFER TO BUY SECURITIES OTHER THAN THOSE SPECIFICALLY
OFFERED HEREBY OR OF ANY SECURITIES OFFERED HEREBY IN ANY JURISDICTION WHERE,
OR TO ANY PERSON WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. THE
INFORMATION CONTAINED IN THIS PROSPECTUS SPEAKS ONLY AS OF THE DATE OF THIS
PROSPECTUS UNLESS THE INFORMATION SPECIFICALLY INDICATES THAT ANOTHER DATE
APPLIES.
TABLE OF CONTENTS
PAGE
----
Incorporation of Certain Documents by Reference .................................... i
Prospectus Summary ................................................................. 1
Risk Factors ....................................................................... 18
Use of Proceeds .................................................................... 29
Selected Historical and Unaudited Pro Forma Consolidated Financial Data of Revlon
Consumer Products Corporation ..................................................... 30
Selected Historical Consolidated Financial Data of Revlon, Inc. .................... 33
The Exchange Offer ................................................................. 36
Capitalization ..................................................................... 44
Description of Notes ............................................................... 45
Description of the Collateral and Intercreditor Arrangements ....................... 82
Description of Other Indebtedness .................................................. 86
Certain United States Federal Income Tax Consequences .............................. 90
Plan of Distribution ............................................................... 94
Legal Matters ...................................................................... 94
Independent Accountants ............................................................ 95
Where You Can Find More Information ................................................ 95
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We are "incorporating by reference" the information we file with the SEC
into this prospectus, which means that we are disclosing important business and
financial information about us to you by referring you to another document
filed separately with the SEC. Certain information that Revlon files after the
date of this prospectus with the SEC will automatically update and supersede
this information. Revlon incorporates by reference into this prospectus the
documents listed below and any future filings made by Revlon with the SEC under
sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended, until the completion of the offering of the exchange notes.
o Annual Report of Revlon Consumer Products Corporation on Form 10-K for
the year ended December 31, 2001, filed on February 25, 2002; and
o Annual Report of Revlon, Inc. on Form 10-K for the year ended December
31, 2001, filed on February 25, 2002.
Any statement contained in a document incorporated or considered to be
incorporated by reference in this prospectus shall be considered to be modified
or superseded for purposes of this prospectus to the extent that a statement
contained in this prospectus or in any subsequently filed document that is or
is considered to be incorporated by reference modifies or supersedes such
statement. Any statement that is modified or superseded shall not, except as so
modified or superseded, constitute a part of this prospectus.
i
You may request a copy of any of the documents which are incorporated by
reference in this prospectus, other than exhibits which are not specifically
incorporated by reference into such documents, at no cost, by writing or
telephoning us at the following address or phone number:
Revlon Consumer Products Corporation
625 Madison Avenue
New York, NY 10022
Telephone: (212) 527-4000
Attention: Investor Relations
IN ORDER TO OBTAIN TIMELY DELIVERY, YOU MUST REQUEST THIS INFORMATION NO
LATER THAN FIVE BUSINESS DAYS BEFORE YOU MUST MAKE YOUR INVESTMENT DECISION.
ii
PROSPECTUS SUMMARY
The following summary highlights selected information from this prospectus
and may not contain all of the information that is important to you. This
prospectus includes specific terms of the exchange notes we are offering, as
well as information regarding our business. We encourage you to read this
prospectus in its entirety. You should pay special attention to the "Risk
Factors" section beginning on page 18 of this prospectus. All references to
"we," "our," "ours," and "us," or "Revlon" in this prospectus are to Revlon
Consumer Products Corporation and its subsidiaries, unless otherwise indicated.
However, in the descriptions of the notes and related matters, these terms refer
solely to Revlon Consumer Products Corporation and not to any of our
subsidiaries. All United States market share and market position data herein for
our brands are based upon retail dollar sales, which are derived from AC Nielsen
data. AC Nielsen measures retail sales volume of products sold in the United
States mass-market distribution channel. Such data represent AC Nielsen's
estimates based upon data gathered by AC Nielsen from market samples and are
therefore subject to some degree of variance. Additionally, as of August 4,
2001, AC Nielsen's data does not reflect sales volume from Wal-Mart, Inc.
OUR COMPANY
We manufacture, market and sell an extensive array of cosmetics and skin
care, fragrances and personal care products. REVLON is one of the world's
best-known names in cosmetics and is a leading mass-market cosmetics brand. We
believe that our global brand name recognition, product quality and marketing
experience have enabled us to create one of the strongest consumer brand
franchises in the world. Our products are sold worldwide and are marketed under
such well-known brand names as REVLON, COLORSTAY, REVLON AGE DEFYING, and
SKINLIGHTS, as well as ALMAY and ULTIMA II in cosmetics; ALMAY Kinetin, VITAMIN
C ABSOLUTES, ETERNA 27, ULTIMA II and JEANNE GATINEAU in skin care; CHARLIE and
FIRE & ICE in fragrances; and HIGH DIMENSION, FLEX, MITCHUM, COLORSILK, JEAN
NATE and BOZZANO in personal care products. To further strengthen our consumer
brand franchises, we market each core brand with a distinct and uniform global
image, including packaging and advertising, while retaining the flexibility to
tailor products to local and regional preferences.
Revlon was founded by Charles Revson, who revolutionized the cosmetics
industry by introducing nail enamels matched to lipsticks in fashion colors
over 70 years ago. Today, we have the number three position in the color
cosmetics category in the U.S. mass-market distribution channel and leading
market positions in a number of our principal product categories, including the
lip, face makeup and nail enamel categories. We also have leading market
positions in several product categories in certain markets outside of the United
States, including in Australia, Canada, Mexico and South Africa. Our products
are sold in more than 100 countries across five continents.
1
The following table sets forth our principal brands and certain selected
products.
BRAND COSMETICS SKIN CARE FRAGRANCES PERSONAL CARE PRODUCTS
- ----- --------- --------- ---------- ----------------------
REVLON Revlon Eterna 27 Charlie High Dimension
ColorStay Vitamin C Ciara Colorsilk
Revlon Age Defying Absolutes Fire & Ice Frost & Glow
Super Lustrous Revlon Absolutes Absolutely Colorstay
Moon Drops Fabulous Flex
New Complexion Outrageous
Absolutely Fabulous Aquamarine
Line & Shine Mitchum
Skinlights Lady Mitchum
Super Top Speed Hi & Dri
Shine Control Jean Nate
Mattifying Revlon Beauty Tools
High Dimension
Illuminance
Wet/Dry
Everylash
StreetWear
ALMAY Almay Time-Off Almay Kinetin Almay
Amazing Almay MilkPlus
One Coat
Skin Stays Clean
Beyond Powder
Organic Fluoride Plus
ULTIMA II Ultima II Glowtion U II Sheer Scent
Beautiful Nutrient Vital Radiance Ultimately U
Wonderwear CHR
Full Moisture LightCaptor-C
Glowtion
Pucker & Pout
Ultimate Edition
SIGNIFICANT Jeanne Gatineau Jeanne Gatineau Bozzano
REGIONAL Cutex Juvena
BRANDS
STRATEGIC PLAN
In 1999 and 2000, we faced a number of strategic challenges. New product
development and introductions slowed down. Our advertising, historically
created and executed by an in-house advertising agency, became somewhat stale
and dated resulting in diminished effectiveness. We had excess manufacturing
capacity as a number of facilities were substantially underutilized. Our
overhead was too high as a percentage of our net sales. In 2001, we initiated a
strategic plan aimed at capitalizing on our significant core strengths, growing
the sales of our products to consumers (also known as "sell-through" or
"consumption") and improving our profitability. Leveraging our strong brand
equity, we have been successful in implementing several key elements of this
plan.
2
We:
o reinvigorated our new product development process and launched four
major new products. Our market share for the Revlon brand from new color
cosmetics products in the United States was approximately 2.5% in the
year ended December 31, 2001, which is more than double the market share
that our new products achieved in the comparable period in 2000;
o closed our in-house advertising division and retained prominent
advertising agencies for our Revlon and Almay brands;
o implemented revised trade terms which have reduced sales returns,
allowances and discounts in our ongoing operations (which is described
under the caption "Summary Ongoing Consolidated Financial Data") by
approximately 20% for the year ended December 31, 2001 versus the
comparable period in 2000;
o reduced departmental general and administrative expenses in our ongoing
operations from $380.7 million in 1999 to $280.4 million in 2001; and
o reduced manufacturing and warehousing square footage by 55% since
November 2000.
New Product Development. One of our objectives was to reinvigorate our
brands by developing a pipeline of innovative new products. Historically, we
were a leader in new product development in mass market cosmetics. Based upon
AC Nielsen data, we believe that in the late 1990s consumption of our new
products substantially exceeded that of our competitors. Our objective is to
return to, as well as maintain, a leadership position in new product
innovation. During 2001, we created our most extensive line-up of new products
since COLORSTAY in the mid-1990s with major new product launches including
SKINLIGHTS skin brighteners, that brighten skin with sheer washes of color,
which created an entirely new category in color cosmetics; ABSOLUTELY FABULOUS
Lipcream, a new premium line of emollient-rich lip color; SUPER TOP SPEED nail
enamel, currently available in 48 shades, containing a patented speed drying
polymer formula which sets in 60 seconds; and ILLUMINANCE, an eyeshadow that
"brightens up eyes". Additionally, in 2001 we launched ALMAY Kinetin Skincare
Advanced Anti-Aging Series featuring Kinetin, a patented technology, and HIGH
DIMENSION hair color, a revolutionary 10-minute home permanent hair color,
compared to many of our competitors' home permanent hair color which require
two to three times as long. In addition, we have developed a pipeline of new
products for introduction in 2002.
New Advertising. We also sought to bring new energy to our brands by
making a fundamental shift in our advertising strategy. We had historically
used an in-house advertising division to create and execute our advertising. We
retained outside agencies and subsequently consolidated all advertising for the
Revlon and Almay brands with Deutsch Inc., to develop advertising campaigns for
a number of key new product launches and to energize our REVLON and ALMAY
brands, respectively. During the third quarter of 2001, we launched new
television and print advertising for REVLON HIGH DIMENSION haircolor.
Revised Trade Terms Creating More Profitable Trade Partnerships. In
December 2000, we introduced fundamental changes in the terms of trade we use
with our domestic retail partners intended to increase sell-through of our
products, reduce merchandise returns and claims for damages and drive market
growth. The revised trade terms have decreased inefficiencies for both Revlon
and our retail partners by reducing returns and associated costs. The aggregate
sales returns, allowances and discounts expense in our ongoing operations has
decreased to $243.9 million in the year ended December 31, 2001 from $306.2
million during 2000. We are also in the process of implementing improved point
of sale data collection methods, which we believe will allow us to more
effectively monitor sales, returns and sell-through. The revised terms of trade
became effective January 1, 2001 and include:
3
o incentives to retailers to encourage more efficient ordering and lower
return rates;
o establishment of a flat off-invoice allowance for damages, eliminating
expensive handling of returns of damaged products;
o a new approach to discontinuing stock keeping units (SKUs) including
providing retailers with advance notice, allowances encouraging
sell-through of the discontinued SKUs and limiting returns credits; and
o providing cooperative allowances and market development funds based upon
consumer sell-through.
We have streamlined our sales operation by eliminating a level of sales
management. By redeploying those resources, we have nearly doubled the number
of merchandisers directly servicing our accounts in order to improve the
in-store appearance of our products and reduce out-of-stock positions for our
faster selling SKUs. In conjunction with the change of our plan-o-grams in the
second quarter of 2001, we effected the largest SKU reduction in Revlon's
history, which eliminated slower moving SKUs and created shelf space for faster
turning products.
Reducing Departmental Costs; Manufacturing Consolidation. Over the last
year we have taken a number of actions to substantially reduce costs and
increase efficiencies.
We have completed our plan to implement substantial reductions in our
domestic administrative expenses, principally through reductions in our overall
employee headcount, in order to redirect savings toward our other strategic
priorities. In 2000 and 2001, we reduced employee headcount in our ongoing
operations by a total of approximately 2,000 from the end of 1999. Departmental
general and administrative expenses for our ongoing operations has decreased
from $380.7 million in 1999 to $330.4 million in 2000 and to $280.4 million in
2001.
We also completed our global manufacturing rationalization and
consolidation plan in the third quarter of 2001. The restructuring plan was
designed to improve profitability by reducing personnel and consolidating
manufacturing facilities. Since November 2000, we have sold or closed
approximately 55% of our manufacturing and distribution facility square
footage, including:
o the closure of our manufacturing operations in Phoenix, Arizona and
Mississauga, Canada and the consolidation of our North American cosmetics
manufacturing into our Oxford, North Carolina facility; and
o the sale or closure of our manufacturing facilities in Auckland, New
Zealand, Maesteg, Wales (UK) and Sao Paulo, Brazil.
Plant capacity utilization at our remaining plants has been substantially
increased. In addition, we realized approximately $100.0 million in gross
proceeds during 2001 through the sale of non-core assets, which was used for
general corporate purposes, including repayment of debt.
Aligning Employee and Shareholder Interests. We have taken a more focused
approach to aligning employee and shareholder interests intended to improve
profitability. We are implementing programs that are structured to deliver
rewards to employees who significantly drive performance results and enhance
shareholder value. We have issued stock options and restricted stock awards to
key employees during the course of 2001, the value of which would increase
based upon improved company-wide performance.
RECENT DEVELOPMENTS
Effective February 14, 2002, our former President and Chief Executive
Officer, Jeffrey M. Nugent, resigned his employment with us. During Mr.
Nugent's tenure as Chief Executive Officer, we accomplished the goals of
lowering costs overall and improving operational efficiency across the
enterprise, creating a platform for future growth. On February 19, 2002, we
announced the
4
appointment of Jack L. Stahl, former president and chief operating officer of
Coca-Cola Company, as our new President and Chief Executive Officer. Following
the appointment of Mr. Stahl, we have begun the process of reviewing and
evaluating our current business strategy.
THE REFINANCING TRANSACTIONS
On November 26, 2001, we issued and sold in a private placement $363
million in aggregate principal amount of the original notes, receiving gross
proceeds of $350.5 million.
On November 30, 2001, we completed the refinancing of our existing credit
facility by entering into the 2001 credit agreement, dated as of November 30,
2001 among us, those of our subsidiaries which are party thereto, the lenders
parties thereto, Citibank, N.A., as documentation agent, Lehman Commercial
Paper Inc., as syndication agent, J.P. Morgan Securities Inc., as sole arranger
and bookrunner, and JPMorgan Chase Bank, as administrative agent. The 2001
credit agreement provides up to $250.0 million in credit facilities and
consists of a $117.9 million term loan facility and a $132.1 million
multi-currency revolving credit facility. The issuance of the original notes
and the 2001 credit agreement are referred to as the "Refinancing
Transactions." The 2001 credit agreement is secured on a first-priority basis
by, with certain limited exceptions, our capital stock, substantially all of
our non-real property assets in the United States, our facility in Oxford,
North Carolina, the capital stock of our domestic subsidiaries and 66% of the
capital stock of our first-tier foreign subsidiaries. Our obligations under the
2001 credit agreement are guaranteed by Revlon, Inc. and, subject to certain
limited exceptions, by our domestic subsidiaries.
The proceeds from the original notes and borrowings under the 2001 credit
agreement were used by us to repay outstanding indebtedness under our previous
credit agreement and fees and expenses of the Refinancing Transactions and the
balance is available to us for general corporate purposes.
* * *
Our principal executive offices are located at 625 Madison Avenue, New
York, New York 10022. Our telephone number is (212) 527-4000.
5
The following sets forth a summary organizational chart for Revlon.
----------------------------------
Mafco Holdings Inc.
("Mafco Holdings")
----------------------------------
|
| 100%
|
----------------------------------
MacAndrews & Forbes
Holdings Inc.
("MacAndrews Holdings")
---------------------------------
|
| 100%
|
----------------------------------
REV Holdings Inc.
("REV Holdings")
----------------------------------
|
| 83%*
|
----------------------------------
Revlon, Inc.
----------------------------------
|
| 100%
|
----------------------------------
REVLON CONSUMER PRODUCTS
CORPORATION
----------------------------------
|
|
----------------------------------
Operating Subsidiaries of Revlon
Consumer Products Corporation
----------------------------------
* REV Holdings currently beneficially owns 11,650,000 shares of the
Class A common stock, par value $.01 per share, of Revlon, Inc.
(representing approximately 57% of the outstanding shares of Class A
common stock of Revlon, Inc.) and all of the outstanding 31,250,000
shares of Class B common stock, par value $.01 per share, of Revlon,
Inc., which together represent approximately 83.0% of the outstanding
shares of common stock of Revlon, Inc. REV Holdings also currently
beneficially owns all of the outstanding 4,333 shares of Series B
Convertible Preferred Stock, par value $.01 per share, of Revlon,
Inc. (each of which is entitled to 100 votes and each of which is
convertible into 100 shares of Class A common stock, which conversion
rights are subject to approval by Revlon, Inc.'s stockholders at its
2002 Annual Meeting of Stockholders), which, together with the Class
A common stock and Class B common stock, represents approximately
97.3% of the combined voting power of the outstanding shares of
common and preferred stock of Revlon, Inc.
6
SUMMARY OF THE EXCHANGE OFFER
On November 26, 2001, we completed the private offering of $363,000,000
aggregate principal amount of 12% senior secured notes due 2005. As part of
that offering, we entered into a registration agreement with the initial
purchasers of these original notes in which we agreed, among other things, to
deliver this prospectus to you and to complete an exchange offer for the
original notes. Below is a summary of the exchange offer.
SECURITIES OFFERED.......... Up to $363,000,000 aggregate principal amount
of new 12% senior secured exchange notes due
2005, which have been registered under the
Securities Act. The form and terms of these
exchange notes are identical in all material
respects to those of the original notes. The
exchange notes, however, will not contain
transfer restrictions and registration rights
applicable to the original notes.
THE EXCHANGE OFFER.......... We are offering to exchange $1,000 principal
amount of our 12% senior secured exchange notes
due 2005, which have been registered under the
Securities Act, for each $1,000 principal amount
of our outstanding 12% senior secured notes due
2005.
In order to be exchanged, an original note must
be properly tendered and accepted. All original
notes that are validly tendered and not
withdrawn will be exchanged. As of the date of
this prospectus, there are $363,000,000
principal amount of original notes outstanding.
We will issue exchange notes promptly after the
expiration of the exchange offer.
RESALES..................... Based on interpretations by the staff of the
SEC, as detailed in a series of no-action letters
issued to third parties, we believe that the
exchange notes issued in the exchange offer may
be offered for resale, resold or otherwise
transferred by you without compliance with the
registration and prospectus delivery requirements
of the Securities Act as long as:
o you are acquiring the exchange notes in the
ordinary course of your business;
o you are not participating, do not intend to
participate and have no arrangement or
understanding with any person to participate,
in a distribution of the exchange notes; and
o you are not an affiliate of ours.
If you are an affiliate of ours, are engaged in
or intend to engage in or have any arrangement
or understanding with any person to participate
in the distribution of the exchange notes:
o you cannot rely on the applicable
interpretations of the staff of the SEC; and
o you must comply with the registration
requirements of the Securities Act in
connection with any resale transaction.
7
Each broker or dealer that receives exchange
notes for its own account in exchange for
original notes that were acquired as a result of
market-making or other trading activities must
acknowledge that it will comply with the
registration and prospectus delivery
requirements of the Securities Act in connection
with any offer to resell, resale, or other
transfer of the exchange notes issued in the
exchange offer, including the delivery of a
prospectus that contains information with
respect to any selling holder required by the
Securities Act in connection with any resale of
the exchange notes.
Furthermore, any broker-dealer that acquired any
of its original notes directly from us:
o may not rely on the applicable interpretation
of the staff of the SEC's position contained in
Exxon Capital Holdings Corp., SEC no-action
letter (April 13, 1988), Morgan, Stanley & Co.
Inc., SEC no-action letter (June 5, 1991) and
Shearman & Sterling, SEC no-action letter (July
2, 1983); and
o must also be named as a selling noteholder in
connection with the registration and prospectus
delivery requirements of the Securities Act
relating to any resale transaction.
EXPIRATION DATE............. 5:00 p.m., New York City time, on
2002 unless we extend the expiration date.
ACCRUED INTEREST ON THE
EXCHANGE NOTES AND
ORIGINAL NOTES............. The exchange notes will bear interest from the
most recent date to which interest has been paid
on the original notes. Interest is paid on the
notes on June 1 and December 1 of each year,
beginning June 1, 2002. If your original notes
are accepted for exchange, then you will receive
interest on the exchange notes and not on the
original notes.
CONDITIONS TO THE
EXCHANGE OFFER.............. The exchange offer is subject to customary
conditions. We may assert or waive these
conditions in our sole discretion. If we
materially change the terms of the exchange
offer, we will resolicit tenders of the original
notes. See "The Exchange Offer -- Conditions to
the Exchange Offer" for more information
regarding conditions to the exchange offer.
PROCEDURES FOR TENDERING
ORIGINAL NOTES.............. Except as described in the section titled "The
Exchange Offer -- Guaranteed Delivery
Procedures," a tendering holder must, on or prior
to the expiration date:
o transmit a properly completed and duly executed
letter of transmittal, including all other
documents required by the letter of
transmittal, to the exchange agent at the
address listed in this prospectus; or
8
o if original notes are tendered in accordance
with the book-entry procedures described in
this prospectus, the tendering holder must
transmit an agent's message to the exchange
agent at the address listed in this prospectus.
See "The Exchange Offer -- Procedures for
Tendering."
SPECIAL PROCEDURES FOR
BENEFICIAL HOLDERS.......... If you are the beneficial holder of original
notes that are registered in the name of your
broker, dealer, commercial bank, trust company or
other nominee, and you wish to tender in the
exchange offer, you should promptly contact the
person in whose name your original notes are
registered and instruct that person to tender on
your behalf. See "The Exchange Offer --
Procedures for Tendering."
GUARANTEED DELIVERY
PROCEDURES.................. If you wish to tender your original notes and you
cannot deliver your original notes, the letter of
transmittal or any other required documents to
the exchange agent before the expiration date,
you may tender your original notes by following
the guaranteed delivery procedures under the
heading "The Exchange Offer -- Guaranteed
Delivery Procedures."
WITHDRAWAL RIGHTS............ Tenders may be withdrawn at any time before
5:00 p.m., New York City time, on the expiration
date.
ACCEPTANCE OF ORIGINAL NOTES
AND DELIVERY OF
EXCHANGE NOTES.............. Subject to the conditions stated in the section
"The Exchange Offer -- Conditions to the Exchange
Offer" of this prospectus, we will accept for
exchange any and all original notes which are
properly tendered in the exchange offer before
5:00 p.m., New York City time, on the expiration
date. The exchange notes will be delivered
promptly after the expiration date. See "The
Exchange Offer--Terms of the Exchange Offer."
CERTAIN UNITED STATES FEDERAL
INCOME TAX CONSEQUENCES..... Your exchange of original notes for exchange
notes to be issued in the exchange offer will not
result in any gain or loss to you and the
exchange notes will be treated as a continuation
of the original notes for U.S. federal income tax
purposes. See "Certain United States Federal
Income Tax Consequences."
EXCHANGE AGENT............... Wilmington Trust Company is serving as exchange
agent in connection with the exchange offer. The
address and telephone number of the exchange
agent are listed under the heading "The Exchange
Offer -- Exchange Agent."
USE OF PROCEEDS.............. We will not receive any proceeds from the
issuance of exchange notes in the exchange offer.
We will pay all expenses incident to the exchange
offer. See "Use of Proceeds."
9
SUMMARY OF TERMS OF THE NOTES
The form and terms of the exchange notes and the original notes are
identical in all material respects, except that the transfer restrictions and
registration rights applicable to the original notes do not apply to the
exchange notes. The exchange notes will evidence the same debt as the original
notes and will be governed by the same indenture.
EXCHANGE NOTES OFFERED...... $363,000,000 aggregate principal amount of 12%
senior secured exchange notes due 2005.
MATURITY DATE............... December 1, 2005
INTEREST PAYMENT DATES...... June 1 and December 1 of each year, beginning
June 1, 2002.
RANKING..................... The original notes are and the exchange notes
will be senior secured debt. The notes will be
equal in right of payment with any of our present
and future senior indebtedness, including trade
payables, and will have the benefit of the
second-priority security interests described
under "Collateral." The original notes rank and
the exchange notes will rank senior to all
present and future subordinated indebtedness. The
original notes are and the exchange notes will be
effectively subordinated to all indebtedness and
other liabilities of our non-guarantor
subsidiaries. As of December 31, 2001, total
indebtedness and other liabilities (excluding
intercompany liabilities) of our non-guarantor
subsidiaries was approximately $108.4 million.
OPTIONAL REDEMPTION......... Prior to December 1, 2005, we may redeem the
notes at our option in whole or in part at a
redemption price equal to the sum of (i) the then
outstanding principal amount of notes to be
redeemed plus (ii) accrued and unpaid interest
(if any) to the date of redemption, plus (iii)
the greater of (a) 1.0% of the then outstanding
principal amount of notes to be redeemed and (b)
the excess of (1) the sum of the present values
of the remaining scheduled payments of principal
and interest in respect of the notes to be
redeemed discounted to the date of redemption at
the applicable treasury rate plus 75 basis
points, over (2) the then outstanding principal
amount of notes to be redeemed. See "Description
of Notes -- Optional Redemption."
CERTAIN COVENANTS........... The indenture governing the notes contains
covenants that, among other things, limit (i) our
ability to issue additional debt and redeemable
stock, (ii) our ability to incur liens, (iii) the
ability of our subsidiaries to issue debt and
preferred stock, (iv) our ability and the ability
of our subsidiaries to pay dividends on capital
stock and our ability to redeem capital stock,
(v) the sale of assets and subsidiary stock, (vi)
transactions with affiliates and (vii)
consolidations, mergers and transfers of all or
substantially all of our assets. The indenture
also prohibits certain restrictions on
distributions from subsidiaries.
10
These covenants are subject to important
exceptions and qualifications, which are
described in the "Description of Notes" section
of this prospectus.
CHANGE OF CONTROL........... Upon a change of control (as defined under
"Description of Notes"), each holder of the notes
will have the right to require us to make an
offer to repurchase all or a portion of such
holder's notes at a price equal to 101% of the
principal amount of the notes plus accrued
interest.
GUARANTEES.................. The original notes are and the exchange notes
will be fully and unconditionally guaranteed on a
senior secured basis by Revlon, Inc. and our
domestic subsidiaries that guarantee the 2001
credit agreement.
COLLATERAL.................. The original notes are and the exchange notes
will be secured on a second-priority basis by,
subject to certain limited exceptions, our
capital stock, the stock of our domestic
subsidiaries, as well as 66% of the capital stock
of our first-tier foreign subsidiaries,
substantially all of our non-real property assets
in the United States and our facility located in
Oxford, North Carolina. The lenders under our
2001 credit agreement and certain other
indebtedness benefit from the first-priority
liens on the collateral.
Releases of collateral from the second-priority
liens will be permitted (i) at our request
unless, after notice from us, holders of at
least 25% of the outstanding principal amount of
the notes object to such release or (ii) upon
the written consent of the holders of at least
66 2/3% of the outstanding principal amount of
the notes. Certain other releases of collateral
will also be permitted. See "Description of the
Collateral and Intercreditor Arrangements."
INTERCREDITOR ARRANGEMENTS... Pursuant to a collateral agency agreement, the
holders of the first-priority liens will, at all
times, control all remedies and other actions
with respect to the collateral. The
second-priority liens will not entitle holders of
the notes to take any action whatsoever with
respect to the collateral at any time when
first-priority liens are outstanding. The holders
of the first-priority liens will receive all
proceeds from any realization on the collateral
until the obligations secured by the
first-priority liens are paid in full. In
addition, proceeds from non-ordinary course asset
dispositions of collateral may be used to repay
the obligations secured by the first-priority
liens or reinvested in assets used in our
business before they would be used to repay the
notes.
ORIGINAL ISSUE DISCOUNT..... The original notes were issued with "original
issue discount" for United States federal income
tax purposes. Thus, each holder of an exchange
note generally must include in income a portion
of the remaining original issue discount for each
11
day during each taxable year in which an
exchange note is held even though there is no
corresponding receipt of cash attributable to
such income. Each holder will include in income
stated interest on an exchange note in
accordance with the holder's method of
accounting for tax purposes. See "Certain United
States Federal Income Tax Consequences."
RISK FACTORS
You should carefully consider the information under "Risk Factors" and all
other information in this prospectus before exchanging your original notes for
exchange notes.
12
SUMMARY HISTORICAL AND UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA
The summary historical consolidated financial data for each of the years
in the five-year period ended December 31, 2001 has been derived from our
audited consolidated financial statements.
You should read "Management's Discussion and Analysis of Financial
Condition and Results of Operations," the consolidated financial statements and
related notes, and the report of our independent auditors included in our
Annual Report on Form 10-K for the fiscal year ended December 31, 2001,
incorporated by reference in this prospectus.
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
1997 1998 1999 2000 2001
-------- -------- -------- -------- --------
(DOLLARS IN MILLIONS)
HISTORICAL STATEMENT OF OPERATIONS DATA (A):
Net sales ...................................................... $2,156.4 $2,149.7 $1,709.9 $1,447.8 $1,321.5
Gross profit ................................................... 1,377.2 1,347.6(c) 983.6 873.5(e) 777.3(f)
Selling, general and administrative expenses ................... 1,158.2 1,188.3 1,154.2(d) 801.8 720.5(f)
Restructuring costs and other, net ............................. 3.6(b) 33.1(c) 40.2(d) 54.1(e) 38.1(f)
-------- -------- -------- -------- --------
Operating income (loss) ........................................ 215.4 126.2 (210.8) 17.6 18.7
Interest expense, net .......................................... 129.5 132.7 145.1 142.4 137.8
Amortization of debt issuance costs ............................ 6.6 5.1 4.3 5.6 6.2
(Gain) loss on sale of product line, brand and facilities, net . -- -- 0.9 (10.8) 14.4
Miscellaneous, net ............................................. 12.2 9.2 (0.5) (0.2) 4.9
-------- -------- -------- -------- --------
Income (loss) from continuing operations before income taxes ... 67.1 (20.8) (360.6) (119.4) (144.6)
Provision for income taxes ..................................... 9.3 5.0 9.1 8.6 4.0
-------- -------- -------- -------- --------
Income (loss) from continuing operations ....................... 57.8 (25.8) (369.7) (128.0) (148.6)
Income (loss) from discontinued operations ..................... 0.7 (64.2) -- -- --
Extraordinary items -- early extinguishments of debt ........... (14.9) (51.7) -- -- (3.6)
-------- -------- -------- -------- --------
Net income (loss) .............................................. $ 43.6 $ (141.7) $ (369.7) $ (128.0) $ (152.2)
-------- -------- -------- -------- --------
OTHER DATA:
Net cash provided by (used for) operating activities ........... $ 7.8 $ (51.1) $ (81.7) $ (84.0) $ (86.5)
Net cash (used for) provided by investing activities ........... (84.3) (91.0) (40.7) 322.1 87.2
Net cash provided by (used for) financing activities ........... 85.8 158.7 117.4 (203.7) 46.3
EBITDA (g) ..................................................... 312.1 268.2 (30.8) 197.5 201.3
Ratio of earnings to fixed charges (h) ......................... 1.4x 0.9x -- 0.3x 0.1x
Capital expenditures ........................................... 52.3 60.8 42.3 19.0 15.1
Purchase of permanent displays ................................. 68.9 76.6 66.5 51.4 44.0
Unaudited pro forma ratio of earnings to fixed charges (i) ..... 0.1x
DECEMBER 31,
-----------------------------------------------------------------------------
1997 1998 1999 2000 2001
------------- ------------- ------------- ------------- -------------
BALANCE SHEET DATA (A):
Total assets ........................... $ 1,759.3 $ 1,831.7 $ 1,560.6 $ 1,104.2 $ 991.4
Total indebtedness ..................... 1,467.9 1,687.9 1,809.7 1,593.8 1,661.1
Total stockholder's deficiency ......... (457.0) (647.0) (1,013.2) (1,104.3) (1,288.8)
- -------------
See accompanying notes to Summary Historical and Pro Forma Consolidated
Financial Data
13
NOTES TO SUMMARY HISTORICAL AND UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA
(a) In March 2000 and May 2000, we completed the disposition of our worldwide
professional products line and our Plusbelle brand in Argentina,
respectively. In July 2001, we completed the disposition of our Colorama
brand and facility in Brazil. Accordingly, the summary historical
financial data include the results of operations of the professional
products line, Plusbelle and Colorama brands through the dates of their
respective dispositions.
In November 2001, the FASB Emerging Issues Task Force (the "EITF") reached
a consensus on EITF Issue 01-9 entitled "Accounting Consideration Given by
a Vendor to a Customer or a Reseller of the Vendor's Products" (the
"Guidelines"). The Guidelines address when sales incentives and discounts
should be recognized, as well as where the related revenues and expenses
should be classified in financial statements. We adopted the earlier
portion of these Guidelines (formerly EITF Issue 00-14) addressing certain
sales incentives effective January 1, 2001, and accordingly, the
accompanying summary historical financial data for each of the years in
the five-year period ended December 31, 2001 reflect the implementation of
the Guidelines. The Guidelines did not affect our operating income (loss),
net income (loss) or EBITDA (as defined below).
In September 2001, Revlon, Inc. acquired from Revlon Holdings Inc., an
affiliate and indirect wholly-owned subsidiary of Mafco Holdings, and
contributed to us all the assets and liabilities of the Charles of the
Ritz business. The acquired assets and liabilities assumed were accounted
for at historical cost in a manner similar to that of a pooling of
interests. The summary historical financial data for each of the years in
the five-year period ended December 31, 2001 is restated to reflect the
acquisition.
(b) In 1997, we incurred restructuring costs of $20.6 million in connection
with the implementation of our business strategy to rationalize factory
operations. These costs primarily included severance and other costs
related to the rationalization of certain factory and warehouse operations
worldwide. Such costs were partially offset by an approximately $12.7
million settlement of a claim and gains of approximately $4.3 million on
the sales of certain factory operations outside the United States.
(c) In late 1998, we developed a strategy to reduce overall costs and
streamline operations. To execute against this strategy, we began to
develop a restructuring plan and executed the plan in several phases,
which has resulted in several restructuring charges being recorded.
In the fourth quarter of 1998, we committed to a restructuring plan to
realign and reduce personnel, exit excess leased real estate, realign and
consolidate regional activities, reconfigure certain manufacturing
operations and exit certain product lines and recognized a charge of $44.2
million, which includes $2.7 million charged to cost of sales. In 1998, we
recognized gains of approximately $8.4 million for the sales of certain
non-core assets.
(d) In the first nine months of 1999, we continued to implement the
restructuring program established in late 1998 for which we recorded a
charge of $20.5 million for employee severance and other personnel
benefits, costs associated with the exit from leased facilities as well as
other costs. Also in 1999, we exited from a non-core business, resulting
in a charge of $1.6 million.
During the fourth quarter of 1999, we continued to restructure our
organization and began a new program in line with our original
restructuring plan developed in late 1998, principally for additional
employee severance and other personnel benefits and to restructure certain
operations outside the United States, including certain operations in
Japan, resulting in a charge of $18.1 million.
During the fourth quarter of 1999, we recorded a charge of $22.0 million
to selling, general and administrative costs related to separation costs
for various executives terminated in 1999.
14
(e) In the first and second quarter of 2000, we recorded charges of $9.5
million and $5.1 million, respectively, relating to the 1999 restructuring
program that began in the fourth quarter of 1999.
During the third quarter of 2000, we continued to re-evaluate our
organizational structure. As part of this re-evaluation, we decided to
improve profitability by reducing personnel and consolidating
manufacturing facilities. This program focused on closing our
manufacturing operations in Phoenix, Arizona and Mississauga, Canada and
to consolidate production into our plant in Oxford, North Carolina. This
program also includes the remaining obligation for excess leased real
estate at our headquarters, consolidation costs associated with closing
our facility in New Zealand, and the elimination of several domestic and
international executive and operational positions, both of which were
effected to reduce and streamline corporate overhead costs. In the third
quarter of 2000, we recorded a charge of $13.7 million for programs begun
in the quarter as well as for programs previously commenced. In the fourth
quarter of 2000, we recorded a charge of $25.8 million related to the
program begun in the third quarter of 2000, principally for additional
employee severance and other personnel benefits and to consolidate
worldwide operations.
During the fourth quarter of 2000, we recorded $4.9 million to cost of
sales related to additional costs associated with the consolidation of
worldwide operations.
(f) In the first, second, third and fourth quarters of 2001, we recorded
charges of $14.6 million, $7.9 million, $3.0 million and $12.6 million,
respectively, related to the 2000 restructuring program, principally for
additional employee severance and other personnel benefits, relocation and
to consolidate worldwide operations. The charge in the fourth quarter of
2001 also was for an adjustment to previous estimates of approximately
$6.6 million.
In 2001, we recorded $38.2 million to cost of sales (which includes $6.1
million of increased depreciation) and $5.4 million to selling, general
and administrative costs related to additional costs associated with the
shutdown of our Phoenix and Canada facilities.
(g) We define EBITDA as operating income (loss) before restructuring costs and
other, net, and additional costs associated with the consolidation of our
worldwide operations and executive severance, plus depreciation and
amortization other than that relating to early extinguishment of debt,
discount and debt issuance costs. EBITDA is presented here as a measure of
our debt service ability, not of our operating results. EBITDA should not
be considered in isolation, as a substitute for net income or cash flow
from operations prepared in accordance with accounting principles
generally accepted in the United States of America or as a measure of our
profitability or liquidity. EBITDA does not take into account our debt
service requirements and other commitments and, accordingly, is not
necessarily indicative of amounts that may be available for discretionary
uses. Additionally, EBITDA may be defined differently for purposes of our
credit agreement.
(h) Earnings used in computing the ratio of earnings to fixed charges consist
of income (loss) from continuing operations before income taxes plus fixed
charges. Fixed charges consist of interest expense (including amortization
of debt issuance costs, but not losses relating to the early
extinguishment of debt) and 33% of rental expense (considered to be
representative of the interest factors). Fixed charges exceeded earnings
by $20.8 million in 1998, $360.6 million in 1999, $119.4 million in 2000
and $144.6 million in 2001.
(i) Pro forma to reflect the increase in interest expense and the amortization
of debt issuance costs of $22.7 million and $1.9 million, respectively,
for the year ended December 31, 2001, as if the Refinancing Transactions
occurred on January 1, 2001. On a pro forma basis, fixed charges would
have exceeded earnings before fixed charges by $169.2 million in the year
ended December 31, 2001.
15
SUMMARY ONGOING CONSOLIDATED FINANCIAL DATA
Since 1999, there have been significant developments in our business. We
provide the following supplemental financial information describing trends in
our ongoing operations. The following table sets forth certain summary
unaudited data for the years ended December 31, 2001, 2000 and 1999,
reconciling our actual as reported results to the ongoing operations, after
giving effect to the following: (i) the disposition of the worldwide
professional products line, and the Plusbelle and Colorama brands, assuming
such transactions occurred on January 1, 1999; (ii) the elimination of
restructuring costs in the period incurred; and (iii) the elimination of
additional costs associated with the closing of our Phoenix and Canada
facilities that were included in cost of sales and selling, general and
administrative expenses and executive severance costs that were included in
selling, general and administrative expenses in the period incurred (after
giving effect thereto, the "ongoing operations"). The adjustments are based
upon available information and certain assumptions that our management believes
are reasonable and do not represent pro forma adjustments prepared in
accordance with Regulation S-X. The summary unaudited data for the ongoing
operations does not purport to represent the results of operations or our
financial position that actually would have occurred had the foregoing
transactions referred to in (i) above been consummated on January 1, 1999.
You should read "Management's Discussion and Analysis of Financial
Condition and Results of Operations," the consolidated financial statements and
related notes and the report of our independent auditors included in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2001, incorporated
in this prospectus by reference.
YEAR ENDED DECEMBER 31,
---------------------------------------------
1999(a) 2000(b) 2001(c)
------------- ------------- -------------
(DOLLARS IN MILLIONS)
STATEMENT OF ONGOING OPERATIONS DATA:
Net sales ............................................ $ 1,268.8 $ 1,303.7 $ 1,305.1
Gross profit ......................................... 722.3 800.6 809.0
Selling, general and administrative expenses ......... 900.4 729.6 706.0
OTHER DATA:
Total secured debt (at period end) ................... $ 635.7 $ 420.4 $ 487.5
Total indebtedness (at period end) ................... 1,809.7 1,593.8 1,661.1
EBITDA ............................................... (72.3) 186.1 202.8
Ratio of EBITDA to interest expense, net ............. -- 1.3x 1.5x
Ratio of secured debt to EBITDA ...................... -- 2.3x 2.4x
Ratio of total indebtedness to EBITDA ................ -- 8.6x 8.2x
- -------------
See accompanying notes to Summary Ongoing Consolidated Financial Data
16
NOTES TO SUMMARY ONGOING CONSOLIDATED FINANCIAL DATA
(a) Reflects the following adjustments for the year ended December 31, 1999:
(in millions)
PRODUCT LINE, RESTRUCTURING
BRANDS AND COSTS AND
AS REPORTED FACILITIES SOLD OTHER, NET* ONGOING
------------- ----------------- -------------- -------------
Net sales .................................. $ 1,709.9 $ (441.1) $ -- $ 1,268.8
Gross profit ............................... 983.6 (261.3) -- 722.3
Selling, general and administrative
expenses .................................. 1,154.2 (231.8) (22.0) 900.4
Restructuring costs and other, net ......... 40.2 ( 3.9) (36.3) --
* See footnote (d) on page 14.
(b) Reflects the following adjustments for the year ended December 31, 2000:
(in millions)
PRODUCT LINE, RESTRUCTURING
BRANDS AND COSTS AND
AS REPORTED FACILITIES SOLD OTHER, NET* ONGOING
------------- ----------------- -------------- -------------
Net sales .................................. $ 1,447.8 $ (144.1) $ -- $ 1,303.7
Gross profit ............................... 873.5 ( 77.8) 4.9 800.6
Selling, general and administrative
expenses .................................. 801.8 ( 72.2) -- 729.6
Restructuring costs and other, net ......... 54.1 -- (54.1) --
* See footnote (e) on page 15.
(c) Reflects the following adjustments for the year ended December 31, 2001:
(in millions)
PRODUCT LINE, RESTRUCTURING
BRANDS AND COSTS AND
AS REPORTED FACILITIES SOLD OTHER, NET* ONGOING
------------- ----------------- -------------- -------------
Net sales .................................. $ 1,321.5 $ (16.4) $ -- $ 1,305.1
Gross profit ............................... 777.3 ( 6.5) 38.2 809.0
Selling, general and administrative
expenses .................................. 720.5 ( 9.1) ( 5.4) 706.0
Restructuring costs and other, net ......... 38.1 -- (38.1) --
* See footnote (f) on page 15.
17
RISK FACTORS
In addition to the information contained elsewhere in this prospectus and
in the documents incorporated by reference herein, the following risk factors
should be carefully considered in evaluating the exchange offer and an
investment in the exchange notes. The following risk factors, other than "You
may have difficulty selling the original notes that you do not exchange,"
generally apply to the original notes as well as the exchange notes.
RISKS RELATING TO THE NOTES
You may have difficulty selling the original notes that you do not exchange.
If you do not exchange your original notes for exchange notes in the
exchange offer, you will continue to be subject to the restrictions on transfer
of your original notes described in the legend on your original notes. The
restrictions on transfer of your original notes arise because we issued the
original notes under exemptions from, or in transactions not subject to, the
registration requirements of the Securities Act and applicable state securities
laws. In general, you may only offer or sell the original notes if they are
registered under the Securities Act and applicable state securities laws, or
offered and sold under an exemption from these requirements. We do not intend
to register the original notes under the Securities Act. To the extent original
notes are tendered and accepted in the exchange offer, the trading market, if
any, for the original notes would be adversely affected. See "The Exchange
Offer -- Consequences of Exchanging or Failing to Exchange Original Notes."
Our substantial indebtedness could affect our operations and flexibility.
We have a substantial amount of outstanding indebtedness. As of December
31, 2001, our total indebtedness was approximately $1,661.1 million. See
"Capitalization." This level of indebtedness could make it more difficult for
us to make interest payments on, or to repurchase, the notes. Although the
indenture governing the notes, the indentures governing our other outstanding
indebtedness, and our 2001 credit agreement limit our ability to borrow
additional money, under certain circumstances we are allowed to borrow a
significant amount of additional money, which would either rank equally in
right of payment with the notes or be subordinated in right of payment to the
notes and, in certain circumstances, could be secured on a first-priority basis
ahead of the notes. See "Description of Notes -- Certain Covenants." Subject to
certain limitations contained in the indenture governing the notes, our
non-guarantor subsidiaries may also incur additional debt that would be
structurally senior to the notes. See "-- The notes are effectively junior to
indebtedness and other liabilities of our non-guarantor subsidiaries." For more
information about our indebtedness, see "Description of Other Indebtedness" and
"Description of Notes" sections of this prospectus.
Our substantial indebtedness could have important consequences to you. For
example, it could:
o require us to dedicate a substantial portion of our cash flow from
operations to payments on our indebtedness, thereby reducing the
availability of our cash flow for other general corporate purposes;
o limit our ability to fund future working capital, capital expenditures,
displays, acquisitions, investments, restructurings and other general
corporate requirements; and
o limit our flexibility in responding to changes in our business and the
industry in which we operate.
Our ability to pay principal of the notes depends on many factors.
We currently anticipate that, in order to pay the principal amount of the
notes upon the occurrence of an event of default, to repurchase the notes if a
change of control occurs or in the event our cash flows from operations are
insufficient to allow us to pay the principal amount of the notes at maturity,
we may be required to refinance our indebtedness, sell assets or operations,
sell our equity securities or seek capital contributions or loans from our
parent, Revlon, Inc., or from our affiliates.
18
Revlon, Inc. has no assets or operations other than holding our capital stock.
None of our affiliates are required to make any capital contributions, loans or
other payments to us regarding our obligations on the notes. We cannot assure
you that we would be able to pay the principal amount of the notes if we took
any of the above actions or that the indenture governing the notes, the
indentures governing our other outstanding indebtedness or any of our other
debt instruments or the debt instruments of our subsidiaries then in effect
would permit us to take any of the above actions. See "-- Restrictions and
covenants in debt agreements limit our ability to take certain actions;
Consequences of failure to comply" and "Description of Other Indebtedness."
The notes are effectively junior to the indebtedness and other liabilities of
our non-guarantor subsidiaries.
We conduct a significant portion of our operations through our
non-guarantor subsidiaries and depend, in part, on earnings and cash flows of,
and dividends from, these subsidiaries to pay our obligations, including
principal and interest on our indebtedness. Certain laws restrict the ability
of our subsidiaries to pay us dividends or make loans and advances to us. To
the extent these restrictions are applied to our non-guarantor subsidiaries, we
would not be able to use the earnings of those subsidiaries to make payments on
the notes. Furthermore, in the event of any bankruptcy, liquidation or
reorganization of a non-guarantor subsidiary, the rights of the holders of
notes to participate in the assets of such non-guarantor subsidiary will rank
behind the claims of that subsidiary's creditors, including trade creditors
(except to the extent we have a claim as a creditor of such subsidiary). As a
result, the notes are effectively subordinated to the outstanding indebtedness
and other liabilities, including trade payables, of our non-guarantor
subsidiaries. As of December 31, 2001, our non-guarantor subsidiaries had
approximately $108.4 million of outstanding indebtedness and other liabilities,
excluding intercompany liabilities, all of which was structurally senior to the
notes. See "-- Our substantial indebtedness could affect our operations and
flexibility" and "Description of Other Indebtedness." In addition, certain of
our foreign subsidiaries have debt obligations that are also secured by the
collateral that secures the notes and our 2001 credit agreement. Such
obligations, including certain borrowings by foreign subsidiaries under the
2001 credit agreement, may also benefit from liens on assets of the foreign
subsidiaries that do not secure the notes.
Our ability to service our debt, meet our debt covenants and meet our cash
requirements depends on many factors.
We currently anticipate that operating cash flow, cash on hand and funds
available for borrowing under our 2001 credit agreement, will be sufficient to
cover our operating expenses, including cash requirements in connection with
our ongoing operations, strategic plans (including restructuring plans) and our
debt service requirements, including our debt covenants, for the foreseeable
future. However, if we do not otherwise generate sufficient cash flow from our
operations, cash on hand or have funds available for borrowing under our credit
facilities, we would be required to adopt one or more alternatives. For
example, we could be required to:
o reduce or delay purchases of permanent displays;
o reduce or delay capital spending;
o restructure our indebtedness;
o delay or revise restructuring programs;
o sell assets or operations;
o seek capital contributions or loans from our affiliates;
o sell equity securities of Revlon, Inc.; and/or
o reduce discretionary spending.
If we are required to take any of these actions, it could have a material
adverse effect on our business, financial condition and results of operations.
In addition, we cannot assure you that we
19
would be able to take any of these actions, that these actions would enable us
to continue to satisfy our capital requirements or that these actions would be
permitted under the terms of our various debt instruments then in effect.
Restrictions and covenants in debt agreements limit our ability to take certain
actions; Consequences of failure to comply.
The indenture governing the notes, the indentures governing our other
outstanding indebtedness and our 2001 credit agreement contain a number of
significant restrictions and covenants that limit our ability and our
subsidiaries' ability, among other things, to:
o borrow money;
o use assets as security in other borrowings or transactions;
o pay dividends on stock or purchase stock;
o sell assets;
o enter into certain transactions with affiliates; and
o make certain investments or acquisitions.
In addition, the 2001 credit agreement further requires us to maintain
certain financial ratios and meet certain tests, including minimum EBITDA and
ratio of debt outstanding under the 2001 credit agreement to EBITDA, and
restricts our ability and the ability of our subsidiaries to make capital
expenditures. Subject to certain limited exceptions, our capital stock, the
capital stock of our domestic subsidiaries, as well as 66% of the capital stock
of our first-tier foreign subsidiaries, substantially all of our non-real
property assets in the United States and our facility located in Oxford, North
Carolina are pledged as collateral to secure on a first-priority basis our 2001
credit agreement and certain other obligations. Certain of our foreign assets
are pledged to secure local borrowings. In addition, a change of control would
be an event of default under the 2001 credit agreement and would give holders
of certain of our debt securities, including the notes and our other
outstanding notes, the right to require the repurchase of their notes.
Events beyond our control, such as prevailing economic conditions, changes
in consumer preferences and changes in the competitive environment, could
impair our operating performance, which could affect our ability and that of
our subsidiaries to comply with the terms of our debt instruments. We cannot
assure you that we and our subsidiaries will be able to comply with the
provisions of our respective debt instruments, including the financial
covenants in the 2001 credit agreement. Breaching any of these covenants or
restrictions or the failure to comply with our obligations after the lapse of
any applicable grace periods could result in a default under the applicable
debt instruments, including the 2001 credit agreement. If there were an event
of default, holders of such defaulted debt could cause all amounts borrowed
under these instruments to be due and payable immediately. We cannot assure you
that our assets or cash flow or that of our subsidiaries would be sufficient to
fully repay borrowings under the outstanding debt instruments, either upon
maturity or if accelerated upon an event of default or, if we were required to
repurchase the notes or any of our other debt securities upon a change of
control, that we would be able to refinance or restructure the payments on such
debt. Further, if we are unable to repay, refinance or restructure our
indebtedness under our 2001 credit agreement, the lenders under our 2001 credit
agreement could proceed against the collateral securing that indebtedness. In
that event, any proceeds received upon a realization of the collateral would be
applied first to amounts due under the 2001 credit agreement and to certain
other senior creditors before any proceeds would be available to make payments
on the notes. See "-- No assurance of adequacy of collateral; Control by
creditors with first-priority liens." In addition, any event of default or
declaration of acceleration under one debt instrument could also result in an
event of default under one or more of our or our subsidiaries' other debt
instruments, including the notes. See "-- Our substantial indebtedness could
affect our operations and flexibility."
20
No assurance of adequacy of collateral; Control by creditors with
first-priority liens.
The original notes are and the exchange notes will be secured on a
second-priority basis by, subject to certain limited exceptions, a pledge of
our capital stock, the capital stock of our domestic subsidiaries, as well as
66% of the capital stock of our first-tier foreign subsidiaries, substantially
all of our non-real property assets in the United States and our facility
located in Oxford, North Carolina. The lenders under the 2001 credit agreement,
the trustee under the notes, for the benefit of the holders of the notes, and
certain other creditors will share in the proceeds of the collateral; however,
the lenders under the 2001 credit agreement and certain other creditors will be
entitled to receive proceeds from the collateral before the holders of the
notes. The ability of the holders of the notes to realize upon the collateral
is limited by the collateral agency agreement, which permits, so long as any
obligations having the benefit of the first-priority liens are outstanding,
only the holders of those obligations to direct the exercise of remedies
against the collateral. In addition, releases of collateral from the
second-priority liens will be permitted (i) at our request unless, after notice
from us, holders of at least 25% of the outstanding principal amount of the
notes object to such release or (ii) upon the written consent of the holders of
at least 66 2/3% of the outstanding principal amount of the notes. Certain other
releases of collateral will also be permitted. Provisions of the agreements
relating to the second-priority liens may be amended or waived automatically
upon comparable amendment or waiver of the first-lien collateral documents
(except, in the case of releases of collateral, unless certain other conditions
are met). In addition, these agreements may be amended or waived (i) at our
request unless, after notice from us, holders of at least 25% of the
outstanding principal amount of the notes object to such amendment or waiver or
(ii) upon the written consent of the holders of a majority of the outstanding
principal amount of the notes. The value of the collateral in the event of
liquidation will depend on market and economic conditions, the availability of
buyers and other factors. We cannot assure you that the proceeds from the sale
or sales of all of such collateral would be sufficient to satisfy the amounts
due on the notes in the event of a default. If such proceeds were not
sufficient to repay amounts due on the notes, then holders of the notes (to the
extent not repaid from the proceeds of the sale of the collateral) would only
have an unsecured claim against our remaining assets. See "Description of the
Collateral and Intercreditor Arrangements."
The right of the collateral agent to foreclose upon and sell the
collateral upon the occurrence of a default will also be subject to limitations
under applicable bankruptcy laws if a bankruptcy proceeding were commenced
against us or our subsidiaries. In addition, because a portion of the
collateral consists of pledges of a portion of the stock of certain of our
foreign subsidiaries, the validity of those pledges under local law, if
applicable, and the ability of the holders of the notes to realize upon that
collateral under local law, to the extent applicable, may be limited by such
local law, which limitations may or may not affect the first-priority liens.
The rights of the holders of the notes with respect to the collateral
securing the notes are limited pursuant to the terms of the collateral agency
agreement. Under the terms of the collateral agency agreement, the holders of
the notes will have a second-priority interest in the collateral. Accordingly,
any proceeds received upon a realization of the collateral securing the notes
and the 2001 credit agreement will be applied first to amounts due under the
2001 credit agreement, amounts due to certain other creditors that have the
benefit of the first-priority liens and to pay certain administrative expenses
before any amounts will be available to pay the notes. Under the terms of the
indenture governing the notes, we are also permitted in the future to incur
additional indebtedness which can be secured by the collateral on a
first-priority basis and which will be entitled to payment out of the proceeds
of any sale of the collateral before the notes. In addition, under the terms of
the collateral agency agreement, at any time that obligations that have the
benefit of the first-priority liens are outstanding, any actions that may be
taken in respect of the collateral, including the approval of certain
amendments to the collateral documents, waivers of past defaults, the ability
to cause the commencement of enforcement proceedings and to control the conduct
of such proceedings, will be at the direction of the holders of the
first-priority obligations and the trustee, on behalf of the holders of the
notes, will not have the ability to control or direct such actions, even if the
rights of the holders of the notes are adversely affected.
21
Limitations on guarantees -- The guarantees provided by Revlon, Inc. and our
subsidiaries are subject to certain defenses that may limit your right to
receive payment on the notes.
Although the guarantees provide the holders of the notes with a direct
claim against the assets of the guarantors, enforcement of the guarantees
against any guarantor would be subject to certain "suretyship" defenses
available to guarantors generally. Enforcement could also be subject to other
defenses available to the guarantors in certain circumstances. See "-- Possible
avoidance of guarantees and liens." To the extent that the guarantees are not
enforceable, the notes would be effectively subordinated to all liabilities of
the guarantors, including trade payables of such guarantors.
Possible avoidance of guarantees and liens -- Federal and state statutes allow
courts, under specific circumstances, to void the guarantees and the liens
securing these guarantees and require noteholders to return payments received
from us or the guarantors.
Our creditors or the creditors of our guarantors could challenge these
guarantees and these liens as fraudulent conveyances or on other grounds. The
delivery of these guarantees and the grant of the second-priority liens
securing these guarantees could be found to be a fraudulent transfer and
declared void if a court determined that: the guarantor delivered the guarantee
and granted the lien with the intent to hinder, delay or defraud its existing
or future creditors; the guarantor did not receive fair consideration for the
delivery of the guarantee and the incurrence of the lien; or the guarantor was
insolvent at the time it delivered the guarantee and granted the lien. If a
court declares either these guarantees or these liens to be void, or if the
guarantees must be limited or voided in accordance with their terms, any claim
you may make against us for amounts payable on the notes would be unsecured and
subordinated to the debt of our guarantor, including trade payables.
You may find it difficult to sell your exchange notes because there is no
existing trading market for the exchange notes.
You may find it difficult to sell your exchange notes because an active
trading market for the exchange notes may not develop. The exchange notes are
being offered to the holders of the original notes. The original notes were
issued on November 26, 2001 primarily to a small number of institutional
investors. After the exchange offer, the trading market for the remaining
untendered original notes could be adversely affected.
There is no existing trading market for the exchange notes, and there can
be no assurance regarding the future development of a market for the exchange
notes, or the ability of the holders of the exchange notes to sell their
exchange notes or the price at which such holders may be able to sell their
exchange notes. If such a market were to develop, the exchange notes could
trade at prices that may be higher or lower than the initial offering price of
the original notes depending on many factors, including prevailing interest
rates, our operating results and the market for similar securities. We do not
intend to apply for listing or quotation of the exchange notes on any exchange,
and so we do not know the extent to which investor interest will lead to the
development of a trading market or how liquid that market might be. Although
Salomon Smith Barney Inc., Bear, Stearns & Co., Inc. and Lehman Brothers Inc.,
the initial purchasers of the original notes, have informed us that they intend
to make a market in the exchange notes, they are not obligated to do so, and
any market-making may be discontinued at any time without notice. Therefore,
there can be no assurance as to the liquidity of any trading market for the
exchange notes or that an active market for the exchange notes will develop. As
a result, the market price of the exchange notes, as well as your ability to
sell the exchange notes, could be adversely affected.
Historically, the market for non-investment grade debt has been subject to
disruptions that have caused substantial volatility in the prices of such
securities. There can be no assurance that the market for the exchange notes
will not be subject to similar disruptions. Any such disruptions may have an
adverse effect on holders of the exchange notes.
22
Broker-dealers or noteholders may become subject to the registration and
prospectus delivery requirements of the Securities Act.
Any broker-dealer that:
o exchanges its original notes in the exchange offer for the purpose of
participating in a distribution of the exchange notes, or
o resells exchange notes that were received by it for its own account in
the exchange offer,
may be deemed to have received restricted securities and may be required to
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction by that broker-dealer.
Any profit on the resale of the exchange notes and any commission or
concessions received by a broker-dealer may be deemed to be underwriting
compensation under the Securities Act.
In addition to broker-dealers, any noteholder that exchanges its original
notes in exchange offer for the purpose of participating in a distribution of
the exchange notes may be deemed to have received restricted securities and may
be required to comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction by
that noteholder.
RISKS RELATING TO THE COMPANY
Limited operating history under the new business strategy.
We have recently implemented material changes in our business strategy
intended to improve operating results and are in the process of implementing
further changes. There can be no assurance that the changes will be successful
or that they will enable us to achieve or maintain profitable operations.
Additionally, it is possible that the changes may have other unanticipated
consequences which could be adverse to our business. The new business strategy
involves a number of significant changes including:
o introduction of a significant number of new products;
o revised trade terms with our domestic customers which are intended to,
among others things, increase consumer sell-through of our products,
reduce merchandise returns and reduce claims for damages;
o a change in our advertising strategy and execution by using outside
agencies and consolidation into a single agency;
o significant reductions in administrative expenses principally by reducing
staffing levels throughout the company;
o shutdowns or dispositions of manufacturing facilities that are
underutilized, consolidation of manufacturing operations and outsourcing
to third-party manufacturers; and
o a shift in our advertising and promotional strategy to put less emphasis
on trade promotion and discounting and more on consumer advertising.
Each of the components of the new business strategy carries significant
risks as well as the possibility of unexpected consequences. Potential risks
include:
o failure of consumers to accept our new product offerings;
o failure of domestic customers to accept and adhere to the revised trade
program;
o reductions in net sales as a result of the revised trade program and/or
as a result of a shift in our advertising and promotional strategy;
o failure of the revised trade program to result in increased consumer
sell-through, decreased returns and decreased damage claims;
23
o possible increases in advertising costs and/or failure to achieve the
intended effect of the new advertising strategy;
o if we elect to pursue a company-wide enterprise software system, the
failure to successfully implement such system or the failure of such
system to successfully integrate our internal systems, unexpected costs
in implementing it or disruptions during implementation;
o significant severance and other cash costs arising out of reductions in
administrative expenses;
o possible adverse effects on employee morale and loss of needed employees;
and
o disruptions resulting from consolidation or outsourcing of manufacturing.
Our former President and Chief Executive Officer, Jeffrey M. Nugent
resigned his employment with us, effective February 14, 2002 and on February
19, 2002, we announced the appointment of Jack L. Stahl, former president and
chief operating officer of Coca-Cola Company, as our new President and Chief
Executive Officer. Several of our other executive officers joined the company
in the recent past. Accordingly, there has been limited opportunity for us to
evaluate the effectiveness of our new management team as a working unit. The
failure of our senior management to function effectively as a team may have an
adverse effect on our ability to implement our business strategy.
Dependence on Oxford, North Carolina facility.
As of December 31, 2001, following our efforts to rationalize and
consolidate our global manufacturing, a substantial portion of our products
were produced at our Oxford, North Carolina facility. Significant unscheduled
downtime at this facility due to equipment breakdowns, power failures, natural
disasters or any other cause, could adversely affect our results of operations
and financial condition. Although we maintain insurance, including business
interruption insurance, that we consider to be adequate under the
circumstances, there can be no assurance that we will not incur losses beyond
the limits or outside the coverage of our insurance.
Dependence on Maesteg, Wales facility.
In July 2001, we sold our principal European manufacturing facility in
Maesteg, Wales and entered into a long-term supply contract with the purchaser
under which the purchaser produces substantially all Revlon color cosmetics and
other products for the European market. If the purchaser is unable to fulfill
its obligations under this supply contract because of manufacturing
difficulties or disruption at the Maesteg, Wales facility or for any other
reason, this could adversely affect our sales in the European market which
could have an adverse effect on our overall results of operations and financial
condition.
We depend on a limited number of customers for a large portion of our net sales.
In 2001, 2000 and 1999, Wal-Mart, Inc. and its affiliates accounted for
approximately 19.9%, 16.5% and 13.1%, respectively, of our net sales (without
giving effect to the adjustments resulting from the adoption of EITF Issue 01-9
discussed below). As a result of our dispositions of non-core assets, including
certain international businesses, we expect that for 2002 and future periods a
small number of other customers will, in the aggregate, account for a large
portion of our net sales. The loss of Wal-Mart or one or more of our other
customers that may account for a significant portion of our sales, or any
significant decrease in sales to these customers, could have a material adverse
effect on our business, financial condition and results of operations.
In January 2002, Kmart Corporation filed a bankruptcy petition for
reorganization under Chapter 11 of the U.S. Bankruptcy Code. Less than 5% of
our 2001 net sales were made to Kmart. We plan to continue doing business with
Kmart for the foreseeable future and accordingly, based upon the information
currently available, believe that Kmart's bankruptcy proceedings will not have
a material adverse effect on our business, financial condition or results of
operations.
24
Competition could materially adversely affect our business, financial condition
and results of operations.
The consumer products business is highly competitive. We compete on the
basis of numerous factors. Brand recognition, product quality, performance and
price, and the extent to which consumers are educated on product benefits have
a marked influence on consumers' choices among competing products and brands.
Advertising, promotion, merchandising and packaging, and the timing of new
product introductions and line extensions also have a significant impact on
buying decisions, and the structure and quality of the sales force affect
product reception, in-store position, permanent display space and inventory
levels in retail outlets. An increase in the amount of competition that we face
could have a material adverse effect on our business, financial condition and
results of operations. We have experienced declines in our market share in
various product categories since late 1998 and there can be no assurance that
such declines will not continue. In addition, we compete in selected product
categories against a number of multinational manufacturers, some of which are
larger and have substantially greater resources than we do, and which may
therefore have the ability to spend more aggressively on advertising and
marketing and more flexibility to respond to changing business and economic
conditions than we do. Certain of our competitors have increased their spending
on discounting and promotional activities in U.S. mass market cosmetics. In
addition to products sold in the mass-market and demonstrator-assisted
channels, our products also compete with similar products sold door-to-door or
through mail order or telemarketing by representatives of direct sales
companies.
Social, political and economic risks affecting foreign operations and effects
of foreign currency fluctuation.
As of December 31, 2001, we had operations based in 20 foreign countries.
We are exposed to the risk of changes in social, political and economic
conditions inherent in operating in foreign countries, including those in Asia,
Eastern Europe and Latin America. Such changes include changes in the laws and
policies that govern foreign investment in countries where we have operations,
as well as, to a lesser extent, changes in United States laws and regulations
relating to foreign trade and investment. In addition, fluctuations in foreign
currency exchange rates may affect the results of our operations and the value
of our foreign assets, which in turn may adversely affect reported earnings
and, accordingly, the comparability of period-to-period results of operations.
Changes in currency exchange rates may affect the relative prices at which we
and foreign competitors sell products in the same market. Our net sales outside
of the United States were 35.5%, 41.8% and 46.9% for 2001, 2000 and 1999,
respectively. In addition, changes in the value of the relevant currencies may
affect the cost of certain items required in our operations. We enter into
forward foreign exchange contracts to hedge certain cash flows denominated in
foreign currency. We had no forward foreign exchange contracts outstanding at
December 31, 2001. We recorded net foreign currency (losses) gains of $(2.2)
million, $(1.6) million and $0.5 million for 2001, 2000 and 1999, respectively.
We can offer no assurances as to the future effect of changes in social,
political and economic conditions on our business or financial condition.
Terrorist attacks, such as the attacks that occurred in New York and
Washington, D.C. on September 11, 2001, and other attacks or acts of war may
adversely affect the markets in which we operate, our operations and our
profitability.
On September 11, 2001, the United States was the target of terrorist
attacks of unprecedented scope. These attacks have caused major instability in
the U.S. and other financial markets and reduced consumer confidence. These
terrorist attacks, the military response and future developments may adversely
effect prevailing economic conditions, resulting in reduced consumer spending
and reduced demand for our products. These developments will subject our
worldwide operations to increased risks and, depending on their magnitude,
could have a material adverse effect on our business.
Control by MacAndrews & Forbes.
MacAndrews & Forbes Holdings Inc. ("MacAndrews Holdings") is a corporation
wholly owned through Mafco Holdings Inc. ("Mafco Holdings" and, together with
MacAndrews Holdings, "MacAndrews & Forbes") by Ronald O. Perelman. MacAndrews &
Forbes owns indirectly
25
approximately 83% of the outstanding common stock of Revlon, Inc., which owns
100% of our common stock. MacAndrews & Forbes will therefore be able to direct
and control our policies and those of our subsidiaries, including mergers,
sales of assets and similar transactions. Our shares of common stock are
pledged to secure Revlon, Inc.'s guarantee under our 2001 credit agreement and
the notes, and shares of Revlon, Inc. and shares of common stock of
intermediate holding companies are or may from time to time be pledged to
secure obligations of MacAndrews & Forbes or its affiliates. A foreclosure upon
any such shares of common stock could constitute a change of control under the
indenture governing the notes and the indentures governing our other
outstanding indebtedness and certain other debt instruments of ours and of our
subsidiaries. A change of control constitutes an event of default under the
2001 credit agreement, which would permit our lenders to accelerate the 2001
credit agreement. In addition, holders of the notes, our 9% Senior Notes due
2006, our 8 1/8% Senior Notes due 2006 and our 8 5/8% Senior Subordinated Notes
due 2008, may require us to repurchase their notes under those circumstances.
See "-- Our ability to pay principal of the notes depends on many factors." We
may not have sufficient funds at the time of the change of control to repay in
full the borrowings under our 2001 credit agreement or to repurchase the notes
and our other outstanding notes. See "-- The notes are effectively junior to
the indebtedness and other liabilities of our non-guarantor subsidiaries."
Forward-Looking Statements.
This prospectus contains forward-looking statements that involve risks and
uncertainties. Our actual results may differ materially from those discussed in
such forward-looking statements. Such statements include, without limitation,
our expectations and estimates (whether qualitative or quantitative) as to:
o the introduction of new products;
o our plans to update our retail presence, evaluate, test and install new
display walls (and our estimates of the costs of such new displays, the
effects of such plans on the accelerated amortization of existing
displays and the estimated amount of such amortization) and our plans to
update the image of the Revlon brand through the introduction of new
graphics and package designs;
o our future financial performance;
o the effect on sales of political and/or economic conditions, adverse
currency fluctuations and competitive activities;
o the possible implementation of a new Enterprise Resource Planning, or
ERP, System, the costs and benefits of such system and the effects of the
adoption of such system on the accelerated amortization of existing
information systems if we proceed with such system;
o restructuring activities, restructuring costs, the timing of such
payments and annual savings and other benefits from such activities;
o the charges, the cash cost and the savings resulting from plant
shutdowns, dispositions and outsourcing;
o the effects of revised trade terms for our U.S. customers, including
reduced returns;
o cash flow from operations, cash on hand and availability of borrowings
under the 2001 credit agreement, the sufficiency of such funds to satisfy
our cash requirements in 2002, and the availability of funds from capital
contributions or loans from Revlon, Inc. or other of our affiliates;
o uses of funds, including for the purchases of permanent displays, capital
expenditures (and our estimates of the amounts of such expenses) and
restructuring costs (and our estimates of the amounts of such costs);
26
o the availability of raw materials and components and, with respect to
Europe, products, including that our facilities and third party
contractual supplier arrangements will provide sufficient capacity for
our current and expected production requirements;
o matters concerning market-risk sensitive instruments;
o the effects of transition to the Euro;
o the effects of the adoption of certain accounting principles, including
our estimates of the amounts of unamortized goodwill and identifiable
intangible assets; and
o the effects of the loss of one or more customers, including, without
limitation, Wal-Mart, and the status of our relationship with our
customers.
Statements that are not historical facts, including statements about our
beliefs and expectations, are forward-looking statements. Forward-looking
statements can be identified by, among other things, the use of forward-looking
language, such as "believes," "expects," "estimates," "projects," "forecast,"
"may," "will," "should," "seeks," "plans," "scheduled to," "anticipates" or
"intends" or the negative of those terms, or other variations of those terms or
comparable language, or by discussions of strategy or intentions. A number of
important factors could cause actual results to differ materially from those
contained in any forward-looking statement. In addition to factors that may be
described in our filings with the SEC, including this filing, the following
factors, among others, could cause our actual results to differ materially from
those expressed in any forward-looking statements made by us:
o difficulties or delays in developing and introducing new products or
failure of customers to accept new product offerings;
o difficulties or delays or unanticipated costs associated with our test
and possible implementation of new display walls and new graphics and
package designs;
o changes in consumer preferences, including reduced consumer demand for
our color cosmetics and other current products;
o effects of and changes in political and/or economic conditions, including
inflation and monetary conditions, and in trade, monetary, fiscal and tax
policies in international markets;
o actions by competitors, including business combinations, technological
breakthroughs, new products offerings, promotional spending and marketing
and promotional successes, including increases in market share;
o unanticipated costs or difficulties or delays in completing projects
associated with our strategic plan, including in connection with the
implementation of a new ERP system;
o difficulties, delays or unanticipated costs or less than expected savings
and other benefits resulting from our restructuring activities;
o difficulties or delays in implementing, higher than expected charges and
cash costs or lower than expected savings from the shutdown, disposition,
outsourcing and consolidation of manufacturing operations;
o difficulties or delays in achieving the intended results of the revised
trade terms, including, without limitation, lower returns or unexpected
consequences from the revised trade terms including the possible effect
on sales;
o lower than expected cash flow from operations, the inability to secure
capital contributions or loans from Revlon, Inc. or other of our
affiliates or the unavailability of funds under the 2001 credit
agreement;
o higher than expected operating expenses, working capital expenses,
permanent display costs, capital expenditures, restructuring costs or
debt service payments;
o difficulties or delays in sourcing raw materials or components and, with
respect to Europe, products;
27
o interest rate or foreign exchange rate changes affecting us and our
market sensitive financial instruments;
o difficulties, delays or unanticipated costs associated with the
transition to the Euro;
o unanticipated effects of our adoption of certain new accounting
standards; and
o combinations among significant customers or the loss, insolvency or
failure to pay debts by a significant customer or customers.
You should consider the areas of risk described above in connection with
any forward-looking statements that may be made by us. Forward-looking
statements speak only as of the date they are made, and, except for our ongoing
obligations to disclose material information under the federal securities laws,
we undertake no obligation to publicly update any forward-looking statements,
whether as a result of new information, future events or otherwise. You are
advised, however, to consult any additional disclosures we make in our
Quarterly Reports on Form 10-Q, Annual Report on Form 10-K and Current Reports
on Form 8-K to the SEC (which, among other places, can be found on the SEC's
website at http://www.sec.gov, as well as on our website at www.revloninc.com.)
See "Where You Can Find More Information." The cautionary discussion of risks
and uncertainties under "Risk Factors" are factors that we think could cause
our actual results to differ materially from expected results. Factors other
than those listed above could cause our results to differ materially from
expected results. This discussion is provided as permitted by the Private
Securities Litigation Reform Act of 1995.
28
USE OF PROCEEDS
We will not receive any proceeds from the exchange offer. In consideration
for issuing the exchange notes, we will receive in exchange the original notes
of like principal amount, the terms of which are identical in all material
respects to the exchange notes. The original notes surrendered in exchange for
exchange notes will be retired and canceled and cannot be reissued.
Accordingly, issuance of the exchange notes will not result in any increase in
our indebtedness. We have agreed to bear the expenses of the exchange offer. No
underwriter is being used in connection with the exchange offer.
On November 26, 2001, we issued and sold the original notes in a private
placement, receiving gross proceeds of $350.5 million. We used the net proceeds
of that offering, together with borrowings under the 2001 credit agreement, to
repay indebtedness outstanding under our previous credit agreement and to pay
fees and expenses incurred in connection with the Refinancing Transactions,
with the balance available for general corporate purposes.
29
SELECTED HISTORICAL AND UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL DATA
OF REVLON CONSUMER PRODUCTS CORPORATION
Our selected historical consolidated financial data for each of the five
years in the five-year period ended December 31, 2001 has been derived from our
audited consolidated financial statements. You should read "Management's
Discussion and Analysis of Financial Condition and Results of Operations", the
consolidated financial statements and related notes and the report of our
independent auditors included in our Annual Report on Form 10-K for the fiscal
year ended December 31, 2001, incorporated by reference in this prospectus.
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------
1997 1998 1999 2000 2001
-------- --------- -------- --------- --------
(DOLLARS IN MILLIONS)
HISTORICAL STATEMENT OF OPERATIONS DATA (a):
Net sales ..................................... $2,156.4 $2,149.7 $1,709.9 $1,447.8 $1,321.5
Gross profit .................................. 1,377.2 1,347.6(c) 983.6 873.5(e) 777.3(f)
Selling, general and administrative expenses... 1,158.2 1,188.3 1,154.2(d) 801.8 720.5(f)
Restructuring costs and other, net ............ 3.6(b) 33.1(c) 40.2(d) 54.1(e) 38.1(f)
-------- -------- -------- -------- --------
Operating income (loss) ....................... 215.4 126.2 (210.8) 17.6 18.7
Interest expense, net ......................... 129.5 132.7 145.1 142.4 137.8
Amortization of debt issuance costs ........... 6.6 5.1 4.3 5.6 6.2
(Gain) loss on sale of product line, brand
and facilities, net .......................... -- -- 0.9 (10.8) 14.4
Miscellaneous, net ............................ 12.2 9.2 (0.5) (0.2) 4.9
-------- -------- -------- -------- --------
Income (loss) from continuing operations
before income taxes .......................... 67.1 (20.8) (360.6) (119.4) (144.6)
Provision for income taxes .................... 9.3 5.0 9.1 8.6 4.0
-------- -------- -------- -------- --------
Income (loss) from continuing operations ...... 57.8 (25.8) (369.7) (128.0) (148.6)
Income (loss) from discontinued operations..... 0.7 (64.2) -- -- --
Extraordinary items -- early extinguishment
of debt ...................................... (14.9) (51.7) -- -- (3.6)
-------- -------- -------- -------- --------
Net income (loss) ............................. $ 43.6 $ (141.7) $ (369.7) $ (128.0) $ (152.2)
======== ======== ======== ======== ========
OTHER DATA:
Net cash provided by (used for) operating
activities ................................... $ 7.8 $ (51.1) $ (81.7) $ (84.0) $ (86.5)
Net cash (used for) provided by investing
activities ................................... (84.3) (91.0) (40.7) 322.1 87.2
Net cash provided by (used for) financing
activities ................................... 85.8 158.7 117.4 (203.7) 46.3
EBITDA (g) .................................... 312.1 268.2 (30.8) 197.5 201.3
Ratio of earnings to fixed charges (h) ........ 1.4x 0.9x -- 0.3x 0.1x
Capital expenditures .......................... 52.3 60.8 42.3 19.0 15.1
Purchase of permanent displays ................ 68.9 76.6 66.5 51.4 44.0
Unaudited proforma ratio of earnings to
fixed charges(i) ............................. 0.1x
DECEMBER 31,
------------------------------------------------------------------------
1997 1998 1999 2000 2001
----------- ----------- ----------- ----------- -----------
BALANCE SHEET DATA (a):
Total assets .................................... $1,759.3 $1,831.7 $ 1,560.6 $ 1,104.2 $ 991.4
Total indebtedness .............................. 1,467.9 1,687.9 1,809.7 1,593.8 1,661.1
Total stockholder's deficiency .................. (457.0) (647.0) (1,013.2) (1,104.3) (1,288.8)
See accompanying notes to Selected Historical and Unaudited Pro Forma
Consolidated Financial Data.
30
NOTES TO SELECTED HISTORICAL AND UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
DATA
(a) In March 2000 and May 2000, we completed the disposition of our worldwide
professional products line and our Plusbelle brand in Argentina,
respectively. In July 2001, we completed the disposition of our Colorama
brand and facility in Brazil. Accordingly, the selected consolidated
financial data include the results of operations of the professional
products line, Plusbelle and Colorama brands through the dates of their
respective dispositions.
In November 2001, the FASB EITF reached a consensus on the Guidelines
which address when sales incentives and discounts should be recognized, as
well as where the related revenues and expenses should be classified in
financial statements. We adopted the earlier portion of these Guidelines
(formerly EITF Issue 00-14) addressing certain sales incentives effective
January 1, 2001, and accordingly, the accompanying selected consolidated
financial data for each of the years in the five-year period ended
December 31, 2001 reflect the implementation of the Guidelines. The
Guidelines did not affect our operating income (loss), net income (loss)
or EBITDA (as defined below).
In September 2001, Revlon, Inc. acquired from Revlon Holdings Inc., an
affiliate and indirect wholly-owned subsidiary of Mafco Holdings, and
contributed to us all the assets and liabilities of the Charles of the
Ritz business. The acquired assets and liabilities assumed were accounted
for at historical cost in a manner similar to that of a pooling of
interests. The selected consolidated financial data for each of the years
in the five-year period ended December 31, 2001 is restated to reflect the
acquisition.
(b) In 1997, we incurred restructuring costs of $20.6 million in connection with
the implementation of our business strategy to rationalize factory
operations. These costs primarily included severance and other costs related
to the rationalization of certain factory and warehouse operations
worldwide. Such costs were partially offset by an approximately $12.7
million settlement of a claim and gains of approximately $4.3 million on the
sales of certain factory operations outside the United States.
(c) In late 1998, we developed a strategy to reduce overall costs and streamline
operations. To execute against this strategy, we began to develop a
restructuring plan and executed the plan in several phases, which has
resulted in several restructuring charges being recorded.
In the fourth quarter of 1998, we committed to a restructuring plan to
realign and reduce personnel, exit excess leased real estate, realign and
consolidate regional activities, reconfigure certain manufacturing
operations and exit certain product lines and recognized a charge of $44.2
million, which includes $2.7 million charged to cost of sales. In 1998, we
recognized gains of approximately $8.4 million for the sales of certain
non-core assets.
(d) In the first nine months of 1999, we continued to implement the
restructuring program established in late 1998 for which we recorded a
charge of $20.5 million for employee severance and other personnel benefits,
costs associated with the exit from leased facilities as well as other
costs. Also in 1999, we exited from a non-core business, resulting in a
charge of $1.6 million.
During the fourth quarter of 1999, we continued to restructure our
organization and began a new program in line with our original
restructuring plan developed in late 1998, principally for additional
employee severance and other personnel benefits and to restructure certain
operations outside the United States, including certain operations in
Japan, resulting in a charge of $18.1 million.
During the fourth quarter of 1999, we recorded a charge of $22.0 million
to selling, general and administrative costs related to separation costs
for various executives terminated in 1999.
(e) In the first and second quarter of 2000, we recorded charges of $9.5 million
and $5.1 million, respectively, relating to the 1999 restructuring program
that began in the fourth quarter of 1999.
31
During the third quarter of 2000, we continued to re-evaluate our
organizational structure. As part of this re-evaluation, we decided to
improve profitability by reducing personnel and consolidating
manufacturing facilities. This program focused on closing our
manufacturing operations in Phoenix, Arizona and Mississauga, Canada and
to consolidate production into our plant in Oxford, North Carolina. This
program also includes the remaining obligation for excess leased real
estate at our headquarters, consolidation costs associated with closing
our facility in New Zealand, and the elimination of several domestic and
international executive and operational positions, both of which were
effected to reduce and streamline corporate overhead costs. In the third
quarter of 2000, we recorded a charge of $13.7 million for programs begun
in the quarter as well as for programs previously commenced. In the fourth
quarter of 2000, we recorded a charge of $25.8 million related to the
program begun in the third quarter of 2000, principally for additional
employee severance and other personnel benefits and to consolidate
worldwide operations.
During the fourth quarter of 2000, we recorded $4.9 million to cost of
sales related to additional costs associated with the consolidation of
worldwide operations.
(f) In the first, second, third and fourth quarters of 2001, we recorded charges
of $14.6 million, $7.9 million, $3.0 million and $12.6 million,
respectively, related to the 2000 restructuring program, principally for
additional employee severance and other personnel benefits, relocation and
to consolidate worldwide operations. The charge in the fourth quarter of
2001 also was for an adjustment to previous estimates of approximately $6.6
million.
In 2001, we recorded $38.2 million to cost of sales (which includes $6.1
million of increased depreciation) and $5.4 million to selling, general
and administrative costs related to additional costs associated with the
consolidation of our Phoenix and Canada facilities.
(g) We define EBITDA as operating income (loss) before restructuring costs and
other, net, and additional costs associated with the consolidation of our
worldwide operations and executive severance, plus depreciation and
amortization other than that relating to early extinguishment of debt,
discount and debt issuance costs. EBITDA is presented here as a measure of
our debt service ability, not of our operating results. EBITDA should not
be considered in isolation, as a substitute for net income or cash flow
from operations prepared in accordance with accounting principles generally
accepted in the United States of America or as a measure of our
profitability or liquidity. EBITDA does not take into account our debt
service requirements and other commitments and, accordingly, is not
necessarily indicative of amounts that may be available for discretionary
uses. Additionally, EBITDA may be defined differently for purposes of our
credit agreement.
(h) Earnings used in computing the ratio of earnings to fixed charges consist of
income (loss) from continuing operations before income taxes plus fixed
charges. Fixed charges consist of interest expense (including amortization
of debt issuance costs, but not losses relating to the early extinguishment
of debt) and 33% of rental expense (considered to be representative of the
interest factors). Fixed charges exceeded earnings by $20.8 million in 1998,
$360.6 million in 1999, $119.4 million in 2000 and $144.6 million in 2001.
(i) Pro forma to reflect the increase in interest expense and the amortization
of debt issuance costs of $22.7 million and $1.9 million, respectively, for
the year ended December 31, 2001, as if the Refinancing Transactions
occurred on January 1, 2001. On a pro forma basis, fixed charges would have
exceeded earnings before fixed charges by $169.2 million in the year ended
December 31, 2001.
32
SELECTED HISTORICAL
CONSOLIDATED FINANCIAL DATA
OF REVLON, INC.
The selected historical consolidated financial data of Revlon, Inc. and
subsidiaries for each of the five years in the five-year period ended December
31, 2001 has been derived from the audited consolidated financial statements of
Revlon, Inc. You should read "Management's Discussion and Analysis of Financial
Condition and Results of Operations", the consolidated financial statements and
related notes and the report of Revlon, Inc.'s independent auditors included in
the Annual Report on Form 10-K of Revlon, Inc. for the fiscal year ended
December 31, 2001, incorporated by reference in this prospectus. All references
to "we," "our," "ours" and "us" in this section are to Revlon, Inc. and its
subsidiaries.
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------------
1997 1998 1999 2000 2001
--------- -------- -------- -------- --------
(DOLLARS IN MILLIONS)
HISTORICAL STATEMENT OF OPERATIONS DATA (a):
Net sales ....................................... $2,156.4 $2,149.7 $1,709.9 $1,447.8 $1,321.5
Gross profit .................................... 1,377.2 1,347.6(c) 983.6 873.5 (e) 777.3(f)
Selling, general and administrative expenses..... 1,159.4 1,189.8 1,155.4(d) 803.5 723.1(f)
Restructuring costs and other, net .............. 3.6(b) 33.1(c) 40.2(d) 54.1 (e) 38.1(f)
-------- -------- -------- -------- --------
Operating income (loss) ......................... 214.2 124.7 (212.0) 15.9 16.1
Interest expense, net ........................... 129.5 132.7 145.1 142.4 136.6
Amortization of debt issuance costs ............. 6.6 5.1 4.3 5.6 6.2
(Gain) loss on sale of product line, brand
and facilities, net ............................ -- -- 0.9 (10.8) 14.4
Miscellaneous, net .............................. 12.2 9.2 (0.5) (0.2) 4.9
-------- -------- -------- -------- --------
Income (loss) from continuing operations
before income taxes ............................ 65.9 (22.3) (361.8) (121.1) (146.0)
Provision for income taxes ...................... 9.3 5.0 9.1 8.6 4.1
-------- -------- -------- -------- --------
Income (loss) from continuing operations ........ 56.6 (27.3) (370.9) (129.7) (150.1)
Income (loss) from discontinued operations....... 0.7 (64.2) -- -- --
Extraordinary items -- early extinguishment
of debt ........................................ (14.9) (51.7) -- -- (3.6)
-------- -------- -------- -------- --------
Net income (loss) ............................... $ 42.4 $ (143.2) $ (370.9) $ (129.7) $ (153.7)
======== ======== ======== ======== ========
OTHER DATA:
Net cash provided by (used for) operating
activities ..................................... $ 7.6 $ (52.2) $ (81.8) $ (84.0) $ (86.5)
Net cash (used for) provided by investing
activities ..................................... (84.3) (91.0) (40.7) 322.1 87.2
Net cash provided by (used for) financing
activities ..................................... 86.0 159.8 117.5 (203.7) 46.3
EBITDA (g) ...................................... 310.9 266.7 (32.0) 195.8 198.7
Ratio of earnings to fixed charges (h) .......... 1.4x 0.9x -- 0.2x 0.1x
Capital expenditures ............................ 52.3 60.8 42.3 19.0 15.1
Purchase of permanent displays .................. 68.9 76.6 66.5 51.4 44.0
DECEMBER 31,
-------------------------------------------------------------------
1997 1998 1999 2000 2001
-------- -------- --------- --------- ---------
BALANCE SHEET DATA (a):
Total assets .................................... $1,757.6 $1,831.0 $ 1,558.9 $ 1,101.8 $ 997.6
Total indebtedness .............................. 1,467.9 1,687.9 1,809.7 1,593.8 1,661.1
Total stockholder's deficiency .................. (458.8) (647.7) (1,015.0) (1,106.7) (1,282.7)
See accompanying notes to Selected Historical Consolidated Financial Data.
33
NOTES TO SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
(a) In March 2000 and May 2000, we completed the disposition of our worldwide
professional products line and our Plusbelle brand in Argentina,
respectively. In July 2001, we completed the disposition of our Colorama
brand and facility in Brazil. Accordingly, the selected consolidated
financial data include the results of operations of the professional
products line, Plusbelle and Colorama brands through the dates of their
respective dispositions.
In November 2001, the FASB Emerging Issues Task Force (the "EITF") reached
a consensus on the Guidelines which address when sales incentives and
discounts should be recognized, as well as where the related revenues and
expenses should be classified in financial statements. We adopted the
earlier portion of these Guidelines (formerly EITF Issue 00-14) effective
January 1, 2001, and accordingly, the accompanying selected consolidated
financial data for each of the years in the five-year period ended
December 31, 2001 reflect the implementation of the Guidelines. The
Guidelines did not affect our operating income (loss), net income (loss)
or EBITDA (as defined below).
In September 2001, Revlon, Inc. acquired from Revlon Holdings Inc., an
affiliate and indirect wholly-owned subsidiary of Mafco Holdings, and
contributed to Revlon all the assets and liabilities of the Charles of the
Ritz business. The acquired assets and liabilities assumed were accounted
for at historical cost in a manner similar to that of a pooling of
interests. The selected consolidated financial data for each of the years
in the five-year period ended December 31, 2001 is restated to reflect the
acquisition.
(b) In 1997, we incurred restructuring costs of $20.6 million in connection with
the implementation of our business strategy to rationalize factory
operations. These costs primarily included severance and other costs related
to the rationalization of certain factory and warehouse operations
worldwide. Such costs were partially offset by an approximately $12.7
million settlement of a claim and gains of approximately $4.3 million on the
sales of certain factory operations outside the United States.
(c) In late 1998, we developed a strategy to reduce overall costs and streamline
operations. To execute against this strategy, we began to develop a
restructuring plan and executed the plan in several phases, which has
resulted in several restructuring charges being recorded.
In the fourth quarter of 1998, we committed to a restructuring plan to
realign and reduce personnel, exit excess leased real estate, realign and
consolidate regional activities, reconfigure certain manufacturing
operations and exit certain product lines and recognized a charge of $44.2
million, which includes $2.7 million charged to cost of sales. In 1998, we
recognized gains of approximately $8.4 million for the sales of certain
non-core assets.
(d) In the first nine months of 1999, we continued to implement the
restructuring program established in late 1998 for which we recorded a
charge of $20.5 million for employee severance and other personnel benefits,
costs associated with the exit from leased facilities as well as other
costs. Also in 1999, we exited from a non-core business, resulting in a
charge of $1.6 million.
During the fourth quarter of 1999, we continued to restructure our
organization and began a new program in line with our original
restructuring plan developed in late 1998, principally for additional
employee severance and other personnel benefits and to restructure certain
operations outside the United States, including certain operations in
Japan, resulting in a charge of $18.1 million.
During the fourth quarter of 1999, we recorded a charge of $22.0 million
to selling, general and administrative costs related to separation costs
for various executives terminated in 1999.
(e) In the first and second quarter of 2000, we recorded charges of $9.5 million
and $5.1 million, respectively, relating to the 1999 restructuring program
that began in the fourth quarter of 1999.
34
During the third quarter of 2000, we continued to re-evaluate our
organizational structure. As part of this re-evaluation, we decided to
improve profitability by reducing personnel and consolidating
manufacturing facilities. This program focused on closing our
manufacturing operations in Phoenix, Arizona and Mississauga, Canada and
to consolidate production into our plant in Oxford, North Carolina. This
program also includes the remaining obligation for excess leased real
estate at our headquarters, consolidation costs associated with closing
our facility in New Zealand, and the elimination of several domestic and
international executive and operational positions, both of which were
effected to reduce and streamline corporate overhead costs. In the third
quarter of 2000, we recorded a charge of $13.7 million for programs begun
in the quarter as well as for programs previously commenced. In the fourth
quarter of 2000, we recorded a charge of $25.8 million related to the
program begun in the third quarter of 2000, principally for additional
employee severance and other personnel benefits and to consolidate
worldwide operations.
During the fourth quarter of 2000, we recorded $4.9 million to cost of
sales related to additional costs associated with the consolidation of
worldwide operations.
(f) In the first, second, third and fourth quarters of 2001, we recorded charges
of $14.6 million, $7.9 million, $3.0 million and $12.6 million,
respectively, related to previous restructuring programs, as well as the
2000 restructuring program, principally for additional employee severance
and other personnel benefits, relocation and to consolidate worldwide
operations and the charge in the fourth quarter of 2001 also was for an
adjustment to previous estimates of approximately $6.6 million.
In 2001, we recorded $38.2 million to cost of sales (which includes $6.1
million of increased depreciation) and $5.4 million to selling, general
and administrative costs related to additional costs associated with the
shutdown of Phoenix and Canadian facilities.
(g) We define EBITDA as operating income (loss) before restructuring costs and
other, net, and additional costs associated with the consolidation of our
worldwide operations and executive severance, plus depreciation and
amortization other than that relating to early extinguishment of debt,
discount and debt issuance costs. EBITDA is presented here as a measure of
our debt service ability, not of our operating results. EBITDA should not
be considered in isolation, as a substitute for net income or cash flow
from operations prepared in accordance with accounting principles generally
accepted in the United States of America or as a measure of our
profitability or liquidity. EBITDA does not take into account our debt
service requirements and other commitments and, accordingly, is not
necessarily indicative of amounts that may be available for discretionary
uses. Additionally, EBITDA may be defined differently for purposes of our
credit agreement.
(h) Earnings used in computing the ratio of earnings to fixed charges consist of
income (loss) from continuing operations before income taxes plus fixed
charges. Fixed charges consist of interest expense (including amortization
of debt issuance costs, but not losses relating to the early extinguishment
of debt) and 33% of rental expense (considered to be representative of the
interest factors). Fixed charges exceeded earnings by $22.3 million in 1998,
$361.8 million in 1999, $121.1 million in 2000 and $146.0 million in 2001.
35
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
When we sold the original notes in November 2001, we and the guarantors
entered into a registration agreement with the initial purchasers of those
original notes. Under the registration agreement, we agreed to file a
registration statement regarding the exchange of the original notes for notes
which are registered under the Securities Act. We also agreed to use our
respective best efforts to cause the registration statement to become effective
with the SEC and to conduct this exchange offer after the registration
statement is declared effective. The registration agreement provides that we
will be required to pay additional cash interest to the holders of the original
notes if:
o the registration statement is not filed by February 25, 2002;
o the registration statement is not declared effective by May 28, 2002; or
o the exchange offer has not been consummated by June 24, 2002.
A copy of the registration agreement is filed as an exhibit to the
registration statement of which this prospectus is a part.
TERMS OF THE EXCHANGE OFFER
Upon the terms and conditions described in this prospectus and in the
accompanying letter of transmittal, which together constitute the exchange
offer, we will accept for exchange original notes that are properly tendered on
or before the expiration date and not withdrawn as permitted below. As used in
this prospectus, the term "expiration date" means 5:00 p.m., New York City
time, on , 2002. However, if we, in our sole discretion, have extended
the period of time for which the exchange offer is open, the term "expiration
date" means the latest time and date to which we extend the exchange offer.
As of the date of this prospectus, $363,000,000 aggregate principal amount
of the original notes is outstanding. This prospectus, together with the letter
of transmittal, is first being sent on or about , 2002 to all holders of
original notes known to us. Our obligation to accept original notes for
exchange in the exchange offer is subject to the conditions described below
under "Conditions to the Exchange Offer."
We reserve the right to extend the period of time during which the
exchange offer is open. We would then delay acceptance for exchange of any
original notes by giving oral or written notice of an extension to the holders
of original notes as described below. During any extension period, all original
notes previously tendered will remain subject to the exchange offer and may be
accepted for exchange by us. Any original notes not accepted for exchange will
be returned to the tendering holder after the expiration or termination of the
exchange offer.
Original notes tendered in the exchange offer must be in denominations of
principal amount of $1,000 and any integral multiple of $1,000.
We reserve the right to amend or terminate the exchange offer, and not to
accept for exchange any original notes not previously accepted for exchange,
upon the occurrence of any of the conditions of the exchange offer specified
below under "Conditions to the Exchange Offer." We will give oral or written
notice of any extension, amendment, non-acceptance or termination to the
holders of the original notes as promptly as practicable. If we materially
change the terms of the exchange offer, we will resolicit tenders of the
original notes, file a post-effective amendment to the prospectus and provide
notice to the noteholders. If the change is made less than five business days
before the expiration of the exchange offer, we will extend the offer so that
the noteholders have at least five business days to tender or withdraw. We will
notify you of any extension by means of a press release or other public
announcement no later than 9:00 a.m., New York City time on that date.
36
Our acceptance of the tender of original notes by a tendering holder will
form a binding agreement upon the terms and subject to the conditions provided
in this prospectus and in the accompanying letter of transmittal.
PROCEDURES FOR TENDERING
Except as described below, a tendering holder must, on or prior to the
expiration date:
o transmit a properly completed and duly executed letter of transmittal,
including all other documents required by the letter of transmittal, to
Wilmington Trust Company at the address listed below under the heading
"Exchange Agent"; or
o if original notes are tendered in accordance with the book-entry
procedures listed below, the tendering holder must transmit an agent's
message to the exchange agent at the address listed below under the
heading "Exchange Agent."
In addition:
o the exchange agent must receive, on or before the expiration date,
certificates for the original notes; or
o a timely confirmation of book-entry transfer of the original notes into
the exchange agent's account at The Depository Trust Company, the
book-entry transfer facility, along with the letter of transmittal or an
agent's message; or
o the holder must comply with the guaranteed delivery procedures described
below.
The Depository Trust Company will be referred to as DTC in this
prospectus.
The term "agent's message" means a message, transmitted to DTC and
received by the exchange agent and forming a part of a book-entry transfer,
that states that DTC has received an express acknowledgment that the tendering
holder agrees to be bound by the letter of transmittal and that we may enforce
the letter of transmittal against this holder.
The method of delivery of original notes, letters of transmittal and all
other required documents is at your election and risk. If the delivery is by
mail, we recommend that you use registered mail, properly insured, with return
receipt requested. In all cases, you should allow sufficient time to assure
timely delivery. You should not send letters of transmittal or original notes
to us.
If you are a beneficial owner whose original notes are registered in the
name of a broker, dealer, commercial bank, trust company or other nominee, and
wish to tender, you should promptly instruct the registered holder to tender on
your behalf. Any registered holder that is a participant in DTC's book-entry
transfer facility system may make book-entry delivery of the original notes by
causing DTC to transfer the original notes into the exchange agent's account.
Signatures on a letter of transmittal or a notice of withdrawal must be
guaranteed unless the original notes surrendered for exchange are tendered:
o by a registered holder of the original notes who has not completed the
box entitled "Special Issuance Instructions" or "Special Delivery
Instructions" on the letter of transmittal, or
o for the account of an "eligible institution."
If signatures on a letter of transmittal or a notice of withdrawal are
required to be guaranteed, the guarantees must be by an "eligible institution."
An "eligible institution" is a financial institution, including most banks,
savings and loan associations and brokerage houses, that is a participant in
the Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Program or the Stock Exchanges Medallion Program.
We will determine in our sole discretion all questions as to the validity,
form and eligibility of original notes tendered for exchange. This discretion
extends to the determination of all questions concerning the timing of receipts
and acceptance of tenders. These determinations will be final and binding.
37
We reserve the right to reject any particular original note not properly
tendered or any which acceptance might, in our judgment or our counsel's
judgment, be unlawful. We also reserve the right to waive any defects or
irregularities or conditions of the exchange offer as to any particular
original note either before or after the expiration date, including the right
to waive the ineligibility of any tendering holder. Our interpretation of the
terms and conditions of the exchange offer as to any particular original note
either before or after the expiration date, including the letter of transmittal
and the instructions to the letter of transmittal, shall be final and binding
on all parties. Unless waived, any defects or irregularities in connection with
tenders of original notes must be cured within a reasonable period of time.
Neither we, the exchange agent nor any other person will be under any duty to
give notification of any defect or irregularity in any tender of original
notes. Nor will we, the exchange agent or any other person incur any liability
for failing to give notification of any defect or irregularity.
If the letter of transmittal is signed by a person other than the
registered holder of original notes, the letter of transmittal must be
accompanied by a written instrument of transfer or exchange in satisfactory
form duly executed by the registered holder with the signature guaranteed by an
eligible institution. The original notes must be endorsed or accompanied by
appropriate powers of attorney. In either case, the original notes must be
signed exactly as the name of any registered holder appears on the original
notes.
If the letter of transmittal or any original notes or powers of attorney
are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, these persons should so indicate when signing. Unless
waived by us, proper evidence satisfactory to us of their authority to so act
must be submitted.
By tendering, each holder will represent to us that, among other things,
o the exchange notes are being acquired in the ordinary course of business
of the person receiving the exchange notes, whether or not that person is
the holder; and
o neither the holder nor the other person has any arrangement or
understanding with any person to participate in the distribution of the
exchange notes.
In the case of a holder that is not a broker-dealer, that holder, by
tendering, will also represent to us that the holder is not engaged in and does
not intend to engage in a distribution of the exchange notes.
If any holder or other person is an "affiliate" of ours, as defined under
Rule 405 of the Securities Act, or is engaged in, or intends to engage in, or
has an arrangement or understanding with any person to participate in, a
distribution of the exchange notes, that holder or other person cannot rely on
the applicable interpretations of the staff of the SEC and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction.
Each broker-dealer that receives exchange notes for its own account in
exchange for original notes, where the original notes were acquired by it as a
result of market-making activities or other trading activities, must
acknowledge that it will deliver a prospectus that meets the requirements of
the Securities Act in connection with any resale of the exchange notes. The
letter of transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. See "Plan of
Distribution."
ACCEPTANCE OF ORIGINAL NOTES FOR EXCHANGE; DELIVERY OF EXCHANGE NOTES
Upon satisfaction or waiver of all of the conditions to the exchange
offer, we will accept, promptly after the expiration date, all original notes
properly tendered. We will issue the exchange notes promptly after acceptance
of the original notes. See "Conditions to the Exchange Offer" below. For
purposes of the exchange offer, we will be deemed to have accepted properly
tendered original notes for exchange when, as and if we have given oral or
written notice to the exchange agent, with prompt written confirmation of any
oral notice.
38
For each original note accepted for exchange, the holder of the original
note will receive an exchange note having a principal amount equal to that of
the surrendered original note. The exchange notes will bear interest from the
most recent date to which interest has been paid on the original notes.
Accordingly, registered holders of exchange notes on the relevant record date
for the first interest payment date following the completion of the exchange
offer will receive interest accruing from the most recent date to which
interest has been paid. Original notes accepted for exchange will cease to
accrue interest from and after the date of completion of the exchange offer.
Holders of original notes whose original notes are accepted for exchange will
not receive any payment for accrued interest on the original notes otherwise
payable on any interest payment date the record date for which occurs on or
after completion of the exchange offer and will be deemed to have waived their
rights to receive the accrued interest on the original notes.
In all cases, issuance of exchange notes for original notes will be made
only after timely receipt by the exchange agent of:
o certificates for the original notes, or a timely book-entry confirmation
of the original notes, into the exchange agent's account at the
book-entry transfer facility;
o a properly completed and duly executed letter of transmittal; and
o all other required documents.
Unaccepted or non-exchanged original notes will be returned without
expense to the tendering holder of the original notes. In the case of original
notes tendered by book-entry transfer in accordance with the book-entry
procedures described below, the non-exchanged original notes will be credited
to an account maintained with the book-entry transfer facility, as promptly as
practicable after the expiration or termination of the exchange offer.
BOOK-ENTRY TRANSFER
The exchange agent will make a request to establish an account for the
original notes at DTC for purposes of the exchange offer within two business
days after the date of this prospectus. Any financial institution that is a
participant in DTC's systems must make book-entry delivery of original notes by
causing DTC to transfer those original notes into the exchange agent's account
at DTC in accordance with DTC's procedure for transfer. This participant should
transmit its acceptance to DTC on or prior to the expiration date or comply
with the guaranteed delivery procedures described below. DTC will verify this
acceptance, execute a book-entry transfer of the tendered original notes into
the exchange agent's account at DTC and then send to the exchange agent
confirmation of this book-entry transfer. The confirmation of this book-entry
transfer will include an agent's message confirming that DTC has received an
express acknowledgment from this participant that this participant has received
and agrees to be bound by the letter of transmittal and that we may enforce the
letter of transmittal against this participant. Delivery of exchange notes
issued in the exchange offer may be effected through book-entry transfer at
DTC. However, the letter of transmittal or facsimile of it or an agent's
message, with any required signature guarantees and any other required
documents, must:
o be transmitted to and received by the exchange agent at the address
listed below under "-- Exchange Agent" on or prior to the expiration
date; or
o comply with the guaranteed delivery procedures described below.
GUARANTEED DELIVERY PROCEDURES
If a registered holder of original notes desires to tender the original
notes, and the original notes are not immediately available, or time will not
permit the holder's original notes or other required documents to reach the
exchange agent before the expiration date, or the procedure for book-entry
transfer described above cannot be completed on a timely basis, a tender may
nonetheless be made if:
o the tender is made through an eligible institution;
39
o prior to the expiration date, the exchange agent received from an
eligible institution a properly completed and duly executed letter of
transmittal, or a facsimile of the letter of transmittal, and notice of
guaranteed delivery, substantially in the form provided by us, by
facsimile transmission, mail or hand delivery,
(1) stating the name and address of the holder of original notes and
the amount of original notes tendered;
(2) stating that the tender is being made; and
(3) guaranteeing that within three New York Stock Exchange trading days
after the expiration date, the certificates for all physically
tendered original notes, in proper form for transfer, or a
book-entry confirmation, as the case may be, and any other
documents required by the letter of transmittal will be deposited
by the eligible institution with the exchange agent; and
o the certificates for all physically tendered original notes, in proper
form for transfer, or a book-entry confirmation, as the case may be, and
all other documents required by the letter of transmittal, are received
by the exchange agent within three New York Stock Exchange trading days
after the expiration date.
WITHDRAWAL RIGHTS
Tenders of original notes may be withdrawn at any time before 5:00 p.m.,
New York City time, on the expiration date.
For a withdrawal to be effective, the exchange agent must receive a
written notice of withdrawal at the address or, in the case of eligible
institutions, at the facsimile number, indicated below under "Exchange Agent"
before 5:00 p.m., New York City time, on the expiration date. Any notice of
withdrawal must:
o specify the name of the person, referred to as the depositor, having
tendered the original notes to be withdrawn;
o identify the original notes to be withdrawn, including the certificate
number or numbers and principal amount of the original notes;
o contain a statement that the holder is withdrawing his election to have
the original notes exchanged;
o be signed by the holder in the same manner as the original signature on
the letter of transmittal by which the original notes were tendered,
including any required signature guarantees, or be accompanied by
documents of transfer to have the trustee with respect to the original
notes register the transfer of the original notes in the name of the
person withdrawing the tender; and
o specify the name in which the original notes are registered, if different
from that of the depositor.
If certificates for original notes have been delivered or otherwise
identified to the exchange agent, then, prior to the release of these
certificates, the withdrawing holder must also submit the serial numbers of the
particular certificates to be withdrawn and signed notice of withdrawal with
signatures guaranteed by an eligible institution unless this holder is an
eligible institution. If original notes have been tendered in accordance with
the procedure for book-entry transfer described above, any notice of withdrawal
must specify the name and number of the account at the book-entry transfer
facility to be credited with the withdrawn original notes. We will determine
all questions as to the validity, form and eligibility, including time of
receipt, of notices of withdrawal. Any original notes so withdrawn will be
deemed not to have been validly tendered for exchange. No exchange notes will
be issued unless the original notes so withdrawn are validly re-tendered. Any
original notes that have been tendered for exchange, but which are not
exchanged for any reason, will be returned to the tendering holder
40
without cost to the holder. In the case of original notes tendered by
book-entry transfer, the original notes will be credited to an account
maintained with the book-entry transfer facility for the original notes.
Properly withdrawn original notes may be re-tendered by following the
procedures described under "Procedures for Tendering" above at any time on or
before 5:00 p.m., New York City time, on the expiration date.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provision of the exchange offer, we will not be
required to accept for exchange, or to issue exchange notes in exchange for,
any original notes, and may terminate or amend the exchange offer, if at any
time before the acceptance of the original notes for exchange or the exchange
of the exchange notes for the original notes, any of the following events
occurs:
o there is threatened, instituted or pending any action or proceeding
before, or any injunction, order or decree issued by, any court or
governmental agency or other governmental regulatory or administrative
agency or commission:
(1) seeking to restrain or prohibit the making or completion of the
exchange offer or any other transaction contemplated by the
exchange offer, or assessing or seeking any damages as a result of
this transaction;
(2) resulting in a material delay in our ability to accept for exchange
or exchange some or all of the original notes in the exchange
offer; or
(3) any statute, rule, regulation, order or injunction has been sought,
proposed, introduced, enacted, promulgated or deemed applicable to
the exchange offer or any of the transactions contemplated by the
exchange offer by any governmental authority, domestic or foreign;
or
o any action has been taken, proposed or threatened, by any governmental
authority, domestic or foreign, that in our sole judgment might directly
or indirectly result in any of the consequences referred to in clauses
(1), (2) or (3) above or, in our sole judgment, might result in the
holders of exchange notes having obligations with respect to resales and
transfers of exchange notes which are greater than those described in the
interpretation of the SEC referred to above, or would otherwise make it
inadvisable to proceed with the exchange offer; or
o the following has occurred:
(1) any general suspension of or general limitation on prices for, or
trading in, securities on any national securities exchange or in
the over-the-counter market; or
(2) any limitation by a governmental authority, which may adversely
affect our ability to complete the transactions contemplated by the
exchange offer; or
(3) a declaration of a banking moratorium or any suspension of payments
in respect of banks in the United States or any limitation by any
governmental agency or authority which adversely affects the
extension of credit; or
(4) a commencement of a war, armed hostilities or other similar
international calamity directly or indirectly involving the United
States, or, in the case of any of the preceding events existing at
the time of the commencement of the exchange offer, a material
acceleration or worsening of these calamities; or
o any change, or any development involving a prospective change, has
occurred or been threatened in our business, financial condition,
operations or prospects and those of our subsidiaries taken as a whole
that is or may be adverse to us, or we have become aware of facts that
have or may have an adverse impact on the value of the original notes or
the exchange notes; which in our sole judgment in any case makes it
inadvisable to proceed with the exchange offer and/or with such
acceptance for exchange or with such exchange.
41
These conditions to the exchange offer are for our sole benefit and we may
assert them regardless of the circumstances giving rise to any of these
conditions, or we may waive them in whole or in part in our sole discretion. If
we do so, the exchange offer will remain open for at least five business days
following any waiver of the preceding conditions. Our failure at any time to
exercise any of the foregoing rights will not be deemed a waiver of any right.
In addition, we will not accept for exchange any original notes tendered,
and no exchange notes will be issued in exchange for any original notes, if at
this time any stop order is threatened or in effect relating to the
registration statement of which this prospectus constitutes a part or the
qualification of the indenture under the Trust Indenture Act of 1939.
EXCHANGE AGENT
We have appointed Wilmington Trust Company as the exchange agent for the
exchange offer. You should direct all executed letters of transmittal to the
exchange agent at the address indicated below. You should direct questions and
requests for assistance, requests for additional copies of this prospectus or
of the letter of transmittal and requests for notices of guaranteed delivery to
the exchange agent addressed as follows:
Delivery To: Wilmington Trust Company, Exchange Agent
By Hand Before 5:00 p.m.: By Registered or Certified Mail:
Wilmington Trust Company Wilmington Trust Company
311 West 11th Street Rodney Square North
Wilmington, DE 19801-1615 1100 N. Market Street
Attention: Corporate Trust Wilmington, DE 19890
Reorg Services, Attention: Corporate Trust
1st Floor, Reorg Services,
Aubrey Rosa 1st Floor,
Aubrey Rosa
For Information Call: (302) 636-6472
By Facsimile Transmission
(for Eligible Institutions only): (302) 636-4145
Confirm by Telephone: (302) 636-6472
All other questions should be addressed to Revlon Consumer Products
Corporation, 625 Madison Avenue, New York, NY 10022, Attention: Investor
Relations. If you deliver the letter of transmittal to an address other than
any address indicated above or transmit instructions via facsimile other than
any facsimile number indicated, then your delivery or transmission will not
constitute a valid delivery of the letter of transmittal.
FEES AND EXPENSES
We will not make any payment to brokers, dealers, or others soliciting
acceptances of the exchange offer. The estimated cash expenses to be incurred
in connection with the exchange offer will be paid by us. We estimate these
expenses in the aggregate to be approximately $500,000.
42
TRANSFER TAXES
Holders who tender their original notes for exchange will not be obligated
to pay any related transfer taxes, except that holders who instruct us to
register exchange notes in the name of, or request that original notes not
tendered or not accepted in the exchange offer be returned to, a person other
than the registered tendering holder will be responsible for the payment of any
applicable transfer taxes.
CONSEQUENCES OF EXCHANGING OR FAILING TO EXCHANGE ORIGINAL NOTES
Holders of original notes who do not exchange their original notes for
exchange notes in the exchange offer will continue to be subject to the
provisions in the indenture regarding transfer and exchange of the original
notes and the restrictions on transfer of the original notes as described in
the legend on the original notes as a consequence of the issuance of the
original notes under exemptions from, or in transactions not subject to, the
registration requirements of the Securities Act and applicable state securities
laws. In general, the original notes may not be offered or sold, unless
registered under the Securities Act, except under an exemption from, or in a
transaction not subject to, the Securities Act and applicable state securities
laws.
Under existing interpretations of the Securities Act by the SEC's staff
contained in several no-action letters to third parties, and subject to the
immediately following sentence, we believe that the exchange notes would
generally be freely transferable by holders after the exchange offer without
further registration under the Securities Act, subject to certain
representations required to be made by each holder of exchange notes, as set
forth below. However, any purchaser of exchange notes who is one of our
"affiliates" (as defined in Rule 405 under the Securities Act) or who intends
to participate in the exchange offer for the purpose of distributing the
exchange notes:
o will not be able to rely on the interpretation of the SEC's staff;
o will not be able to tender its original notes in the exchange offer; and
o must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any sale or transfer of the notes
unless such sale or transfer is made pursuant to an exemption from such
requirements. See "Plan of Distribution."
We do not intend to seek our own interpretation regarding the exchange
offer and there can be no assurance that the SEC's staff would make a similar
determination with respect to the exchange notes as it has in other
interpretations to other parties, although we have no reason to believe
otherwise.
43
CAPITALIZATION
The following table sets forth our cash and capitalization as of December
31, 2001. The information presented below should be read in conjunction with
"Summary Historical and Unaudited Pro Forma Consolidated Financial Data" and
"Summary Ongoing Consolidated Financial Data" included elsewhere in this
prospectus and our consolidated financial statements and the related notes, and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included in our reports incorporated by reference herein.
DECEMBER 31,
2001
--------------
(IN MILLIONS)
Cash and cash equivalents ......................... $ 103.3
Marketable securities ............................. 2.2
----------
$ 105.5
==========
SHORT-TERM DEBT:
Secured debt:
Short-term borrowings ............................ $ 17.5
----------
Total short-term debt .......................... 17.5
----------
LONG-TERM DEBT:
Secured debt:
Credit agreement
Term loan ..................................... 117.9
Revolving loans ............................... 1.3
12% Senior Secured Notes due 2005 (a) ............ 350.8
----------
Total secured debt ............................ 487.5
----------
Unsecured debt:
8 1/8% Senior Notes due 2006 ..................... 249.6
9% Senior Notes due 2006 ......................... 250.0
8 5/8% Senior Subordinated Notes due 2008 ........ 649.9
Advances from Holdings ........................... 24.1
----------
Total unsecured debt ........................... 1,173.6
TOTAL INDEBTEDNESS ............................. 1,661.1
----------
TOTAL STOCKHOLDER'S DEFICIENCY ................. (1,288.8)
----------
TOTAL CAPITALIZATION .......................... $ 372.3
==========
- ----------
(a) Reflects issuance of $363.0 million aggregate principal amount of
notes at a price of 96.569% of principal amount.
44
DESCRIPTION OF NOTES
The terms of the exchange notes to be issued in the exchange offer are
identical in all material respects to the terms of the original notes, except
for the transfer restrictions and registration rights relating to the original
notes. Any original notes that remain outstanding after the exchange offer,
together with exchange notes issued in the exchange offer, will be treated as a
single class of securities under the indenture for voting purposes. You can
find the definitions of certain terms used in this description under the
subheading "Certain Definitions." In this description, the words "Company,"
"we," "us" and "our" refer only to Revlon Consumer Products Corporation, and
not to any of its Subsidiaries.
GENERAL
The original notes were, and the exchange notes will be, issued by us
under an Indenture dated as of November 26, 2001, among the Company, the
Guarantors and Wilmington Trust Company, as Trustee (the "Indenture"). In
connection with the consummation of the Refinancing Transactions, we and the
Guarantors also entered into a Collateral Agency Agreement and various security
documents relating to the collateral securing the original notes and which will
secure the exchange notes.
We urge you to read the Indenture, the Collateral Agency Agreement and
other security documents because they, and not this description, define your
rights as a holder of the original notes and the exchange notes, together
referred to as the Notes. Copies of the Indenture, the Collateral Agency
Agreement and other security documents are available upon request to us at the
address indicated under "Incorporation of Certain Documents by Reference."
We have issued $363 million in aggregate principal amount of original
notes and, subject to compliance with the debt and lien incurrence covenants in
the Indenture, can issue up to $300 million in aggregate principal amount of
additional Notes at later dates under the same Indenture. We can issue
additional Notes as part of the same series. Any additional Notes that we issue
in the future will be identical in all respects to the Notes that we have
already issued, including as to their secured status, except that Notes issued
in the future will have different issuance prices and issuance dates. We will
issue Notes only in fully registered form without coupons, in denominations of
$1,000 and whole multiples of $1,000.
PRINCIPAL, MATURITY AND INTEREST
The Notes will mature on December 1, 2005. We have issued $363 million
aggregate principal amount of original notes.
Interest on the Notes accrues at a rate of 12% per annum and will be
payable semi-annually in arrears on June 1 and December 1, commencing on June
1, 2002. We will pay interest to those persons who were holders of record on
the May 15 or November 15 immediately preceding each interest payment date.
Interest on the Notes accrues from the date of original issuance or, if
interest has already been paid, from the date it was most recently paid.
Interest will be computed on the basis of a 360-day year comprised of twelve
30-day months.
The interest rate on the Notes will increase by 0.50% if:
(1) we do not file within 90 days after the issuance of the Notes either:
(A) a registration statement to allow for an exchange offer or;
(B) a resale shelf registration statement for the Notes; or
(2) we do not complete the exchange offer (or a resale shelf registration
statement is not declared effective) within 210 days after the issuance
of the Notes.
45
RANKING
The original notes are, and the exchange notes will be:
o senior secured obligations of the Company;
o equal in ranking ("pari passu") with all our existing and future senior
debt, and will have the benefit of the second-priority security interests
described under "Security;"
o senior in right of payment to all our existing and future subordinated
debt; and
o guaranteed on a senior secured basis by the Parent Guarantor and the
Subsidiary Guarantors;
As of December 31, 2001, the total outstanding debt of the Company and the
Subsidiary Guarantors, excluding unused commitments made by lenders, was as
follows:
$1,643.9 million -- approximate total outstanding debt of the
Company and the Subsidiary Guarantors, combined and
excluding intercompany liabilities
We only have a stockholder's claim in the assets of our Subsidiaries. This
stockholder's claim is junior to the claims that creditors of our Subsidiaries
have against our Subsidiaries. Holders of the original notes are, and the
holders of exchange notes will be, only creditors of the Company and of those
Subsidiaries that are Subsidiary Guarantors. In the case of Subsidiaries that
are not Subsidiary Guarantors (which on the date of this prospectus will
consist only of non-U.S. Subsidiaries), all the existing and future liabilities
of these Subsidiaries, including any claims of trade creditors and preferred
stockholders, respectively are and will be effectively senior to the Notes.
A substantial portion of our operations is conducted through our
Subsidiaries. Therefore, our ability to service our debt, including the Notes,
is partially dependent upon the earnings of our Subsidiaries, and their ability
to distribute those earnings as dividends, loans or other payments to us.
Certain laws restrict the ability of our Subsidiaries to pay us dividends or
make loans and advances to us. If these restrictions are applied to
Subsidiaries that are not Subsidiary Guarantors, then we would not be able to
use the earnings of those Subsidiaries to make payments on the Notes.
Furthermore, under certain circumstances, bankruptcy "fraudulent conveyance"
laws or other similar laws could invalidate the Subsidiary Guarantees. If this
were to occur, we would also be unable to use the earnings of these Subsidiary
Guarantors to the extent they face restrictions on distributing funds to us or
on making payments on their Guarantees. Any of the situations described above
could make it more difficult for us to service our debt.
As of December 31, 2001, the total balance sheet liabilities of the
Subsidiary Guarantors and our other subsidiaries, excluding unused commitments
made by lenders, were as follows:
$ 30.3 million -- approximate total balance sheet liabilities of the
Subsidiary Guarantors, excluding intercompany
liabilities
$108.4 million -- approximate total balance sheet liabilities of all other
Subsidiaries, excluding intercompany liabilities
The Subsidiary Guarantors and our other Subsidiaries have other liabilities,
including contingent liabilities, that may be significant. The Indenture
contains limitations on the amount of additional Debt that we and our
Subsidiaries may incur. However, the amounts of this Debt could nevertheless be
substantial and may be incurred either by Subsidiary Guarantors or by our other
Subsidiaries.
Even though the original notes are, and the exchange notes will be,
secured, to the extent that other secured Debt of the Company and of the
Subsidiary Guarantors has either of the following:
(1) a prior lien on the Collateral securing the Notes; or
(2) a lien on other property that is not Collateral that secures the Notes,
then such other secured Debt will have a claim on that Collateral or that other
property, as the case may be, that is prior to the claim of the Notes on the
same Collateral or property to the extent of either:
46
(1) the value of the assets securing the other secured Debt; or
(2) the amount of the other secured Debt,
whichever is less.
See "Risk Factors--The notes are effectively junior to the indebtedness
and other liabilities of our non-guarantor subsidiaries," "--Limitations on
guarantees," "--Possible avoidance of guarantees and liens--Federal and state
statues allow courts, under specific circumstances, to void the guarantees and
the liens securing these guarantees and require noteholders to return payments
received from us or the guarantors," "--Our substantial indebtedness could
affect our operations and flexibility," "--Our ability to service our debt, meet
our debt covenants and meet our cash requirements depends on many factors" and
"Description of Other Indebtedness."
GUARANTEES
Our obligations under the Indenture, including the repurchase obligation
resulting from a Change of Control, are fully and unconditionally guaranteed,
jointly and severally, on a senior secured basis, by the Parent Guarantor and
our existing domestic Subsidiaries and certain of our future domestic
Subsidiaries that are not Non-Recourse Subsidiaries and that guarantee the 2001
credit agreement.
The Company, together with Subsidiary Guarantors, currently generate a
majority of our net sales. As of December 31, 2001, our Subsidiaries that were
not Subsidiary Guarantors represented the following approximate percentages of
our assets and net sales, on a consolidated basis (and net of intercompany
balances):
29% -- of our consolidated assets represented by Subsidiaries that are
not Subsidiary Guarantors
35% -- of our consolidated net sales represented by Subsidiaries that
are not Subsidiary Guarantors (net sales for the year ended
December 31, 2001)
Under certain circumstances, a Subsidiary Guarantor will be released from
all its obligations under its Subsidiary Guarantee. See "Certain
Covenants--Limitation on Sales of Assets and Subsidiary Stock," and
"--Additional Guarantees; Releases of Guarantors."
SECURITY
The original notes and the Guarantees are, and the exchange notes will be,
secured on a second-priority basis (subject to Liens permitted by the covenant
described under "--Limitation on Liens" and the Collateral Agency Agreement)
by, subject to certain limited exceptions, our capital stock, the capital stock
of our domestic subsidiaries as well as 66% of the capital stock of our foreign
subsidiaries directly owned by us or our domestic subsidiaries, substantially
all of our non-real property assets in the United States and our facility
located in Oxford, North Carolina. The lenders under our 2001 credit agreement
and certain other creditors benefit from first-priority liens on such
collateral. See "Description of the Collateral and Intercreditor Arrangements."
OPTIONAL REDEMPTION
We shall be entitled to redeem the Notes at our option at any time or from
time to time prior to December 1, 2005, as a whole or in part, at a redemption
price per Note equal to the sum of (1) the then outstanding principal amount
thereof, plus (2) accrued and unpaid interest (if any) to the date of
redemption, plus (3) the Applicable Premium.
In the case of any partial redemption, selection of the Notes for
redemption will be made by the Trustee on a pro rata basis, by lot or by such
other method that complies with legal and securities exchange requirements and
as the Trustee in its sole discretion shall deem to be fair and appropriate,
although no Note of $1,000 in original principal amount or less shall be
redeemed in part. If any Note
47
is to be redeemed in part only, the notice of redemption relating to such Note
shall state the portion of the principal amount thereof to be redeemed. A new
Note in principal amount equal to the unredeemed portion thereof will be issued
in the name of the Holder thereof upon cancelation of the original Note.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each Holder of Notes to be redeemed at his
registered address. Notes in denominations larger than $1,000 may be redeemed
in part but only in whole multiples of $1,000. If money sufficient to pay the
redemption price of and accrued interest on all Notes (or portions thereof) to
be redeemed on the redemption date is deposited with the Paying Agent on or
before the redemption date and certain other conditions are satisfied, on and
after such date interest ceases to accrue on such Notes (or such portions
thereof) called for redemption.
The following definitions are used to determine the Applicable Premium:
"Applicable Premium" means, with respect to a Note at any time, the
greater of (1) 1.0% of the then outstanding principal amount of such Note at
such time and (2) the excess of (A) the present value of the required interest
and principal payments due on such Note, computed using a discount rate equal
to the Treasury Rate plus 75 basis points, over (B) the then outstanding
principal amount of such Note at such time.
"Treasury Rate" means the yield to maturity at the time of computation of
United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15(519)
which has become publicly available at least two Business Days prior to the
date fixed for redemption or, in the case of defeasance, prior to the date of
deposit (or, if such Statistical Release is no longer published, any publicly
available source of similar market data)) most nearly equal to the then
remaining average life to Stated Maturity; provided, however, that if the
average life to Stated Maturity is not equal to the constant maturity of a
United States Treasury security for which a weekly average yield is given, the
Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly yields of United States Treasury
securities for which such yields are given, except that if the average life to
Stated Maturity is less than one year, the weekly average yield on actually
traded United States Treasury securities adjusted to a constant maturity of one
year shall be used.
SINKING FUND
There will be no mandatory sinking fund payments for the Notes.
CHANGE OF CONTROL
Upon the occurrence of any of the following events (each a "Change of
Control"), each Holder of Notes will have the right to require the Company to
repurchase all or any part of such Holder's Notes at a repurchase price in cash
equal to their Put Amount as of the date of repurchase plus accrued and unpaid
interest to the date of repurchase:
(1) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than one or more Permitted Holders, is or becomes
the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person will be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire,
whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 35% of the total voting
power of the Voting Stock of the Company; provided, however, that the
Permitted Holders "beneficially own" (as so defined), directly or
indirectly, in the aggregate a lesser percentage of the total voting
power of the Voting Stock of the Company than such other person and do
not have the right or ability by voting power, contract or otherwise to
elect or designate for election a majority of the Board of Directors of
the Company (for the purposes of this clause (1), such other person
will be deemed to beneficially own any Voting Stock of a specified
corporation held by a parent corporation, if
48
such other person beneficially owns, directly or indirectly, more than
35% of the voting power of the Voting Stock of such parent corporation
and the Permitted Holders beneficially own, directly or indirectly, in
the aggregate a lesser percentage of the voting power of the Voting
Stock of such parent corporation and do not have the right or ability
by voting power, contract or otherwise to elect or designate for
election a majority of the Board of Directors of such parent
corporation); or
(2) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the
Company (together with any new directors whose election by such Board
of Directors or whose nomination for election by the shareholders of
the Company was approved by a vote of 66 2/3% of the directors of the
Company then still in office who were either directors at the beginning
of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority
of the Board of Directors of the Company then in office;
provided that, prior to the mailing of the notice to Holders of Notes provided
for in the following paragraph, but in any event within 30 days following any
Change of Control, the Company covenants to (i) repay in full all Bank Debt or
to offer to repay in full all Bank Debt and to repay the Bank Debt of each
lender who has accepted such offer or (ii) obtain the requisite consent under
the Bank Debt to permit the repurchase of the Notes as provided for below. The
Company must first comply with the covenant in the preceding sentence before it
will be required to purchase Notes in connection with a Change of Control.
Within 45 days following any Change of Control, the Company will mail a
notice to each Holder with a copy to the Trustee stating
(1) that a Change of Control has occurred and that such Holder has the
right to require the Company to repurchase all or any part of such
Holder's Notes at a repurchase price in cash equal to their Put Amount
as of the date of repurchase plus accrued and unpaid interest to the
date of repurchase;
(2) the circumstances and relevant facts regarding such Change of Control;
(3) the repurchase date (which will be no earlier than 30 days nor later
than 60 days from the date such notice is mailed); and
(4) the instructions, determined by the Company consistent with this
provision, that a Holder must follow in order to have its Notes
repurchased.
Holders electing to have a Note repurchased will be required to surrender
the Note, with an appropriate form duly completed, to the Company at the
address specified in the notice at least 10 Business Days prior to the purchase
date. Holders will be entitled to withdraw their election if the Trustee or the
Company receives not later than three Business Days prior to the purchase date,
a facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note which was delivered for purchase by the Holder and
a statement that such Holder is withdrawing his election to have such Note
repurchased.
On the repurchase date, all Notes repurchased by the Company shall be
delivered to the Trustee for cancellation, and the Company shall pay the
repurchase price plus accrued and unpaid interest to the Holders entitled
thereto. Upon surrender of a Note that is repurchased under this provision in
part, the Company shall execute and the Trustee shall authenticate for the
Holder thereof (at the Company's expense) a new Note having a principal amount
equal to the principal amount of the Note surrendered less the portion of the
principal amount of the Note repurchased.
Our ability to pay cash to Holders of Notes upon a repurchase may be
limited by our then existing financial resources. See "Risk Factors--Our
ability to pay principal of the notes depends on many factors" and "--Our
ability to service our debt, meet our debt covenants and meet our cash
requirements depends on many factors." We will comply with any tender offer
rules under the Exchange Act which may then be applicable, including Rule 14e-1,
in connection with any offer required to be made by us to repurchase the Notes
as a result of a Change of Control.
49
The Credit Facilities (as defined under "Description of Other Indebtedness
- -- The 2001 Credit Agreement") and other existing indebtedness of the Company
contain, and future indebtedness of ours may contain, prohibitions on the
occurrence of certain events that would constitute a Change of Control or
require such indebtedness to be purchased upon a Change of Control. Moreover,
the exercise by the Holders of their right to require us to repurchase the
Notes could cause a default under such indebtedness, even if the Change of
Control itself does not. Finally, our ability to pay cash to the Holders of
Notes following the occurrence of a Change of Control may be limited by our
then-existing financial resources. There can be no assurance that sufficient
funds will be available when necessary to make any required repurchases and
there can be no assurance that the Company would be able to obtain financing to
make such repurchases. The provisions relating to our obligation to make an
offer to repurchase the Notes as a result of a Change of Control may be waived
or modified with the written consent of the Holders of a majority in principal
amount of the Notes.
CERTAIN COVENANTS
Set forth below are certain covenants contained in the Indenture:
Limitation on Debt. (a) The Company shall not, and shall not permit any
Subsidiary of the Company to, Issue, directly or indirectly, any Debt;
provided, however, that the Company and its Subsidiaries shall be permitted to
Issue Debt if, at the time of such Issuance, the Consolidated EBITDA Coverage
Ratio for the period of the most recently completed four consecutive fiscal
quarters ending at least 45 days prior to the date such Debt is Issued exceeds
the ratio of 2.0 to 1.0.
(b) Notwithstanding the foregoing, the Company and its Subsidiaries may
Issue the following Debt:
(1) Debt Issued pursuant to the Credit Agreement and the Notes, any
Refinancing thereof, or any other credit agreement, indenture or other
agreement, in an aggregate principal amount outstanding at any one
time not to exceed an amount equal to $675 million less the sum of all
principal payments (whether by prepayment, repayment or purchase) made
with respect to such Debt pursuant to paragraphs (a)(iii)(A),
(a)(iii)(B)(1) or (a)(iii)(C) of the covenant described under "--
Limitation on Sales of Assets and Subsidiary Stock" to the extent that
such payments (i) are as a result of an Asset Disposition involving
assets that are included in the Collateral, or are owned, directly or
indirectly, by a Foreign Subsidiary the stock of which is included in
the Collateral, and (ii) permanently retire such Debt in accordance
with the terms of the agreements governing such Debt;
(2) Debt Issued on an unsecured basis pursuant to any other credit
agreement, indenture or other agreement in an aggregate principal
amount not to exceed $225 million outstanding at any one time;
(3) Debt (other than Debt described in clauses (1) and (2) above) in
respect of the undrawn portion of the face amount of or unpaid
reimbursement obligations in respect of letters of credit for the
account of the Company or any of its Subsidiaries in an aggregate
amount at any time outstanding not to exceed the excess of (i) $150
million over (ii) the undrawn portion of the face amount of or unpaid
reimbursement obligations in respect of letters of credit Issued under
the Credit Agreement or any Refinancing thereof or any other credit
agreement, indenture or other agreement pursuant to clause (1) above;
(4) Debt of the Company Issued to and held by a Wholly Owned Recourse
Subsidiary of the Company and Debt of a Subsidiary of the Company
Issued to and held by the Company or a Wholly Owned Recourse
Subsidiary; provided, however, that any subsequent Issuance or
transfer of any Capital Stock that results in any such Wholly Owned
Recourse Subsidiary ceasing to be a Wholly Owned Recourse Subsidiary
or any subsequent transfer of such Debt (other than to the Company or
a Wholly Owned Recourse Subsidiary) will be deemed, in each case, to
constitute the Issuance of such Debt by the Company or of such Debt by
such Subsidiary;
50
(5) Debt of the Company consisting of the 9% Senior Notes, the 8 1/8%
Senior Notes, the 8 5/8% Senior Subordinated Notes and Debt of the
Company Issued to Refinance any Debt permitted by this clause (5);
provided, however, that, in the case of a Refinancing, the principal
amount of the Debt so Issued shall not exceed the principal amount of
the Debt so Refinanced plus any Refinancing Costs thereof; provided
further, however, that any Debt Issued pursuant to this clause (5) to
Refinance the 8 5/8% Senior Subordinated Notes, or any Refinancing
thereof shall be subordinated to the Notes to at least the same extent
as the 8 5/8% Senior Subordinated Notes are subordinated to the Notes;
(6) Debt (other than Debt described in clause (1), (2), (3), (4) or (5)
above or (11) or (12) below) of the Company or any of its Subsidiaries
outstanding on the Issue Date, as identified on a schedule to the
Indenture, and Debt Issued to Refinance any Debt permitted by this
clause (6), or by paragraph (a) above; provided, however, that in the
case of a Refinancing, the principal amount of the Debt so Issued will
not exceed the principal amount of the Debt so Refinanced plus any
Refinancing Costs thereof;
(7) Debt Issued and arising out of purchase money obligations for property
acquired in an amount not to exceed, for the period through December
31, 2002, $50 million, plus for each period of twelve consecutive
months ending on December 31 thereafter, $15 million; provided,
however, that any such amounts which are available to be utilized
during any such twelve month period and are not so utilized may be
utilized during any succeeding period;
(8) Debt of a Subsidiary of the Company Issued and outstanding on or prior
to the date on which such Subsidiary was acquired by the Company
(other than Debt Issued as consideration in, or to provide all or any
portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such
Subsidiary became a Subsidiary of the Company or was acquired by the
Company);
(9) Debt Issued to Refinance Debt referred to in the foregoing clause (8)
or this clause (9); provided, however, that the principal amount of
the Debt so Issued shall not exceed the principal amount of the Debt
so Refinanced plus any Refinancing Costs thereof;
(10) Non-Recourse Debt of a Non-Recourse Subsidiary; provided, however,
that if any such Debt thereafter ceases to be Non-Recourse Debt of a
Non-Recourse Subsidiary, then such event will be deemed for the
purposes of this covenant to constitute the Issuance of such Debt by
the issuer thereof;
(11) Permitted Affiliate Debt;
(12) Debt of Foreign Subsidiaries in an aggregate principal amount at the
time of Issuance which, when taken together with all other Debt issued
by Foreign Subsidiaries pursuant to this clause (12) and then
outstanding, does not exceed $60 million; provided, however, that such
Foreign Subsidiaries shall not be permitted to have more than $30
million of such Debt outstanding at any one time that consists of Debt
that is not offset or secured by a compensating cash balance, a
counterpart cash deposit or a cash deposit pledge at the bank or banks
to whom such Debt was Issued (or an affiliate of such bank or banks);
and
(13) Debt (other than Debt described in clauses (1) through (12) above and
paragraph (a) above) in an aggregate principal amount outstanding at
any time not to exceed $150 million.
(c) Notwithstanding the foregoing paragraph (b), the Company shall not
permit any Foreign Subsidiary that is not a Subsidiary Guarantor to Issue,
directly or indirectly, any Debt pursuant to paragraph (b) above except (1)
Debt Issued pursuant to clause (1) of paragraph (b) if, at the time of such
Issuance, the principal amount of such Debt does not exceed in the aggregate,
when taken together with all other Debt Issued by all Foreign Subsidiaries
pursuant to such clause (1) and then outstanding, $75 million and (2) Debt
Issued pursuant to clauses (4) and (7)-(12) of paragraph (b).
(d) To the extent the Company or any Subsidiary of the Company guarantees
any Debt of the Company or of a Subsidiary of the Company, such guarantee and
such Debt will be deemed to be the
51
same indebtedness and only the amount of the Debt will be deemed to be
outstanding. If the Company or a Subsidiary of the Company guarantees any Debt
of a Person that, subsequent to the Issuance of such guarantee, becomes a
Subsidiary, such guarantee and the Debt so guaranteed will be deemed to be the
same indebtedness, which will be deemed to have been Issued when the guarantee
was Issued and will be deemed to be permitted to the extent the guarantee was
permitted when Issued.
(e) For purposes of determining compliance with any U.S. dollar
denominated restriction on the Issuance of Debt where the Debt Issued is
denominated in a different currency, the amount of such Debt will be the U.S.
Dollar Equivalent determined on the date of the Issuance of such Debt,
provided, however, that if any such Debt denominated in a different currency is
subject to a Hedging Obligation with respect to U.S. dollars covering all
principal, premium, if any, and interest payable on such Debt, the amount of
such Debt expressed in U.S. dollars will be as provided in such Hedging
Obligation. The principal amount of any Refinancing Debt Issued in the same
currency as the Debt being Refinanced will be the U.S. Dollar Equivalent of the
Debt Refinanced, except to the extent that (1) such U.S. Dollar Equivalent was
determined based on a Hedging Obligation, in which case the Refinancing Debt
will be determined in accordance with the preceding sentence, and (2) the
principal amount of the Refinancing Debt exceeds the principal amount of the
Debt being Refinanced, in which case the U.S. Dollar Equivalent of such excess
will be determined on the date such Refinancing Debt is Issued.
(f) Notwithstanding paragraph (b)(1) above, prior to the consummation of
the Refinancing Transactions, the Notes shall be treated as not having been
Issued for purposes of this "--Limitation on Debt" covenant.
Limitation on Liens. (a) The Company shall not, and shall not permit any
Subsidiary of the Company to, create or suffer to exist any Lien upon any of
its property or assets (including Capital Stock or Debt of any Subsidiary of
the Company) now owned or hereafter acquired by it, securing any Debt or other
obligation other than the following Liens:
(1) Liens existing as of the Issue Date;
(2) any Lien arising by reason of (i) any judgment, decree or order of any
court or arbitrator, so long as such judgment, decree or order is
being contested in good faith and any appropriate legal proceedings
which may have been duly initiated for the review of such judgment,
decree or order shall not have been finally terminated or the period
within which such proceedings may be initiated shall not have expired,
(ii) taxes not delinquent or which are being contested in good faith,
for which adequate reserves (as determined by the Company) have been
established, (iii) security for payment of workers' compensation or
other insurance, (iv) security for the performance of tenders,
contracts (other than contracts for the payment of borrowed money) or
leases in the ordinary course of business, (v) deposits to secure
public or statutory obligations, or in lieu of surety or appeal bonds
entered into in the ordinary course of business, (vi) operation of law
in favor of carriers, warehousemen, landlords, mechanics, materialmen,
laborers, employees, suppliers or similar Persons, incurred in the
ordinary course of business for sums which are not delinquent for a
period of more than 30 days or are being contested in good faith by
negotiations or by appropriate proceedings which suspend the
collection thereof, (vii) security for surety, appeal, reclamation,
performance or other similar bonds and (viii) security for Hedging
Obligations;
(3) Liens to secure the payment of all or a part of the purchase price of,
or Capital Lease Obligations with respect to, assets (including
Capital Stock) or property or business acquired or constructed after
the Issue Date; provided, however, that (i) the Debt secured by such
Liens shall have otherwise been permitted to be Issued under the
Indenture and (ii) such Liens shall not encumber any other assets or
property of the Company or any of its Subsidiaries and shall attach to
such assets or property within 180 days of the completion of
construction or acquisition of such assets or property;
(4) Liens on the assets or property of a Subsidiary of the Company
existing at the time such Subsidiary became a Subsidiary of the
Company and not incurred as a result of (or in
52
connection with or in anticipation of) such Subsidiary becoming a
Subsidiary of the Company; provided, however, that such Liens do not
extend to or cover any other property or assets of the Company or any
of its Subsidiaries;
(5) Liens on any assets, including Collateral, of the Company or any
Subsidiary of the Company securing (A) obligations in respect of any
Debt permitted by clause (1) of paragraph (b) of "--Limitation on
Debt" above and (B) obligations in respect of Debt, in an aggregate
principal amount not to exceed $30 million at any time outstanding,
permitted by clause (12) of such paragraph (b);
(6) leases and subleases of real property by the Company and its
Subsidiaries (in any such case, as lessor) which do not interfere with
the ordinary conduct of the business of the Company or any of its
Subsidiaries, and which are made on customary and usual terms
applicable to similar properties;
(7) Liens securing Debt which is Issued to Refinance Debt which has been
secured by a Lien permitted under the Indenture and is permitted to be
Refinanced under the Indenture; provided, however, that such Liens do
not extend to or cover any property or assets of the Company or any of
its Subsidiaries not securing the Debt so Refinanced, other than as
otherwise permitted under "--Limitation on Liens;"
(8) easements, reservations, licenses, rights-of-way, zoning restrictions
and covenants, conditions and restrictions and other similar
encumbrances or title defects which, in the aggregate, do not
materially detract from the use of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Company or any of its Subsidiaries;
(9) Liens on assets of a Non-Recourse Subsidiary;
(10) Liens on assets located outside the United States and Canada to secure
Debt Issued by Foreign Subsidiaries permitted by paragraphs (b) and
(c) of "--Limitation on Debt" above;
(11) Liens in favor of the United States of America for amounts paid by the
Company or any of its Subsidiaries as progress payments under
government contracts entered into by them;
(12) other Liens incidental to the conduct of the business of the Company
and its Subsidiaries or the ownership of any of their assets not
incurred in connection with Debt, which Liens do not in any case
materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the business of the Company or
any of its Subsidiaries; and
(13) Liens granted in the ordinary course of business of the Company or any
of its Subsidiaries in favor of issuers of documentary or trade
letters of credit for the account of the Company or such Subsidiary or
bankers' acceptances, which Liens secure the reimbursement obligations
of the Company or such Subsidiary on account of such letters of credit
or bankers' acceptances; provided, that each such Lien is limited to
(A) the assets acquired or shipped with the support of such letter of
credit or bankers' acceptances and (B) any assets of the Company or
such Subsidiary which are in the care, custody or control of such
issuer in the ordinary course of business.
(b) Notwithstanding paragraph (a) above, the Company shall not, and shall
not permit any Subsidiary of the Company, to create or suffer to exist any Lien
upon any of the Collateral (including Collateral consisting of Capital Stock or
Debt of any Subsidiary of the Company) now owned or hereafter acquired by it
(i) securing any Public Debt unless the holders of such Public Debt share in
the distribution of proceeds from the foreclosure on Collateral either (x) on
an equal and ratable basis with the holders of the Primary First-Lien
Obligations (and any other obligations that share on an equal and ratable basis
with the Primary First-Lien Obligations) or (y) on an equal and ratable basis
with the Holders of the Notes (and any other obligations that share on an equal
and ratable basis with the Holders of the Notes) or (ii) securing any Debt or
other obligations (other than Public Debt) unless the holders thereof share in
the distribution of proceeds from the foreclosure on Collateral on an equal or
any greater basis with the Holders of the Notes or on any basis with the
holders of the Primary First-Lien Obligations or any other obligations that
share in such proceeds. Liens permitted by paragraph (a) above and which comply
with the requirements of this paragraph (b) are referred to collectively as
"Permitted Liens."
53
Limitation on Restricted Payments. (a) The Company shall not, and shall
not permit any Subsidiary of the Company, directly or indirectly, to
(i) declare or pay any dividend or make any distribution on or in respect
of its Capital Stock (including any payment in connection with any
merger or consolidation involving the Company) or to the holders of
its Capital Stock (except dividends or distributions payable solely
in its Non-Convertible Capital Stock or in options, warrants or other
rights to purchase its Non-Convertible Capital Stock and except
dividends or distributions payable to the Company or a Subsidiary of
the Company and, if a Subsidiary of the Company is not wholly owned,
to its other equity holders to the extent they are not Affiliates of
the Company),
(ii) purchase, redeem or otherwise acquire or retire for value any Capital
Stock of the Company,
(iii) purchase, repurchase, redeem, defease or otherwise acquire or retire
for value, prior to scheduled maturity, scheduled repayment or
scheduled sinking fund payment any Subordinated Obligations (other
than the purchase, repurchase or other acquisition of Subordinated
Obligations purchased in anticipation of satisfying a sinking fund
obligation, principal installment or final maturity, in each case
within one year of the date of acquisition) or
(iv) make any Investment in (A) an Affiliate of the Company other than a
Subsidiary of the Company and other than an Affiliate of the Company
which will become a Subsidiary of the Company as a result of any such
Investment, or (B) a Non-Recourse Subsidiary (any such dividend,
distribution, purchase, redemption, repurchase, defeasance, other
acquisition, retirement or Investment being herein referred to as a
"Restricted Payment"),
if at the time the Company or such Subsidiary makes such Restricted Payment
(the amount of any such Restricted Payment, if other than in cash, as
determined in good faith by the Board of Directors, the determination of which
shall be evidenced by a resolution of the Board of Directors):
(1) a Default shall have occurred and be continuing (or would result
therefrom); or
(2) the Company is not able to incur $1.00 of additional Debt in
accordance with the provisions of paragraph (a) of "--Limitation on
Debt;" or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments after the Issue Date would exceed the sum of:
(a) 50% of the Consolidated Net Income of the Company accrued during
the period (treated as one accounting period) from October 1,
2001, to the end of the most recent fiscal quarter ending at
least 45 days prior to the date of such Restricted Payment (or,
in case such Consolidated Net Income shall be a deficit, minus
100% of such deficit);
(b) the aggregate Net Cash Proceeds received by the Company from the
Issue or sale of its Capital Stock (other than Redeemable Stock
or Exchangeable Stock) subsequent to the Issue Date (other than
an Issuance or sale to a Subsidiary of the Company or an employee
stock ownership plan or other trust established by the Company or
any Subsidiary for the benefit of their employees);
(c) the aggregate Net Cash Proceeds received by the Company from the
Issue or sale of its Capital Stock (other than Redeemable Stock
or Exchangeable Stock) to an employee stock ownership plan
subsequent to the Issue Date; provided, however, that if such
employee stock ownership plan incurs any Debt, such aggregate
amount shall be limited to an amount equal to any increase in the
Consolidated Net Worth of the Company resulting from principal
repayments made by such employee stock ownership plan with
respect to Debt incurred by it to finance the purchase of such
Capital Stock;
(d) the amount by which Debt of the Company is reduced on the
Company's balance sheet upon the conversion or exchange (other
than by a Subsidiary) subsequent to the Issue
54
Date of any Debt of the Company convertible or exchangeable for
Capital Stock (other than Redeemable Stock or Exchangeable Stock)
of the Company (less the amount of any cash, or other property,
distributed by the Company upon such conversion or exchange);
(e) the aggregate net cash proceeds received by the Company
subsequent to the Issue Date as capital contributions (which
shall not be deemed to include any net cash proceeds received in
connection with (i) the issuance of any Permitted Affiliate Debt
and (ii) any contribution designated at the time it is made as a
restricted contribution (a "Restricted Contribution"); and
(f) to the extent that an Investment made by the Company or a
Subsidiary subsequent to the Issue Date has theretofore been
included in the calculation of the amount of Restricted Payments,
the aggregate cash repayments to the Company or a Subsidiary of
such Investment to the extent not included in Consolidated Net
Income of the Company.
Notwithstanding the foregoing, the Company may take actions to make a
Restricted Payment in anticipation of the occurrence of any of the events
described in this paragraph (a) or paragraph (b) below; provided, however, that
the making of such Restricted Payment shall be conditional upon the occurrence
of such event.
(b) Paragraph (a) shall not prohibit the following:
(i) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Capital Stock or Subordinated
Obligations of the Company made by exchange for, or out of the
proceeds of the substantially concurrent Issue or sale of, Capital
Stock of the Company (other than Redeemable Stock or Exchangeable
Stock and other than Capital Stock issued or sold to a Subsidiary or
an employee stock ownership plan) or of a cash capital contribution
to the Company; provided, however, that (A) such purchase,
repurchase, redemption, defeasance or other acquisition or
retirement for value shall be excluded in the calculation of the
amount of Restricted Payments and (B) the Net Cash Proceeds from
such sale shall be excluded from clauses (3)(b) and (3)(c) of
paragraph (a) above;
(ii) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations of
the Company made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Subordinated Obligations;
provided, however, that such purchase, repurchase, redemption,
defeasance or other acquisition or retirement for value shall be
excluded in the calculation of the amount of Restricted Payments;
(iii) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations from
Net Available Cash to the extent permitted by "--Limitation on Sales
of Assets and Subsidiary Stock" below, provided, however, that such
purchase, repurchase, redemption, defeasance or other acquisition or
retirement for value shall be excluded in the calculation in the
amount of Restricted Payments;
(iv) dividends paid within 60 days after the date of declaration thereof,
or Restricted Payments made within 60 days after the making of a
binding commitment in respect thereof, if at such date of
declaration or of such commitment such dividend or other Restricted
Payment would have complied with paragraph (a); provided, however,
that at the time of payment of such dividend or the making of such
Restricted Payment, no other Default shall have occurred and be
continuing (or result therefrom); provided further, however, that
such dividend or other Restricted Payment shall be included in the
calculation of the amount of Restricted Payments;
55
(v) dividends in an aggregate amount per annum not to exceed 6% of the
aggregate Net Cash Proceeds received by the Company in connection
with all Public Equity Offerings occurring after the Issue Date;
provided, however, that such amount shall be included in the
calculation of the amount of Restricted Payments;
(vi) so long as no Default has occurred and is continuing or would result
from such transaction, (x) amounts paid or property transferred
pursuant to the Permitted Transactions and (y) dividends or
distributions, redemptions of Capital Stock and other Restricted
Payments in an aggregate amount not to exceed the sum of all
Restricted Contributions, provided, however, that in the case of
clause (y), such dividends, distributions, redemptions of Capital
Stock and other Restricted Payments are not prohibited by the Credit
Agreement or any Refinancing thereof (whether pursuant to its terms
or as a result of waiver, amendment, termination or otherwise);
provided further, however, that such amounts paid, property
transferred, dividends, distributions, redemptions and Restricted
Payments shall be excluded in the calculation of the amount of
Restricted Payments;
(vii) so long as no Default has occurred and is continuing or would result
from such transaction, Restricted Payments in an aggregate amount
not to exceed the sum of (x) $30 million and (y) $5 million per
annum from the Issue Date (net of any applicable cash exercise price
actually received by the Company) made from time to time to finance
the purchase by the Company or Parent of its common stock (for not
more than fair market value) in connection with the delivery of such
common stock to grantees under any stock option plan of the Company
or Parent upon the exercise by such grantees of stock options or
stock appreciation rights settled with common stock or upon the
grant of shares of restricted common stock pursuant thereto;
provided, however, that (A) amounts available pursuant to this
clause (vii) to be utilized for Restricted Payments during any such
year may be carried forward and utilized in any succeeding year, (B)
no Restricted Payments shall be permitted pursuant to this clause
unless, at the time of such purchase, the issuance by the Company or
Parent of new shares of common stock to such optionee would cause
more than 19.9% of the total voting power or more than 19.9% of the
total value of the stock of the Company or Parent to be held by
Persons other than members of the Mafco Consolidated Group (the term
"stock" for purposes of this clause shall have the same meaning as
such term has for purposes of Section 1504 of the Code) and (C) no
Restricted Payments shall be permitted pursuant to this clause if,
at the time of and after giving effect to such Restricted Payment,
the aggregate number of shares of common stock of Parent purchased
by the Company or the Parent pursuant to this clause would exceed
2.5% of the total number of shares of common stock of the Parent
outstanding at the time of such Restricted Payment; provided
further, however, that such amounts shall be excluded in the
calculation of the amount of Restricted Payments;
(viii) any purchase, repurchase, redemption, defeasance or other
acquisition by any Non-Recourse Subsidiary of Non-Recourse Debt of
such Non-Recourse Subsidiary; provided, however, that the amount of
such purchase, repurchase, redemption, defeasance or other
acquisition shall be excluded in the calculation of the amount of
Restricted Payments;
(ix) any purchase of 8 5/8% Senior Subordinated Notes pursuant to the
"Change of Control" provisions thereof and any purchase of any other
Subordinated Obligations pursuant to an option given to a holder of
such Subordinated Obligation pursuant to a "Change of Control"
covenant which is no more favorable to the holders of such
Subordinated Obligations than the provisions of the Indenture
relating to a Change of Control are to Holders as determined in good
faith by the Board of Directors of the Company, the determination of
which shall be evidenced by a resolution adopted by such Board of
Directors; provided, however, that no such purchase shall be
permitted prior to the time when the Company shall have purchased
all Notes tendered for purchase by Holders electing to have their
Notes purchased pursuant to the provisions of "--Change of Control;"
provided further, however, that such purchases shall be excluded
from the calculation of Restricted Payments;
56
(x) so long as no Default shall have occurred and be continuing, amounts
paid to Parent to the extent necessary to enable Parent to pay
actual expenses, other than those paid to Affiliates of the Company,
incidental to being a publicly reporting, but non-operating,
company; provided, however, that such amounts paid shall be excluded
in the calculation of the amount of Restricted Payments; or
(xi) any loan to a Permitted Affiliate entered into in the ordinary
course of business; provided, however, that such Permitted Affiliate
holds, directly or indirectly, no more than 10% of the outstanding
Capital Stock of the Company.
Limitation on Restrictions on Distributions from Subsidiaries. The Company
shall not, and shall not permit any Subsidiary of the Company to, create or
otherwise cause or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any Subsidiary of the Company to
(i) pay dividends or make any other distributions on its Capital Stock or pay
any Debt owed to the Company, (ii) make any loans or advances to the Company or
(iii) transfer any of its property or assets to the Company, except:
(1) any encumbrance or restriction in effect at or entered into on the
Issue Date, including pursuant to the Credit Agreement, any
agreement entered into pursuant thereto or any other agreement;
(2) any encumbrance or restriction with respect to a Subsidiary of the
Company pursuant to an agreement relating to any Debt Issued by such
Subsidiary on or prior to the date on which such Subsidiary was
acquired by the Company (other than Debt Issued as consideration in,
or to provide all or any portion of the funds or credit support
utilized to consummate, the transaction or series of related
transactions pursuant to which such Subsidiary became a Subsidiary
of the Company or was acquired by the Company) and outstanding on
such date;
(3) any encumbrance or restriction pursuant to an agreement effecting an
Issuance of Bank Debt or a Refinancing of any other Debt Issued
pursuant to an agreement referred to in clause (1) or (2) above or
this clause (3) or contained in any amendment to an agreement
referred to in clause (1) or (2) above or this clause (3); provided,
however, that any such encumbrance or restriction with respect to
any Subsidiary is no less favorable to the Holders of Notes than the
least favorable of the encumbrances and restrictions with respect to
such Subsidiary contained in the agreements referred to in clause
(1) or (2) above, as determined in good faith by the Board of
Directors of the Company, the determination of which shall be
evidenced by a resolution of such Board of Directors;
(4) any such encumbrance or restriction consisting of customary
nonassignment provisions in leases governing leasehold interests to
the extent such provisions restrict the transfer of the lease;
(5) in the case of clause (iii) above, restrictions contained in
security agreements securing Debt of a Subsidiary (other than
security agreements securing Debt of a Subsidiary Issued in
connection with any agreement referred to in clause (1), (2) or (3)
above) and restrictions contained in agreements relating to a
disposition of property of a Subsidiary, to the extent such
restrictions restrict the transfer of the property subject to such
agreements;
(6) any encumbrance or restriction binding on a Foreign Subsidiary
contained in an agreement pursuant to which such Foreign Subsidiary
has Issued Debt consisting of working capital borrowings; and
(7) any encumbrance or restriction relating to a Non-Recourse
Subsidiary.
57
Limitation on Sales of Assets and Subsidiary Stock. (a) The Company shall
not, and shall not permit any Subsidiary of the Company (other than a
Non-Recourse Subsidiary) to, make any Asset Disposition unless:
(i) the Company or such Subsidiary receives consideration at the time of
such Asset Disposition at least equal to the fair market value, as
determined in good faith by the Board of Directors of the Company,
the determination of which shall be conclusive and evidenced by a
resolution of the Board of Directors of the Company (including as to
the value of all non-cash consideration), of the Capital Stock and
assets subject to such Asset Disposition;
(ii) at least 75% of the consideration consists of cash, cash
equivalents, readily marketable securities which the Company
intends, in good faith, to liquidate promptly after such Asset
Disposition or the assumption of liabilities (including, in the case
of the sale of the Capital Stock of a Subsidiary of the Company,
liabilities of the Company or such Subsidiary); and
(iii) an amount equal to 100% of the Net Available Cash from such Asset
Disposition is applied by the Company (or such Subsidiary, as the
case may be):
(A) first, to the extent the Company is so required by the terms of
any Applicable Debt, to prepay, repay or purchase such
Applicable Debt (in each case other than Debt owed to the
Company or an Affiliate of the Company) in accordance with the
terms of such Debt;
(B) second, to the extent of the balance of such Net Available Cash
after application in accordance with clause (A), at the
Company's election, to either (1) the optional prepayment,
repayment or repurchase of Applicable Debt (in each case other
than Debt owed to the Company or an Affiliate of the Company)
which the Company is not required by the terms thereof to
prepay, repay or repurchase (whether or not the related loan
commitment is permanently reduced in connection therewith), or
(2) the investment by the Company or any Wholly Owned Recourse
Subsidiary (or, additionally in the case of an Asset
Disposition by a Subsidiary that is not a Wholly Owned Recourse
Subsidiary, the investment by such Subsidiary) in assets to
replace the assets that were the subject of such Asset
Disposition or in assets that (as determined by the Board of
Directors of the Company, the determination of which shall be
conclusive and evidenced by a resolution of such Board of
Directors) will be used in the businesses of the Company and
its Wholly Owned Recourse Subsidiaries (or, additionally in the
case of an Asset Disposition by a Subsidiary that is not a
Wholly Owned Recourse Subsidiary, the businesses of such
Subsidiary) existing on the Issue Date or in businesses
reasonably related thereto (provided that if the assets that
were the subject of such Asset Disposition constituted
Collateral, then such replacement or other assets shall be
pledged at the time of their acquisition to the Collateral
Agent as Collateral, subject to Permitted Liens and the
Collateral Agency Agreement) in all cases, within the later of
one year from the date of such Asset Disposition or the receipt
of such Net Available Cash; and
(C) third, to the extent of the balance of such Net Available Cash
after application in accordance with clauses (A) and (B), to
make an offer to purchase Notes and other Applicable Pari Passu
Debt designated by the Company pursuant to and subject to the
conditions of paragraph (b) below;
provided, however, that in connection with an offer pursuant to clause (C)
above, if the principal amount and premium of such Notes and such Applicable
Pari Passu Debt, together with accrued and unpaid interest tendered for
acceptance pursuant to such offer exceeds the balance of Net Available Cash,
then the Company will accept for purchase the Notes and such Applicable Pari
Passu Debt of each such tendering Holder on a pro rata basis in accordance with
the principal amount so tendered.
Generally, by virtue of the foregoing provisions and the definitions of
"Applicable Debt" and "Applicable Pari Passu Debt," if we make an Asset
Disposition with an asset that is part of Collateral,
58
or is a foreign asset owned directly or indirectly by a Foreign Subsidiary the
stock of which constitutes Collateral, we will not be permitted to use the Net
Available Cash from such Asset Disposition except (1) to prepay or purchase
Debt or other obligations that are secured by Collateral or, in the case of a
foreign asset sale, Debt of a Foreign Subsidiary, or (2) to reinvest in assets
that will become Collateral (subject to Permitted Liens and the Collateral
Agency Agreement) or, in the case of a foreign asset sale, in other assets. If
we do neither within one year, then we will be required to make an offer to
purchase the Notes and, if we choose, other Debt secured by the Collateral. If,
on the other hand we make an Asset Disposition with assets that do not
constitute Collateral, the provisions described in the foregoing paragraph will
not permit us to use the Net Available Cash except to prepay or purchase any
non-subordinated Debt, whether secured or unsecured, or to reinvest in assets
that may or may not become part of the Collateral. If we do neither within one
year, then we will be required to make an offer to purchase the Notes and, if
we choose, any other non-subordinated Debt. Any excess cash remaining after any
offer described in this paragraph may be used for any other purpose otherwise
permitted by the Indenture. The description in this paragraph is qualified in
its entirety by the actual provisions of the Indenture to which this
description relates.
Notwithstanding the foregoing provisions of this paragraph (a), the
Company and the Subsidiaries shall not be required to apply any Net Available
Cash in accordance with this paragraph (a) except to the extent that the
aggregate Net Available Cash from all Asset Dispositions which are not applied
in accordance with this paragraph (a) exceeds $10,000,000. Pending application
of Net Available Cash pursuant to this paragraph (a), such Net Available Cash
shall be (i) invested in Temporary Cash Investments (which, if the assets that
were the subject of such Asset Disposition constituted Collateral, then such
Temporary Cash Investments shall be pledged to the Collateral Agent as
Collateral, subject to Permitted Liens and the Collateral Agency Agreement,
pending such application) or (ii) used to make an optional prepayment under any
revolving credit facility constituting Applicable Debt, whether or not the
related loan commitment is permanently reduced in connection therewith.
(b) In the event of an Asset Disposition that requires the purchase of
Notes pursuant to paragraph (a)(iii)(C), the Company will be required to
purchase Notes and other Applicable Pari Passu Debt designated by the Company
tendered pursuant to an offer by the Company for the Notes and such Applicable
Pari Passu Debt (the "Offer") at a purchase price of 100% of their principal
amount, without premium, plus accrued interest to the Purchase Date (or in
respect of other Applicable Pari Passu Debt such lesser price, if any, as may
be provided for by the terms of such Applicable Pari Passu Debt) in accordance
with the procedures (including prorationing in the event of oversubscription)
set forth in the Indenture, provided that the procedures for making an offer to
holders of other Applicable Pari Passu Debt will be as provided for by the
terms of such Applicable Pari Passu Debt. If
(x) the aggregate purchase price of Notes and other Applicable Pari Passu
Debt tendered pursuant to the Offer is less than the Net Available Cash
allotted to the purchase of the Notes and Applicable Pari Passu Debt,
(y) the Company shall not be obligated to make an offer pursuant to the
last sentence of this paragraph, or
(z) the Company shall be unable to purchase Notes from Holders thereof in
an Offer because of the provisions of applicable law or of the
Company's or its Subsidiaries' loan agreements, indentures or other
contracts governing Debt or Debt of Subsidiaries (in which case the
Company need not make an Offer),
the Company shall apply the remaining Net Available Cash to (1) invest in
assets to replace the assets that were the subject of the Asset Disposition or
in assets that (as determined by the Board of Directors of the Company, the
determination of which shall be conclusive and evidenced by a resolution of
such Board of Directors) will be used in the businesses of the Company and its
Wholly Owned Recourse Subsidiaries (or, additionally in the case of an Asset
Disposition by a Subsidiary that is not a Wholly Owned Recourse Subsidiary, the
business of such Subsidiary) existing on the Issue Date or in businesses
reasonably related thereto or (2) in the case of clause (x) or (y) above,
prepay,
59
repay or repurchase any Debt of the Company or Debt of a Wholly Owned Recourse
Subsidiary or, additionally in the case of an Asset Disposition by a Subsidiary
that is not a Wholly Owned Recourse Subsidiary, Debt of such Subsidiary (in
each case other than Debt owed to the Company or an Affiliate of the Company),
whether or not the related loan commitment is permanently reduced in connection
therewith.
The Company shall not be required to make an Offer for Notes and other
Applicable Pari Passu Debt pursuant to this covenant if the Net Available Cash
available therefor (after application of the proceeds as provided in clause (A)
and clause (B) of paragraph (a)(iii) above) is less than $10,000,000 for any
particular Asset Disposition (which lesser amounts shall, except with respect
to Asset Dispositions involving Collateral, not be carried forward for purposes
of determining whether an Offer is required with respect to the Net Available
Cash from any subsequent Asset Disposition).
(c) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
covenant. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this provision, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this covenant by virtue thereof.
Limitation on Transactions with Affiliates. (a) The Company shall not, and
shall not permit any of its Subsidiaries (other than a Non-Recourse Subsidiary)
to, conduct any business or enter into any transaction or series of similar
transactions (including the purchase, sale, lease or exchange of any property
or the rendering of any service) with any Affiliate of the Company or any legal
or beneficial owner of 10% or more of the voting power of the Voting Stock of
the Company or with an Affiliate of any such owner unless
(i) the terms of such business, transaction or series of transactions are
(A) set forth in writing and (B) at least as favorable to the Company
or such Subsidiary as terms that would be obtainable at the time for a
comparable transaction or series of similar transactions in
arm's-length dealings with an unrelated third Person and
(ii) to the extent that such business, transaction or series of
transactions (other than Debt Issued by the Company which is permitted
under "--Limitation on Debt") is known by the Board of Directors of
the Company to involve an Affiliate of the Company or a legal or
beneficial owner of 10% or more of the voting power of the Voting
Stock of the Company or an Affiliate of such owner, then
(A) with respect to a transaction or series of related transactions,
other than any purchase or sale of inventory in the ordinary
course of business (an "Inventory Transaction"), involving
aggregate payments or other consideration in excess of $5.0
million, such transaction or series of related transactions has
been approved (and the value of any noncash consideration has
been determined) by a majority of those members of the Board of
Directors of the Company having no personal stake in such
business, transaction or series of transactions and
(B) with respect to a transaction or series of related transactions,
other than any Inventory Transaction, involving aggregate
payments or other consideration in excess of $20.0 million (with
the value of any noncash consideration being determined by a
majority of those members of the Board of Directors of the
Company having no personal stake in such business, transaction or
series of transactions), such transaction or series of related
transactions has been determined, in the written opinion of a
nationally recognized investment banking firm to be fair, from a
financial point of view, to the Company or such Subsidiary, as
the case may be.
(b) The provisions of paragraph (a) shall not prohibit:
(i) any Restricted Payment permitted to be paid pursuant to
"--Limitation on Restricted Payments;"
60
(ii) any transaction between the Company and any of its Subsidiaries;
provided, however, that no portion of any minority interest in any
such Subsidiary is owned by (x) any Affiliate (other than the
Company, a Wholly Owned Recourse Subsidiary of the Company, a
Permitted Affiliate or an Unrestricted Affiliate) of the Company or
(y) any legal or beneficial owner of 10% or more of the voting power
of the Voting Stock of the Company or any Affiliate of such owner
(other than the Company, any Wholly Owned Recourse Subsidiary of the
Company or an Unrestricted Affiliate);
(iii) any transaction between Subsidiaries of the Company; provided,
however, that no portion of any minority interest in any such
Subsidiary is owned by (x) any Affiliate (other than the Company, a
Wholly Owned Recourse Subsidiary of the Company, a Permitted
Affiliate or an Unrestricted Affiliate) of the Company or (y) any
legal or beneficial owner of 10% or more of the voting power of the
Voting Stock of the Company or any Affiliate of such owner (other
than the Company, any Wholly Owned Recourse Subsidiary of the
Company or an Unrestricted Affiliate);
(iv) any transaction between the Company or a Subsidiary of the Company
and its own employee stock ownership plan;
(v) any transaction with an officer or director of the Company, of
Parent or of any Subsidiary of the Company entered into in the
ordinary course of business (including compensation or employee
benefit arrangements with any such officer or director); provided,
however, that such officer holds, directly or indirectly, no more
than 10% of the outstanding Capital Stock of the Company;
(vi) any business or transaction with an Unrestricted Affiliate;
(vii) any transaction which is a Permitted Transaction; and
(viii) any transaction pursuant to which Mafco Holdings will provide the
Company and its Subsidiaries at their request and at the cost to
Mafco Holdings with certain allocated services to be purchased from
third party providers, such as legal and accounting services,
insurance coverage and other services.
Additional Guarantees; Releases of Guarantors. (a) From and after the
Issue Date, if any Subsidiary of the Parent Guarantor, whether existing on the
Issue Date or thereafter formed or acquired, becomes an obligor in respect of
Debt or other obligations that at the time constitutes Primary First Lien
Obligations (except a Foreign Subsidiary that becomes an obligor solely in
respect of Debt or other obligations of itself or another Foreign Subsidiary),
and such Person is not at the time a Guarantor, then the Company shall cause
such Person to execute and deliver to the Trustee a guarantee of the Notes at
the time such Person becomes such an obligor.
(b) Notwithstanding the foregoing, any Subsidiary Guarantee provided under
the Indenture, including pursuant to paragraph (a) above, shall be released,
(1) without any action required on the part of the Trustee or any
Holder, if all of the Capital Stock or all or substantially all of
the assets of such Subsidiary is sold or otherwise disposed of to a
Person other than the Company or a Subsidiary of the Company and the
Company otherwise complies, to the extent applicable, with the
provisions under "--Limitation on Sales of Assets and Subsidiary
Stock;"
(2) upon request of the Company without consent unless, within 20
Business Days after written notice of the proposed release of such
Subsidiary Guarantee is mailed to the Trustee and the Holders,
Holders of 25% of the outstanding principal amount of Notes deliver
to the Company a written objection to such release;
(3) with the written consent of Holders of 66 2/3% of the principal
amount of the Notes then outstanding; or
61
(4) upon request of the Company without consent if the fair market value
of the assets of the related Subsidiary Guarantor (as determined in
good faith by the Board of Directors of the Company), together with
the fair market value of the assets of other Subsidiary Guarantors
whose Subsidiary Guarantee was released in the same calendar year,
do not exceed $5,000,000 (subject to a cumulative carryover for
amounts not used in any prior calendar year).
At the request of the Company, the Trustee shall execute and deliver an
instrument evidencing such release.
Amendment to Security Documents. The Company shall not amend, modify or
supplement, or permit or consent to any amendment, modification or supplement
of, the Security Documents in any way that would be adverse to the Holders in
any material respect except in the following circumstances:
(a) in accordance with the provisions described under "Description of
the Collateral and Intercreditor Arrangements--Amendment to
Collateral Documents;"
(b) upon request of the Company without consent unless, within 20
Business Days after written notice of a proposed amendment,
modification, supplement or waiver is mailed to the Trustee and the
Holders, 25% in interest of the Holders delivers to the Company a
written objection thereto;
(c) to effectuate a release of Collateral permitted under "Description
of the Collateral and Intercreditor Arrangements--Releases of
Collateral" or a release of a Subsidiary Guarantee permitted under
"--Additional Guarantees; Releases of Guarantors"; or
(d) with the written consent of Holders of a majority of the principal
amount of the Notes then outstanding.
Additional Security Documents. From and after the date the Security
Documents are executed and delivered, if the Parent Guarantor or any Subsidiary
of the Parent Guarantor executes and delivers in respect of any property of
such Person any mortgages, deeds of trust, security agreements, pledge
agreements or similar instruments to secure Debt or other obligations that at
the time constitute Primary First Lien Obligations (except a Foreign Subsidiary
that does so solely in respect of Debt or other obligations of itself or
another Foreign Subsidiary), then the Company will, or will cause such Person
to, execute and deliver substantially identical mortgages, deeds of trust,
security agreements, pledge agreements or similar instruments in order to vest
in the Collateral Agent a perfected security interest, subject only to
Permitted Liens and the Collateral Agency Agreement, in such property for the
benefit of the Collateral Agent on behalf of the Holders, among others, and
thereupon all provisions of this Indenture and the Collateral Agency Agreement
relating to Collateral shall be deemed to relate to such property to the same
extent and with the same force and effect.
Commission Reports. Notwithstanding that the Company may not be required
to be subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, the Company will file or cause to be filed with the Commission
and provide the Trustee and Holders of the Notes with the information,
documents and other reports (or copies of such portions of any of the foregoing
as the Commission may by rules and regulations prescribe) with respect to the
Company specified in Sections 13 and 15(d) of the Exchange Act. The Company
also will comply with the other provisions of TIA Section 314(a).
SUCCESSOR COMPANY
(a) The Company may not consolidate with or merge with or into, or convey,
transfer or lease all or substantially all its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (if not the Issuer) is
organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and such
Person expressly assumes by a supplemental indenture, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all
the obligations of the Company under the Indenture and the Notes;
62
(ii) immediately after giving effect to such transaction (and treating
any Debt which becomes an obligation of the resulting, surviving or
transferee person or any of its Subsidiaries as a result of such
transaction as having been issued by such Person or such Subsidiary
at the time of such transaction), no Default has occurred and is
continuing;
(iii) immediately after giving effect to such transaction, the resulting,
surviving or transferee Person would be able to incur at least $1.00
of Debt pursuant to paragraph (a) of the "--Limitation on Debt"
covenant;
(iv) immediately after giving effect to such transaction, the resulting,
surviving or transferee Person has a Consolidated Net Worth in an
amount which is not less than the Consolidated Net Worth of the
Company immediately prior to such transaction; and
(v) the Company delivers to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or
transfer and such supplemental indenture (if any) comply with the
Indenture;
provided that, nothing in this paragraph shall prohibit a Wholly Owned Recourse
Subsidiary from consolidating with or merging with or into, or conveying,
transferring or leasing all or substantially all its assets to, the Company.
(b) The resulting, surviving or transferee Person will be the successor
Company and shall succeed to, and be substituted for, and may exercise every
right and power of, the predecessor Company under the Indenture and thereafter,
except in the case of a lease, the predecessor Company will be discharged from
all obligations and covenants under the Indenture and the Notes.
(c) Unless the Guarantee of a Guarantor is being released as permitted by
paragraph (b) of "--Additional Guarantees" in connection with a merger,
conveyance, transfer or lease, the Company will not permit such Guarantor to
consolidate with or merge with or into, or convey, transfer or lease all or
substantially all of its assets to, any Person (other than the Company or a
Subsidiary Guarantor) unless:
(i) the resulting, surviving or transferee Person (if not such
Guarantor) is organized and existing under the laws of the
jurisdiction under which such Guarantor was organized or under the
laws of the United States of America, any State thereof or the
District of Columbia and such Person expressly assumes by a
supplemental guarantee agreement, executed and delivered to the
Trustee, all the obligations of such Guarantor under its Guarantee;
(ii) immediately after giving effect to such transaction (and treating
any Debt which becomes an obligation of the resulting, surviving or
transferee Person or any of its Subsidiaries as a result of such
transaction as having been issued by such Person or such Subsidiary
at the time of the transaction), no Default has occurred and is
continuing; and
(iii) the Company delivers to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or
transfer and such supplemental guarantee agreement (if any) comply
with the Indenture.
DEFAULTS
An Event of Default is defined in the Indenture as
(i) a default in the payment of interest on the Notes when due,
continued for 30 days,
(ii) a default in the payment of principal of any Note when due at its
Stated Maturity, upon redemption, upon required purchase, upon
declaration or otherwise,
(iii) the failure by the Issuer to comply with its obligations described
under "--Successor Company,"
63
(iv) the failure by the Company to comply for 30 days after notice with
any of the covenants described under "--Limitation on Debt,"
"--Limitation on Liens," "--Limitation on Restricted Payments,"
"--Limitation on Restrictions on Distributions from Subsidiaries,"
"--Limitations on Sales of Assets and Subsidiary Stock" (other than
a failure to purchase Notes), "--Limitation on Transactions with
Affiliates," "Change of Control" (other than a failure to purchase
Notes), "--Additional Guarantees by Subsidiaries," "--Amendment to
Security Documents," "--Additional Security Documents," or
"--Commission Reports" above,
(v) the failure by the Company to comply for 60 days after notice with
the other agreements applicable to it contained in the Indenture or
the Notes (other than those referred to in clauses (i), (ii), (iii)
and (iv) of this paragraph),
(vi) Debt of the Parent Guarantor, the Company or any Significant
Subsidiary is not paid within any applicable grace period after
final maturity or is accelerated by the holders thereof because of a
default and the total principal amount of the portion of such Debt
that is unpaid or accelerated exceeds $25 million or its foreign
currency equivalent and such default continues for 10 days after
notice as specified in the last sentence of this paragraph (the
"cross acceleration provision"),
(vii) certain events of bankruptcy, insolvency or reorganization of the
Parent Guarantor, the Company or a Significant Subsidiary (the
"bankruptcy provisions"),
(viii) any judgment or decree for the payment of money in excess of $25
million or its foreign currency equivalent is entered against the
Parent Guarantor, the Company or a Significant Subsidiary and is not
discharged and either (A) an enforcement proceeding has been
commenced by any creditor upon such judgment or decree or (B) there
is a period of 60 days following the entry of such judgment or
decree during which such judgment or decree is not discharged,
waived or the execution thereof stayed and, in the case of (B), such
default continues for 10 days after the notice specified in the next
sentence (the "judgment default provision"),
(ix) the Liens created by the Security Documents shall at any time not
constitute a valid and perfected Lien on the Collateral intended to
be covered thereby (to the extent perfection by filing,
registration, recordation or possession is required herein or
therein) in favor of the Collateral Agent, free and clear of all
other Liens (other than Permitted Liens), or, except for expiration
in accordance with its terms or amendment, modification, waiver,
termination or release in accordance with the terms of this
Indenture, any of the Security Documents shall for whatever reason
be terminated or cease to be in full force and effect, if in either
case, such default continues for 10 days after notice, or the
enforceability thereof shall be contested by the Company or any
Guarantor (the "security default provisions"), or
(x) a Guarantee ceases to be in full force and effect (other than in
accordance with the terms of this Indenture) and such default
continues for 10 days after notice, or a Guarantor denies or
disaffirms its obligations under its Guarantee (the "guarantee
provision").
However, a default under clauses (iv), (v), (vi), (viii) (B), (ix) and (x) will
not constitute an Event of Default until the Trustee or the Holders of at least
25% in principal amount of the outstanding Notes notify the Company of the
default and the Company does not cure such default within the time specified
after receipt of such notice.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the outstanding Notes by notice
to the Company and the Trustee may declare the principal of and accrued but
unpaid interest on all the Notes to be due and payable. Upon such a
declaration, such principal and interest shall be due and payable immediately.
If an Event of Default relating to certain events of bankruptcy, insolvency or
reorganization of the Company occurs and is continuing, the principal of and
interest on all the Notes will ipso facto become and be immediately
64
due and payable without any declaration or other act on the part of the Trustee
or any Holders of the Notes. Under certain circumstances, the Holders of a
majority in principal amount of the outstanding Notes may rescind any such
acceleration with respect to the Notes and its consequences. However, even
following an Event of Default and acceleration of the Notes, neither the
Trustee nor the Holders will have any right or ability to exercise or cause the
exercise of remedies against the Collateral while any Primary First-Lien
Obligations exist. See "Description of the Collateral and Intercreditor
Arrangements--Exercise of Remedies and Application of Proceeds."
Subject to the provisions of the Indenture relating to the duties of the
Trustee, in case an Event of Default occurs and is continuing, the Trustee will
be under no obligation to exercise any of the rights or powers under the
Indenture at the request or direction of any of the Holders of the Notes unless
such Holders have offered to the Trustee reasonable indemnity or security
against any loss, liability or expense which might be incurred in compliance
with such request or direction. Except to enforce the right to receive payment
of principal or interest when due, no Holder of a Note may pursue any remedy
with respect to the Indenture or the Notes unless
(i) such Holder has previously given the Trustee written notice that an
Event of Default is continuing,
(ii) Holders of at least 25% in principal amount of the outstanding Notes
have requested the Trustee to in writing pursue the remedy,
(iii) such Holders have offered the Trustee reasonable security or
indemnity against any loss, liability or expense which might be
incurred in compliance with such request,
(iv) the Trustee has not complied with such request within 60 days after
the receipt thereof and the offer of security or indemnity and
(v) the Holders of a majority in principal amount of the outstanding
Notes have not given the Trustee a direction inconsistent with such
request within such 60-day period.
Subject to certain restrictions, the Holders of a majority in principal amount
of the outstanding Notes are given the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
of exercising any trust or power conferred on the Trustee. The Trustee,
however, may refuse to follow any direction that conflicts with law or the
Indenture or that the Trustee determines is unduly prejudicial to the rights of
any other Holder of a Note or that would involve the Trustee in personal
liability.
The Indenture provides that if a Default occurs and is continuing and is
known to the Trustee, the Trustee must mail to each Holder of the Notes notice
of the Default within 90 days after it occurs. Except in the case of a Default
in the payment of principal of or interest on any Note, the Trustee may
withhold notice if and so long as a committee of its Trust Officers in good
faith determines that withholding notice is in the interests of the Holders of
the Notes. In addition, the Company is required to deliver to the Trustee,
within 120 days after the end of each fiscal year, a certificate indicating
whether the signers thereof know of any Default that occurred during the
previous year. The Company also is required to deliver to the Trustee, within
30 days after the occurrence thereof, written notice of any event which would
constitute certain Defaults, their status and what action the Company is taking
or proposes to take in respect thereof.
AMENDMENT
Subject to certain exceptions, the Indenture or the Indenture Documents
may be amended with the consent of the Holders of a majority in principal
amount of the Notes then outstanding and any past default or noncompliance with
any provisions may be waived with the consent of the Holders of a majority in
principal amount of the Notes then outstanding. However, (a) without the
consent of each Holder of an outstanding Note affected, no amendment may, among
other things,
(i) reduce the principal amount of Notes whose Holders must consent to
an amendment,
(ii) reduce the rate of or extend the time for payment of interest on any
Note,
65
(iii) reduce the principal of or extend the Stated Maturity of any Note,
(iv) reduce the premium payable upon the redemption of any Note or change
the time at which any Note may be redeemed as described under
"--Optional Redemption" above,
(v) make any Note payable in money other than that stated in the Note,
(vi) make any change to the provision which protects the right of any
Holder of the Notes to receive payment of principal of and interest
on such Holder's Notes on or after the due dates therefor or to
institute suit for the enforcement of any payment on or with respect
to such Holder's Notes, or
(vii) make any change in the amendment provisions which require each
Holder's consent or in the waiver provisions
and (b) with certain exceptions described under "--Certain Covenants--Additional
Guarantees; Releases of Guarantors" and "Description of the Collateral and
Intercreditor Arrangements-- Releases of Collateral," without the consent of
Holders of at least 66 2/3% of the outstanding principal amount of the Notes, no
amendment may release any Guarantor from its obligation under its Guarantee,
change any Guarantee in any manner that adversely affects the rights of any
Holder of Notes under such Guarantee in any material respect or release any
Collateral from the Liens of the Security Documents.
Without the consent of or notice to any Holder of the Notes, the Company,
the Guarantors and the Trustee may amend the Indenture or the Indenture
Documents
(i) to cure any ambiguity, omission, defect or inconsistency,
(ii) to comply with certain covenants described under "--Additional
Guarantees; Releases of Guarantors," "--Amendment to Security
Documents" or "--Additional Security Documents," or "Description of
the Collateral and Intercreditor Arrangements-- Amendment to
Collateral Documents" and "--Releases of Collateral,"
(iii) to provide for the assumption by a successor corporation of the
obligations of the Company under the Indenture if in compliance with
the provisions described under "--Successor Company" above,
(iv) to provide for uncertificated Notes in addition to or in place of
certificated Notes (provided that the uncertificated Notes are
issued in registered form for purposes of Section 163(f) of the
Code, or in a manner such that the uncertificated Notes are
described in Section 163(f)(2)(B) of the Code),
(v) to add guarantees with respect to the Notes, to secure the Notes,
(vi) to add to the covenants of the Company for the benefit of the
Holders of the Notes or to surrender any right or power conferred
upon the Company,
(vii) to provide for issuance of the Exchange Notes under the Indenture
(including to provide for treatment of the Exchange Notes and the
Notes as a single class of securities) in connection with the
Exchange Offer, or
(viii) to comply with any requirement of the Commission in connection with
the qualification of the Indenture under the TIA or to otherwise
comply with the TIA, or to make any change that does not adversely
affect the rights of any Holder of the Notes.
The consent of the Holders of the Notes is not necessary under the
Indenture to approve the particular form of any proposed amendment. It is
sufficient if such consent approves the substance of the proposed amendment.
After an amendment under the Indenture becomes effective, the Company is
required to mail to Holders of the Notes a notice briefly describing such
amendment. However, the failure to give such notice to all Holders of the
Notes, or any defect therein, will not impair or affect the validity of the
amendment.
66
A consent to any amendment or waiver under the Indenture by any Holder of
Notes given in connection with a tender of such Holder's Notes will not be
rendered invalid by such tender.
TRANSFER
The original notes have been, and the exchange notes will be, issued in
registered form and will be transferable only upon the surrender of the Notes
being transferred for registration of transfer. The Company may require payment
of a sum sufficient to cover any tax, assessment or other governmental charge
payable in connection with certain transfers and exchanges. See "Book Entry;
Delivery and Form."
DEFEASANCE
The Company at any time may terminate all its obligations under the Notes
and the Indenture ("legal defeasance"), except for certain obligations,
including those respecting the defeasance trust and obligations to register the
transfer or exchange of the Notes, to replace mutilated, destroyed, lost or
stolen Notes and to maintain a registrar and paying agent in respect of the
Notes. The Company at any time may terminate certain of its obligations under
the covenants described under "--Certain Covenants" and "--Change of Control"
above, the operation of the cross acceleration provision, the bankruptcy
provisions with respect to Significant Subsidiaries, the judgment default
provision, the security default provisions, the guarantee provision and the
30-day covenant compliance provision, described under "--Defaults" above, and
the limitations contained in clauses (ii), (iii) and (iv) described under
paragraph (a) and clause (ii) described under paragraph (c) of "--Successor
Company" ("covenant defeasance").
The Company may exercise its legal defeasance option notwithstanding its
prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the Notes
may not be accelerated because of an Event of Default with respect thereto. If
the Company exercises its covenant defeasance option, payment of the Notes may
not be accelerated because of an Event of Default specified in clause (iv)
(with respect to the covenants described under "Certain Covenants"), (vi),
(vii) (with respect only to Significant Subsidiaries), (viii), (ix) or (x)
under "--Defaults" above, or because of the failure of the Company to comply
with clause (ii), (iii) or (iv) described under paragraph (a) or clause (ii)
described under paragraph (c) of "--Successor Company" above. If the Company
exercises its legal defeasance option or its covenant defeasance option, the
Collateral will be released and each Guarantor will be released from all its
obligations under its guarantee.
In order to exercise either defeasance option, the Company must
irrevocably deposit in trust (the "defeasance trust") with the Trustee money or
U.S. Government Obligations for the payment of principal and interest (if any)
on the Notes to redemption or maturity, as the case may be, and must comply
with certain other conditions, including (unless the Notes will mature or be
redeemed within 60 days) delivering to the Trustee an Opinion of Counsel to the
effect that Holders of the Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and defeasance and will
be subject to federal income tax on the same amount and in the same manner and
at the same times as would have been the case if such deposit and defeasance
had not occurred (and, in the case of legal defeasance only, such Opinion of
Counsel must be based on a ruling of the Internal Revenue Service or other
change in applicable federal income tax law).
CONCERNING THE TRUSTEE
Wilmington Trust Company is the Trustee under the Indenture and the
Collateral Agent for the benefit of the Holders under the Collateral Agency
Agreement and has been appointed by the Company as Registrar and Paying Agent
with regard to the Notes.
GOVERNING LAW
The Indenture provides that it and the Notes will be governed by, and
construed in accordance with, the laws of the State of New York without giving
effect to applicable principles of conflicts of law to the extent that the
application of the law of another jurisdiction would be required thereby.
67
CERTAIN DEFINITIONS
The following are certain definitions used in the Indenture and applicable
to the description of the Indenture and the Notes set forth herein.
"Affiliate" of any specified Person means (i) any other Person which,
directly or indirectly, is in control of, is controlled by or is under common
control with such specified Person or (ii) any other Person who is a director
or officer (A) of such specified Person, (B) of any Subsidiary of such
specified Person or (C) of any Person described in clause (i) above. For
purposes of this definition, control of a Person means the power, direct or
indirect, to direct or cause the direction of the management and policies of
such Person whether by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Applicable Debt" means:
(1) in respect of any asset that is the subject of an Asset Disposition
at a time when such asset is included in the Collateral, Pari Passu
Debt or Debt of a Subsidiary or any other non-Debt obligation that,
in each case, is secured at such time by Collateral under a Lien
that takes priority over the Lien of the Security Documents; or
(2) in respect of any asset that is the subject of an Asset Disposition
at a time when such asset is not included in the Collateral but is
owned, directly or indirectly, by a Foreign Subsidiary the stock of
which is included in the Collateral, any Debt or other obligation
referred to in clause (1) above, any Debt of such Foreign Subsidiary
or any Debt of any other Foreign Subsidiary that is a Wholly Owned
Recourse Subsidiary, provided that such Foreign Subsidiary has not
guaranteed unsecured Debt of the Company or a Subsidiary Guarantor;
or
(3) in respect of any other asset, any Pari Passu Debt or Debt of a
Wholly Owned Recourse Subsidiary or additionally, in the case of an
Asset Disposition by a Subsidiary that is not a Wholly Owned
Recourse Subsidiary, Debt of such Subsidiary.
"Applicable Pari Passu Debt" means:
(1) in respect of any asset that is the subject of an Asset Disposition
at a time when such asset is included in the Collateral, Pari Passu
Debt that is secured at such time by Collateral; or
(2) in respect of any asset that is the subject of an Asset Disposition
at a time when such asset is not included in the Collateral but is
owned, directly or indirectly, by a Foreign Subsidiary the stock of
which is included in the Collateral, Pari Passu Debt that is secured
at such time by Collateral; or
(3) in respect of any other asset, Pari Passu Debt.
"Asset Disposition" means any sale, lease, transfer or other disposition
(or series of related sales, leases, transfers or dispositions) of shares of
Capital Stock of a Subsidiary of the Company (other than directors' qualifying
shares and other than Capital Stock of a Non-Recourse Subsidiary), property or
other assets (each referred to for the purposes of this definition as a
"disposition") by the Company or any of its Subsidiaries (other than a
Non-Recourse Subsidiary) (including any disposition by means of a merger,
consolidation or similar transaction) other than:
(i) a disposition by a Subsidiary of the Company to the Company or by
the Company or a Subsidiary of the Company to a Wholly Owned
Recourse Subsidiary;
(ii) a disposition of property or assets by the Company or its
Subsidiaries at fair market value in the ordinary course of
business;
(iii) a disposition by the Company or its Subsidiaries of obsolete assets
in the ordinary course of business;
(iv) a disposition subject to or permitted by the provisions described in
"--Limitation on Restricted Payments" above;
68
(v) an issuance of employee stock options; and
(vi) a disposition by the Company or its Subsidiaries in which the
Company or its Subsidiaries receive as consideration Capital Stock
of (or similar interests in) a Person engaged in, or assets that
will be used in, the businesses of the Company and its Wholly Owned
Recourse Subsidiaries, or additionally, in the case of a disposition
by a Subsidiary of the Company that is not a Wholly Owned Recourse
Subsidiary, the business of such Subsidiary, existing on the Issue
Date or in businesses reasonably related thereto, as determined by
the Board of Directors of the Company, the determination of which
shall be conclusive and evidenced by a resolution of the Board of
Directors of the Company, provided that if such disposition involves
assets consisting of Collateral, such Capital Stock is pledged to
the Collateral Agent as Collateral, subject to Permitted Liens and
the Collateral Agency Agreement.
"Bank Debt" means any and all amounts payable by the Company or any of its
Subsidiaries under or in respect of the Credit Agreement or any Refinancing
thereof, or any other agreements with lenders party to the foregoing, including
principal, premium (if any), interest (including interest accruing on or after
the filing of any petition in bankruptcy or for reorganization relating to the
Company), fees, charges, expenses, reimbursement obligations, guarantees and
all other amounts payable thereunder or in respect thereof; provided, however,
that nothing in this definition shall permit the Company or any of its
Subsidiaries to Issue any Debt that is not permitted pursuant to "--Limitation
on Debt" above.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person or any committee thereof duly authorized to act on
behalf of such Board of Directors.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligations" of a Person means any obligation which is
required to be classified and accounted for as a capital lease on the face of a
balance sheet of such Person prepared in accordance with GAAP; the amount of
such obligation shall be the capitalized amount thereof, determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the
first date upon which such lease may be terminated by the lessee without
payment of a penalty.
"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any
Preferred Stock, but excluding any debt securities convertible into or
exchangeable for such equity.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means all property and assets that from time to time secure
the Notes pursuant to the applicable Security Documents and the Collateral
Agency Agreement.
"Collateral Agency Agreement" means the Collateral Agency Agreement dated
November 30, 2001 by and among the Company, the Trustee, JPMorgan Chase Bank,
as administrative agent under the Credit Agreement and as administrative agent
for the benefit of the holders of the Bank Obligations referred to therein, and
the Collateral Agent, as the same may be amended, restated, supplemented or
otherwise modified from time to time.
"Collateral Agent" means Wilmington Trust Company in its capacity as
collateral agent under the Collateral Agency Agreement for the benefit of the
Holders, among others, until a successor replaces it in accordance with the
applicable provisions of the Collateral Agency Agreement, and thereafter means
such successor.
"Consolidated EBITDA Coverage Ratio" means, for any period, the ratio of
(i) the aggregate amount of EBITDA for such period to (ii) Consolidated
Interest Expense for such period; provided, however, that:
69
(1) if the Company or any Subsidiary of the Company has Issued any Debt
since the beginning of such period that remains outstanding or if
the transaction giving rise to the need to calculate the
Consolidated EBITDA Coverage Ratio is an Issuance of Debt, or both,
EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving effect on a pro forma basis to such Debt as
if such Debt had been Issued on the first day of such period and the
discharge of any other Debt Refinanced or otherwise discharged with
the proceeds of such new Debt as if such discharge had occurred on
the first day of such period;
(2) if since the beginning of such period the Company or any Subsidiary
of the Company shall have made any Asset Disposition, EBITDA for
such period shall be reduced by an amount equal to the EBITDA (if
positive) directly attributable to the assets which are the subject
of such Asset Disposition for such period, or increased by an amount
equal to the EBITDA (if negative), directly attributable thereto for
such period and Consolidated Interest Expense for such period shall
be reduced by an amount equal to the Consolidated Interest Expense
directly attributable to any Debt of the Company or any Subsidiary
of the Company Refinanced or otherwise discharged with respect to
the Company and its continuing Subsidiaries in connection with such
Asset Dispositions for such period (or if the Capital Stock of any
Subsidiary of the Company is sold, the Consolidated Interest Expense
for such period directly attributable to the Debt of such Subsidiary
to the extent the Company and its continuing Subsidiaries are no
longer liable for such Debt after such sale); and
(3) if since the beginning of such period the Company or any Subsidiary
of the Company (by merger or otherwise) shall have made an
Investment in any Subsidiary of the Company (or any Person which
becomes a Subsidiary of the Company) or an acquisition of assets,
including any acquisition of assets occurring in connection with a
transaction causing a calculation to be made hereunder, which
constitutes all of an operating unit of a business, EBITDA and
Consolidated Interest Expense for such period shall be calculated
after giving pro forma effect thereto, as if such Investment or
acquisition occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets, the amount of income or earnings relating thereto, and
the amount of Consolidated Interest Expense associated with any Debt Issued in
connection therewith, the pro forma calculations shall be determined in good
faith by a responsible financial or accounting Officer of the Company. If any
Debt bears a floating rate of interest and is being given pro forma effect, the
interest on such Debt shall be calculated as if the rate in effect on the date
of determination had been the applicable rate for the entire period.
"Consolidated Interest Expense" means, for any period, the sum of:
(a) the interest expense, net of any interest income, of the Company and
its consolidated Subsidiaries (other than Non-Recourse Subsidiaries)
for such period as determined in accordance with GAAP consistently
applied; plus
(b) Preferred Stock dividends in respect of Preferred Stock of the
Company or any Subsidiary of the Company (other than a Non-Recourse
Subsidiary) held by Persons other than the Company or a Wholly Owned
Recourse Subsidiary; plus
(c) the cash contributions to an employee stock ownership plan of the
Company and its Subsidiaries (other than Non-Recourse Subsidiaries)
to the extent such contributions are used by an employee stock
ownership plan to pay interest.
"Consolidated Net Income" means with respect to any Person, for any
period, the consolidated net income (or loss) of such Person and its
consolidated Subsidiaries for such period as determined in accordance with
GAAP, adjusted to the extent included in calculating such net income (or loss),
by excluding:
70
(i) all extraordinary gains or losses;
(ii) the portion of net income (or loss) of such Person and its
consolidated Subsidiaries attributable to minority interests in
unconsolidated Persons except to the extent that, in the case of net
income, cash dividends or distributions have actually been received
by such Person or one of its consolidated Subsidiaries (subject, in
the case of a dividend or distribution received by a Subsidiary of
such Person, to the limitations contained in clause (v) below) and,
in the case of net loss, such Person or any Subsidiary of such
Person has actually contributed, lent or transferred cash to such
unconsolidated Person;
(iii) net income (or loss) of any other Person attributable to any period
prior to the date of combination of such other Person with such
Person or any of its Subsidiaries on a "pooling of interests" basis;
(iv) net gains or losses in respect of dispositions of assets by such
Person or any of its Subsidiaries (including pursuant to a
sale-and-leaseback arrangement) other than in the ordinary course of
business;
(v) the net income of any Subsidiary of such Person to the extent that
the declaration of dividends or distributions by that Subsidiary of
that income is not at the time permitted, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulations
applicable to that Subsidiary or its shareholders;
(vi) any net income or loss of any Non-Recourse Subsidiary, except that
such Person's equity in the net income of any such Non-Recourse
Subsidiary for such period shall be included in such Consolidated
Net Income up to the aggregate amount of cash actually distributed
by such Non-Recourse Subsidiary during such period to such Person as
a dividend or other distribution; and
(vii) the cumulative effect of a change in accounting principles;
provided, however, that in using Consolidated Net Income for
purposes of calculating the Consolidated EBITDA Coverage Ratio at
any time, net income of a Subsidiary of the type described in clause
(v) of this definition shall not be excluded.
"Consolidated Net Worth" of any Person means, at any date, all amounts
which would, in conformity with GAAP, be included under shareholders' equity on
a consolidated balance sheet of such Person as at such date, less (x) any
amounts attributable to Redeemable Stock and (y) any amounts attributable to
Exchangeable Stock.
"Credit Agreement" means the Second Amended and Restated Credit Agreement
dated November 30, 2001 by and among the Company, JPMorgan Chase Bank,
Citibank, N.A. and others, as agents, and the lenders named therein, as the
same may be amended, restated, supplemented or otherwise modified from time to
time.
"Debt" of any Person means, without duplication:
(i) the principal of and premium (if any) in respect of (A) indebtedness
of such Person for money borrowed and (B) indebtedness evidenced by
Notes, debentures, bonds or other similar instruments for the
payment of which such Person is responsible or liable;
(ii) all Capital Lease Obligations of such Person;
(iii) all obligations of such Person issued or assumed as the deferred
purchase price of property, all conditional sale obligations of such
Person and all obligations of such Person under any title retention
agreement (but excluding trade accounts payable and other accrued
current liabilities arising in the ordinary course of business);
(iv) all obligations of such Person for the reimbursement of any obligor
on any letter of credit, banker's acceptance or similar credit
transaction (other than obligations with respect to
71
letters of credit securing obligations (other than obligations
described in (i) through (iii) above) entered into in the ordinary
course of business of such Person to the extent such letters of
credit are not drawn upon or, if and to the extent drawn upon, such
drawing is reimbursed no later than the third Business Day following
receipt by such Person of a demand for reimbursement following
payment on the letter of credit);
(v) the amount of all obligations of such Person with respect to the
redemption, repayment (including liquidation preference) or other
repurchase of, in the case of a Subsidiary of the Company, any
Preferred Stock and, in the case of any other Person, any Redeemable
Stock (but excluding in each case any accrued dividends);
(vi) all obligations of the type referred to in clauses (i) through (v)
of other Persons and all dividends of other Persons for the payment
of which, in either case, such Person is responsible or liable,
directly or indirectly, as obligor, guarantor or otherwise,
including guarantees of such obligations and dividends; and
(vii) all obligations of the type referred to in clauses (i) through (vi)
of other Persons secured by any Lien on any property or asset of
such Person (whether or not such obligation is assumed by such
Person), the amount of such obligation being deemed to be the lesser
of the value of such property or assets or the amount of the
obligation so secured.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Defaulting Subsidiary" means any Subsidiary of the Company (other than a
Non-Recourse Subsidiary) with respect to which an event described under clauses
(vi), (vii) or (viii) in "--Defaults" above has occurred and is continuing.
"Depository" means, with respect to the Notes issuable or issued in whole
or in part in global form, The Depository Trust Company, until a successor
shall have been appointed and become such pursuant to the applicable provisions
of the Indenture and, thereafter, "Depository" shall mean or include such
successor.
"EBITDA" means, for any period, the Consolidated Net Income of the Company
for such period, plus the following to the extent included in calculating such
Consolidated Net Income:
(i) income tax expense;
(ii) Consolidated Interest Expense;
(iii) depreciation expense;
(iv) amortization expense;
(v) all other noncash charges (excluding any noncash charge to the
extent that it requires an accrual of or a reserve for cash
disbursements for any future period); and
(vi) foreign currency gains or losses.
"Escrow Agreement" means the escrow agreement dated November 26, 2001 by
and among the Company and Wilmington Trust Company, as escrow agent.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchangeable Stock" means any Capital Stock of a Person which by its
terms or otherwise is required to be exchanged or converted or is exchangeable
or convertible at the option of the holder into another security (other than
Capital Stock of such Person which is neither Exchangeable Stock nor Redeemable
Stock).
"Foreign Subsidiary" means any Subsidiary of the Company which (i) is
organized under the laws of any jurisdiction outside of the United States, (ii)
is organized under the laws of Puerto Rico or the U.S. Virgin Islands, (iii)
has substantially all its operations outside of the United States, or (iv) has
substantially all its operations in Puerto Rico or the U.S. Virgin Islands.
72
"GAAP" means generally accepted accounting principles in the United
States, as in effect from time to time, except that for purposes of calculating
the Consolidated EBITDA Coverage Ratio, it shall mean generally accepted
accounting principles in the United States as in effect on the Issue Date.
"guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Debt or other obligation of any other
Person and any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation of such other Person (whether arising
by virtue of partnership arrangements, or by agreement to keep-well, to
purchase assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for purposes
of assuring in any other manner the obligee of such Debt or other obligation of
the payment thereof or to protect such obligee against loss in respect thereof
(in whole or in part); provided, however, that the term "guarantee" shall not
include endorsements for collection or deposit in the ordinary course of
business. The term "guarantee" used as a verb has a corresponding meaning.
"Guarantees" means the Parent Guarantee and the Subsidiary Guarantees.
"Guarantors" means, collectively, the Parent Guarantor and the Subsidiary
Guarantors.
"Hedging Obligations" of any Person means the obligations of such Person
pursuant to any interest rate swap agreement, foreign currency exchange
agreement, interest rate collar agreement, option or futures contract or other
similar agreement or arrangement designed to protect such Person against
changes in interest rates or foreign exchange rates.
"Holder" or "Securityholder" means the Person in whose name a Note is
registered on the Registrar's books.
"Indenture Documents" means the Indenture, the Notes, the Guarantees, the
Escrow Agreement, the Collateral Agency Agreement and the Security Documents.
"Investment" in any Person means any loan or advance to, any net payment
on a guarantee of, any acquisition of Capital Stock, equity interest,
obligation or other security of, or capital contribution or other investment
in, such Person. Investments shall exclude advances to customers and suppliers
in the ordinary course of business. The term "Invest" used as verb has a
corresponding meaning. For purposes of the definitions of "Non-Recourse
Subsidiary" and "Restricted Payment" and for purposes of "--Limitation on
Restricted Payments" above, (i) "Investment" shall include a designation after
the Issue Date of a Subsidiary of the Company as a Non-Recourse Subsidiary, and
such Investment shall be valued at an amount equal to the portion
(proportionate to the Company's equity interest in such Subsidiary) of the fair
market value of the net assets of such Subsidiary at the time that such
Subsidiary is designated a Non-Recourse Subsidiary; and (ii) any property
transferred to or from a Non-Recourse Subsidiary shall be valued at its fair
market value at the time of such transfer, in each case as determined in good
faith by the Board of Directors of the Company, and if such property so
transferred (including in a series of related transactions) has a fair market
value, as so determined by the Board of Directors, in excess of $10,000,000,
such determination shall be confirmed by an independent appraiser.
"Issue" means issue, assume, guarantee, incur or otherwise become liable
for; provided, however, that any Debt or Capital Stock of a Person existing at
the time such Person becomes a Subsidiary of another Person (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be issued by such
Subsidiary at the time it becomes a Subsidiary of such other Person. The term
"Issuance" or "Issued" has a corresponding meaning.
"Issue Date" means the date of original issue of the original Notes.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions are not required to be open in the State of New York or in the
state where the principal office of the Trustee is located.
73
"Lien" means any mortgage, pledge, security interest, conditional sale or
other title retention agreement or other similar lien.
"Mafco Consolidated Group" means the "Affiliated Group" (within the
meaning of Section 1504(a)(1) of the Code) of which Mafco Holdings is the
common parent.
"Mafco Holdings" means Mafco Holdings Inc., a Delaware corporation, and
its successors.
"Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only
as and when received, but excluding any other consideration received in the
form of assumption by the acquiring Person of Debt or other obligations
relating to such properties or assets or received in any other noncash form)
therefrom, in each case net of:
(i) all legal, title and recording tax expenses, commissions and other
fees and expenses incurred, and all Federal, state, provincial,
foreign and local taxes required or estimated in good faith to be
required to be accrued as a liability under GAAP, as a consequence
of such Asset Disposition;
(ii) all payments made on any Debt which is secured by any assets subject
to such Asset Disposition, in accordance with the terms of any Lien
upon or other security agreement of any kind with respect to such
assets, or which must by its terms, or in order to obtain a
necessary consent to such Asset Disposition, or by applicable law be
repaid out of the proceeds from or in connection with such Asset
Disposition and;
(iii) all distributions and other payments required to be made to minority
interest holders in Subsidiaries or joint ventures as a result of
such Asset Disposition;
provided, however, that in connection with an Asset Disposition to a Subsidiary
of the Company (other than a Wholly Owned Recourse Subsidiary), Net Available
Cash will be deemed to be a percentage of Net Available Cash (as calculated
above) equal to (A) 100% minus (B) the Company's percentage ownership in such
Subsidiary.
"Net Cash Proceeds," with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or estimated in
good faith to be payable as a result thereof.
"Non-Convertible Capital Stock" means, with respect to any corporation,
any non-convertible Capital Stock of such corporation and any Capital Stock of
such corporation convertible solely into non-convertible common stock of such
corporation; provided, however, that Non-Convertible Capital Stock shall not
include any Redeemable Stock or Exchangeable Stock.
"Non-Recourse Debt" means Debt or that portion of Debt (i) as to which
neither the Company nor its Subsidiaries (other than a Non-Recourse Subsidiary)
(A) provide credit support (including any undertaking, agreement or instrument
which would constitute Debt), (B) is directly or indirectly liable or (C)
constitute the lender and (ii) no default with respect to which (including any
rights which the holders thereof may have to take enforcement action against
the assets of a Non-Recourse Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Debt of the Company or its Subsidiaries
(other than Non-Recourse Subsidiaries) to declare a default on such other Debt
or cause the payment thereof to be accelerated or payable prior to its Stated
Maturity.
"Non-Recourse Subsidiary" means a Subsidiary of the Company (i) which has
been designated as such by the Company, (ii) which has no Debt other than
Non-Recourse Debt and (iii) which is in the same line of business as the
Company and its Wholly Owned Recourse Subsidiaries existing on the Issue Date
or in businesses reasonably related thereto.
"Obligations" means (a) the full and punctual payment of Principal of and
interest, if any, on the Notes when due, whether at maturity, by acceleration,
by redemption or otherwise, and all other monetary obligations of the Company
under this Indenture and the Notes and (b) the full and punctual performance of
all other obligations of the Company under this Indenture and the Notes.
74
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer, an Assistant Treasurer or the Secretary or an
Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, Vice Chairman, the President or a Vice President (regardless of Vice
Presidential designation), and by the Treasurer, an Assistant Treasurer,
Secretary or an Assistant Secretary, of the Company and delivered to the
Trustee. One of the Officers signing an Officers' Certificate given pursuant to
the last paragraph under "--Defaults" above shall be the principal executive,
financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company (or to Parent or one of its Subsidiaries or the
Trustee).
"Parent" means Revlon, Inc., a Delaware corporation, and any other Person
which acquires or owns directly or indirectly 80% or more of the voting power
of the Voting Stock of the Company.
"Parent Guarantee" means a guarantee on the terms set forth in the
Indenture by the Parent Guarantor of the Company's obligations with respect to
the Notes.
"Parent Guarantor" means Revlon, Inc., a Delaware corporation, and its
successors.
"Pari Passu Debt" means the following obligations, whether outstanding on
the Issue Date or thereafter created, incurred or assumed, and whether at any
time owing actually or contingent:
(i) all obligations consisting of the Bank Debt, the Notes, the 9%
Senior Notes and the 8 1/8% Senior Notes;
(ii) all obligations consisting of the principal of and premium (if any)
and accrued and unpaid interest (including interest accruing on or
after the filing of any petition in bankruptcy or for reorganization
relating to the Company), and all fees, expenses and other amounts
in respect of (A) indebtedness of the Company for money borrowed and
(B) indebtedness evidenced by notes, debentures, bonds or other
similar instruments for the payment of which the Company is
responsible or liable;
(iii) all Capital Lease Obligations of the Company;
(iv) all obligations of the Company (A) for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar
credit transaction, (B) under interest rate swaps, caps, collars,
options and similar arrangements and foreign currency hedges entered
into in respect of any obligations described in clauses (i), (ii)
and (iii) or (C) Issued or assumed as the deferred purchase price of
property and all conditional sale obligations of the Company and all
obligations of the Company under any title retention agreement;
(v) all obligations of other Persons of the type referred to in clauses
(ii), (iii) and (iv) and all dividends of other persons for the
payment of which, in either case, the Company is responsible or
liable as obligor, guarantor or otherwise, including by means of any
agreement which has the economic effect of a guarantee; and
(vi) all obligations consisting of Refinancings of any obligation
described in clauses (i), (ii), (iii), (iv) or (v);
unless, in the case of any particular obligation, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is
provided that such obligations are subordinate in right of payment to the
Notes. However, Pari Passu Debt will not include:
(1) any obligation of the Company to any Subsidiary of the Company or
any Permitted Affiliate Debt;
(2) any liability for Federal, state, local or other taxes owed or owing
by the Company;
(3) any accounts payable or other liability to trade creditors arising
in the ordinary course of business (including guarantees thereof or
instruments evidencing such liabilities);
75
(4) any indebtedness, guarantee or obligation of the Company (including
the 8 5/8% Senior Subordinated Notes) that is subordinate or junior
in any respect to any other indebtedness, guarantee or obligation of
the Company; or
(5) that portion of any Debt which at the time of Issuance is issued in
violation of the Indenture; provided, however, that in the case of
this clause (5), (A) any Debt Issued to any person who had no actual
knowledge that the Issuance of such Debt was not permitted under the
Indenture and who received on the date of Issuance thereof a
certificate from an officer of the Company to the effect that the
Issuance of such Debt would not violate the Indenture shall
constitute Pari Passu Debt and (B) any Debt arising from the
honoring by a bank or other financial institution of a check, draft
or similar instrument inadvertently (except in the case of daylight
overdrafts) drawn against insufficient funds in the ordinary course
of business shall constitute Pari Passu Debt provided that such Debt
would normally be extinguished within three Business Days of
Issuance.
"Permitted Affiliate" means any individual that is a director or officer
of the Company, of Parent, of a Subsidiary of the Company or of an Unrestricted
Affiliate; provided, however, that such individual is not also a director or
officer of Mafco Holdings or any Person that controls Mafco Holdings.
"Permitted Affiliate Debt" means (i) Debt Issued to an Affiliate of the
Company representing amounts owing by the Company pursuant to the Tax Sharing
Agreement and (ii) Debt Issued to an Affiliate of the Company to the extent of
cash actually received by the Company, which cash either is required to be
advanced or contributed to the Company pursuant to the terms of the Credit
Agreement or any Refinancing thereof or, if not advanced or contributed to the
Company, would lead to a default under the Credit Agreement or any Refinancing
thereof.
"Permitted Holders" means Ronald O. Perelman (or in the event of his
incompetence or death, his estate, heirs, executor, administrator, committee or
other personal representative (collectively, "heirs")) or any Person
controlled, directly or indirectly, by Ronald O. Perelman or his heirs.
"Permitted Transactions" means (i) any transaction or series of similar
transactions (including the purchase, sale, lease or exchange of any property
or the rendering of any service) between the Company or any Subsidiary of the
Company, on the one hand, and any Affiliate of the Company or any legal or
beneficial owner of 10% or more of the voting power of Voting Stock of the
Company or an Affiliate of any such owner, on the other hand, existing on, or
pursuant to an agreement in effect on, the Issue Date and disclosed on a
schedule to the Indenture and any amendments thereto which do not adversely
affect the rights of the Holders and (ii) any Tax Sharing Agreement.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"Preferred Stock," as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Primary First-Lien Obligations" means at any time, the obligations that
are represented by the Person serving at that time as the Controlling Party
under (and as defined in) in the Collateral Agency Agreement.
"principal" of a Note as of any date means the principal of the Note as of
such date.
"Public Debt" means obligations of the Company or of a Guarantor evidenced
by bonds, debentures, notes and similar instruments issued in a manner and
pursuant to documentation customary in the intended market for obligations
publicly traded or traded in the high yield bond or other private placement or
similar market primarily among financial institutions (other than any such
obligations that are traded primarily among commercial banks).
76
"Public Equity Offering" means an underwritten public offering of equity
securities of the Company or Revlon, Inc. pursuant to an effective registration
statement under the Securities Act.
"Put Amount" as of any date means, with respect to each $1,000 principal
amount of Notes, 101% of the outstanding principal amount thereof as of the
date of repurchase.
"Redeemable Stock" means any Capital Stock that by its terms or otherwise
is required to be redeemed on or prior to the first anniversary of the Stated
Maturity of the Notes or is redeemable at the option of the holder thereof at
any time on or prior to the first anniversary of the Stated Maturity of the
Notes.
"Refinance" means, in respect of any Debt, to refinance, extend, renew,
refund, repay, prepay, redeem, defease or retire, or to issue Debt in exchange
or replacement for, such Debt. "Refinanced" and "Refinancing" shall have
correlative meanings.
"Refinancing Costs" means, with respect to any Debt being Refinanced, any
premium actually paid thereon and reasonable costs and expenses, including
underwriting discounts, in connection with such Refinancing.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Documents" means, collectively, the pledge agreements, security
agreements and mortgages listed on Schedule II of the Indenture and all other
security documents delivered to the Collateral Agent on November 30, 2001
granting a security interest in any assets of any Person to secure the
Obligations, in each case as the same may be amended, restated, supplemented or
otherwise modified from time to time.
"Shelf Registration Statement" has the meaning ascribed thereto in the
Registration Agreement.
"Significant Subsidiary" means:
(i) any Subsidiary (other than a Non-Recourse Subsidiary) of the Company
which at the time of determination either (A) had assets which, as
of the date of the Company's most recent quarterly consolidated
balance sheet, constituted at least 5% of the Company's total assets
on a consolidated basis as of such date, in each case determined in
accordance with GAAP, or (B) had revenues for the 12-month period
ending on the date of the Company's most recent quarterly
consolidated statement of income which constituted at least 5% of
the Company's total revenues on a consolidated basis for such
period; or
(ii) any Subsidiary of the Company (other than a Non-Recourse Subsidiary)
which, if merged with all Defaulting Subsidiaries (as defined below)
of the Company, would at the time of determination either (A) have
had assets which, as of the date of the Company's most recent
quarterly consolidated balance sheet, would have constituted at
least 10% of the Company's total assets on a consolidated basis as
of such date or (B) have had revenues for the 12-month period ending
on the date of the Company's most recent quarterly consolidated
statement of income which would have constituted at least 10% of the
Company's total revenues on a consolidated basis for such period
(each such determination being made in accordance with GAAP).
"Stated Maturity" means, with respect to any security, the date specified
in such security as the fixed date on which the principal of such security is
due and payable, including pursuant to any mandatory redemption provision (but
excluding any provision providing for the repurchase of such security at the
option of the holder thereof upon the happening of any contingency).
"Subordinated Obligation" means any Debt of the Company (whether
outstanding on the date hereof or hereafter Issued) which is subordinate or
junior in right of payment to the Notes.
"Subsidiary" means, with respect to any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of shares of Capital Stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned, directly or indirectly, by (i) such Person, (ii) such
Person and one or more Subsidiaries of such Person or (iii) one or more
Subsidiaries of such Person.
77
"Subsidiary Guarantee" means a guarantee on the terms set forth in the
Indenture by a Subsidiary Guarantor of the Company's obligations with respect
to the Notes.
"Subsidiary Guarantors" means, collectively, the Subsidiaries of the
Company party to the Indenture and any Subsidiary that executes a Subsidiary
Supplemental Indenture pursuant to the Indenture.
"Tax Sharing Agreement" means:
(i) that certain agreement dated June 24, 1992, as amended, among the
Company, certain of its Subsidiaries, Revlon Holdings, Inc., Revlon,
Inc. and Mafco Holdings; and
(ii) any other tax allocation agreement between the Company or any of its
Subsidiaries with any direct or indirect shareholder of the Company
with respect to consolidated or combined tax returns including the
Company or any of its Subsidiaries but only to the extent that
amounts payable from time to time by the Company or any such
Subsidiary under any such agreement do not exceed the corresponding
tax payments that the Company or such Subsidiary would have been
required to make to any relevant taxing authority had the Company or
such Subsidiary not joined in such consolidated or combined returns,
but instead had filed returns including only the Company or its
Subsidiaries (provided that any such agreement may provide that, if
the Company or any such Subsidiary ceases to be a member of the
affiliated group of corporations of which Mafco Holdings is the
common parent for purposes of filing a consolidated Federal income
tax return (such cessation, a "Deconsolidation Event"), then the
Company or such Subsidiary shall indemnify such direct or indirect
shareholder with respect to any Federal, state or local income,
franchise or other tax liability (including any related interest,
additions or penalties) imposed on such shareholder as the result of
an audit or other adjustment with respect to any period prior to
such Deconsolidation Event that is attributable to the Company, such
Subsidiary or any predecessor business thereof (computed as if the
Company, such Subsidiary or such predecessor business, as the case
may be, were a stand-alone entity that filed separate tax returns as
an independent corporation), but only to the extent that any such
tax liability exceeds any liability for taxes recorded on the books
of the Company or such Subsidiary with respect to any such period).
"Temporary Cash Investments" means any of the following:
(i) any investment in direct obligations of the United States of America
or any agency thereof or obligations guaranteed by the United States
of America or any agency thereof, in each case, maturing within 360
days of the date of acquisition thereof;
(ii) investments in time deposit accounts, certificates of deposit and
money market deposits maturing within 180 days of the date of
acquisition thereof issued by a bank or trust company (including the
Trustee) which is organized under the laws of the United States of
America, any state thereof or any foreign country recognized by the
United States of America having capital, surplus and undivided
profits aggregating in excess of $250.0 million and whose debt is
rated "A" (or such similar equivalent rating) or higher by at least
one nationally recognized statistical rating organization (as
defined in Rule 436 under the Securities Act) or any money-market
fund sponsored by any registered broker dealer or mutual fund
distributor;
(iii) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (i) above
entered into with a nationally recognized broker-dealer;
(iv) investments in commercial paper, maturing not more than 90 days
after the date of acquisition, issued by a corporation (other than
an Affiliate or Subsidiary of the Company) organized and in
existence under the laws of the United States of America or any
foreign country recognized by the United States of America with a
rating at the time as of which any investment therein is made of
"P-2" (or higher) according to Moody's Investors Service, Inc. or
"A-2" (or higher) according to Standard and Poor's Corporation;
78
(v) securities with maturities of six months or less from the date of
acquisition backed by standby or direct pay letters of credit issued
by any bank satisfying the requirements of clause (ii) above; and
(vi) securities with maturities of six months or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States of America, or by any political
subdivision or taxing authority thereof, and rated at least "A" by
Standard & Poor's Corporation or "A" by Moody's Investors Service,
Inc.
"Trust Officer" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer its corporate trust matters.
"Trustee" means the party named in the Indenture until a successor
replaces it and, thereafter, means the successor.
"Unrestricted Affiliate" means a Person (other than a Subsidiary of the
Company) controlled (as defined in the definition of an "Affiliate") by the
Company, in which no Affiliate of the Company (other than (x) a Wholly Owned
Recourse Subsidiary of the Company, (y) a Permitted Affiliate and (z) another
Unrestricted Affiliate) has an Investment.
"U.S. Dollar Equivalent" means with respect to any monetary amount in a
currency other than U.S. dollars, at any time for determination thereof, the
amount of U.S. dollars obtained by converting such foreign currency involved in
such computation into U.S. dollars at the spot rate for the purchase of U.S.
dollars with the applicable foreign currency as published in The Wall Street
Journal in the "Exchange Rates" column under the heading "Currency Trading" on
the date two Business Days prior to such determination.
Except as described under "Certain Covenants--Limitation on Debt,"
whenever it is necessary to determine whether the Company has complied with any
covenant in the Indenture or a Default has occurred and an amount is expressed
in a currency other than U.S. dollars, such amount will be treated as the U.S.
Dollar Equivalent determined as of the date such amount is initially determined
in such currency.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable at the issuer's option.
"Voting Stock" of a corporation means all classes of Capital Stock of such
corporation then outstanding and normally entitled to vote in the election of
directors.
"Wholly Owned Recourse Subsidiary" means a Subsidiary of the Company
(other than a Non-Recourse Subsidiary) all the Capital Stock of which (other
than directors' qualifying shares) is owned by (i) the Company, (ii) the
Company and one or more Wholly Owned Recourse Subsidiaries or (iii) one or more
Wholly Owned Recourse Subsidiaries.
BOOK ENTRY; DELIVERY AND FORM
The original notes were and the exchange notes will be initially issued in
the form of one or more Global Securities registered in the name of The
Depository Trust Company ("DTC") or its nominee.
Upon the issuance of a Global Security, DTC or its nominee will credit the
accounts of Persons holding through it with the respective principal amounts of
the Notes represented by such Global Security purchased by such Persons in the
offering. Such accounts shall be designated by the initial purchasers.
Ownership of beneficial interests in a Global Security will be limited to
Persons that have accounts with DTC ("participants") or Persons that may hold
interests through participants. Ownership of beneficial interests in a Global
Security will be shown on, and the transfer of that ownership interest will be
effected only through, records maintained by DTC (with respect to participants'
interests) and such participants (with respect to the owners of beneficial
interests in such Global Security other than participants). The laws of some
jurisdictions require that certain purchasers
79
of securities take physical delivery of such securities in definitive form.
Such limits and such laws may impair the ability to transfer beneficial
interests in a Global Security.
Payment of principal of and interest on Notes represented by a Global
Security will be made in immediately available funds to DTC or its nominee, as
the case may be, as the sole registered owner and the sole holder of the Notes
represented thereby for all purposes under the Indenture. The Company has been
advised by DTC that upon receipt of any payment of principal of or interest on
any Global Security, DTC will immediately credit, on its book entry
registration and transfer system, the accounts of participants with payments in
amounts proportionate to their respective beneficial interests in the principal
or face amount of such Global Security as shown on the records of DTC. Payments
by participants to owners of beneficial interests in a Global Security held
through such participants will be governed by standing instructions and
customary practices as is now the case with securities held for customer
accounts registered in "street name" and will be the sole responsibility of
such participants.
A Global Security may not be transferred except as a whole by DTC or a
nominee of DTC to a nominee of DTC or to DTC. A Global Security is exchangeable
for certificated Notes only if:
(a) DTC notifies the Company that it is unwilling or unable to continue
as a depositary for such Global Security or if at any time DTC ceases to be
a clearing agency registered under the Exchange Act,
(b) the Company in its discretion at any time determines not to have
all the Notes represented by such Global Security, or
(c) there shall have occurred and be continuing a Default or an Event
of Default with respect to the Notes represented by such Global Security.
Any Global Security that is exchangeable for certificated Notes pursuant
to the preceding sentence will be exchanged for certificated Notes in
authorized denominations and registered in such names as DTC or any successor
depositary holding such Global Security may direct. Subject to the foregoing, a
Global Security is not exchangeable, except for a Global Security of like
denomination to be registered in the name of DTC or any successor depositary or
its nominee. In the event that a Global Security becomes exchangeable for
certificated Notes,
(a) certificated Notes will be issued only in fully registered form in
denominations of $1,000 or integral multiples thereof,
(b) payment of principal of, and premium, if any, and interest on, the
certificated Notes will be payable, and the transfer of the certificated
Notes will be registerable, at the office or agency of the Company
maintained for such purposes, and
(c) no service charge will be made for any registration of transfer or
exchange of the certificated Notes, although the Company may require
payment of a sum sufficient to cover any tax or governmental charge imposed
in connection therewith.
So long as DTC or any successor depositary for a Global Security, or any
nominee, is the registered owner of such Global Security, DTC or such successor
depositary or nominee, as the case may be, will be considered the sole owner or
holder of the Notes represented by such Global Security for all purposes under
the Indenture and the Notes. Except as set forth above, owners of beneficial
interests in a Global Security will not be entitled to have the Notes
represented by such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of certificated Notes in definitive
form and will not be considered to be the owners or holders of any Notes under
such Global Security. Accordingly, each Person owning a beneficial interest in
a Global Security must rely on the procedures of DTC or any successor
depositary, and, if such Person is not a participant, on the procedures of the
participant through which such Person owns its interest, to exercise any rights
of a Holder under the Indenture. The Company understands that under existing
industry practices, in the event that the Company requests any action of
Holders or that an owner of a beneficial interest in a Global Security desires
to give or take any action which a Holder is entitled
80
to give or take under the Indenture, DTC or any successor depositary would
authorize the participants holding the relevant beneficial interest to give or
take such action and such participants would authorize beneficial owners owning
through such participants to give or take such action or would otherwise act
upon the instructions of beneficial owners owning through them.
DTC has advised the Company that DTC is a limited purpose trust company
organized under the Banking Law of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code and a "clearing agency" registered under the
Exchange Act. DTC was created to hold the securities of its participants and to
facilitate the clearance and settlement of securities transactions among its
participants in such securities through electronic book entry changes in
accounts of the participants, thereby eliminating the need for physical
movement of securities certificates. DTC's participants include securities
brokers and dealers (which may include the initial purchasers), banks, trust
companies, clearing corporations and certain other organizations some of whom
(or their representatives) own DTC. Access to DTC's book entry system is also
available to others, such as banks, brokers, dealers and trust companies, that
clear through or maintain a custodial relationship with a participant, either
directly or indirectly.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in Global Securities among participants of DTC, it is
under no obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. None of the Company, the Trustee or
the initial purchasers will have any responsibility for the performance by DTC
or its participants or indirect participants of their respective obligations
under the rules and procedures governing their operations.
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DESCRIPTION OF THE COLLATERAL AND INTERCREDITOR ARRANGEMENTS
The following summary of our collateral and intercreditor arrangements is
subject to and qualified in its entirety by reference to the detailed
provisions of the security and pledge agreements, the collateral agency
agreement and the other agreements relating to collateral. We urge you to read
those agreements and the indenture governing the notes because they, and not
this description, define your rights as a holder of notes. Copies of such
agreements are available upon request to us.
COLLATERAL
The original notes are and the exchange notes will be secured on a
second-priority basis by liens on substantially the same assets that secure our
borrowings under the 2001 credit agreement on a first-priority basis. The
second-priority liens on the collateral run in favor of a collateral agent for
the benefit of the holders of the notes and certain other permitted future
obligations described below and are subject to the terms of the collateral
agency agreement described below.
The collateral securing the notes consists primarily of the following
assets that are owned by us and our domestic subsidiaries or, in the case of
our capital stock, by Revlon, Inc., subject to certain limited exceptions:
o our capital stock;
o the capital stock of our domestic subsidiaries;
o 66% of the capital stock of foreign subsidiaries held directly by us or a
domestic subsidiary;
o our facility located in Oxford, North Carolina;
o domestic inventory, equipment and accounts receivable; and
o U.S. patents, copyrights, trademarks and other domestic intangibles.
The collateral is also subject to liens in favor of holders of certain of
our other debt and non-debt obligations as follows:
First, in addition to the 2001 credit agreement and the notes, the
indenture for the notes permits us to incur additional secured debt that
can be secured by a lien on the same collateral subject to the limit
described in the next sentence. We are also permitted by the indenture to
refinance the 2001 credit agreement, the notes and any such additional
secured debt, in whole or in part, with debt secured by a lien on the same
collateral so long as the aggregate principal amount of the debt so secured
under the 2001 credit agreement, the notes, any such additional secured
debt and any refinancings thereof does not exceed $675.0 million when
incurred.
Second, certain other lines of credit at some of our foreign
subsidiaries are or will be guaranteed by us, and our obligations under
those guarantees will also be secured by a lien on the collateral. As at
December 31, 2001, in addition to foreign borrowings under the 2001 credit
agreement, there was approximately $2.5 million available under those lines
of credit and in the future we may have up to a total of $30 million
available under those or other lines at our foreign subsidiaries secured by
the collateral.
Third, certain types of our other obligations, such as those arising
under our hedging, foreign exchange and cash management arrangements, are
and may in the future also be secured by a lien on the collateral. See
"Description of Notes -- Certain Covenants -- Limitations on Liens."
If Revlon, Inc. or any of its subsidiaries, including us, but excluding
any foreign subsidiaries in respect of foreign borrowings, grants a lien on
additional assets in the future for the benefit of the lenders under the 2001
credit agreement or any replacement thereof (or, if neither the 2001 credit
agreement nor any replacement thereof then exists, to other holders of
first-lien obligations), we will also be required by the indenture governing
the notes to grant a second-priority lien on those additional assets to the
collateral agent for the benefit of the holders of the notes and any other
second-lien obligations.
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The foreign lines of credit that are secured by the collateral, as well as
borrowings by certain of our foreign subsidiaries under a portion of the 2001
credit agreement, may also be secured by assets of our foreign subsidiaries
that are not included in the collateral. In addition, other permitted debt may
be secured by other assets not included in the collateral to the extent
permitted by the indenture.
The obligations referred to in clauses "Second" and "Third" above share
the first-priority liens on the collateral with the 2001 credit agreement.
Except in certain circumstances, the indenture for the notes permits the other
obligations described above to share either the first-priority liens or the
second-priority liens on the collateral as we elect. See "Description of Notes
- -- Certain Covenants -- Limitation on Liens."
EXERCISE OF REMEDIES AND APPLICATION OF PROCEEDS
All rights against the collateral of the second-lien collateral agent and
the holders of second-lien obligations, including the holders of the notes, are
subject to the terms and provisions of the collateral agency agreement.
The decision of whether, and to what extent, to exercise remedies against
the collateral will be solely at the direction of the controlling party under
the collateral agency agreement. Initially, and for so long as the 2001 credit
agreement is in effect, the controlling party under the collateral agency
agreement will be the administrative agent under the 2001 credit agreement,
acting at the direction of the lenders under the 2001 credit agreement. In the
future, the controlling party will be a representative of holders of first-lien
obligations during any period while any first-lien obligations exist.
The second-lien collateral agent and the holders of the second-lien
obligations, including the holders of the notes, do not have any right to
initiate or direct the exercise of remedies against the collateral while any
first-lien obligations exist. As a result, even following an Event of Default
under the indenture governing the notes and an acceleration of the debt
evidenced by the notes, neither the trustee nor the holders of the notes have
any right or ability to exercise or cause the exercise of remedies against the
collateral while any first-lien obligations exist. During any period when no
first-lien obligations exist, the controlling party will be the trustee under
the indenture or another representative of the holders of the second-lien
obligations, in each case, acting at the direction of a majority in interest of
those holders.
The controlling party is not entitled to direct, and the collateral agent
will have no right to commence, the exercise of remedies against the collateral
except upon certain bankruptcy events or upon our failure to pay the principal
amount due on any obligations included in the class that the controlling party
represents at any date when the principal amount of such obligations shall have
been declared or become due and payable or at final maturity. If the
second-lien collateral agent or any holder of notes receives any cash proceeds
or other monies in respect of the collateral by exercise of rights of set-off
or otherwise at any time when the controlling party would be entitled to direct
the exercise of remedies against the collateral, such proceeds or monies are
required to be delivered to the controlling party to be applied in accordance
with the collateral agency agreement.
The cash proceeds of any sales of, or collections on, any collateral
received upon or during the exercise of remedies will be applied pursuant to
the collateral agency agreement in the following order of priority:
o First, to the payment of all collection and collateral administration
expenses of the first-lien collateral agent (or, if no first-lien
obligations then exist, the second-lien collateral agent);
o Second, to the payment of all first-lien obligations, including the 2001
credit agreement, the other foreign lines and our hedging, foreign
exchange and cash management liabilities described above;
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o Third, to the payment of all second-lien obligations, including the
notes, on a pro rata basis; and
o Fourth, to us.
RELEASES OF COLLATERAL
The indenture and the collateral agency agreement permit the
second-priority liens on the collateral to be released in the following
circumstances:
First, if we wish to sell, transfer or otherwise dispose of any asset
included in the collateral in a transaction that will not violate the
asset disposition covenant in the indenture governing the notes, then we
will be entitled to a release of the second-priority lien on that asset in
order to complete that sale or disposition. If the net proceeds of that
transaction are required by the indenture governing the notes to be
reinvested in assets, the reinvestment assets will be subject to the
second-priority liens as well as the first-priority liens.
Second, if we wish to obtain the release of an asset from the
second-priority lien under other circumstances, we will be entitled to do
so if we mail written notice of our request to the trustee and the holders
of the notes and if we do not receive written objections from holders of
at least 25% in principal amount of the notes within 20 business days
after that mailing. If we receive such objections, then we will not be
entitled to that release unless we obtain the consent of at least 66 2/3%
in principal amount of the notes.
Third, in addition to the releases described above, if the controlling
party under the collateral agency agreement consents to any release of an
asset from the first-priority lien or if no first-priority lien then
exists, then we will be entitled to the release of that asset from the
second-priority lien upon request if (i) the aggregate value of all
collateral released under this clause (i) does not exceed $5 million per
annum on a cumulative basis, (ii) we provide substitute additional
collateral having a fair value at least equal to the fair value of the
collateral that is so released and which shall also be subject to the
first-lien collateral documents or (iii) the release relates solely to
assets, property or business being acquired or constructed after November
26, 2001 and is to enable all or part of the purchase price of, or Capital
Lease Obligations with respect to, such assets, property or business to be
secured by a "purchase money lien" (a lien permitted by clause (3) under
"Description of Notes--Limitation on Liens" that relates solely to such
assets, property or business).
Fourth, if all of the stock of any of our subsidiaries that is pledged
to the collateral agent is released from the second-priority lien under
any of the circumstances described above, then we will be entitled to the
release of the assets of that subsidiary from the second-priority liens as
well. If any notice given under paragraph "Second" above relates to the
release of all the stock of a subsidiary, the notice must also state that
all the assets of the subsidiary comprising collateral will be released as
well. If the stock of any of our subsidiaries is released under the
circumstances described in clause (ii) in paragraph "Third" above, the
substitute additional collateral must have a fair value at least equal to
the fair value (without duplication) of the stock of the subsidiary and
the assets of the subsidiary so released.
The second-lien collateral agent, for itself and on behalf of each holder
of notes, has granted the first-lien collateral agent a power of attorney to
accomplish the purposes of the foregoing release provisions (except with
respect to paragraph "Second" above) in the place of the second-lien collateral
agent.
AMENDMENT TO COLLATERAL DOCUMENTS
We are not permitted to amend or modify, or seek a consent under, any of
the security agreements, pledge agreements, mortgages or other documents that
create the second-priority liens on the collateral in any way that would be
adverse to the holders of the notes in any material respect except in the
following circumstances:
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First, if the controlling party under the collateral agency agreement
agrees to any amendment or waiver of, or consent under, any provision of
the first-lien collateral documents, then such amendment, waiver or
consent will automatically apply to the comparable provision of the
comparable second-lien collateral document. Any amendments, waivers or
consents that effect a release of collateral from the second liens,
however, will not be permitted except as provided under "Releases of
Collateral" above.
Second, if we wish to obtain an amendment or waiver or seek a consent
under any second-lien collateral document under other circumstances, we
will be entitled to do so if we mail written notice of our request to the
trustee and the holders of the notes and if we do not receive written
objections from holders of at least 25% in principal amount of the notes
within 20 business days after that mailing. If we receive such objections,
then we will not be entitled to effect that amendment or waiver, and such
consent will not be effective, unless we obtain the consent of a majority
in principal amount of the notes.
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DESCRIPTION OF OTHER INDEBTEDNESS
Each of the following summaries of our indebtedness is subject to and
qualified in its entirety by reference to the detailed provisions of the
respective agreements and instruments to which each summary relates. Copies of
such agreements and instruments are available upon request to us or the initial
purchasers.
THE 2001 CREDIT AGREEMENT
The 2001 credit agreement provides up to $250.0 million in credit
facilities and is comprised of two senior secured facilities provided by a
syndicate of lenders: a term loan facility of $117.9 million (the "Term Loan
Facility"), and a $132.1 million multi-currency revolving credit facility (the
"Revolving Credit Facility", together with the Term Loan Facility, the "Credit
Facilities"). The Revolving Credit Facility is available (i) to us in revolving
credit loans denominated in U.S. dollars (the "Revolving Credit Loans"), (ii)
to us as swing loans (subject to a sub-limit of no more than $30.0 million)
and/or letters of credit (subject to a sub-limit of no more than $50.0 million)
denominated in U.S. dollars (the "Letters of Credit") and (iii) to us and
certain of our international subsidiaries designated from time to time in
revolving credit loans and bankers' acceptances denominated in U.S. dollars and
other currencies (the "Local Loans").
The Credit Facilities (other than the Local Loans) bear interest at a rate
equal to, at our option, either (i) the Alternate Base Rate (as defined in the
2001 credit agreement) plus 3.75%; or (B) the Eurodollar Rate (as defined in
the 2001 credit agreement) plus 4.75%. Local Loans bear interest at a rate
equal to the Eurocurrency Rate (as defined in the 2001 credit agreement) or, if
the lender making the Local Loan agrees, the local lender rate, in each case
plus 4.75%. The Credit Facilities require the payment of the following fees:
(i) 0.75% of the average daily unused portion of the Revolving Credit Facility,
(ii) 0.25% of the outstanding amount of any Local Loan, and (iii) 4.75% of the
aggregate undrawn face amounts of outstanding Letters of Credit. In addition,
we paid certain facility and other fees to the lenders and agents upon closing
of the 2001 credit agreement. Prior to its termination date, the commitments
under the Credit Facilities will be reduced by: (i) the net proceeds received
from sales of assets by us or our subsidiaries and (ii) the net proceeds from
the issuance by Revlon, Inc., us or any of our subsidiaries of certain
indebtedness for borrowed money, subject, in each case, to certain limited
exceptions. The 2001 credit agreement will terminate on May 30, 2005.
The Credit Facilities, subject to certain exceptions and limitations, are
supported by guarantees from Revlon, Inc. and our domestic subsidiaries and,
with respect to the Local Loans, by us. Our obligations under the Credit
Facilities and the obligations under the aforementioned guarantees are secured
on a first-priority basis, subject to certain limited exceptions, primarily by
(i) a mortgage on our facility in Oxford, North Carolina; (ii) our capital
stock, the capital stock of our domestic subsidiaries and 66% of the capital
stock of our first tier foreign subsidiaries; (iii) domestic intellectual
property and intangibles; (iv) domestic inventory, equipment and accounts
receivable; and (v) certain assets of certain international subsidiaries who
are borrowers of Local Loans (to support their borrowings only). The 2001
credit agreement provides that the liens on the stock and property described
above may be shared from time to time with specified types of other obligations
incurred or guaranteed by us, such as interest rate hedging obligations and
certain working capital lines and permits second-priority liens on such stock
and property to secure the notes.
The 2001 credit agreement contains various restrictive covenants
prohibiting us and our subsidiaries from (i) with certain exceptions, incurring
additional indebtedness or guarantees, (ii) making dividend, tax sharing
payments and other restricted payments to any of our parent companies or
affiliates, including payments under such tax sharing agreements on account of
U.S. federal gains taxes due with respect to asset sales, in each case with
certain exceptions, (iii) creating liens or other encumbrances on our assets or
revenues, granting negative pledges or selling or transferring any of our
assets except in the ordinary course of business, all subject to certain
limited exceptions, (iv) with certain exceptions, engaging in merger or
acquisition transactions, (v) prepaying indebtedness, subject to certain
limited exceptions, and modifying the terms of certain indebtedness and
material contractual obligations, (vi) making investments, subject to certain
limited exceptions,
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and (vii) entering into transactions with our affiliates other than upon terms
no less favorable to us or our subsidiaries than would be obtained in an
arms'-length transaction. In addition to the foregoing, the 2001 credit
agreement contains financial covenants requiring us to maintain minimum EBITDA
levels and a ratio of debt outstanding under the 2001 credit agreement to
EBITDA and covenants that limit the amount of our capital expenditures.
The "Events of Default" under the 2001 credit agreement include:
(i) nonpayment of any principal, interest or other fees when due,
subject in the case of interest and fees to a grace period,
(ii) non-compliance with the covenants in the 2001 credit agreement or
the ancillary security documents, subject in certain instances to
grace periods,
(iii) the institution of any bankruptcy, insolvency or similar proceeding
by or against us, any of our subsidiaries or Revlon, Inc.,
(iv) a default by Revlon, Inc. or any of its subsidiaries on certain debt
instruments,
(v) the failure by us, certain of our subsidiaries or Revlon, Inc. to
pay certain material judgments,
(vi) a change of control such that (A) Revlon, Inc. does not own 100% of
our capital stock, (B) any person (or group of persons acting in
concert) other than Ronald O. Perelman (or his heirs, estate or
other personal representative or affiliates) controls us, or if
Ronald O. Perelman (or his heirs, estate or other personal
representatives or affiliates) does not control us, any other person
(or group of persons acting in concert) owns more than 25% of our
voting power or (C) one third or more of the directors serving on
our board of directors did not either serve as a director on the
date of the closing of the 2001 credit agreement or was not
nominated as a director by at least two thirds of such continuing
directors,
(vii) the failure of Revlon, Inc. to contribute to us as a capital
contribution all of the net proceeds it receives from the sale of
(A) any of its equity securities or (B) any of our capital stock,
(viii) the failure of any of our, our subsidiaries' or Revlon, Inc.'s
representations or warranties in any of the documents entered into
in connection with the 2001 credit agreement to be correct in all
material respects when made or confirmed,
(ix) the conduct by Revlon, Inc. of any meaningful business activities
other than those that are customary for a publicly traded holding
company which is not itself an operating company, including the
ownership of meaningful assets (other than our capital stock) or,
subject to limited exceptions, the incurrence of debt, and
(x) the failure of certain of our affiliates which hold our or our
subsidiaries' indebtedness to be party to a valid and enforceable
agreement prohibiting such affiliate from demanding or retaining
payments in respect of such indebtedness.
The events of default under the 2001 credit agreement include other
customary events of default for such types of agreements.
8 1/8% SENIOR NOTES
The 8 1/8% Senior Notes due 2006, or the 8 1/8% Senior Notes, are senior
unsecured obligations of Revlon and rank pari passu in right of payment with
all our existing and future Pari Passu Debt (as defined in the indenture
relating to the 8 1/8% Senior Notes, or the 8 1/8% Senior Notes Indenture),
including the 12% Senior Secured Notes, the 9% Senior Notes and the
indebtedness under the 2001 credit agreement, and are senior to the 8 5/8%
Senior Subordinated Notes and to all our future subordinated indebtedness. The
8 1/8% Senior Notes are effectively subordinated to the outstanding indebtedness
and other liabilities of our subsidiaries. Interest is payable on February 1
and August 1.
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The 8 1/8% Senior Notes may be redeemed at our option in whole or from time
to time in part at any time on or after February 1, 2002 at the redemption
prices set forth in the 8 1/8% Senior Notes Indenture plus accrued and unpaid
interest, if any, to the date of redemption.
Upon a Change of Control (as defined in the 8 1/8% Senior Notes Indenture),
we will have the option to redeem the 8 1/8% Senior Notes in whole at a
redemption price equal to the principal amount thereof, plus accrued and unpaid
interest, if any, thereon to the date of redemption plus the Applicable Premium
(as defined in the 8 1/8% Senior Notes Indenture) and, subject to certain
conditions, each holder of the 8 1/8% Senior Notes will have the right to
require us to repurchase all or a portion of such holder's 8 1/8% Senior Notes
at a price equal to 101% of the principal amount thereof, plus accrued and
unpaid interest, if any, thereon to the date of repurchase.
The 8 1/8% Senior Notes Indenture contains covenants that, among other
things, limit (i) the issuance of additional debt and redeemable stock by us,
(ii) the incurrence of liens, (iii) the issuance of debt and preferred stock by
our subsidiaries, (iv) the payment of dividends on our capital stock and that
of our subsidiaries and the redemption of our capital stock and certain
subordinated obligations, (v) the sale of assets and subsidiary stock, (vi)
transactions with affiliates and (vii) consolidations, mergers and transfers of
all or substantially all our assets. The 8 1/8% Senior Notes Indenture also
prohibits certain restrictions on distributions from subsidiaries. All of these
limitations and prohibitions, however, are subject to a number of important
qualifications.
9% SENIOR NOTES
The 9% Senior Notes due 2006, or the 9% Senior Notes, are senior unsecured
obligations of Revlon and rank pari passu in right of payment with all our
existing and future Pari Passu Debt (as defined in the indenture relating to
the 9% Senior Notes, or the 9% Senior Notes Indenture), including the 12%
Senior Secured Notes, the 8 1/8% Senior Notes and the indebtedness under the
2001 credit agreement, and are senior to the 8 5/8% Senior Subordinated Notes
and to all our future subordinated indebtedness. The 9% Senior Notes are
effectively subordinated to outstanding indebtedness and other liabilities of
our subsidiaries. Interest is payable on May 1 and November 1.
The 9% Senior Notes may be redeemed at our option in whole or from time to
time in part at any time on or after November 1, 2002 at the redemption prices
set forth in the 9% Senior Notes Indenture plus accrued and unpaid interest, if
any, to the date of redemption. In addition, at any time prior to November 1,
2001, we may redeem up to 35% of the aggregate principal amount of the 9%
Senior Notes originally issued at a redemption price of 109% of the principal
amount thereof, plus accrued and unpaid interest, if any, thereon to the date
fixed for redemption, with, and to the extent we receive, the net cash proceeds
of one or more Public Equity Offerings (as defined in the 9% Senior Notes
Indenture), provided that at least $162.5 million aggregate principal amount of
the 9% Senior Notes remains outstanding immediately after the occurrence of
each such redemption.
Upon a Change in Control (as defined in the 9% Senior Notes Indenture), we
will have the option to redeem the 9% Senior Notes in whole at a redemption
price equal to the principal amount thereof, plus accrued and unpaid interest,
if any, thereon to the date of redemption plus the Applicable Premium (as
defined in the 9% Senior Notes Indenture) and, subject to certain conditions,
each holder of the 9% Senior Notes will have the right to require us to
repurchase all or a portion of such holder's 9% Senior Notes at a price equal
to 101% of the principal amount thereof, plus accrued and unpaid interest, if
any, thereon to the date of repurchase.
The 9% Senior Notes Indenture contains covenants that, among other things,
limit (i) the issuance of additional debt and redeemable stock by us, (ii) the
incurrence of liens, (iii) the issuance of debt and preferred stock by our
subsidiaries, (iv) the payment of dividends on our capital stock and that of
our subsidiaries and the redemption of our capital stock and certain
subordinated obligations, (v) the sale of assets and subsidiary stock, (vi)
transactions with affiliates and (vii) consolidations, mergers and transfers of
all or substantially all our assets. The 9% Senior Notes Indenture also
prohibits certain restrictions on distributions from subsidiaries. All of these
limitations and prohibitions, however, are subject to a number of important
qualifications.
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8 5/8% SENIOR SUBORDINATED NOTES
The 8 5/8% Notes due 2008, or the 8 5/8% Senior Subordinated Notes, are
general unsecured obligations of Revlon and are (i) subordinate in right of
payment to all our existing and future Senior Debt (as defined in the indenture
relating to the 8 5/8% Senior Subordinated Notes, or the 8 5/8% Senior
Subordinated Notes Indenture) of Revlon, including the 12% Senior Secured
Notes, the 9% Senior Notes, the 8 1/8% Senior Notes and the indebtedness under
the 2001 credit agreement, (ii) pari passu in right of payment with all our
future senior subordinated debt, if any, and (iii) senior in right of payment
to all our future subordinated debt, if any. The 8 5/8% Senior Subordinated
Notes are effectively subordinated to the outstanding indebtedness and other
liabilities of our subsidiaries. Interest is payable on February 1 and August
1.
The 8 5/8% Senior Subordinated Notes may be redeemed at our option in whole
or from time to time in part at any time on or after February 1, 2003 at the
redemption prices set forth in the 8 5/8% Senior Subordinated Notes Indenture
plus accrued and unpaid interest, if any, to the date of redemption.
Upon a Change of Control (as defined in the 8 5/8% Senior Subordinated
Notes Indenture), we will have the option to redeem the 8 5/8% Senior
Subordinated Notes in whole at a redemption price equal to the principal amount
thereof, plus accrued and unpaid interest, if any, thereon to the date of
redemption plus the Applicable Premium (as defined in the 8 5/8% Senior
Subordinated Notes Indenture) and, subject to certain conditions, each holder
of the 8 5/8% Senior Subordinated Notes will have the right to require us to
repurchase all or a portion of such holder's 8 5/8% Senior Subordinated Notes at
a price equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, thereon to the date of repurchase.
The 8 5/8% Senior Subordinated Notes Indenture contains covenants that,
among other things, limit (i) the issuance of additional debt and redeemable
stock by us, (ii) the incurrence of liens, (iii) the issuance of debt and
preferred stock by our subsidiaries, (iv) the payment of dividends on our
capital stock and that of our subsidiaries and the redemption of our capital
stock, (v) the sale of assets and subsidiary stock, (vi) transactions with
affiliates, (vii) consolidations, mergers and transfers of all or substantially
all of our assets and (viii) the issuance of additional subordinated debt that
is senior in right of payment to the 8 5/8% Senior Subordinated Notes. The
8 5/8% Senior Subordinated Notes Indenture also prohibits certain restrictions
on distributions from subsidiaries. All of these limitations and prohibitions,
however, are subject to a number of important qualifications.
The 8 1/8% Senior Notes Indenture, the 8 5/8% Senior Subordinated Notes
Indenture and the 9% Senior Notes Indenture contain customary events of default
for debt instruments of such type.
OTHER INDEBTEDNESS
During 1992, Revlon Holdings Inc. (or "Holdings") an affiliate and
indirect wholly-owned subsidiary of Mafco Holdings, made an advance of $25.0
million to us, evidenced by subordinated noninterest-bearing demand notes. The
notes were subsequently adjusted by offsets and additional amounts loaned by
Holdings to us. In 1998, approximately $6.8 million due to us from Holdings was
offset against the notes payable to Holdings. At December 31, 2001, the balance
of $24.1 million is evidenced by noninterest-bearing promissory notes payable
to Holdings that are subordinated to our obligations under the 2001 credit
agreement.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following summary describes certain material United States federal
income tax consequences of the exchange of original notes for exchange notes
pursuant to the exchange offer and of the ownership and disposition of exchange
notes. The summary is based on the Internal Revenue Code of 1986, as amended,
(or the "Code"), and regulations, rulings and judicial decisions as of the date
hereof, all of which are subject to change, possibly on a retroactive basis.
The discussion applies only to beneficial owners that purchased the original
notes pursuant to the initial offering and that hold the notes as capital
assets within the meaning of Section 1221 of the Code. This summary is for
general information only and does not address all aspects of United States
federal income taxation that may be relevant to holders of the notes in light
of their particular circumstances or to holders subject to special rules, and
it does not address the effects of any state, local or foreign tax laws.
PROSPECTIVE HOLDERS OF EXCHANGE NOTES SHOULD CONSULT THEIR TAX ADVISORS AS
TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF EXCHANGING ORIGINAL NOTES FOR
EXCHANGE NOTES AND OF OWNING AND DISPOSING OF EXCHANGE NOTES.
The exchange of original notes for exchange notes pursuant to the exchange
offer will not constitute a taxable event for holders because there will be no
"significant modification" of the notes for U.S. federal income tax purposes.
Accordingly, the exchange notes will be treated as a continuation of the
original notes in the hands of the holders. Therefore, if you exchange your
original notes for exchange notes pursuant to the exchange offer:
o you will not recognize gain or loss in connection with the exchange
offer;
o you will have the same adjusted tax basis in the exchange notes that you
had in the original notes immediately prior to the exchange offer;
o you will have the same holding period in the exchange notes that you had
in the original notes immediately prior to the exchange; and
o the United States federal income tax consequences associated with owning
the original notes will continue to apply to the exchange notes.
TAX CONSEQUENCES TO UNITED STATES PERSONS
For purposes of the following discussion, a "United States person" means a
beneficial owner of an exchange note that is, for United States federal income
tax purposes:
o an individual citizen or resident of the United States,
o a corporation (or other entity treated as a corporation for United States
federal income tax purposes) created or organized in or under the laws of
the United States, any State or the District of Columbia, or
o an estate or trust the income of which is subject to United States
federal income taxation regardless of its source.
If a partnership holds exchange notes, the tax treatment of a partner will
generally depend upon the status of the partner and upon the activities of the
partnership. Partners of partnerships holding exchange notes should consult
their tax advisors.
Stated Interest
Stated interest on an exchange note will generally be taxable to a United
States person as ordinary interest income at the time it is accrued or received
in accordance with the United States person's method of accounting for tax
purposes.
Original Issue Discount
As a continuation of the original notes, the exchange notes will be
treated as having been issued with original issue discount (or "OID") for
United States federal income tax purposes. In general, the
90
amount of OID with respect to an original note was equal to the excess of the
note's stated redemption price at maturity (i.e., the face amount of the note)
over its issue price (i.e., the cost of the original note).
Each United States person, regardless of the holder's accounting method,
generally must include in ordinary income a portion of the remaining OID not
previously included in income for each day during each taxable year in which an
exchange note is held, determined by using a constant yield-to-maturity method
that reflects compounding of interest. This means that each United States
person holding an exchange note will be required to include amounts in income
without a corresponding receipt of cash attributable to such income.
A United States person's adjusted tax basis in an exchange note will
generally equal the original note's issue price, increase by OID included in
income with respect to the original or exchange note.
Disposition of Exchange Notes
Upon the sale, exchange, redemption, retirement or other disposition of an
exchange note, a United States person will recognize taxable gain or loss equal
to the difference between the amount realized on the disposition and the United
States person's adjusted tax basis in the exchange note. For these purposes,
the amount realized does not include any amount attributable to accrued
interest on the exchange note, which amounts are taxable as interest as
described above.
Gain or loss realized on the sale, exchange, redemption, retirement or
other disposition of an exchange note will be capital gain or loss. Prospective
investors should consult their tax advisors regarding the treatment of capital
gains (which may be taxed at lower rates than ordinary income for taxpayers who
are individuals, trusts or estates) and losses (the deductibility of which is
subject to limitations).
Backup Withholding and Information Reporting
In general, information reporting requirements will apply to various
payments or principal and interest on the exchange notes and to the proceeds of
sale or redemption of a note unless a holder is an exempt recipient, such as a
corporation. Backup withholding tax will apply to these payments if a holder
fails to provide its taxpayer identification number or certification of foreign
or other exempt status, or if the holder fails to report the full amount of any
interest income. For 2002, the backup withholding rate is 30%.
Any amounts withheld under the backup withholding rules will be allowed as
a refund or a credit against a holder's United States federal income tax
liability if the required information is furnished to the IRS.
TAX CONSEQUENCES TO NON-UNITED STATES PERSONS
The following is a summary of certain United States federal tax
consequences that will apply to non-United States persons. The term "non-United
States person" means a beneficial owner of an exchange note that is not a
United States person.
Stated Interest and OID
A 30% United States federal withholding tax will not apply to any payment
of interest (including OID) on an exchange note to a non-United States person,
provided that the holder:
o does not actually or constructively own 10% or more of the total combined
voting power of all classes of our stock that are entitled to vote within
the meaning of section 871(h)(3) of the Code,
o is not a controlled foreign corporation that is related to us through
stock ownership, and
91
o either (a) provides its name and address, and certifies, under penalties
of perjury, that it is not a United States person, which certification
may be made on an IRS W-8BEN or successor form, or (b) holds its exchange
notes through various foreign intermediaries and satisfies the
certification requirements of applicable Treasury regulations. Special
certification and other rules apply to certain non-United States persons
that are entities rather than individuals.
If a non-United States person cannot satisfy the requirements described
above, payments of interest (including OID) will be subject to the 30% United
States federal withholding tax, unless the holder provides us with a properly
executed (1) IRS Form W-8BEN, or successor form, claiming an exemption from or
reduction in withholding under the benefit of a tax treaty or (2) IRS Form
W-8ECI, or successor form, stating that interest paid on the exchange note is
not subject to withholding tax because it is effectively connected with its
conduct of a trade or business in the United States.
If a non-United States person is engaged in a trade or business in the
United States and interest (including OID) on an exchange note is effectively
connected with the conduct of that trade or business, such holder (although
exempt from the 30% withholding tax) will be subject to United States federal
income tax on that interest (including OID) on a net income basis in the same
manner as if such holder were a United States person as defined under the Code.
In addition, if the holder is a foreign corporation, it may be subject to a
branch profits tax equal to 30% (or lower applicable treaty rate) of its
earnings and profits for the taxable year, subject to adjustments, that are
effectively connected with its conduct of a trade or business in the United
States. For this purpose, interest (including OID) will be included in earnings
and profits.
Disposition of Exchange Notes
The 30% United States federal withholding tax will not apply to any gain
that a non-United States person realizes on the sale, exchange, redemption,
retirement or other disposition of an exchange note.
Any gain realized on the disposition of an exchange note generally will
not be subject to United States federal income tax unless that gain is
effectively connected with the conduct of a trade or business in the United
States by the holder, the holder is an individual who is present in the United
States for 183 days or more in the taxable year of that disposition and other
conditions are met or the gain represents accrued interest, in which case the
rules for interest described above will apply.
United States Federal Estate Tax
The estate of an individual non-United States person will not be subject
to United States federal estate tax on an exchange note beneficially owned by
the individual at the time of his death, provided that (1) such individual did
not own 10% or more of the total combined voting power of all classes of our
voting stock (within the meaning of the Code and the U.S. Treasury regulations)
and (2) interest (including OID) on the exchange note would not have been, if
received at the time of the individual's death, effectively connected with his
conduct of a trade or business in the United States.
Information Reporting and Backup Withholding
In general, subject to the discussions above under "--Stated Interest and
OID," a holder will not be subject to backup withholding and information
reporting with respect to payments that we make to the holder provided that we
do not have actual knowledge that the holder is a United States person and the
holder has given us the statement or provided the certifications described
above under "--Stated Interest and OID."
In addition, subject to the discussion above under "--Disposition of
Exchange Notes," a holder will not be subject to backup withholding or
information reporting with respect to the proceeds of the sale or other
disposition of an exchange note within the United States or conducted through
certain United States-related financial intermediaries if the payor receives
the statements or certifications described above and does not have actual
knowledge that the holder is a United States person, as defined under the Code,
or the holder otherwise establishes an exemption.
92
Any amounts withheld under the backup withholding rules will be allowed as
a refund or a credit against a holder's United States federal income tax
liability provided the required information is furnished to the IRS.
Non-United States persons should consult their tax advisors concerning the
applicability of the above tax consequences to their particular situations,
including the necessity of satisfying various certification requirements, and
concerning the applicability of other taxes, such as estate taxes and state and
local taxes.
93
PLAN OF DISTRIBUTION
Each broker-dealer that receives exchange notes for its own account in the
exchange offer must acknowledge that it will deliver a prospectus in connection
with any resale of the exchange notes. This prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of exchange notes received in exchange for original notes where
the original notes were acquired as a result of market-making activities or
other trading activities. We have agreed that, for a period of 180 days after
the expiration date of the exchange offer, we will make this prospectus, as
amended or supplemented, available to any broker-dealer for use in connection
with any resale.
We will not receive any proceeds from any sale of exchange notes by
broker-dealers. Exchange notes received by broker-dealers for their own account
in the exchange offer may be sold from time to time in one or more transactions
in the over-the-counter market, in negotiated transactions, through the writing
of options on the exchange notes or a combination of these methods of resale.
These resales may be made at market prices prevailing at the time of resale, at
prices related to these prevailing market prices or negotiated prices. Any
resale may be made directly to purchasers or to or through brokers or dealers
who may receive compensation in the form of commissions or concessions from any
broker-dealer and/or the purchasers of any of the exchange notes. Any
broker-dealer that resells exchange notes that were received by it for its own
account in the exchange offer and any broker or dealer that participates in a
distribution of the exchange notes may be deemed to be an underwriter within
the meaning of the Securities Act, and any profit on the resale of exchange
notes and any commission or concessions received by those persons may be deemed
to be underwriting compensation under the Securities Act. And such
broker-dealer must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction,
including the delivery of a prospectus that contains information with respect
to any selling holder required by the Securities Act in connection with any
resale of the exchange notes. The letter of transmittal states that, by
acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an underwriter within the
meaning of the Securities Act.
Furthermore, any broker-dealer that acquired any of its original notes
directly from us:
o may not rely on the applicable interpretation of the staff of the SEC's
position contained in Exxon Capital Holdings Corp., SEC no-action letter
(April 13, 1988), Morgan, Stanley & Co. Inc., SEC no-action letter (June
5, 1991) and Shearman & Sterling, SEC no-action letter (July 2, 1983);
and
o must also be named as a selling noteholder in connection with the
registration and prospectus delivery requirements of the Securities Act
relating to any resale transaction.
For a period of 180 days after the expiration date of the exchange offer,
we will promptly send additional copies of this prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests these
documents in the letter of transmittal. We have agreed to pay all expenses
incident to the performance of our obligations in relation to the exchange
offer. We will indemnify the holders of the notes, including any
broker-dealers, against various liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
Certain legal matters with respect to the exchange notes will be passed
upon for us by Paul, Weiss, Rifkind, Wharton & Garrison, New York, New York and
certain other legal matters with respect to the exchange notes offered hereby
will be passed upon for us by Skadden, Arps, Slate, Meagher & Flom LLP, New
York, New York. Skadden, Arps, Slate, Meagher & Flom LLP and Paul, Weiss,
Rifkind, Wharton & Garrison have from time to time represented, and may
continue to represent, MacAndrews & Forbes and certain of its affiliates
(including us and Revlon, Inc.) in connection with certain legal matters.
94
INDEPENDENT ACCOUNTANTS
Our consolidated financial statements and the related financial statement
schedule incorporated in this prospectus by reference from our Annual Report on
Form 10-K for the year ended December 31, 2001 have been audited by KPMG LLP,
independent certified public accountants, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance
upon the report of such firm given upon their authority as experts in
accounting and auditing.
The consolidated financial statements of Revlon, Inc. and its subsidiaries
and the related financial statement schedule incorporated in this prospectus by
reference from the Annual Report on Form 10-K of Revlon, Inc. for the year
ended December 31, 2001 have been audited by KPMG LLP, independent certified
public accountants, as stated in their report, which is incorporated herein by
reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-4 under the
Securities Act with respect to our offering of the exchange notes. This
prospectus does not contain all of the information in the registration
statement. You will find additional information about us and the exchange notes
in the registration statement. Any statements made in this prospectus
concerning the provisions of legal documents are not necessarily complete and
you should read the documents that are filed as exhibits to the registration
statement.
Revlon Consumer Products Corporation is subject to the informational
requirements of the Exchange Act, and in accordance therewith files reports and
other information with the SEC. Such reports and other information can be
inspected and copied at prescribed rates at the public reference facilities
maintained by the SEC at Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Regional Office of the SEC located at Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, IL 60661. The SEC
also maintains a website that contains reports, proxy and information
statements and other information. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms. The website address is
http://www.sec.gov.
95
================================================================================
$363,000,000
[REVLON LOGO]
REVLON CONSUMER PRODUCTS CORPORATION
Offer for All Outstanding 12% Senior Secured Notes due 2005
in Exchange for 12% Senior Secured Exchange Notes due 2005,
Which Have Been Registered Under
the Securities Act of 1933
--------------
PROSPECTUS
--------------
, 2002
================================================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS OF REVLON CONSUMER PRODUCTS
CORPORATION
Section 102(b)(7) of the General Corporation Law of the State at Delaware
allows a corporation to eliminate or limit the personal liability of directors
to a corporation or its stockholders for monetary damages for a breach of
fiduciary duty as a director, except where the director breached his duty of
loyalty, failed to act in good faith, engaged in intentional misconduct or
knowingly violated a law, authorized the payment of a dividend or approved a
stock repurchase or redemption in violation of Delaware corporate law or
obtained an improper personal benefit.
Section 145 of the Delaware General Corporation Law empowers a Delaware
corporation to indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of such corporation) by reason of the fact
that such person is or was a director, officer, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, provided that such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe such person's conduct was
unlawful. A Delaware corporation may indemnify directors, officers, employees
and other agents of such corporation in an action by or in the right of a
corporation under the same conditions against expenses (including attorney's
fees) actually and reasonably incurred by the person in connection with the
defense and settlement of such action or suit, except that no indemnification
is permitted without judicial approval if the person to be indemnified has been
adjudged to be liable to the corporation. Where a present or former director or
officer of the corporation is successful on the merits or otherwise in the
defense of any action, suit or proceeding referred to above or in defense of
any claim, issue or matter therein, the corporation must indemnify such person
against the expenses (including attorneys' fees) which he or she actually and
reasonably incurred in connection therewith.
Article X of the By-laws of Revlon Consumer Products Corporation ("RCPC")
allows RCPC to purchase and maintain director and officer liability insurance on
behalf of any person who is or was a director or officer of RCPC or such person
who serves or served as a director, officer, employee or agent, of another
corporation, partnership or other enterprise at the request of RCPC. Article X
of the RCPC's By-laws provides for indemnification of the officers and directors
of RCPC to the fullest extent permitted by applicable law.
Pursuant to Section 102(b)(7) of the General Corporation Law of the State
of Delaware, Article Sixth of the Certificate of Incorporation of RCPC provides
that no director of RCPC shall be personally liable to RCPC or its stockholders
for monetary damages for any breach of his fiduciary duty as a director, except
for liability (1) for any breach of the director's duty of loyalty to RCPC or
its stockholders, (2) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of the law, (3) pursuant to
Section 174 of the General Corporation Law of the State of Delaware, or (4) for
any transaction from which the director denied an improper personal benefit.
INDEMNIFICATION OF DIRECTORS AND OFFICERS OF THE GUARANTORS
The provisions of the By-laws of RCPC described above provide for
indemnification for directors and officers of RCPC serving at the request of
RCPC as director or officer of, or in other specified capacities in respect of,
the Guarantors. In addition, the following indemnification provisions are
applicable.
II-1
DELAWARE
Revlon, Inc., Almay, Inc., Charles Of The Ritz Group Ltd., Cosmetics &
More Inc., PPI Two Corporation, Revlon Consumer Corp., Revlon Government Sales,
Inc., Revlon International Corporation, Revlon Products Corp., Revlon Real
Estate Corporation, Riros Group Inc. and RIT Inc. are organized under the laws
of the state of Delaware.
The indemnification provisions of the Delaware General Corporation Law
described in "Indemnification of Directors and Officers" above also relate to
the directors and officers of Revlon, Inc., Almay, Inc., Charles Of The Ritz
Group Ltd., Cosmetics & More Inc., PPI Two Corporation, Revlon Consumer Corp.,
Revlon Government Sales, Inc., Revlon International Corporation, Revlon
Products Corp., Revlon Real Estate Corporation, Riros Group Inc. and RIT Inc.
NEW YORK
North America Revsale Inc., RIROS Corporation and Charles Revson Inc.
(collectively, the "New York Guarantors") are organized under the laws of the
State of New York.
Section 722(a) of the New York Business Corporation Law ("NYBCL") provides
that a corporation may indemnify any person made, or threatened to be made, a
party to any action or proceeding (other than one by or in the right of the
corporation to procure a judgment in its favor), whether civil or criminal,
including an action by or in the right of any other corporation or any
partnership, joint venture, trust, employee benefit plan or other enterprise,
which any director or officer of the corporation served in any capacity at the
request of the corporation, by reason of the fact that he, his testator or
intestate, was a director or officer of the corporation, or served such other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise in any capacity, against judgments, fines, amounts paid in
settlement and reasonable expenses, including attorney's fees actually and
necessarily incurred as a result of such action or proceeding, or any appeal
therein, if such director or officer acted in good faith for a purpose which he
reasonably believed to be in, or, in the case of service for any other
corporation or any partnership, joint venture, trust, employee benefit plan or
other enterprise, not opposed to, the best interests of the corporation and, in
criminal actions or proceedings, in addition, had no reasonable cause to believe
that his conduct was unlawful.
Section 722(c) of the NYBCL provides that a corporation may indemnify its
directors and officers in relation to an action by or in the right of the
corporation to procure a judgment in its favor in similar circumstances to
those described in the preceding paragraph against amounts paid in settlement
and reasonable expenses, including attorney's fees, actually and necessarily
incurred by him or her in connection with the defense or settlement of such
action, except that no indemnification shall be made in respect of a threatened
action, or a pending action which is settled or otherwise disposed of, or any
claim, issue or matter as to which such person is adjudged liable to the
corporation unless a court determines that an indemnity is proper in the
circumstances of the case.
Section 721 of the NYBCL provides that, in addition to indemnification
provided in Article 7 of the NYBCL, a corporation may indemnify a director or
officer by a provision contained in the certificate of incorporation or by-laws
or by a duly authorized resolution of its shareholders or directors or by
agreement, provided that no indemnification may be made to or on behalf of any
director or officer if a judgment or other final adjudication adverse to the
director or officer establishes that his acts were committed in bad faith or
were the result of active and deliberate dishonesty and were material to the
cause of action, or that such director or officer personally gained in fact a
financial profit or other advantage to which he was not legally entitled.
The By-Laws of each of the New York Guarantors contain provisions that
provide for indemnification of its officers and directors to the fullest extent
permitted by the NYBCL.
Section 723 of the NYBCL specifies the manner in which payment of
indemnification under Sections 722 and 721 of the NYBCL may be authorized by
the corporation. It provides that a corporation shall indemnify a person who
has been successful, on the merits or otherwise, in
II-2
defending an action described in Section 722. In other circumstances, unless
ordered by a court upon application of a director or officer under Section 724
of the NYBCL, indemnification as described above may only be made if it is
authorized in each specific case. The board of directors can authorize
indemnification, either acting as a quorum of disinterested directors based upon
a determination that the applicable standard of conduct has been met or that
indemnification is proper under the NYBCL, or based upon an opinion by
independent legal counsel that indemnification is proper in the circumstances
because the applicable standard of conduct has been met, or if the shareholders
decide that indemnification is proper because the applicable standard of conduct
has been met.
The New York Guarantors are also each authorized under its By-Laws and the
NYBCL to advance expenses incurred in defending a civil or criminal action or
proceeding to a director or officer upon receipt of an undertaking by him to
repay such expenses if it is ultimately determined that he is not entitled to
indemnification.
Section 726 of the NYBCL permits, and the By-laws of the New York
Guarantors authorize, the purchase and maintenance of insurance to indemnify
(1) the corporation for any obligation which it incurs as a result of the
indemnification of directors and officers under sections outlined above, (2)
directors and officers in instances in which they may be indemnified by the
corporation under such sections, and (3) directors and officers in instances in
which they may not otherwise be indemnified by the corporation under such
sections, provided the contract of insurance covering such directors and
officers provides, in a manner acceptable to the New York State superintendent
of insurance, for a retention amount and for co-insurance.
Section 402(b) of the NYBCL provides that a corporation's Certificate of
Incorporation may include a provision eliminating or limiting the personal
liability of its directors to the corporation or its shareholders for damages
for any breach of duty in such capacity, except liability if a judgment or
final adjudication establishes that the directors acts or omissions were in bad
faith or involved intentional misconduct or a knowing violation of law or that
he personally gained in fact a financial profit or other advantage to which he
was not legally entitled or that his acts violated Section 719 of the NYBCL or
liability if the act or omission occurred prior to the adoption of a provision
authorized by this section. The Certificates of Incorporation of each of the
New York Guarantors authorize a limitation on such liabilities to the fullest
extent permitted by Section 402(b).
CALIFORNIA
Pacific Finance and Development Corp. ("Pacific Finance") is organized
under the laws of the State of California.
Section 317 of the California Corporations Code empowers a corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, other than in certain actions
by or in the right of the corporation as described below, by reason of the fact
that he or she is or was a director, officer, employee or other agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, or was a director, officer, employee or
agent of a corporation that was a predecessor corporation of the corporation or
of another enterprise at the request of the predecessor corporation, against
expenses, including attorneys' fees, judgments, fines, settlements and other
amounts actually or reasonably incurred by this person in connection with the
action, suit or proceeding if the person acted in good faith and in a manner he
or she reasonably believed to be in the best interests of the corporation, and,
with respect to any criminal proceeding, had no reasonable cause to believe that
his or her conduct was unlawful. In the case of an action by or in the right of
the corporation, no indemnification shall be made in respect to any claim, issue
or matter as to which this person shall have been adjudged to be liable to the
corporation in the performance of his or her duty to the corporation and its
shareholders unless and only to the extent that the court in which the action or
suit is or was pending shall determine that, in view of all of the circumstances
of the case, this person is fairly and reasonably entitled to indemnify for
those expenses which the court shall deem proper. In addition, no
indemnification shall be made in respect to
II-3
amounts paid in settling or otherwise disposing of a pending action without
court approval, or in respect of expenses incurred in defending a pending action
which is settled or otherwise disposed of without court approval. Section 317
further provides that to the extent that a director, officer, employee or agent
of a corporation has been successful on the merits in defense of any action,
suit or proceeding referred to above or in the defense of any claim, issue or
matter therein, this person shall be indemnified against expenses, including
attorneys' fees, actually and reasonably incurred by him or her in connection
therewith. Section 317 also permits the purchase and maintenance of insurance on
behalf of any agent of the corporation against any liability asserted against or
incurred by the agent in that capacity or arising out of the agent's status as
such. The Articles of Incorporation of Pacific Finance authorize the
indemnification of directors, officers, employees or other agents of the
corporation to the fullest extent permitted under California law. The By-laws of
Pacific Finance contain provisions that provide for indemnification of its
directors to the fullest extent permissible under Section 317 and which
authorize the indemnification of its employees, officers and agents (other than
directors).
Under Section 204(a)(10) of the California Corporations Code, a
corporation may relieve its directors from personal liability to such
corporation or its shareholders for monetary damages for any breach of their
fiduciary duty as directors except:
(a) for any intentional misconduct or knowing and culpable violation of
law;
(b) for any act or omission not in good faith or that a director believes
to be contrary to the best interests of the corporation or its
shareholders;
(c) for any transaction from which the director derived an improper
personal benefit;
(d) for acts or omissions that show a reckless disregard for the
director's duty to the corporation or its shareholders in
circumstances in which the director was aware, or should have been
aware, in the ordinary course of performing his or her duties, of a
risk of serious injury to the corporation or its shareholders;
(e) for acts or omissions that constitute an unexcused pattern of
inattention that amounts to an abdication of the director's duty to
the corporation or its shareholders; or
(f) for liability under Sections 310 and 316 of the California
Corporations Code.
The Articles of Incorporation of Pacific Finance eliminate the liability
of directors of the corporation for monetary damages to the fullest extent
permissible under California law.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(A) EXHIBITS:
EXHIBIT NO. DESCRIPTION
------------- -----------
3.1 Certificate of Incorporation of Revlon Consumer Products Corporation (incorporated
by reference to Exhibit 3.3 to the Form 10 of Revlon Consumer Products Corporation
filed with the Commission on August 7, 1992, File No. 1-11334).
3.2 Certificate of Amendment of Certificate of Incorporation of Revlon Consumer
Products Corporation as filed with the Commission on February 18, 1993
(incorporated by reference to Exhibit 3.4 to the Annual Report on Form 10-K for the
year ended December 31, 1992 of Revlon Consumer Products Corporation (the
"Revlon Consumer Products Corporation 1992 Form 10-K")).
3.3 Amended and Restated By-laws of Revlon Consumer Products Corporation dated
January 30, 1997 (incorporated by reference to Exhibit 3.3 to the Annual Report on
Form 10-K for the year ended December 31, 1996 of Revlon Consumer Products
Corporation).
II-4
(A) EXHIBITS:
EXHIBIT NO. DESCRIPTION
------------- -----------
3.4 Amended and Restated Certificate of Incorporation of Revlon, Inc. dated March 4,
1996 (incorporated by reference to Exhibit 3.4 to the Quarterly Report on Form 10-Q
of Revlon, Inc. for the quarterly period ended March 31, 1996).
3.5 Certificate of the Designations, Powers, Preferences and Rights of Series B
Convertible Preferred Stock of Revlon, Inc. (incorporated by reference to Exhibit 3.2
to the Registration Statement on Form S-8 of Revlon, Inc. filed with the Commission
on October 11, 2001, File No. 333-71378).
3.6 Amended and Restated By-laws of Revlon, Inc., dated as of June 30, 2001
(incorporated by reference to Exhibit 3.2 to the Quarterly Report on Form 10-Q of
Revlon, Inc. for the quarterly period ended June 30, 2001 (the "Revlon 2001 Second
Quarter Form 10-Q")).
4.1 Indenture, dated as of November 26, 2001, among Revlon Consumer Products
Corporation, the Guarantors party thereto, including Revlon, Inc., as parent
guarantor, and Wilmington Trust Company, as trustee, relating to the 12% Senior
Secured Notes due 2005 (incorporated by reference to Exhibit 4.2 to the Current
Report on Form 8-K of Revlon Consumer Products Corporation filed with the
Commission on November 30, 2001 (the "Revlon Consumer Products Corporation
November 2001 Form 8-K")).
4.2 Form of 12% Senior Secured Exchange Note due 2005.
4.3 Registration Agreement, dated November 26, 2001, between Revlon Consumer
Products Corporation, the Guarantors listed on the signature page thereto and
Salomon Smith Barney Inc., Bear, Stearns & Co. Inc. and Lehman Brothers Inc.
4.4 Revlon Pledge Agreement, dated as of November 30, 2001, between Revlon, Inc., as
pledgor, in favor of Wilmington Trust Company, as note collateral agent (the "Note
Collateral Agent") (incorporated by reference to Exhibit 4.2 to the Annual Report on
Form 10-K of Revlon Consumer Products Corporation for the year ended
December 31, 2001 (the "Revlon Consumer Products Corporation 2001 Form 10-K")).
4.5 Company Pledge Agreement (Domestic), dated as of November 30, 2001, between
Revlon Consumer Products Corporation, as pledgor, in favor of Wilmington Trust
Company, as Note Collateral Agent (incorporated by reference to Exhibit 4.3 to the
Revlon Consumer Products Corporation 2001 Form 10-K).
4.6 Subsidiary Pledge Agreement (Domestic), dated as of November 30, 2001, between
RIROS Corporation, as pledgor, in favor of Wilmington Trust Company, as Note
Collateral Agent (incorporated by reference to Exhibit 4.4 to the Revlon Consumer
Products Corporation 2001 Form 10-K).
4.7 Subsidiary Pledge Agreement (Domestic), dated as of November 30, 2001, between
Revlon International Corporation, as pledgor, in favor of Wilmington Trust Company,
as Note Collateral Agent (incorporated by reference to Exhibit 4.5 to the Revlon
Consumer Products Corporation 2001 Form 10-K).
4.8 Subsidiary Pledge Agreement (Domestic), dated as of November 30, 2001, between
PPI Two Corporation, as pledgor, in favor of Wilmington Trust Company, as Note
Collateral Agent (incorporated by reference to Exhibit 4.6 to the Revlon Consumer
Products Corporation 2001 Form 10-K).
4.9 Company Pledge Agreement (International), dated as of November 30, 2001, between
Revlon Consumer Products Corporation, as pledgor, in favor of Wilmington Trust
Company, as Note Collateral Agent (incorporated by reference to Exhibit 4.7 to the
Revlon Consumer Products Corporation 2001 Form 10-K).
II-5
(A) EXHIBITS:
EXHIBIT NO. DESCRIPTION
------------- -----------
4.10 Subsidiary Pledge Agreement (International), dated as of November 30, 2001,
between RIROS Corporation, as pledgor, in favor of Wilmington Trust Company, as
Note Collateral Agent (incorporated by reference to Exhibit 4.8 to the Revlon
Consumer Products Corporation 2001 Form 10-K).
4.11 Subsidiary Pledge Agreement (International), dated as of November 30, 2001,
between Revlon International Corporation, as pledgor, in favor of Wilmington Trust
Company, as Note Collateral Agent (incorporated by reference to Exhibit 4.9 to the
Revlon Consumer Products Corporation 2001 Form 10-K).
4.12 Subsidiary Pledge Agreement (International), dated as of November 30, 2001,
between PPI Two Corporation, as pledgor, in favor of Wilmington Trust Company, as
Note Collateral Agent (incorporated by reference to Exhibit 4.10 to the Revlon
Consumer Products Corporation 2001 Form 10-K).
4.13 Company Security Agreement, dated as of November 30, 2001, between Revlon
Consumer Products Corporation, as grantor, in favor of Wilmington Trust Company,
as Note Collateral Agent (incorporated by reference to Exhibit 4.11 to the Revlon
Consumer Products Corporation 2001 Form 10-K).
4.14 Subsidiary Security Agreement, dated as of November 30, 2001, among Almay, Inc.,
Carrington Parfums Ltd., Charles of the Ritz Group Ltd., Charles Revson Inc.,
Cosmetics & More, Inc., North America Revsale Inc., Pacific Finance & Development
Corp., PPI Two Corporation, Prestige Fragrances, Ltd., Revlon Consumer Corp.,
Revlon Government Sales, Inc., Revlon International Corporation, Revlon Products
Corp., Revlon Real Estate Corporation, RIROS Corporation, RIROS Group Inc. and
RIT Inc., each as grantor, in favor of Wilmington Trust Company, as Note Collateral
Agent (incorporated by reference to Exhibit 4.12 to the Revlon Consumer Products
Corporation 2001 Form 10-K).
4.15 Company Copyright Security Agreement, dated as of November 30, 2001, between
Revlon Consumer Products Corporation, as grantor, in favor of Wilmington Trust
Company, as Note Collateral Agent (incorporated by reference to Exhibit 4.13 to the
Revlon Consumer Products Corporation 2001 Form 10-K).
4.16 Company Patent Security Agreement, dated as of November 30, 2001, between
Revlon Consumer Products Corporation, as grantor, in favor of Wilmington Trust
Company, as Note Collateral Agent (incorporated by reference to Exhibit 4.14 to the
Revlon Consumer Products Corporation 2001 Form 10-K).
4.17 Company Trademark Security Agreement, dated as of November 30, 2001, between
Revlon Consumer Products Corporation, as grantor, in favor of Wilmington Trust
Company, as Note Collateral Agent (incorporated by reference to Exhibit 4.15 to the
Revlon Consumer Products Corporation 2001 Form 10-K).
4.18 Subsidiary Trademark Security Agreement, dated as of November 30, 2001, between
Charles Revson Inc., as grantor, in favor of Wilmington Trust Company, as Note
Collateral Agent (incorporated by reference to Exhibit 4.16 to the Revlon Consumer
Products Corporation 2001 Form 10-K).
4.19 Subsidiary Trademark Security Agreement, dated as of November 30, 2001, between
Charles of the Ritz Group, Ltd., as grantor, in favor of Wilmington Trust Company, as
Note Collateral Agent (incorporated by reference to Exhibit 4.17 to the Revlon
Consumer Products Corporation 2001 Form 10-K).
II-6
(A) EXHIBITS:
EXHIBIT NO. DESCRIPTION
------------- -----------
4.20 Deed of Trust, Assignment of Rents and Leases and Security Agreement, dated as of
November 30, 2001, between Revlon Consumer Products Corporation and First
American Title Insurance Company for the use and benefit of Wilmington Trust
Company, as Note Collateral Agent (incorporated by reference to Exhibit 4.18 to the
Revlon Consumer Products Corporation 2001 Form 10-K).
4.21 Amended and Restated Collateral Agency Agreement, dated as of May 30, 1997, and
further amended and restated as of November 30, 2001, between Revlon Consumer
Products Corporation, JPMorgan Chase Bank, as bank agent and as administrative
agent, and Wilmington Trust Company, as trustee and as Note Collateral Agent
(incorporated by reference to Exhibit 4.19 to the Revlon Consumer Products
Corporation 2001 Form 10-K).
4.22 Indenture, dated as of February 1, 1998, between Revlon Escrow Corp. ("Revlon
Escrow") and U.S. Bank Trust National Association (formerly known as First Trust
National Association), as Trustee, relating to the 8 1/8% Senior Notes due 2006 (the
"8 1/8% Senior Notes Indenture") (incorporated by reference to Exhibit 4.1 to the
Registration Statement on Form S-1 of Revlon Consumer Products Corporation filed
with the Commission on March 12, 1998, File No. 333-47875 (the "Revlon Consumer
Products Corporation 1998 Form S-1")).
4.23 Indenture, dated as of February 1, 1998, between Revlon Escrow and U.S. Bank Trust
National Association (formerly known as First Trust National Association), as
Trustee, relating to the 8 5/8% Senior Subordinated Notes Due 2008 (the "8 5/8% Senior
Subordinated Notes Indenture") (incorporated by reference to Exhibit 4.3 to the
Revlon Consumer Products Corporation 1998 Form S-1).
4.24 First Supplemental Indenture, dated April 1, 1998, among Revlon Consumer Products
Corporation, Revlon Escrow, and the Trustee, amending the 8 1/8% Senior Notes
Indenture (incorporated by reference to Exhibit 4.2 to the Revlon Consumer Products
Corporation 1998 Form S-1).
4.25 First Supplemental Indenture, dated March 4, 1998, among Revlon Consumer
Products Corporation, Revlon Escrow, and the Trustee, amending the 8 5/8% Senior
Subordinated Notes Indenture (incorporated by reference to Exhibit 4.4 to the
Revlon Consumer Products Corporation 1998 Form S-1).
4.26 Indenture, dated as of November 6, 1998, between Revlon Consumer Products
Corporation and U.S. Bank Trust National Association, as Trustee, relating to Revlon
Consumer Products Corporation's 9% Senior Notes due 2006 (incorporated by
reference to Exhibit 4.13 to the Quarterly Report on Form 10-Q for the quarterly
period ended September 30, 1998 of Revlon, Inc.)
4.27 Second Amended and Restated Credit Agreement, dated as of November 30, 2001,
among Revlon Consumer Products Corporation, the subsidiaries of Revlon Consumer
Products Corporation parties thereto, the lenders parties thereto, the Co-Agents
parties thereto, Citibank, N.A., as documentation agent, Lehman Commercial Paper
Inc., as syndication agent, J.P. Morgan Securities Inc., as sole arranger and
bookrunner, and JPMorgan Chase Bank, as administrative agent (incorporated by
reference to Exhibit 4.1 to the Revlon Consumer Products Corporation November
2001 Form 8-K).
5.1 Opinion of Paul, Weiss, Rifkind, Wharton & Garrison, special counsel to Revlon
Consumer Products Corporation.
II-7
(A) EXHIBITS:
EXHIBIT NO. DESCRIPTION
------------- -----------
10.1 Asset Transfer Agreement, dated as of June 24, 1992, among Revlon Holdings Inc.
("Holdings"), National Health Care Group, Inc., Charles of the Ritz Group Ltd.,
Revlon Consumer Products Corporation and Revlon, Inc. (incorporated by reference
to Exhibit 10.1 to Amendment No. 1 to the Revlon, Inc. Registration Statement on
Form S-1 filed with the Commission on June 29, 1992, File No. 33-47100).
10.2 Tax Sharing Agreement, entered into as of June 24, 1992, among Mafco Holdings,
Revlon, Inc., Revlon Consumer Products Corporation and certain subsidiaries of
Revlon Consumer Products Corporation as amended and restated as of January 1,
2001 (incorporated by reference to Exhibit 10.2 to the Revlon Consumer Products
Corporation 2001 Form 10-K).
10.3 Employment Agreement, dated as of November 2, 1999, between Revlon Consumer
Products Corporation and Jeffrey M. Nugent (the "Nugent Employment Agreement")
(incorporated by reference to Exhibit 10.10 to the Annual Report on Form 10-K for
the year ended December 31, 1999 of Revlon, Inc. (the "Revlon 1999 Form 10-K")).
10.4 Amendment, dated June 15, 2001, to the Nugent Employment Agreement dated as of
November 2, 1999 (incorporated by reference to Exhibit 10.18 to the Revlon 2001
Second Quarter Form 10-Q).
10.5 Employment Agreement, amended and restated as of May 9, 2000, between Revlon
Consumer Products Corporation and Douglas H. Greeff (the "Greeff Employment
Agreement") (incorporated by reference to Exhibit 10.22 to the Quarterly Report on
Form 10-Q for the quarterly period ended June 30, 2000 of Revlon, Inc.).
10.6 Amendment dated June 18, 2001 to the Greeff Employment Agreement (incorporated
by reference to Exhibit 10.6 to the Revlon Consumer Products Corporation 2001
Form 10-K).
10.7 Employment Agreement, effective as of August 1, 2001, between Revlon Consumer
Products Corporation and Paul E. Shapiro (incorporated by reference to Exhibit 10.7
to the Revlon Consumer Products Corporation 2001 Form 10-K.)
10.8 Revlon Executive Bonus Plan (Amended and Restated as of June 18, 2001)
(incorporated by reference to Exhibit 10.8 to the Revlon Consumer Products
Corporation 2001 Form 10-K).
10.9 Amended and Restated Revlon Pension Equalization Plan, amended and restated as
of December 14, 1998 (incorporated by reference to Exhibit 10.15 to the Annual
Report on Form 10-K for year ended December 31, 1998 of Revlon, Inc.).
10.10 Executive Supplemental Medical Expense Plan Summary dated July 1991
(incorporated by reference to Exhibit 10.18 to the Registration Statement on Form
S-1 of Revlon, Inc. filed with the Commission on May 22, 1992, File No. 33-47100).
10.11 Benefit Plans Assumption Agreement, dated as of July 1, 1992, by and among
Holdings, Revlon, Inc. and Revlon Consumer Products Corporation (incorporated by
reference to Exhibit 10.25 to the Revlon Consumer Products Corporation 1992 Form
10-K).
10.12 Revlon Amended and Restated Executive Deferred Compensation Plan dated as of
August 6, 1999 (incorporated by reference to Exhibit 10.27 to the Quarterly Report
on Form 10-Q of Revlon, Inc. for the quarterly period ended September 30, 1999).
10.13 Revlon Executive Severance Policy effective January 1, 1996 (incorporated by
reference to Exhibit 10.23 to the Amendment No. 3 to the Registration Statement on
Form S-1 of Revlon, Inc. filed with the Commission on February 5, 1996, File No.
33-99558).
II-8
(A) EXHIBITS:
EXHIBIT NO. DESCRIPTION
------------- -----------
10.14 Revlon, Inc. Third Amended and Restated 1996 Stock Plan (amended and restated as
of May 10, 2000) (incorporated by reference to Exhibit 10.16 to the Revlon 2001
Second Quarter 10-Q).
10.15 Purchase Agreement, dated as of February 18, 2000, by and among Revlon, Inc.,
Revlon Consumer Products Corporation, REMEA 2 B.V., Revlon Europe, Middle
East and Africa, Ltd., Revlon International Corporation, Europeenne de Produits de
Beaute S.A., Deutsche Revlon GmbH & Co. K.G., Revlon Canada, Inc., Revlon de
Argentina, S.A.I.C., Revlon South Africa (Proprietary) Limited, Revlon (Suisse) S.A.,
Revlon Overseas Corporation C.A., CEIL - Comercial, Exportadora, Industrial Ltda.,
Revlon Manufacturing Ltd., Revlon Belgium N.V., Revlon (Chile) S.A., Revlon (Hong
Kong) Limited, Revlon, S.A., Revlon Nederland B.V., Revlon New Zealand Limited,
European Beauty Products S.p.A. and Beauty Care Professional Products
Luxembourg, S.a.r.l. (incorporated by reference to Exhibit 10.19 to the Revlon 1999
Form 10-K).
10.16 Purchase and Sale Agreement dated as of July 31, 2001 by and between Holdings and
Revlon, Inc. (incorporated by reference to exhibit 10.16 to the Revlon Consumer
Products Corporation 2001 Form 10-K).
12.1 Statement re: Computation of Ratio of Earnings to Fixed Charges.
21 Subsidiaries of Revlon Consumer Products Corporation (incorporated by reference to
Exhibit 21.1 to the Revlon Consumer Products Corporation 2001 Form 10-K).
23.1 Consent of KPMG LLP.
23.2 Consent of Paul, Weiss, Rifkind, Wharton & Garrison, special counsel to Revlon
Consumer Products Corporation (included in Exhibit 5.1).
24.1 Power of Attorney executed by Ronald O. Perelman.
24.2 Power of Attorney executed by Donald G. Drapkin.
24.3 Power of Attorney executed by Howard Gittis.
24.4 Power of Attorney executed by Meyer Feldberg.
24.5 Power of Attorney executed by Edward J. Landau.
24.6 Power of Attorney executed by Vernon E. Jordan, Jr.
24.7 Power of Attorney executed by Jerry W. Levin.
24.8 Power of Attorney executed by Linda Gosden Robinson.
24.9 Power of Attorney executed by Terry Semel.
24.10 Power of Attorney executed by Martha Stewart.
24.11 Power of Attorney executed by Douglas H. Greeff.
25.1 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as
amended, of Wilmington Trust Company, as trustee under the Indenture, in relation
to the 12% Senior Secured Exchange Notes.
25.2 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as
amended, of Wilmington Trust Company, as trustee under the Indenture, in relation
to the Guarantees.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Form of Letter to Clients.
99.4 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees.
II-9
ITEM 22. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post-effective amendment by
these paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Securities and Exchange Act of
1934 that are incorporated by reference in the registration statement.
(2) That for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of a
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrants pursuant to the foregoing provisions, or otherwise, the
Registrants have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by a
Registrant of expenses incurred or paid by a director, officer or controlling
person of a Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrants will, unless
in the opinion of their respective counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
The undersigned Registrants hereby undertake to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of Form S-4, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
The undersigned Registrants hereby undertake to supply by means of a
post-effective amendment all information concerning a transaction that was not
the subject of and included in the registration statement when it became
effective.
II-10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Revlon
Consumer Products Corporation has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of New York, State of New York, on the 25th day of February, 2002.
REVLON CONSUMER PRODUCTS CORPORATION
By: /s/ Paul E. Shapiro
-------------------------
Name: Paul E. Shapiro
Title: Executive Vice President and Chief
Administrative Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on February 25, 2002.
SIGNATURE TITLE
--------- -----
*
- ------------------------------ Chairman of the Board, Chairman of
Ronald O. Perelman the Executive Committee of the Board
and Director
/s/ Paul E. Shapiro
- ------------------------------ Executive Vice President and Chief
Paul E. Shapiro Administrative Officer (Principal
Executive Officer)
/s/ Douglas H. Greeff
- ------------------------------ Executive Vice President and Chief
Douglas H. Greeff Financial Officer (Principal Financial
Officer)
*
- ------------------------------ Director
Donald G. Drapkin
*
- ------------------------------ Director
Howard Gittis
*
- ------------------------------ Director
Edward J. Landau
/s/ Laurence Winoker
- ------------------------------ Senior Vice President, Corporate
Laurence Winoker Controller and Treasurer (Principal
Accounting Officer)
- ----------
* Robert K. Kretzman, by signing his name hereto, does hereby sign this
registration statement on behalf of the directors and officers of the
registrant after whose typed names asterisks appear, pursuant to powers
of attorney duly executed by such directors and officers and filed with
the Securities and Exchange Commission.
By: /s/ Robert K. Kretzman
-------------------------------
Name: Robert K. Kretzman
Title: Attorney-in-fact
II-11
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Revlon, Inc.
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 25th day of February, 2002.
REVLON, INC.
By: /s/ Paul E. Shapiro
-------------------------
Name: Paul E. Shapiro
Title: Executive Vice President and Chief
Administrative Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on February 25, 2002.
SIGNATURE TITLE
--------- -----
*
- ------------------------------ Chairman of the Board and Director
Ronald O. Perelman
/s/ Paul E. Shapiro
- ------------------------------ Executive Vice President and Chief
Paul E. Shapiro Administrative Officer (Principal
Executive Officer)
/s/ Douglas H. Greeff
- ------------------------------ Executive Vice President and Chief
Douglas H. Greeff Financial Officer (Principal Financial
Officer)
*
- ------------------------------ Director
Donald G. Drapkin
*
- ------------------------------ Director
Howard Gittis
*
- ------------------------------ Director
Edward J. Landau
*
- ------------------------------ Director
Meyer Feldberg
*
- ------------------------------ Director
Vernon E. Jordan, Jr.
II-12
SIGNATURE TITLE
--------- -----
*
- ------------------------------ Director
Jerry W. Levin
*
- ------------------------------ Director
Linda Gosden Robinson
*
- ------------------------------ Director
Terry Semel
*
- ------------------------------ Director
Martha Stewart
/s/ Laurence Winoker
- ------------------------------ Senior Vice President, Corporate
Laurence Winoker Controller and Treasurer (Principal
Accounting Officer)
- ----------
* Robert K. Kretzman, by signing his name hereto, does hereby sign this
registration statement on behalf of the directors and officers of the
registrant after whose typed names asterisks appear, pursuant to powers
of attorney duly executed by such directors and officers and filed with
the Securities and Exchange Commission.
By: /s/ Robert K. Kretzman
-------------------------------
Name: Robert K. Kretzman
Title: Attorney-in-fact
II-13
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of the
Guarantors listed below have duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of New York, State of New York, on the 25th day of February, 2002.
ALMAY, INC.
CHARLES OF THE RITZ GROUP LTD.
CHARLES REVSON INC.
COSMETICS & MORE INC.
NORTH AMERICA REVSALE INC.
PACIFIC FINANCE & DEVELOPMENT CORP.
PPI TWO CORPORATION
REVLON CONSUMER CORP.
REVLON GOVERNMENT SALES, INC.
REVLON INTERNATIONAL CORPORATION
REVLON PRODUCTS CORP.
REVLON REAL ESTATE CORPORATION
RIROS CORPORATION
RIROS GROUP INC.
RIT INC.
By: /s/ Robert K. Kretzman
----------------------------------------
Name: Robert K. Kretzman
Title: Vice President, Secretary and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below in relation to each of the
Guarantors by the following persons in the capacities indicated on February 25,
2002.
SIGNATURE TITLE
--------- -----
/s/ Douglas H. Greeff Vice President, Chief Financial Officer
- ------------------------------
Douglas H. Greeff and Director
/s/ Robert K. Kretzman Vice President, Secretary and Director
- ------------------------------
Robert K. Kretzman
/s/ Michael T. Sheehan Vice President and Director
- ------------------------------
Michael T. Sheehan
- ----------
* Robert K. Kretzman, by signing his name hereto, does hereby sign this
registration statement on behalf of the directors and officers of the
registrant after whose typed names asterisks appear, pursuant to powers
of attorney duly executed by such directors and officers and filed with
the Securities and Exchange Commission.
By: /s/ Robert K. Kretzman
-------------------------------
Name: Robert K. Kretzman
Title: Attorney-in-fact
II-14
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------- -----------
3.1 Certificate of Incorporation of Revlon Consumer Products Corporation (incorporated by
reference to Exhibit 3.3 to the Form 10 of Revlon Consumer Products Corporation filed
with the Commission on August 7, 1992, File No. 1-11334).
3.2 Certificate of Amendment of Certificate of Incorporation of Revlon Consumer Products
Corporation as filed with the Commission on February 18, 1993 (incorporated by
reference to Exhibit 3.4 to the Annual Report on Form 10-K for the year ended
December 31, 1992 of Revlon Consumer Products Corporation (the "Revlon Consumer
Products Corporation 1992 Form 10-K")).
3.3 Amended and Restated By-laws of Revlon Consumer Products Corporation dated
January 30, 1997 (incorporated by reference to Exhibit 3.3 to the Annual Report on
Form 10-K for the year ended December 31, 1996 of Revlon Consumer Products
Corporation).
3.4 Amended and Restated Certificate of Incorporation of Revlon, Inc. dated March 4, 1996
(incorporated by reference to Exhibit 3.4 to the Quarterly Report on Form 10-Q of
Revlon, Inc. for the quarterly period ended March 31, 1996).
3.5 Certificate of the Designations, Powers, Preferences and Rights of Series B Convertible
Preferred Stock of Revlon, Inc. (incorporated by reference to Exhibit 3.2 to the
Registration Statement on Form S-8 of Revlon, Inc. filed with the Commission on
October 11, 2001, File No. 333-71378).
3.6 Amended and Restated By-laws of Revlon, Inc., dated as of June 30, 2001 (incorporated
by reference to Exhibit 3.2 to the Quarterly Report on Form 10-Q of Revlon, Inc. for the
quarterly period ended June 30, 2001 (the "Revlon 2001 Second Quarter Form 10-Q")).
4.1 Indenture, dated as of November 26, 2001, among Revlon Consumer Products
Corporation, the Guarantors party thereto, including Revlon, Inc., as parent guarantor,
and Wilmington Trust Company, as trustee, relating to the 12% Senior Secured Notes due
2005 (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K of
Revlon Consumer Products Corporation filed with the Commission on November 30,
2001 (the "Revlon Consumer Products Corporation November 2001 Form 8-K")).
4.2 Form of 12% Senior Secured Exchange Note due 2005.
4.3 Registration Agreement, dated November 26, 2001, between Revlon Consumer Products
Corporation, the Guarantors listed on the signature page thereto and Salomon Smith
Barney Inc., Bear, Stearns & Co. Inc. and Lehman Brothers Inc.
4.4 Revlon Pledge Agreement, dated as of November 30, 2001, between Revlon, Inc., as
pledgor, in favor of Wilmington Trust Company, as note collateral agent (the "Note
Collateral Agent") (incorporated by reference to Exhibit 4.2 to the Annual Report on
Form 10-K of Revlon Consumer Products Corporation for the year ended December 31,
2001 (the "Revlon Consumer Products Corporation 2001 Form 10-K")).
4.5 Company Pledge Agreement (Domestic), dated as of November 30, 2001, between
Revlon Consumer Products Corporation, as pledgor, in favor of Wilmington Trust
Company, as Note Collateral Agent (incorporated by reference to Exhibit 4.3 to the
Revlon Consumer Products Corporation 2001 Form 10-K).
4.6 Subsidiary Pledge Agreement (Domestic), dated as of November 30, 2001, between
RIROS Corporation, as pledgor, in favor of Wilmington Trust Company, as Note
Collateral Agent (incorporated by reference to Exhibit 4.4 to the Revlon Consumer
Products Corporation 2001 Form 10-K).
II-15
EXHIBIT NO. DESCRIPTION
- ----------- -----------
4.7 Subsidiary Pledge Agreement (Domestic), dated as of November 30, 2001, between
Revlon International Corporation, as pledgor, in favor of Wilmington Trust Company, as
Note Collateral Agent (incorporated by reference to Exhibit 4.5 to the Revlon Consumer
Products Corporation 2001 Form 10-K).
4.8 Subsidiary Pledge Agreement (Domestic), dated as of November 30, 2001, between PPI
Two Corporation, as pledgor, in favor of Wilmington Trust Company, as Note Collateral
Agent (incorporated by reference to Exhibit 4.6 to the Revlon Consumer Products
Corporation 2001 Form 10-K).
4.9 Company Pledge Agreement (International), dated as of November 30, 2001, between
Revlon Consumer Products Corporation, as pledgor, in favor of Wilmington Trust
Company, as Note Collateral Agent (incorporated by reference to Exhibit 4.7 to the
Revlon Consumer Products Corporation 2001 Form 10-K).
4.10 Subsidiary Pledge Agreement (International), dated as of November 30, 2001, between
RIROS Corporation, as pledgor, in favor of Wilmington Trust Company, as Note
Collateral Agent (incorporated by reference to Exhibit 4.8 to the Revlon Consumer
Products Corporation 2001 Form 10-K).
4.11 Subsidiary Pledge Agreement (International), dated as of November 30, 2001, between
Revlon International Corporation, as pledgor, in favor of Wilmington Trust Company, as
Note Collateral Agent (incorporated by reference to Exhibit 4.9 to the Revlon Consumer
Products Corporation 2001 Form 10-K).
4.12 Subsidiary Pledge Agreement (International), dated as of November 30, 2001, between
PPI Two Corporation, as pledgor, in favor of Wilmington Trust Company, as Note
Collateral Agent (incorporated by reference to Exhibit 4.10 to the Revlon Consumer
Products Corporation 2001 Form 10-K).
4.13 Company Security Agreement, dated as of November 30, 2001, between Revlon
Consumer Products Corporation, as grantor, in favor of Wilmington Trust Company, as
Note Collateral Agent (incorporated by reference to Exhibit 4.11 to the Revlon
Consumer Products Corporation 2001 Form 10-K).
4.14 Subsidiary Security Agreement, dated as of November 30, 2001, among Almay, Inc.,
Carrington Parfums Ltd., Charles of the Ritz Group Ltd., Charles Revson Inc.,
Cosmetics & More, Inc., North America Revsale Inc., Pacific Finance & Development
Corp., PPI Two Corporation, Prestige Fragrances, Ltd., Revlon Consumer Corp., Revlon
Government Sales, Inc., Revlon International Corporation, Revlon Products Corp.,
Revlon Real Estate Corporation, RIROS Corporation, RIROS Group Inc. and RIT Inc.,
each as grantor, in favor of Wilmington Trust Company, as Note Collateral Agent
(incorporated by reference to Exhibit 4.12 to the Revlon Consumer Products Corporation
2001 Form 10-K).
4.15 Company Copyright Security Agreement, dated as of November 30, 2001, between
Revlon Consumer Products Corporation, as grantor, in favor of Wilmington Trust
Company, as Note Collateral Agent (incorporated by reference to Exhibit 4.13 to the
Revlon Consumer Products Corporation 2001 Form 10-K).
4.16 Company Patent Security Agreement, dated as of November 30, 2001, between Revlon
Consumer Products Corporation, as grantor, in favor of Wilmington Trust Company, as
Note Collateral Agent (incorporated by reference to Exhibit 4.14 to the Revlon
Consumer Products Corporation 2001 Form 10-K).
II-16
EXHIBIT NO. DESCRIPTION
- ------------- -------------------------------------------------------------------------------------------
4.17 Company Trademark Security Agreement, dated as of November 30, 2001, between
Revlon Consumer Products Corporation, as grantor, in favor of Wilmington Trust
Company, as Note Collateral Agent (incorporated by reference to Exhibit 4.15 to the
Revlon Consumer Products Corporation 2001 Form 10-K).
4.18 Subsidiary Trademark Security Agreement, dated as of November 30, 2001, between
Charles Revson Inc., as grantor, in favor of Wilmington Trust Company, as Note
Collateral Agent (incorporated by reference to Exhibit 4.16 to the Revlon Consumer
Products Corporation 2001 Form 10-K).
4.19 Subsidiary Trademark Security Agreement, dated as of November 30, 2001, between
Charles of the Ritz Group, Ltd., as grantor, in favor of Wilmington Trust Company, as
Note Collateral Agent (incorporated by reference to Exhibit 4.17 to the Revlon
Consumer Products Corporation 2001 Form 10-K).
4.20 Deed of Trust, Assignment of Rents and Leases and Security Agreement, dated as of
November 30, 2001, between Revlon Consumer Products Corporation and First American
Title Insurance Company for the use and benefit of Wilmington Trust Company, as Note
Collateral Agent (incorporated by reference to Exhibit 4.18 to the Revlon Consumer
Products Corporation 2001 Form 10-K).
4.21 Amended and Restated Collateral Agency Agreement, dated as of May 30, 1997, and
further amended and restated as of November 30, 2001, between Revlon Consumer
Products Corporation, JPMorgan Chase Bank, as bank agent and as administrative
agent, and Wilmington Trust Company, as trustee and as Note Collateral Agent
(incorporated by reference to Exhibit 4.19 to the Revlon Consumer Products Corporation
2001 Form 10-K).
4.22 Indenture, dated as of February 1, 1998, between Revlon Escrow Corp. ("Revlon
Escrow") and U.S. Bank Trust National Association (formerly known as First Trust
National Association), as Trustee, relating to the 8 1/8% Senior Notes due 2006 (the "8 1/8%
Senior Notes Indenture") (incorporated by reference to Exhibit 4.1 to the Registration
Statement on Form S-1 of Revlon Consumer Products Corporation filed with the
Commission on March 12, 1998, File No. 333-47875 (the "Revlon Consumer Products
Corporation 1998 Form S-1")).
4.23 Indenture, dated as of February 1, 1998, between Revlon Escrow and U.S. Bank Trust
National Association (formerly known as First Trust National Association), as Trustee,
relating to the 8 5/8% Senior Subordinated Notes Due 2008 (the "8 5/8% Senior Subordinated
Notes Indenture") (incorporated by reference to Exhibit 4.3 to the Revlon Consumer
Products Corporation 1998 Form S-1).
4.24 First Supplemental Indenture, dated April 1, 1998, among Revlon Consumer Products
Corporation, Revlon Escrow, and the Trustee, amending the 8 1/8% Senior Notes
Indenture (incorporated by reference to Exhibit 4.2 to the Revlon Consumer Products
Corporation 1998 Form S-1).
4.25 First Supplemental Indenture, dated March 4, 1998, among Revlon Consumer Products
Corporation, Revlon Escrow, and the Trustee, amending the 8 5/8% Senior Subordinated
Notes Indenture (incorporated by reference to Exhibit 4.4 to the Revlon Consumer
Products Corporation 1998 Form S-1).
II-17
EXHIBIT NO. DESCRIPTION
- ----------- -----------
4.26 Indenture, dated as of November 6, 1998, between Revlon Consumer Products
Corporation and U.S. Bank Trust National Association, as Trustee, relating to Revlon
Consumer Products Corporation's 9% Senior Notes due 2006 (incorporated by reference
to Exhibit 4.13 to the Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 1998 of Revlon, Inc.).
4.27 Second Amended and Restated Credit Agreement, dated as of November 30, 2001,
among Revlon Consumer Products Corporation, the subsidiaries of Revlon Consumer
Products Corporation parties thereto, the lenders parties thereto, the Co-Agents parties
thereto, Citibank, N.A., as documentation agent, Lehman Commercial Paper Inc., as
syndication agent, J.P. Morgan Securities Inc., as sole arranger and bookrunner, and
JPMorgan Chase Bank, as administrative agent (incorporated by reference to Exhibit 4.1
to the Revlon Consumer Products Corporation November 2001 Form 8-K).
5.1 Opinion of Paul, Weiss, Rifkind, Wharton & Garrison, special counsel to Revlon
Consumer Products Corporation.
10.1 Asset Transfer Agreement, dated as of June 24, 1992, among Revlon Holdings Inc.
("Holdings") National Health Care Group, Inc., Charles of the Ritz Group Ltd., Revlon
Consumer Products Corporation and Revlon, Inc. (incorporated by reference to Exhibit
10.1 to Amendment No. 1 to the Revlon, Inc. Registration Statement on Form S-1 filed
with the Commission on June 29, 1992, File No. 33-47100).
10.2 Tax Sharing Agreement, entered into as of June 24, 1992, among Mafco Holdings,
Revlon, Inc., Revlon Consumer Products Corporation and certain subsidiaries of Revlon
Consumer Products Corporation as amended and restated as of January 1, 2001
(incorporated by reference to Exhibit 10.2 to the Revlon Consumer Products Corporation
2001 Form 10-K.)
10.3 Employment Agreement, dated as of November 2, 1999, between Revlon Consumer
Products Corporation and Jeffrey M. Nugent (the "Nugent Employment Agreement")
(incorporated by reference to Exhibit 10.10 to the Annual Report on Form 10-K for the
year ended December 31, 1999 of Revlon, Inc. (the "Revlon 1999 Form 10-K")).
10.4 Amendment, dated June 15, 2001, to the Nugent Employment Agreement dated as of
November 2, 1999 (incorporated by reference to Exhibit 10.18 to the the "Revlon 2001
Second Quarter Form 10-Q).
10.5 Employment Agreement, amended and restated as of May 9, 2000, between Revlon
Consumer Products Corporation and Douglas H. Greeff (the "Greeff Employment
Agreement") (incorporated by reference to Exhibit 10.22 to the Quarterly Report on
Form 10-Q for the quarterly period ended June 30, 2000 of Revlon, Inc.).
10.6 Amendment dated June 18, 2001 to the Greeff Employment Agreement (incorporated
by reference to Exhibit 10.6 to the Revlon Consumer Products Corporation 2001 Form
10-K).
10.7 Employment Agreement, effective as of August 1, 2001, between Revlon Consumer
Products Corporation and Paul E. Shapiro (incorporated by reference to Exhibit 10.7 to
the Revlon Consumer Products Corporation 2001 Form 10-K).
10.8 Revlon Executive Bonus Plan (Amended and Restated as of June 18, 2001) (incorporated
by reference to Exhibit 10.8 to the Revlon Consumer Products Corporation 2001 Form
10-K).
II-18
EXHIBIT NO. DESCRIPTION
- ----------- -----------
10.9 Amended and Restated Revlon Pension Equalization Plan, amended and restated as of
December 14, 1998 (incorporated by reference to Exhibit 10.15 to the Annual Report on
Form 10-K for year ended December 31, 1998 of Revlon, Inc.).
10.10 Executive Supplemental Medical Expense Plan Summary dated July 1991 (incorporated
by reference to Exhibit 10.18 to the Registration Statement on Form S-1 of Revlon, Inc.
filed with the Commission on May 22, 1992, File No. 33-47100).
10.11 Benefit Plans Assumption Agreement, dated as of July 1, 1992, by and among Holdings,
Revlon, Inc. and Revlon Consumer Products Corporation (incorporated by reference to
Exhibit 10.25 to the Revlon Consumer Products Corporation 1992 Form 10-K).
10.12 Revlon Amended and Restated Executive Deferred Compensation Plan dated as of
August 6, 1999 (incorporated by reference to Exhibit 10.27 to the Quarterly Report on
Form 10-Q of Revlon, Inc. for the quarterly period ended September 30, 1999).
10.13 Revlon Executive Severance Policy effective January 1, 1996 (incorporated by reference
to Exhibit 10.23 to the Amendment No. 3 to the Registration Statement on Form S-1 of
Revlon, Inc. filed with the Commission on February 5, 1996, File No. 33-99558).
10.14 Revlon, Inc. Third Amended and Restated 1996 Stock Plan (amended and restated as of
May 10, 2000) (incorporated by reference to Exhibit 10.16 to the Revlon 2001 Second
Quarter Form 10-Q).
10.15 Purchase Agreement, dated as of February 18, 2000, by and among Revlon, Inc., Revlon
Consumer Products Corporation, REMEA 2 B.V., Revlon Europe, Middle East and
Africa, Ltd., Revlon International Corporation, Europeenne de Produits de Beaute S.A.,
Deutsche Revlon GmbH & Co. K.G., Revlon Canada, Inc., Revlon de Argentina,
S.A.I.C., Revlon South Africa (Proprietary) Limited, Revlon (Suisse) S.A., Revlon
Overseas Corporation C.A., CEIL - Comercial, Exportadora, Industrial Ltda., Revlon
Manufacturing Ltd., Revlon Belgium N.V., Revlon (Chile) S.A., Revlon (Hong Kong)
Limited, Revlon, S.A., Revlon Nederland B.V., Revlon New Zealand Limited, European
Beauty Products S.p.A. and Beauty Care Professional Products Luxembourg, S.a.r.l.
(incorporated by reference to Exhibit 10.19 to the Revlon 1999 Form 10-K).
10.16 Purchase and Sale Agreement dated as of July 31, 2001 by and between Holdings and
Revlon, Inc. (incorporated by reference to exhibit 10.16 to the Revlon Consumer
Products Corporation 2001 Form 10-K).
12.1 Statement re: Computation of Ratio of Earnings to Fixed Charges.
21 Subsidiaries of Revlon Consumer Products Corporation (incorporated by reference to
Exhibit 21.1 to the Revlon Consumer Products Corporation 2001 Form 10-K).
23.1 Consent of KPMG LLP.
23.2 Consent of Paul, Weiss, Rifkind, Wharton & Garrison, special counsel to Revlon
Consumer Products Corporation (included in Exhibit 5.1).
24.1 Power of Attorney executed by Ronald O. Perelman.
24.2 Power of Attorney executed by Donald G. Drapkin.
24.3 Power of Attorney executed by Howard Gittis.
24.4 Power of Attorney executed by Meyer Feldberg.
24.5 Power of Attorney executed by Edward J. Landau.
24.6 Power of Attorney executed by Vernon E. Jordan, Jr.
II-19
EXHIBIT NO. DESCRIPTION
- ----------- -----------
24.7 Power of Attorney executed by Jerry W. Levin.
24.8 Power of Attorney executed by Linda Gosden Robinson.
24.9 Power of Attorney executed by Terry Semel.
24.10 Power of Attorney executed by Martha Stewart.
24.11 Power of Attorney executed by Douglas H. Greeff.
25.1 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended,
of Wilmington Trust Company, as trustee under the Indenture, in relation to the 12%
Senior Secured Exchange Notes.
25.2 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended,
of Wilmington Trust Company, as trustee under the Indenture, in relation to the
Guarantees.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Form of Letter to Clients.
99.4 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees.
II-20
EXHIBIT 4.2
[FORM OF FACE OF EXCHANGE SECURITY OR PRIVATE EXCHANGE
SECURITY]
CUSIP No. $
---------------- ---------------
12% Senior Secured Exchange Note Due 2005
Revlon Consumer Products Corporation, a Delaware corporation,
promises to pay to____________ , or registered assigns, the principal sum of
________ Dollars on December 1, 2005.
Interest Payment Dates: June 1 and December 1.
Record Dates: May 15 and November 15.
Additional provisions of this Security are set forth on the
other side of this Security.
Dated: REVLON CONSUMER PRODUCTS
CORPORATION
By:
----------------------------------------
[Title]
[SEAL] By:
---------------------------------------
[Title]
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
WILMINGTON TRUST COMPANY,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
------------------------------------------
Authorized Signatory
*/ [If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1 to
Appendix A captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF
INCREASES OR DECREASES IN GLOBAL SECURITY".]
**/ [If the Security is a Private Exchange Security issued in a Private Exchange
Offer to an Initial Purchaser holding an unsold portion of its initial
allotment, add the Restricted Securities Legend from Exhibit 1 to Appendix A and
replace the Assignment Form included in this Exhibit A with the Assignment Form
included in such Exhibit 1 to Appendix A.]
2
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY]
12% Senior Secured Exchange Note Due 2005
1. Interest
Revlon Consumer Products Corporation, a Delaware corporation
(such corporation, and its successors and assigns under the Indenture
hereinafter referred to, being herein called the "Company"), promises to pay
interest on the Principal amount of this Security at the rate per annum shown
above (without duplication of the interest that accrued on the Initial Security
in exchange for which this Security was issued)[; provided, however, that if (a)
by February 25, 2002, neither the Shelf Registration Statement nor the Exchange
Offer Registration Statement has been filed with the SEC, the rate per annum at
which this Security bears interest will increase by 0.5% from and including such
date until but excluding the earlier of (i) the date on which the Shelf
Registration Statement or the Exchange Offer Registration Statement is filed and
(ii) June 24, 2002 and if (b) by June 24, 2002, neither (i) the Registered
Exchange Offer is consummated nor (ii) the Shelf Registration Statement is
declared effective, the rate per annum at which this Security bears interest
will increase by 0.5% from and including such date until but excluding the
earlier of (i) the consummation of the Registered Exchange Offer and (ii) the
effective date of the Shelf Registration Statement.](1) The Company will pay
interest semiannually on June 1 and December 1 of each year, commencing June 1,
2002. Interest on the Securities will accrue from the most recent date to which
interest has been paid on the Initial Securities, or, if no interest has been
paid on the Initial Securities, the Exchange Securities or the Private Exchange
Securities, as the case may be, from November 26, 2001. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. The Company
shall pay interest on overdue Principal at the rate borne by the Securities plus
1% per annum, and it shall pay interest on overdue installments of interest at
the same rate to the extent lawful.
- --------
(1) Insert if at the time of issuance of the Exchange Security or Private
Exchange Security (as the case may be) neither the Registered Exchange Offer has
been consummated nor a Shelf Registration Statement has been declared effective
in accordance with the Registration Agreement.
3
2. Method of Payment
The Company will pay interest referred to in paragraph 1 above
(except defaulted interest) on the Exchange Securities or Private Exchange
Securities to the persons who are registered holders of Securities at the close
of business on the May 15 and November 15 next preceding the interest payment
date even if Exchange Securities or Private Exchange Securities are canceled
after the record date and on or before the interest payment date. The Company
will pay interest referred to in paragraph 1 of the Initial Securities (except
defaulted interest) on the Initial Securities in exchange for which the Exchange
Securities or Private Exchange Securities were issued to the Persons who, at the
close of business on the May 15 or the November 15 next preceding each interest
payment date, are registered holders of such Initial Securities, if such record
date occurs prior to such exchange, or registered holders of the Exchange
Securities or Private Exchange Securities, if such record date occurs on or
after the date of such exchange, even if Exchange Securities or Private Exchange
Securities are canceled after the record date and on or before the interest
payment date. Holders must surrender Securities to a Paying Agent to collect
Principal payments. The Company will pay Principal, interest and premium, if
any, in money of the United States that at the time of payment is legal tender
for payment of public and private debts. Payments in respect of the Securities
represented by a global note (including principal, premium and interest) will be
made by wire transfer of immediately available funds to the accounts specified
by The Depository Trust Company. The Company will make all payments in respect
of a certificated Security (including principal, premium and interest) by
mailing a check to the registered address of each Holder thereof; provided,
however, that payments on a certificated Security will be made by wire transfer
to a U.S. dollar account maintained by the payee with a bank in the United
States if such Holder elects payment by wire transfer by giving written notice
to the Trustee or the Paying Agent to such effect designating such account no
later than 30 days immediately preceding the relevant due date for payment (or
such other date as the Trustee may accept in its discretion).
4
3. Paying Agent, Registrar and Collateral Agent
Initially, Wilmington Trust Company, as trustee ("Trustee"),
will act as Paying Agent and Registrar. The Company may appoint and change any
Paying Agent, Registrar or co-registrar without notice. The Company or any of
its domestically incorporated Wholly Owned Recourse Subsidiaries may act as
Paying Agent, Registrar or co-registrar. Initially, Wilmington Trust Company
will act as Collateral Agent.
4. Indenture
The Company issued the Securities under an Indenture dated as
of November 26, 2001 ("Indenture"), between the Company and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
ss.ss. 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act").
Capitalized terms used herein and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are obligations of the Company secured as
provided in paragraph 9 below and limited to $663,000,000 aggregate Principal
amount (subject to Section 2.07 of the Indenture). This Security is one of the
Exchange Securities referred to in the Indenture. The Securities constitute
"Designated Senior Debt" of the Company for purposes of the Company's Indenture
dated as of February 1, 1998 with U.S. Bank Trust National Association, as
trustee. [This Security is one of the Original Securities referred to in the
Indenture issued in an aggregate Principal amount of $363,000,000. The
Securities include the Original Securities, up to an aggregate Principal amount
of $300,000,000 of Additional Securities that may be issued under the Indenture
and any Exchange Securities or Private Exchange Securities issued in exchange
for Initial Securities]. [This Security is one of up to $300,000,000 aggregate
Principal amount of Additional Securities. The Securities include such
Additional Securities, the Initial Securities in an aggregate principal amount
of $363,000,000 previously issued under the Indenture and any Exchange
Securities or Private Exchange Securities issued in exchange for Initial
Securities.] The Initial Securities, the Exchange Securities, the Private
Exchange Securities and any Additional Securities are treated as a single class
of securities under the Indenture. The Indenture imposes certain limitations
on, among other things, the
5
issuance of debt and redeemable stock by the Company, the issuance of debt and
preferred stock by the Subsidiaries of the Company, the payment of dividends and
other distributions and acquisitions or retirements of the Company's Capital
Stock and Subordinated Obligations, the incurrence by the Company and its
Subsidiaries of Liens on its property and assets, the sale or transfer of assets
and Subsidiary stock by the Company and transactions with Affiliates. In
addition, the Indenture limits the ability of the Company and its Subsidiaries
to restrict distributions and dividends from Subsidiaries.
5. Optional Redemption
The Company may redeem the Securities at the option of the
Company at any time or from time to time, in whole or in part, at a redemption
price equal to the sum of (i) the then outstanding aggregate Principal amount
thereof, plus (ii) accrued and unpaid interest (if any) to the redemption date,
plus (iii) the Applicable Premium.
6. Notice of Redemption
Notice of redemption under paragraph 5 will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his registered address. Securities in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000. If money sufficient to pay the redemption price of and accrued interest
on all Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to accrue
on such Securities (or such portions thereof) called for redemption.
6
7. Put Provisions
Upon a Change of Control, any Holder of Securities will have
the right, subject to certain conditions, to cause the Company to repurchase all
or any part of the Securities of such Holder at a repurchase price equal to the
Put Amount of the Securities to be repurchased plus accrued and unpaid interest
to the repurchase date (subject to the right of Holders of record on the
relevant record date to receive interest due on the related interest payment
date) as provided in, and subject to the terms of, the Indenture.
8. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or
exchange Securities in accordance with the Indenture. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities for a period of 15 days before a selection of Securities to be
redeemed.
9. Guarantees; Security
The payment of Principal of and interest, if any, on the
Securities and other Obligations of the Company under the Securities and the
Indenture will be (i) unconditionally and jointly and severally guaranteed by
the Guarantors, pursuant to, and subject to the terms (including release
provisions) of, Section 4.10 and Article X of the Indenture and (ii) secured on
a second-priority basis by the Lien of the Security Documents pursuant to, and
subject to the terms (including release provisions) of, Section 4.12 and Article
XI of the Indenture and the Collateral Agency Agreement.
7
10. Persons Deemed Owners
The registered Holder of this Security may be treated as the
owner of it for all purposes.
11. Unclaimed Money
If money for the payment of Principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
12. Discharge and Defeasance
Subject to certain conditions, the Company at any time may
terminate some or all of its obligations under the Securities and the Indenture
if the Company deposits with the Trustee money or U.S. Government Obligations
for the payment of Principal and interest on the Securities to redemption or
maturity, as the case may be.
8
13. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture, any Indenture Guarantee or the Securities or any other Indenture
Document may be amended with the written consent of the Holders of at least a
majority in Principal amount outstanding of the Securities and (ii) any default
or noncompliance with any provision may be waived with the written consent of
the Holders of a majority in Principal amount outstanding of the Securities.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Securityholder, the Company, the Guarantors and the Trustee may amend the
Indenture, any Indenture Guarantee or the Securities or any other Indenture
Document to cure any ambiguity, omission, defect or inconsistency, or to comply
with Sections 4.10, 4.11 or 4.12 or Article V or XI of the Indenture, or to
provide for uncertificated Securities in addition to or in place of certificated
Securities, or to add Indenture Guarantees with respect to the Securities or to
secure the Securities, or to add additional covenants or surrender rights and
powers conferred on the Company, or to comply with any requirement of the SEC in
connection with qualifying the Indenture under the Act, or to otherwise comply
with the Act or to provide for the issuance of the Exchange Securities or the
Private Exchange Securities, or to make any change that does not adversely
affect the rights of any Securityholder. A consent to any amendment or waiver of
any provision in the Indenture or in the Securities by any Holder given in
connection with a tender of such Holder's Securities shall not be rendered
invalid by such tender.
9
14. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for
30 days in payment of interest on the Securities; (ii) default in payment of
Principal on the Securities at maturity, upon redemption pursuant to paragraph 5
of the Securities, upon declaration or otherwise, or failure by the Company to
repurchase Securities when required; (iii) failure by the Company, as
applicable, to comply with other agreements in the Indenture or the Securities,
in certain cases subject to notice and lapse of time; (iv) certain accelerations
(including failure to pay within any grace period after final maturity) of other
Debt of the Parent Guarantor, the Company or any Significant Subsidiary if the
amount accelerated (or so unpaid) exceeds $25 million and continues for 10 days
after the required notice to the Company; (v) certain events of bankruptcy or
insolvency with respect to the Parent Guarantor, the Company or any Significant
Subsidiary; (vi) certain judgments or decrees for the payment of money in excess
of $25 million if such default continues for 10 days after the required notice
to the Company; (vii) the invalidity or asserted invalidity by the Company or
any Guarantor of the Liens created by the Security Documents (with certain
exceptions) if such default continues for 10 days after the required notice to
the Company; and (viii) an Indenture Guarantee ceasing to be in full force and
effect (other than in accordance with the Indenture) if such default continues
for 10 days after the required notice to the Company or denial or disaffirmation
by a Guarantor of its obligations under its Indenture Guarantee. If an Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
Principal amount of the Securities may declare all the Securities to be due and
payable immediately. Certain events of bankruptcy or insolvency are Events of
Default which will result in the Securities being due and payable immediately
upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in Principal
amount of the Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Securityholders notice of any continuing
Default (except a Default in payment of Principal or interest) if it determines
that withholding notice is in their interest.
10
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
16. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any liability for any obligations of the
Company or the Trustee under the Securities or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. By
accepting a Security, each Securityholder waives and releases all such
liability. The waiver and release are part of the consideration for the issue of
the Securities.
17. Authentication
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. Abbreviations
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
11
19. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
20. Holders' Compliance with Registration Agreement
Each Holder of a Security, by acceptance hereof, acknowledges
and agrees to the provisions of the Registration Agreement, including, without
limitation, the obligations of the Holders with respect to a registration and
the indemnification of the Company to the extent provided therein.
21. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
The Company will furnish to any Securityholder upon written
request and without charge to the Securityholder a copy of the Indenture which
has in it the text of this Security in larger type. Requests may be made to the
Company at:
625 Madison Avenue
New York, New York 10022
Attention of General Counsel
12
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer
this Security on the books of the Company. The agent
may substitute another to act for him.
Date: Your Signature:
------------------------- -------------------------------
(Sign exactly as your name
appears on the other side of
this Security.)
Signature must be guaranteed
by a participant in a
recognized signature guaranty
medallion program or other
signature guarantor acceptable
to the Trustee.
13
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.07 or 4.09 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.07 or 4.09 of the Indenture,
state the amount in Principal amount: $
Date: Your Signature:
---------------------- ------------------------------
(Sign exactly as your name
appears on the other side of
the Security.)
Signature Guarantee:
-----------------------------------------------------------
(Signature must be guaranteed by a member
firm of the New York Stock Exchange or a
commercial bank or trust company.)
14
EXHIBIT 4.3
REVLON CONSUMER PRODUCTS CORPORATION
12% Senior Secured Notes Due 2005
REGISTRATION AGREEMENT
November 26, 2001
SALOMON SMITH BARNEY INC.
As Representative of the Initial Purchasers
388 Greenwich Street
New York, NY 10013
Dear Sirs:
Revlon Consumer Products Corporation, a Delaware corporation ("Revlon"
or the "Issuer"), proposes to issue and sell to Salomon Smith Barney Inc. as
representative of certain initial purchasers (the "Initial Purchasers") listed
on 1 of a purchase agreement dated November 19, 2001 (the "Purchase
Agreement"), upon the terms set forth therein, its 12% Senior Secured Notes due
2005 (the "Notes"). Capitalized terms used but not specifically defined herein
are defined in the Purchase Agreement. As an inducement to the Initial
Purchasers to enter into the Purchase Agreement and in satisfaction of a
condition to your obligations thereunder, Revlon and the Guarantors agree with
you, for the benefit of the holders of the Notes (including the Initial
Purchasers) (the "Holders"), as follows:
1. Registered Exchange Offer. Revlon and the Guarantors shall, at
their cost, prepare and, not later than 90 days after the Closing Date (or, if
the 90th day is not a business day, the first business day thereafter) (February
25, 2002, assuming the Closing Date is November 26, 2001), shall file with the
Securities and Exchange Commission (the "Commission") a registration statement
(the "Exchange Offer Registration Statement") on an appropriate form under the
Securities Act of 1933, as amended (the "1933 Act"), with respect to a proposed
offer (the "Registered Exchange Offer") to the Holders to issue and deliver to
such Holders, in exchange for the Notes, a like principal amount of debt
securities (the "Exchange Notes") of Revlon with terms substantially identical
in all material respects to the Notes (except that the Exchange Notes will not
contain terms with respect to transfer restrictions and interest rate
increases), shall use their respective best efforts to cause the Exchange Offer
Registration Statement to become effective under the 1933 Act by 180 days after
the Closing Date (or, if the 180th day is not a business day, the first business
day thereafter) (May 28, 2002, assuming the Closing Date is November 26, 2001)
and shall use their respective
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best efforts to keep the Exchange Offer Registration Statement effective under
the 1933 Act until the close of business on the 180th day following the
expiration of the Registered Exchange Offer (such period being called the
"Exchange Offer Registration Period") for use by Exchanging Dealers (as defined
below) as contemplated in Section 3(g) below. Revlon and the Guarantors shall be
deemed not to have used their respective best efforts to keep the Exchange Offer
Registration Statement effective during the Exchange Offer Registration Period
if Revlon or any Guarantor voluntarily takes any action that would result in
Exchanging Dealers not being able to use such Registration Statement as
contemplated in such Section 3(g), unless (i) such action is required by
applicable law or (ii) such action is taken by Revlon or a Guarantor in good
faith and for valid business reasons (not including avoidance of Revlon's and
the Guarantors' obligations hereunder), including, but not limited to, the
acquisition or divestiture of assets, so long as Revlon and the Guarantors
promptly thereafter comply with the requirements of Section 3(j) hereof, if
applicable. The Exchange Notes will be issued under the Indenture.
Upon the effectiveness of the Exchange Offer Registration Statement,
the Issuer and the Guarantors shall promptly commence the Registered Exchange
Offer, it being the objective of such Registered Exchange Offer to enable each
Holder electing to exchange Notes for Exchange Notes (assuming that such Holder
is not an affiliate of Revlon within the meaning of the 1933 Act, acquires the
Exchange Notes in the ordinary course of such Holder's business and has no
arrangements with any person to participate in the distribution of the Exchange
Notes) to trade such Exchange Notes from and after their receipt without any
limitations or restrictions under the 1933 Act and without material restrictions
under the securities laws of a substantial proportion of the several states of
the United States. Notwithstanding the foregoing, the Initial Purchasers, Revlon
and the Guarantors acknowledge that, pursuant to current interpretations by the
Commission's staff of Section 5 of the 1933 Act, and in the absence of an
applicable exemption therefrom, (i) each Holder (including any Initial
Purchaser) which is a broker-dealer electing to exchange the Notes, acquired for
its own account as a result of market making activities or other trading
activities, for the Exchange Notes (an "Exchanging Dealer"), is required to
deliver a prospectus containing the information set forth in Annex A hereto on
the cover, in Annex B hereto in "The Exchange Offer" section, and in Annex C
hereto in the "Plan of Distribution" section of such prospectus in connection
with a sale of any such Exchange Notes received by such Exchanging Dealer
pursuant to the Registered Exchange Offer
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and (ii) each Initial Purchaser which elects to sell Exchange Notes acquired in
exchange for the Notes constituting any portion of an unsold allotment is
required to deliver a prospectus containing the information required by Items
507 and/or 508 of Regulation S-K under the 1933 Act, as applicable, in
connection with such a sale.
If, upon consummation of the Registered Exchange Offer, any Initial
Purchaser holds the Notes constituting any portion of an unsold allotment
acquired by it as part of its initial distribution, the Issuer, simultaneously
with the delivery of the Exchange Notes pursuant to the Registered Exchange
Offer, shall issue and deliver to such Initial Purchaser upon the written
request of such Initial Purchaser, in exchange (the "Private Exchange") for the
Notes held by such Initial Purchaser, a like principal amount of the Exchange
Notes issued under the Indenture and identical in all material respects
(including the existence of restrictions on transfer under the 1933 Act and the
securities laws of the several states of the United States) to the Notes (the
"Private Exchange Notes"; the Notes, the Exchange Notes and the Private Exchange
Notes being hereinafter referred to collectively as the "Securities"). The
Issuer and the Guarantors will use reasonable efforts to cause the Private
Exchange Notes to bear the same CUSIP number as the Exchange Notes.
In connection with the Registered Exchange Offer, the Issuer and the
Guarantors shall:
(a) mail to each Holder a copy of the prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter of
transmittal and related documents;
(b) keep the Registered Exchange Offer open for not less than 30 days
after the date notice thereof is mailed to the Holders (or longer if
required by applicable law);
(c) utilize the services of a depositary for the Registered Exchange
Offer with an address in the Borough of Manhattan, The City of New York;
(d) permit Holders to withdraw tendered Notes at any time prior to the
close of business, New York time, on the last business day on which the
Registered Exchange Offer shall remain open; and
(e) otherwise comply in all respects with all applicable laws.
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As soon as practicable after the close of the Registered Exchange
Offer or the Private Exchange, as the case may be, the Issuer and the Guarantors
shall:
(a) accept for exchange all Notes tendered and not validly withdrawn
pursuant to the Registered Exchange Offer and the Private Exchange;
(b) deliver to the Trustee for cancellation all Notes so accepted for
exchange; and
(c) cause the Trustee promptly to authenticate and deliver to each
Holder of the Notes either Exchange Notes or Private Exchange Notes, as the
case may be, equal in principal amount to the Notes of such Holder so
accepted for exchange.
The Indenture will provide that the Exchange Notes will not be subject
to the transfer restrictions applicable to the Notes set forth in the Indenture
and that all Securities issued under the Indenture will vote and consent
together on all matters as one class and that none of the Securities issued
under the Indenture will have the right to vote or consent as a class separate
from one another on any matter.
Notwithstanding any other provisions hereof, the Issuer and the
Guarantors shall ensure that (i) any Exchange Offer Registration Statement and
any amendment thereto and any prospectus forming part thereof and any supplement
thereto complies in all material respects with the 1933 Act and the rules and
regulations thereunder, (ii) any Exchange Offer Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(iii) any prospectus forming part of any Exchange Offer Registration Statement,
and any supplement to such prospectus, does not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements, in the light of the circumstances under which they were made, not
misleading.
Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Issuer that at the time of the consummation of the
Registered Exchange Offer (i) any Exchange Notes received by such Holder will be
acquired in the ordinary course of business, (ii) such Holder will have no
arrangements or understanding with any person to participate in the distribution
of the
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Notes or the Exchange Notes within the meaning of the 1933 Act, (iii) such
Holder is not an "affiliate", as defined in Rule 405 of the 1933 Act, of Revlon
or if it is an affiliate, such Holder acknowledges that it must comply with the
registration and prospectus delivery requirements of the 1933 Act to the extent
applicable, (iv) if such Holder is not a broker-dealer, that it is not engaged
in, and does not intend to engage in, a distribution of the Exchange Notes and
(v) if such Holder is a broker-dealer, that it will receive Exchange Notes for
its own account in exchange for the Notes that were acquired as a result of
market-making activities or other trading activities and that it will be
required to acknowledge that it will deliver a prospectus in connection with any
resale of such Exchange Notes.
2. Shelf Registration. If, (i) because of any change in law or
applicable interpretations thereof by the Commission's staff, the Issuer
determines that it is not permitted to effect the Registered Exchange Offer as
contemplated by Section 1 hereof, (ii) for any other reason the Registered
Exchange Offer is not consummated by the 210th day after the Closing Date (or,
if such day is not a business day, the first business day thereafter) (June 24,
2002, assuming the Closing Date is November 26, 2001), (iii) any Initial
Purchaser so requests with respect to the Notes (or Private Exchange Notes) held
by it following consummation of the Registered Exchange Offer, (iv) any Holder
(other than an Exchanging Dealer) is not eligible to participate in the
Registered Exchange Offer or, in the case of any Holder (other than an
Exchanging Dealer) or Initial Purchaser that participates in the Registered
Exchange Offer, such Holder or Initial Purchaser does not receive freely
tradeable Exchange Notes in exchange for the exchanged Notes (in the case of an
Initial Purchaser constituting any portion of an unsold allotment) (it being
understood that the requirement that an Initial Purchaser deliver a prospectus
in connection with sales of the Exchange Notes acquired in the Registered
Exchange Offer in exchange for the Notes acquired as a result of market-making
activities or other trading activities, shall not result in such Exchange Notes
not being "freely tradeable" for purposes of this Section 2) or (v) if the
Issuer so elects, the following provisions shall apply:
(a) The Issuer and the Guarantors shall, at their cost, as promptly as
practicable file with the Commission and thereafter shall use their best efforts
to cause to be declared effective a shelf registration statement on an
appropriate form under the 1933 Act relating to the offer and sale of the Notes
by the Holders or the Exchange Notes or the Private Exchange Notes by the
Initial Purchasers, as
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applicable, from time to time in accordance with the methods of distribution
elected by such Holders or the Initial Purchasers, as applicable, and set forth
in such registration statement (hereafter, a "Shelf Registration Statement" and,
together with any Exchange Offer Registration Statement, a "Registration
Statement").
(b) The Issuer and the Guarantors shall use their best efforts to keep
the Shelf Registration Statement continuously effective in order to permit the
prospectus forming part thereof to be usable by Holders or the Initial
Purchasers, as applicable, for a period of two years from the date the Shelf
Registration Statement is declared effective by the Commission or such shorter
period that will terminate when all the Notes covered by the Shelf Registration
Statement have been sold pursuant to the Registration Statement or when, in the
opinion of outside counsel to the Issuer, which is reasonably satisfactory in
form and substance to counsel for the Initial Purchasers, all such Notes may be
sold without registration under the 1933 Act and unlegended certificates
representing the Securities may be given to the holders thereof (in any such
case, such period being called the "Shelf Registration Period"). The Issuer and
the Guarantors shall be deemed not to have used their best efforts to keep the
Shelf Registration Statement effective during the requisite period if Revlon or
any Guarantor voluntarily takes any action that would result in Holders of
Securities covered thereby not being able to offer and sell such Securities
during that period, unless (i) such action is required by applicable law, or
(ii) such action is taken by Revlon or a Guarantor in good faith and for valid
business reasons (not including avoidance of Revlon's and the Guarantors'
obligations hereunder), including, but not limited to, the acquisition or
divestiture of assets, so long as the Issuer and the Guarantors promptly
thereafter comply with the requirements of Section 3(j) hereof, if applicable.
(c) Notwithstanding any other provisions hereof, the Issuer and the
Guarantors shall ensure that (i) any Shelf Registration Statement and any
amendment thereto and any prospectus forming part thereof and any supplement
thereto complies in all material respects with the 1933 Act and the rules and
regulations thereunder, (ii) any Shelf Registration Statement and any amendment
thereto does not, when it becomes effective, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) any prospectus
forming part of any Shelf Registration Statement, and any supplement to such
prospectus, does not include an untrue statement of a
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material fact or omit to state a material fact necessary in order to make the
statements, in the light of the circumstances under which they were made, not
misleading.
3. Registration Procedures. In connection with any Shelf Registration
Statement and, to the extent applicable, any Exchange Offer Registration
Statement, the following provisions shall apply:
(a) The Issuer and the Guarantors shall (i) furnish to each Initial
Purchaser, prior to the filing thereof with the Commission, a copy of the
Registration Statement and each amendment thereof and each supplement, if any,
to the prospectus included therein and shall use its best efforts to reflect in
each such document, when so filed with the Commission, such comments as the
Initial Purchasers reasonably may propose; (ii) include the information set
forth in Annex A hereto on the cover, in Annex B hereto in "The Exchange Offer"
section, and in Annex C hereto in the "Plan of Distribution" section of the
prospectus forming a part of the Exchange Offer Registration Statement, and
include the information set forth in Annex D hereto in the Letter of Transmittal
delivered pursuant to the Registered Exchange Offer; (iii) if requested by an
Initial Purchaser, include the information required by Items 507 and/or 508 of
Regulation S-K under the 1933 Act, as applicable, in the prospectus forming a
part of the Registration Statement; and (iv) in the case of a Shelf Registration
Statement, include the names of the Holders who propose to sell Securities
pursuant to the Shelf Registration Statement, as selling security holders.
(b) (1) The Issuer and the Guarantors shall advise you (which notice
pursuant to clause (ii) shall be accompanied by an instruction to suspend the
use of the prospectus until the requisite changes have been made) and, in the
case of a Shelf Registration Statement, the Holders of Securities included
therein, and, in the case of an Exchange Offer Registration Statement, any
Exchanging Dealer which has provided in writing to the Issuer a telephone or
facsimile number or address for notices, and, if requested by you or any such
Holder or Exchanging Dealer, confirm such advice in writing:
(i) when any Registration Statement and any amendment thereto has
been filed with the Commission and when the Registration Statement or
any post-effective amendment thereto has become effective; and
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(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the prospectus included
therein or for additional information.
(2) The Issuer and the Guarantors shall advise you and, in the case of
a Shelf Registration Statement, Holders of Securities included therein,
and, in the case of an Exchange Offer Registration Statement, any
Exchanging Dealer which has provided in writing to the Issuer a telephone
or facsimile number or address for notices, and, if requested by you or any
such Holder or Exchanging Dealer, confirm such advice in writing;
(i) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose;
(ii) of the receipt by the Issuer of any notification with
respect to the suspension of the qualification of the Securities
included therein for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and
(iii) of the happening of any event that requires the making of
any changes in the Registration Statement or the prospectus so that,
as of such date, the statements therein are not misleading and do not
omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the
prospectus, in light of the circumstances under which they were made)
not misleading (which advice shall be accompanied by an instruction to
suspend the use of the prospectus until the requisite changes have
been made).
(c) The Issuer and the Guarantors shall make every reasonable effort
to obtain the withdrawal of any order suspending the effectiveness of any
Registration Statement at the earliest possible time.
(d) The Issuer and the Guarantors shall furnish to each Holder of
Securities included within the coverage of any Shelf Registration Statement
(including any Exchanging Dealer which so requests in writing or any
Initial Purchaser), without charge, at least one copy of such Shelf
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, and, if the Holder so requests in
writing, all exhibits (including those incorporated by reference).
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(e) The Issuer and the Guarantors shall, during the Shelf Registration
Period, deliver to each Holder of Securities included within the coverage
of any Shelf Registration Statement, without charge, as many copies of the
prospectus (including each preliminary prospectus) included in such Shelf
Registration Statement and any amendment or supplement thereto as such
Holder may reasonably request; and the Issuer and the Guarantors consent to
the use of the prospectus or any amendment or supplement thereto by each of
the selling Holders of Securities in connection with the offering and sale
of the Securities covered by the prospectus or any amendment or supplement
thereto.
(f) The Issuer and the Guarantors shall furnish to each Exchanging
Dealer or Initial Purchaser, as applicable, which so requests, without
charge, at least one copy of the Exchange Offer Registration Statement and
any post-effective amendment thereto, including financial statements and
schedules, and, if the Exchanging Dealer or Initial Purchaser, as
applicable, so requests in writing, all exhibits (including those
incorporated by reference).
(g) The Issuer and the Guarantors shall, during the Exchange Offer
Registration Period, promptly deliver to each broker-dealer that is the
beneficial owner (as defined in Rule 13d-3 under the Securities Exchange
Act of 1934, as amended (the "1934 Act")) of Exchange Notes received by
such broker-dealer in the Registered Exchange Offer (a "Participating
Broker-Dealer") and such other persons as may be required to deliver a
prospectus following the Registered Exchange Offer, without charge, as many
copies of the prospectus included in such Exchange Offer Registration
Statement and any amendment or supplement thereto as such person may
reasonably request for delivery by such person in connection with a sale of
Exchange Notes received by it pursuant to the Registered Exchange Offer;
and the Issuer and the Guarantors consent to the use of the prospectus or
any amendment or supplement thereto by any such Participating Broker-Dealer
or other person as aforesaid.
(h) Prior to any public offering of Securities pursuant to any
Registration Statement, the Issuer and the Guarantors shall register or
qualify or cooperate with the Holders of Securities included therein and
their respective counsel in connection with the registration or
qualification of such Securities for offer and sale under the securities or
blue sky laws of such jurisdictions as any such Holder reasonably requests
in writing and do any and all other acts or things necessary or advisable
to enable the offer and sale in such jurisdictions of the Securities
covered by such
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Registration Statement; provided, however, that Revlon and the Guarantors shall
not be required to qualify generally to do business in any jurisdiction where it
is not then so qualified or to take any action which would subject it to general
service of process or to taxation in any such jurisdiction where it is not then
so subject.
(i) The Issuer and the Guarantors shall cooperate with the Holders of
Securities to facilitate the timely preparation and delivery of certificates
representing the Securities to be sold pursuant to any Shelf Registration
Statement free of any restrictive legends and in such denominations and
registered in such names as Holders may request prior to sales of the Securities
pursuant to such Shelf Registration Statement.
(j) Upon the occurrence of any event contemplated by paragraph
(b)(2)(iii) above, the Issuer and the Guarantors shall promptly prepare a
post-effective amendment to the Registration Statement or a supplement to the
related prospectus or file any other required document so that, as thereafter
delivered to purchasers of the Securities included therein, the prospectus will
not include an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. If the Issuer notifies the Initial
Purchasers, the Holders and any known Participating Broker-Dealer in accordance
with paragraphs (1)(ii) or (2)(i) through (iii) of Section 3(b) above to suspend
the use of the prospectus until the requisite changes to the prospectus have
been made, then the Initial Purchasers, the Holders and any such Participating
Broker-Dealers shall suspend use of such prospectus.
(k) Not later than the effective date of the applicable Registration
Statement, the Issuer and the Guarantors shall provide a CUSIP number for the
Notes, the Exchange Notes or the Private Exchange Notes, as the case may be, and
provide the trustee with printed certificates for the Notes, the Exchange Notes
or the Private Exchange Notes, as the case may be, in a form eligible for
deposit with The Depository Trust Company (it being expressly understood that
the Exchange Notes will continue to be held in book-entry form in the same
manner as the Notes).
(l) The Issuer and the Guarantors shall comply with all applicable
rules and regulations of the Commission and shall make generally available to
its security holders as soon as practicable after the effective date of the
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applicable Registration Statement an earnings statement satisfying the
provisions of Section 11(a) of the 1933 Act.
(m) The Issuer and the Guarantors shall cause the Indenture to be
qualified under the Trust Indenture Act of 1939, as amended, in a timely manner.
In the event that such qualification would require the appointment of a new
trustee under the Indenture, the Issuer and the Guarantors shall appoint a new
trustee thereunder pursuant to the applicable provisions of the Indenture.
(n) The Issuer may require each Holder of Securities to be sold
pursuant to any Shelf Registration Statement to furnish to the Issuer such
information regarding the Holder and the distribution of such Securities as the
Issuer may from time to time reasonably require for inclusion in such
Registration Statement, and the Issuer may exclude from such Registration
Statement the Securities of any Holder that fails to furnish such information
within a reasonable time after receiving such request.
(o) The Issuer and the Guarantors shall enter into such customary
agreements (including if requested an underwriting agreement in customary form)
and take all such other action, if any, as any Holder shall reasonably request
in order to facilitate the disposition of the Securities pursuant to any Shelf
Registration Statement.
(p) In the case of any Shelf Registration Statement, the Issuer and
the Guarantors shall (i) make reasonably available for inspection by the
Holders, and any underwriter participating in any disposition pursuant to a
Registration Statement, and any attorney, accountant or other agent retained by
the Holders or any such underwriter, all relevant financial and other records,
pertinent corporate documents and properties of the Issuer and the Guarantors
and (ii) cause the Issuer's and the Guarantors' respective officers, directors
and employees to supply all relevant information reasonably requested by the
Holders or any such underwriter, attorney, accountant or agent in connection
with any such Registration Statement.
(q) In the case of any Exchange Offer Registration Statement, the
Issuer and the Guarantors shall (i) make reasonably available for inspection by
the Initial Purchasers, but in each case only in such firm's capacity as an
Exchanging Dealer and with the express understanding that each such firm shall
be acting solely for itself and not on behalf of any other party, including,
without limitation, any other Exchanging Dealer, all relevant financial and
other records, pertinent corporate documents and properties
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of the Issuer and the Guarantors and (ii) cause the Issuer's and the Guarantors'
respective officers, directors and employees to supply all information
reasonably requested by any of them.
(r) In the case of any Shelf Registration Statement, the Issuer and
the Guarantors, if requested by any Holder, shall cause (x) their counsel to
deliver an opinion relating to the Securities included within the coverage of
such Shelf Registration Statement in customary form, (y) their respective
officers to execute and deliver all customary documents and certificates
requested by any underwriters of the Securities and (z) their independent public
accountants to provide to the selling Holders and any underwriter therefor a
comfort letter in customary form.
(s) In the case of any Exchange Offer Registration Statement, the
Issuer and the Guarantors, if requested by the Initial Purchasers, but in each
case only in such firm's capacity as an Exchanging Dealer and with the express
understanding that each such firm shall be acting solely for itself and not on
behalf of any other party, including, without limitation, any other Exchanging
Dealer, in connection with any prospectus delivery as contemplated in paragraph
(g) above, shall use their best efforts to cause, on and as of the effective
date of the Exchange Offer Registration Statement, (x) their counsel to deliver
an opinion relating to the Exchange Offer Registration Statement and the
Exchange Notes in customary form, (y) their respective officers to execute and
deliver all customary documents and certificates requested and (z) their
independent public accountants to provide a comfort letter in customary form,
subject to receipt of appropriate documentation (including the delivery of a
customary representation letter), as contemplated by Statement on Auditing
Standards No. 72.
(t) If a Registered Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Notes by Holders to the Issuer (or to such
other person as directed by the Issuer) in exchange for the Exchange Notes or
the Private Exchange Notes, as the case may be, the Issuer shall mark, or cause
to be marked, on the Notes so exchanged that such Notes are being canceled in
exchange for the Exchange Notes or the Private Exchange Notes, as the case may
be; in no event shall the Notes be marked as paid or otherwise satisfied.
(u) The Issuer shall pay interest on the Notes for failure to comply
with its and the Guarantors'
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obligations under Section 1 or Section 2, as applicable, in accordance with the
terms of the Notes.
4. Registration Expenses. Revlon and the Guarantors shall bear all
expenses incurred in connection with the performance of its obligations under
Sections 1, 2 and 3 hereof and, in the event of any Shelf Registration
Statement, shall reimburse the Holders for the reasonable fees and disbursements
of one firm or counsel designated by the Holders of a majority in principal
amount of the Securities to be registered thereunder to act as counsel for the
Holders in connection therewith, and, in the case of any Exchange Offer
Registration Statement, shall reimburse the Initial Purchasers, as applicable,
for the reasonable fees and disbursements of counsel in connection therewith,
whether or not the Exchange Offer Registration Statement or a Shelf Registration
Statement is filed or becomes effective.
5. Indemnification. (a) In the event of a Shelf Registration or in
connection with any prospectus delivery pursuant to a Registered Exchange Offer
by an Exchanging Dealer as contemplated in Section 3(g) above, Revlon and the
Guarantors shall indemnify and hold harmless each Holder and each person, if
any, who controls such Holder within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in any such Registration
Statement or any prospectus forming part thereof or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any prospectus, in
the light of the circumstances under which they were made) not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental or regulatory agency or body, commenced or threatened, or of
any claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission; and
(iii) against any and all expense whatsoever, as incurred (including,
subject to Section 5(c) hereof, the fees and disbursements of counsel
chosen by the
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indemnified party reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding
by any governmental or regulatory agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission);
provided, however, that (i) this indemnity shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Issuer by the indemnified party expressly for use in such Registration
Statement and (ii) such indemnity with respect to any preliminary
prospectus shall not inure to the benefit of any Holder (or any person
controlling such Holder) from whom the person asserting any such loss,
claim, damage or liability purchased the Securities which are the subject
thereof if such person did not receive a copy of the final prospectus (or
the final prospectus as supplemented) at or prior to the confirmation of
the sale of such Securities to such person and (A) the untrue statement or
omission of a material fact contained in such preliminary prospectus was
corrected in the final prospectus (or the final prospectus as supplemented)
and (B) such Holder had previously been furnished by or on behalf of the
Issuer (prior to the date of mailing by such Holder of the applicable
confirmation) with a sufficient number of copies of the final prospectus as
so amended or supplemented.
(b) In the event of a Shelf Registration Statement, each Holder shall
indemnify and hold harmless the Issuer and the Guarantors, their respective
directors and officers and each person, if any, who controls the Issuer or
any Guarantor within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act against any and all loss, liability, claim, damage and
expense described in the indemnity contained in Section 5(a) hereof, as
incurred, but only with respect to untrue statements or omissions, or
alleged untrue statements or omissions, made in the Registration Statement
(or any amendment or supplement thereto) in reliance on and in conformity
with written information furnished to the Issuer by such Holder expressly
for use in the Registration Statement (or in such amendment or supplement);
provided, however, that no such Holder shall be liable for any indemnity
claims hereunder in excess of the amount of net proceeds received by such
Holder from the sale of Securities pursuant to the Registration Statement.
15
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it
in respect of which indemnity may be sought hereunder, but failure to so
notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have otherwise than on account of this indemnity
agreement, except to the extent actually prejudiced thereby. If any such
claim or action shall be brought against an indemnified party, the
indemnified party shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the
extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying
party to the indemnified party of its election to assume the defense of
such claim or action, the indemnifying party shall not be liable to the
indemnified party under this Section 5 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the
defense thereof (other than reasonable costs of investigation); provided,
however, if the defendants in any such action include both an indemnified
party and an indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties that are different from or additional to
those available to the indemnifying party, the indemnified party or parties
under this Section 5 shall have the right to employ not more than one
counsel (in addition to any local counsel) to represent them and, in that
event, the fees and expenses of not more than one such separate counsel (in
addition to any local counsel) shall be paid by the indemnifying party, as
such expenses are incurred. No indemnifying party shall be liable for any
settlement effected without its written consent. An indemnifying party
shall not, without the prior written consent of the indemnified party,
settle or compromise or consent to the entry of any judgment with respect
to any pending or threatened claim, action, suit or proceeding in respect
of which indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding.
(d) To provide for just and equitable contribution in circumstances in
which the indemnity provided for in Sections 5(a) through (c) hereof is for
any reason held to be unenforceable by the indemnified parties
16
although applicable in accordance with its terms, Revlon and the
Guarantors, on the one hand, and the applicable Holder or Holders, on the
other hand, shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity incurred
by Revlon and the Guarantors and such Holder or Holders, as incurred, in
such proportions that Revlon and the Guarantors are responsible for that
portion represented by the percentage that the aggregate consideration
received by Revlon from the sale by it of the Securities sold by such
Holder bears to the aggregate principal amount of Securities sold by such
Holder and such Holder is responsible for the balance; provided, however,
that no person found guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) by a court of competent
jurisdiction shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section
5, each person, if any, who controls a Holder within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights
to contribution as such Holder and each director and officer of Revlon and
each person, if any, who controls Revlon within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as Revlon.
(e) The agreements contained in this Section 5 shall survive the sale
of the Securities pursuant to a Registration Statement and shall remain in
full force and effect, regardless of any termination or cancelation of this
Agreement or any investigation made by or on behalf of any indemnified
party.
6. Underwritten Registrations. (a) "Transfer Restricted Notes" means
each Security until (i) the date on which such Transfer Restricted Note has
been exchanged by a person other than a broker-dealer for a freely
transferable Exchange Note in the Registered Exchange Offer, (ii) following
the exchange by a broker-dealer in the Registered Exchange Offer of a
Transfer Restricted Note for an Exchange Note, the date on which such
Exchange Note is sold to a purchaser who receives from such broker-dealer
on or prior to the date of such sale a copy of the prospectus contained in
the Exchange Offer Registration Statement, (iii) the date on which such
Transfer Restricted Note has been effectively registered under the 1933 Act
and disposed of in accordance with the Shelf Registration Statement or (iv)
the date on which such Transfer Restricted Note is distributed to the
public pursuant to Rule 144 under the 1933 Act or is saleable pursuant to
Rule 144(k) under the 1933 Act.
17
(b) If any of the Transfer Restricted Notes covered by any Shelf
Registration are to be sold in an underwritten offering, the investment
banker or investment bankers and manager or managers that will administer
the offering ("Managing Underwriters") will be selected by the Holders of a
majority in aggregate principal amount of such Transfer Restricted Notes to
be included in such offering.
No person may participate in any underwritten registration
hereunder unless such person (i) agrees to sell such person's Transfer
Restricted Notes on the basis reasonably provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements.
7. Miscellaneous. (a) Amendment and Waivers. The provisions of
this Agreement may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, unless
Revlon has obtained the written consent of Holders of a majority in
aggregate principal amount of the Securities.
(b) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telex, telecopier, or air courier guaranteeing overnight delivery:
(i) if to a Holder, at the most current address given by such
Holder to the Issuer in accordance with the provisions of this Section
7(b), which address initially is, with respect to each Holder, the
address of such Holder maintained by the Registrar under the
Indenture, with a copy in like manner to the Initial Purchasers;
(ii) if to the Initial Purchasers, initially at the respective
addresses set forth in the Purchase Agreement with copies to the
parties specified therein; and
(iii) if to the Issuer or any Guarantor, initially at the address
of the Issuer set forth in the Purchase Agreement, with copies to the
parties specified therein.
All such notices and communications shall be deemed to have been
duly given when received.
18
The Initial Purchasers or Revlon by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
(c) Successors and Assigns. This Agreement shall be binding upon
Revlon and the Guarantors and their respective successors and assigns.
(d) Counterparts. This agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(e) Headings. The headings in this agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning
hereof.
(f) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY. Specified times of day refer to New York City time.
(g) Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid,
illegal or unenforceable, the validity, legality and enforceability of any
such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(h) Securities Held by the Issuer. Whenever the consent or
approval of Holders of a specified percentage of principal amount of
Securities is required hereunder, Securities held by the Issuer or any of
its affiliates (other than subsequent Holders of Securities if such
subsequent Holders are deemed to be affiliates solely by reason of their
holdings of such Securities) shall not be counted in determining whether
such consent or approval was given by the Holders of such required
percentage.
(i) No Inconsistent Agreements. Revlon and the Guarantors have
not, as of the date hereof, entered into, nor shall they, on or after the
date hereof, enter into, any agreement with respect to their respective
securities that is inconsistent with the rights granted to the Holders
herein or otherwise conflicts with the provisions hereof.
19
(j) Copies of Agreement. Revlon shall provide a copy of this
Agreement to prospective purchasers of the Notes identified to them by the
Initial Purchasers upon request.
20
Please confirm that the foregoing correctly sets forth the
agreement between Revlon, the Guarantors and you.
Very truly yours,
REVLON CONSUMER PRODUCTS
CORPORATION
By: /s/ Robert K. Kretzman
--------------------------
Name: Robert K. Kretzman
Title: Senior Vice President
REVLON, INC., as Parent
Guarantor
By /s/ Robert K. Kretzman
--------------------------
Name: Robert K. Kretzman
Title: Senior Vice President
ALMAY, INC.
CARRINGTON PARFUMS, LTD.
CHARLES OF THE RITZ GROUP LTD.
CHARLES REVSON INC.
COSMETICS & MORE INC.
NORTH AMERICA REVSALE INC.
PACIFIC FINANCE & DEVELOPMENT
CORP.
PPI TWO CORPORATION
PRESTIGE FRAGRANCES, LTD.
REVLON CONSUMER CORP.
REVLON GOVERNMENT SALES, INC.
REVLON INTERNATIONAL
CORPORATION
REVLON PRODUCTS CORP.
REVLON REAL ESTATE CORPORATION
RIROS CORPORATION
RIROS GROUP INC.
RIT INC.
as the other Guarantors
by /s/ Robert K. Kretzman
----------------------------
Name: Robert K. Kretzman
Title: Vice President and
Secretary
21
CONFIRMED AND ACCEPTED
as of the date first above written:
SALOMON SMITH BARNEY INC.
By: /s/ Marco Habert
-----------------------------------------
Name: Marco Habert
Title: Vice President
ANNEX A TO
REGISTRATION AGREEMENT
Each broker-dealer that receives Exchange Notes for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the 1933 Act. This Prospectus, as it may be amended or supplemented
from time to time, may be used by a broker-dealer in connection with resales of
Exchange Notes received in exchange for the Notes where such Notes were acquired
by such broker-dealer as a result of market-making activities or other trading
activities. The Issuer has agreed that, for a period of 180 days after the
Expiration Date (as defined herein), it will make this Prospectus available to
any broker-dealer for use in connection with any such resale. See "Plan of
Distribution".
ANNEX B TO
REGISTRATION AGREEMENT
Each broker-dealer that receives Exchange Notes for its own
account in exchange for the Notes, where such Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Notes. See "Plan of Distribution".
ANNEX C TO
REGISTRATION AGREEMENT
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Notes received in
exchange for Existing Notes where such Existing Notes were acquired as a result
of market-making activities or other trading activities. The Issuer has agreed
that for a period of 180 days after the Expiration Date, it will make this
Prospectus, as amended or supplemented, available to any broker-dealer for use
in connection with any such resale. In addition, until , 200 , all dealers
effecting transactions in the Exchange Notes may be required to deliver a
prospectus. 1/
The Issuer will not receive any proceeds from any sale of
Exchange Notes by broker-dealers. Exchange Notes received by broker-dealers for
their own account pursuant to the Exchange Offer may be sold from time to time
in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Exchange Notes or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer and/or the purchasers of any such
Exchange Notes. Any broker-dealer that resells Exchange Notes that were received
by it for its own account pursuant to the Exchange Offer and any broker or
dealer that participates in a distribution of such Exchange Notes may be deemed
to be an "underwriter" within the meaning of the 1933 Act and any profit on any
such resale of Exchange Notes and any commissions or concessions received by any
such persons may be deemed to be underwriting compensation under the 1933 Act.
The Letter of Transmittal states that by acknowledging that it will deliver and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the 1933 Act.
- --------
1/ The legend required by Item 502(e) of Regulation S-K must appear on the
back page of the Exchange Offer Prospectus.
For a period of 180 days after the Expiration Date, the Issuer
will promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Issuer has agreed to pay all expenses incident
to the Exchange Offer other than commissions or concessions of any brokers or
dealers and will indemnify the holders of the Notes (including any
broker-dealers) against certain liabilities, including liabilities under the
1933 Act.
ANNEX D TO
REGISTRATION AGREEMENT
Rider A
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name:
Address:
Rider B
If the undersigned is not a broker-dealer, the undersigned represents
that it is not engaged in, and does not intend to engage in, a
distribution of Exchange Notes. If the undersigned is a broker-dealer
that will receive Exchange Notes for its own account in exchange for
Notes, it represents that the Notes to be exchanged for Exchange Notes
were acquired by it as a result of market-making or other trading
activities and acknowledges that it will deliver a prospectus in
connection with any resale of such Exchange Notes; however, by so
acknowledging and by delivering a prospectus, the undersigned will not
be deemed to admit that it is an "underwriter" within the meaning of
the 1933 Act.
[Letterhead of Paul, Weiss, Rifkind, Wharton & Garrison]
EXHIBIT 5.1
February 25, 2002
Revlon Consumer Products Corporation
Revlon, Inc. and each Subsidiary
listed on Schedule 1 to this letter
625 Madison Avenue
New York, New York 10022
Revlon Consumer Products Corporation
Registration Statement on Form S-4
Ladies and Gentlemen:
In connection with the Registration Statement on Form S-4 (the
"Registration Statement") referred to above filed by Revlon Consumer Products
Corporation, a Delaware corporation (the "Company"), Revlon, Inc., a Delaware
corporation (the "Parent Guarantor") and each subsidiary of the Company the name
and jurisdiction of organization of which are set forth on Schedule 1 to this
letter (the "Subsidiary Guarantors" and, together with the Parent Guarantor, the
"Guarantors") with the Securities and Exchange Commission under the Securities
Act of 1933, as amended (the "Securities Act"), and the rules and regulations
under the Act (the "Securities Act Rules"), we have been requested to furnish
our opinion as to the legality of the securities being registered by the
Registration Statement. The Registration Statement covers $363,000,000 aggregate
principal amount at maturity of the Company's 12% Senior Secured Exchange Notes
due 2005 (the "Exchange Notes") to be issued pursuant to the Indenture, dated as
of November 26, 2001 (the "Indenture"), among the Company, the
Revlon Consumer Products Corporation 2
Guarantors and Wilmington Trust Company, as trustee (the "Trustee"), and as
contemplated by the Registration Agreement, dated November 26, 2001, by and
among the Company and the signatories thereto.
In connection with the furnishing of this opinion, we have
examined originals, or copies certified or otherwise identified to our
satisfaction, of the Registration Statement, the Indenture and the form of the
Exchange Notes included as Exhibit A to the Indenture (collectively, the
"Documents"). We also have examined such corporate records and other instruments
as we have deemed necessary or appropriate and such other certificates,
agreements and documents as we deemed relevant and necessary as a basis for the
opinions expressed below.
In our examination of the documents listed above, we have
assumed, without independent investigation, the genuineness of all signatures,
the enforceability of the Documents against all parties thereto (other than the
Company and the Guarantors in the case of the Indenture and the Company in the
case of the Exchange Notes), the authenticity of all documents submitted to us
as originals, the conformity to the original documents of all documents
submitted to us as certified, photostatic, reproduced or conformed copies of
valid existing agreements and other documents, the authenticity of all such
latter documents and the legal capacity of all individuals who have executed any
of the documents.
In expressing the opinions set forth below, we have relied
upon the factual matters contained in the representations and warranties of the
Company and the
Revlon Consumer Products Corporation 3
Guarantors made in any of the Documents and upon certificates of public
officials and officers of the Company and the Guarantors. We also have assumed
that the Exchange Notes will be in the form of Exhibit A to the Indenture and
any information omitted from such form and indicated as such by a blank space
has been properly added.
In addition, in the case of the Company and each of the
Guarantors, we have assumed, without independent investigation, that (i) it is
validly existing and in good standing under the laws of its jurisdiction of
organization, (ii) it has all necessary corporate power and authority to
execute, deliver and perform its obligations under each Document to which it is
a party, (iii) the execution, delivery and performance of each Document have
been duly authorized by all necessary corporate action and do not violate its
charter or other organizational documents or the laws of its jurisdiction of
organization and (iv) each Document has been duly executed and delivered by it
under the laws of its jurisdiction of organization.
Based upon the foregoing, and subject to the assumptions,
exceptions and qualifications set forth in this letter, we are of the opinion
that:
1. The Exchange Notes to be issued under the Indenture, when
issued, authenticated and delivered as provided in the Indenture and as
contemplated by the Registration Statement, will be validly issued and delivered
and will constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as enforceability of
such obligations may be subject to (i)
Revlon Consumer Products Corporation 4
bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or other similar laws now or hereafter in effect affecting creditors'
rights generally, (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity) and (iii)
principles of commercial reasonableness.
2. The Indenture Guarantees (as defined in the Indenture) have
been validly issued and delivered and constitute valid and binding obligations
of each of the Guarantors, enforceable against each of the Guarantors in
accordance with their terms, except as enforceability of such obligations may be
subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium or other similar laws now or hereafter in effect affecting
creditors' rights generally, (ii) general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in equity) and
(iii) principles of commercial reasonableness.
The opinions in this letter are limited to the laws of the
State of New York. Our opinion is rendered only with respect to the laws, and
the rules, regulations and orders under such laws, which are currently in
effect.
We hereby consent to the use of our name in the Registration
Statement and in the related Prospectus as the same appears in the caption
"Legal Matters" and to the use of this opinion as an exhibit to the Registration
Statement. In giving this consent,
Revlon Consumer Products Corporation 5
we do not admit that we come within the category of persons whose consent is
required by the Securities Act or the Securities Act Rules.
Very truly yours,
/s/ Paul, Weiss, Rifkind, Wharton
& Garrison
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
Schedule 1
SUBSIDIARY GUARANTORS
Name of Type of Jurisdiction of
Subsidiary Entity Organization
- ---------- ------ ------------
Almay, Inc. Corporation Delaware
Charles of the Ritz Group Ltd. Corporation Delaware
Charles Revson Inc. Corporation New York
Cosmetics & More Inc. Corporation Delaware
North America Revsale Inc. Corporation New York
Pacific Finance & Development Corp. Corporation California
PPI Two Corporation Corporation Delaware
Revlon Consumer Corp. Corporation Delaware
Revlon Government Sales, Inc. Corporation Delaware
Revlon International Corporation Corporation Delaware
Revlon Products Corp. Corporation Delaware
Revlon Real Estate Corporation Corporation Delaware
RIROS Corporation Corporation New York
RIROS Group Inc. Corporation Delaware
RIT Inc. Corporation Delaware
EXHIBIT 12.1
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(dollars in millions)
YEAR ENDED DECEMBER 31,
----------- -- ----------- -- ------------ -- ------------ - -------------
1997 1998 1999 2000 2001
----------- ----------- ------------ ------------ -------------
(Loss) income from continuing operations before
income taxes............................. $ 67.1 $ (20.8) $ (360.6) $ (119.4) $ (144.6)
Interest expense............................... 133.7 137.9 147.9 144.5 140.5
Amortization of debt issuance costs............ 6.6 5.1 4.3 5.6 6.2
Portion of rental expense deemed to represent
interest............................... 15.2 14.4 14.1 10.9 9.6
----------- ----------- ------------ ------------ -------------
Earnings (loss) before fixed charges........... $ 222.6 $ 136.6 $ (194.3) $ 41.6 $ 11.7
=========== =========== ============ ============ =============
Interest expense............................... $ 133.7 $ 137.9 $ 147.9 $ 144.5 $ 140.5
Amortization of debt issuance costs............ 6.6 5.1 4.3 5.6 6.2
Portion of rental expense deemed to represent
interest............................... 15.2 14.4 14.1 10.9 9.6
----------- ----------- ------------ ------------ -------------
Fixed charges.................................. $ 155.5 $ 157.4 $ 166.3 $ 161.0 $ 156.3
=========== =========== ============ ============ =============
Ratio of earnings to fixed charges............. 1.4x 0.9x - 0.3x 0.1x
=========== =========== ============ ============ =============
Deficiency of earnings to fixed charges........ $ - $ 20.8 $ 360.6 $ 119.4 $ 144.6
=========== =========== ============ ============ =============
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholder
Revlon Consumer Products Corporation:
We consent to the incorporation by reference in this registration statement on
Form S-4 of Revlon Consumer Products Corporation of our report dated February
25, 2002, relating to the consolidated balance sheets of Revlon Consumer
Products Corporation and its subsidiaries as of December 31, 2001 and 2000, and
the related statements of operations, stockholder's deficiency and comprehensive
loss and cash flows for each of the years in the three-year period ended
December 31, 2001 and the related financial statement schedule, which report
appears in the December 31, 2001 annual report on Form 10-K of Revlon Consumer
Products Corporation.
We also consent to the incorporation by reference in this registration statement
on Form S-4 of Revlon Consumer Products Corporation of our report dated February
25, 2002, relating to the consolidated balance sheets of Revlon, Inc. and its
subsidiaries as of December 31, 2001 and 2000, and the related statements of
operations, stockholders' deficiency and comprehensive loss and cash flows for
each of the years in the three-year period ended December 31, 2001 and the
related financial statement schedule, which report appears in the December 31,
2001 annual report on Form 10-K of Revlon, Inc.
We also consent to the reference to our firm under the heading "Independent
Accountants" in the prospectus.
/s/ KPMG LLP
New York, New York
February 25, 2002
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints each of Robert K. Kretzman, Michael T. Sheehan, Laurence Winoker
and Barry F. Schwartz, or any one of them, each acting alone, his true and
lawful attorney-in-fact and agent, with full power of substitution, for him and
in his name, place and stead, in any and all capacities, in connection with the
Registration Statement on Form S-1 or Form S-4, as applicable (the "Registration
Statement") of Revlon Consumer Products Corporation (the "Company"), Revlon,
Inc. ("Revlon"), Almay, Inc., Charles of the Ritz Group Ltd., Charles Revson
Inc., Cosmetics & More Inc., North America Revsale Inc., Pacific Finance &
Development Corp., PPI Two Corporation, Revlon Consumer Corp., Revlon Government
Sales, Inc., Revlon International Corporation, Revlon Products Corp., Revlon
Real Estate Corporation, RIROS Corporation, RIROS Group Inc., RIT Inc., under
the Securities Act of 1933, as amended (the "Securities Act"), including,
without limiting the generality of the foregoing, to sign the Registration
Statement in the name and on behalf of each of the Company and Revlon or on
behalf of the undersigned as a director or officer of each of the Company and
Revlon, to sign any amendments and supplements relating thereto (including
post-effective amendments) under the Securities Act and to sign any instrument,
contract, document or other writing of or in connection with the Registration
Statement and any amendments and supplements thereto (including post-effective
amendments) and to file the same, with all exhibits thereto, and other documents
in connection therewith, including this power of attorney, with the Securities
and Exchange Commission and any applicable securities exchange or securities
self-regulatory body, granting unto said attorneys-in-fact and agents, each
acting alone, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, each acting alone, or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS HEREOF, the undersigned has signed these presents
this 22nd day of February, 2002.
/s/ Ronald O. Perelman
-----------------------
Ronald O. Perelman
EXHIBIT 24.2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints each of Robert K. Kretzman, Michael T. Sheehan, Laurence Winoker
and Barry F. Schwartz, or any one of them, each acting alone, his true and
lawful attorney-in-fact and agent, with full power of substitution, for him and
in his name, place and stead, in any and all capacities, in connection with the
Registration Statement on Form S-1 or Form S-4, as applicable (the "Registration
Statement") of Revlon Consumer Products Corporation (the "Company"), Revlon,
Inc. ("Revlon"), Almay, Inc., Charles of the Ritz Group Ltd., Charles Revson
Inc., Cosmetics & More Inc., North America Revsale Inc., Pacific Finance &
Development Corp., PPI Two Corporation, Revlon Consumer Corp., Revlon Government
Sales, Inc., Revlon International Corporation, Revlon Products Corp., Revlon
Real Estate Corporation, RIROS Corporation, RIROS Group Inc., RIT Inc., under
the Securities Act of 1933, as amended (the "Securities Act"), including,
without limiting the generality of the foregoing, to sign the Registration
Statement in the name and on behalf of each of the Company and Revlon or on
behalf of the undersigned as a director or officer of each of the Company and
Revlon, to sign any amendments and supplements relating thereto (including
post-effective amendments) under the Securities Act and to sign any instrument,
contract, document or other writing of or in connection with the Registration
Statement and any amendments and supplements thereto (including post-effective
amendments) and to file the same, with all exhibits thereto, and other documents
in connection therewith, including this power of attorney, with the Securities
and Exchange Commission and any applicable securities exchange or securities
self-regulatory body, granting unto said attorneys-in-fact and agents, each
acting alone, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, each acting alone, or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS HEREOF, the undersigned has signed these presents
this 22nd day of February, 2002.
/s/ Donald G. Drapkin
-------------------------
Donald G. Drapkin
EXHIBIT 24.3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints each of Robert K. Kretzman, Michael T. Sheehan, Laurence Winoker
and Barry F. Schwartz, or any one of them, each acting alone, his true and
lawful attorney-in-fact and agent, with full power of substitution, for him and
in his name, place and stead, in any and all capacities, in connection with the
Registration Statement on Form S-1 or Form S-4, as applicable (the "Registration
Statement") of Revlon Consumer Products Corporation (the "Company"), Revlon,
Inc. ("Revlon"), Almay, Inc., Charles of the Ritz Group Ltd., Charles Revson
Inc., Cosmetics & More Inc., North America Revsale Inc., Pacific Finance &
Development Corp., PPI Two Corporation, Revlon Consumer Corp., Revlon Government
Sales, Inc., Revlon International Corporation, Revlon Products Corp., Revlon
Real Estate Corporation, RIROS Corporation, RIROS Group Inc., RIT Inc., under
the Securities Act of 1933, as amended (the "Securities Act"), including,
without limiting the generality of the foregoing, to sign the Registration
Statement in the name and on behalf of each of the Company and Revlon or on
behalf of the undersigned as a director or officer of each of the Company and
Revlon, to sign any amendments and supplements relating thereto (including
post-effective amendments) under the Securities Act and to sign any instrument,
contract, document or other writing of or in connection with the Registration
Statement and any amendments and supplements thereto (including post-effective
amendments) and to file the same, with all exhibits thereto, and other documents
in connection therewith, including this power of attorney, with the Securities
and Exchange Commission and any applicable securities exchange or securities
self-regulatory body, granting unto said attorneys-in-fact and agents, each
acting alone, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, each acting alone, or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS HEREOF, the undersigned has signed these presents
this 22nd day of February, 2002.
/s/ Howard Gittis
--------------------------
Howard Gittis
EXHIBIT 24.4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints each of Robert K. Kretzman, Michael T. Sheehan and Laurence
Winoker, or any one of them, each acting alone, his true and lawful
attorney-in-fact and agent, with full power of substitution, for him and in his
name, place and stead, in any and all capacities, in connection with the
Registration Statement on Form S-1 or Form S-4, as applicable (the "Registration
Statement") of Revlon Consumer Products Corporation (the "Company"), Revlon,
Inc. ("Revlon"), Almay, Inc., Charles of the Ritz Group Ltd., Charles Revson
Inc., Cosmetics & More Inc., North America Revsale Inc., Pacific Finance &
Development Corp., PPI Two Corporation, Revlon Consumer Corp., Revlon Government
Sales, Inc., Revlon International Corporation, Revlon Products Corp., Revlon
Real Estate Corporation, RIROS Corporation, RIROS Group Inc., RIT Inc., under
the Securities Act of 1933, as amended (the "Securities Act"), including,
without limiting the generality of the foregoing, to sign the Registration
Statement in the name and on behalf of each of the Company and Revlon or on
behalf of the undersigned as a director or officer of each of the Company and
Revlon, to sign any amendments and supplements relating thereto (including
post-effective amendments) under the Securities Act and to sign any instrument,
contract, document or other writing of or in connection with the Registration
Statement and any amendments and supplements thereto (including post-effective
amendments) and to file the same, with all exhibits thereto, and other documents
in connection therewith, including this power of attorney, with the Securities
and Exchange Commission and any applicable securities exchange or securities
self-regulatory body, granting unto said attorneys-in-fact and agents, each
acting alone, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, each acting alone, or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS HEREOF, the undersigned has signed these presents
this 22nd day of February, 2002.
/s/ Meyer Feldberg
--------------------------
Meyer Feldberg
EXHIBIT 24.5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints each of Robert K. Kretzman, Michael T. Sheehan and Laurence
Winoker, or any one of them, each acting alone, his true and lawful
attorney-in-fact and agent, with full power of substitution, for him and in his
name, place and stead, in any and all capacities, in connection with the
Registration Statement on Form S-1 or Form S-4, as applicable (the "Registration
Statement") of Revlon Consumer Products Corporation (the "Company"), Revlon,
Inc. ("Revlon"), Almay, Inc., Charles of the Ritz Group Ltd., Charles Revson
Inc., Cosmetics & More Inc., North America Revsale Inc., Pacific Finance &
Development Corp., PPI Two Corporation, Revlon Consumer Corp., Revlon Government
Sales, Inc., Revlon International Corporation, Revlon Products Corp., Revlon
Real Estate Corporation, RIROS Corporation, RIROS Group Inc., RIT Inc., under
the Securities Act of 1933, as amended (the "Securities Act"), including,
without limiting the generality of the foregoing, to sign the Registration
Statement in the name and on behalf of each of the Company and Revlon or on
behalf of the undersigned as a director or officer of each of the Company and
Revlon, to sign any amendments and supplements relating thereto (including
post-effective amendments) under the Securities Act and to sign any instrument,
contract, document or other writing of or in connection with the Registration
Statement and any amendments and supplements thereto (including post-effective
amendments) and to file the same, with all exhibits thereto, and other documents
in connection therewith, including this power of attorney, with the Securities
and Exchange Commission and any applicable securities exchange or securities
self-regulatory body, granting unto said attorneys-in-fact and agents, each
acting alone, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, each acting alone, or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS HEREOF, the undersigned has signed these presents
this 22nd day of February, 2002.
/s/ Edward J. Landau
--------------------------
Edward J. Landau
EXHIBIT 24.6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints each of Robert K. Kretzman, Michael T. Sheehan and Laurence
Winoker, or any one of them, each acting alone, his true and lawful
attorney-in-fact and agent, with full power of substitution, for him and in his
name, place and stead, in any and all capacities, in connection with the
Registration Statement on Form S-1 or Form S-4, as applicable (the "Registration
Statement") of Revlon Consumer Products Corporation (the "Company"), Revlon,
Inc. ("Revlon"), Almay, Inc., Charles of the Ritz Group Ltd., Charles Revson
Inc., Cosmetics & More Inc., North America Revsale Inc., Pacific Finance &
Development Corp., PPI Two Corporation, Revlon Consumer Corp., Revlon Government
Sales, Inc., Revlon International Corporation, Revlon Products Corp., Revlon
Real Estate Corporation, RIROS Corporation, RIROS Group Inc., RIT Inc., under
the Securities Act of 1933, as amended (the "Securities Act"), including,
without limiting the generality of the foregoing, to sign the Registration
Statement in the name and on behalf of each of the Company and Revlon or on
behalf of the undersigned as a director or officer of each of the Company and
Revlon, to sign any amendments and supplements relating thereto (including
post-effective amendments) under the Securities Act and to sign any instrument,
contract, document or other writing of or in connection with the Registration
Statement and any amendments and supplements thereto (including post-effective
amendments) and to file the same, with all exhibits thereto, and other documents
in connection therewith, including this power of attorney, with the Securities
and Exchange Commission and any applicable securities exchange or securities
self-regulatory body, granting unto said attorneys-in-fact and agents, each
acting alone, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, each acting alone, or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS HEREOF, the undersigned has signed these presents
this 22nd day of February, 2002.
/s/ Vernon E. Jordan, Jr.
--------------------------
Vernon E. Jordan, Jr.
EXHIBIT 24.7
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints each of Robert K. Kretzman, Michael T. Sheehan and Laurence
Winoker, or any one of them, each acting alone, his true and lawful
attorney-in-fact and agent, with full power of substitution, for him and in his
name, place and stead, in any and all capacities, in connection with the
Registration Statement on Form S-1 or Form S-4, as applicable (the "Registration
Statement") of Revlon Consumer Products Corporation (the "Company"), Revlon,
Inc. ("Revlon"), Almay, Inc., Charles of the Ritz Group Ltd., Charles Revson
Inc., Cosmetics & More Inc., North America Revsale Inc., Pacific Finance &
Development Corp., PPI Two Corporation, Revlon Consumer Corp., Revlon Government
Sales, Inc., Revlon International Corporation, Revlon Products Corp., Revlon
Real Estate Corporation, RIROS Corporation, RIROS Group Inc., RIT Inc., under
the Securities Act of 1933, as amended (the "Securities Act"), including,
without limiting the generality of the foregoing, to sign the Registration
Statement in the name and on behalf of each of the Company and Revlon or on
behalf of the undersigned as a director or officer of each of the Company and
Revlon, to sign any amendments and supplements relating thereto (including
post-effective amendments) under the Securities Act and to sign any instrument,
contract, document or other writing of or in connection with the Registration
Statement and any amendments and supplements thereto (including post-effective
amendments) and to file the same, with all exhibits thereto, and other documents
in connection therewith, including this power of attorney, with the Securities
and Exchange Commission and any applicable securities exchange or securities
self-regulatory body, granting unto said attorneys-in-fact and agents, each
acting alone, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, each acting alone, or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS HEREOF, the undersigned has signed these presents
this 21st day of February, 2002.
/s/ Jerry W. Levin
--------------------------
Jerry W. Levin
EXHIBIT 24.8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints each of Robert K. Kretzman, Michael T. Sheehan and Laurence
Winoker, or any one of them, each acting alone, her true and lawful
attorney-in-fact and agent, with full power of substitution, for her and in her
name, place and stead, in any and all capacities, in connection with the
Registration Statement on Form S-1 or Form S-4, as applicable (the "Registration
Statement") of Revlon Consumer Products Corporation (the "Company"), Revlon,
Inc. ("Revlon"), Almay, Inc., Charles of the Ritz Group Ltd., Charles Revson
Inc., Cosmetics & More Inc., North America Revsale Inc., Pacific Finance &
Development Corp., PPI Two Corporation, Revlon Consumer Corp., Revlon Government
Sales, Inc., Revlon International Corporation, Revlon Products Corp., Revlon
Real Estate Corporation, RIROS Corporation, RIROS Group Inc., RIT Inc., under
the Securities Act of 1933, as amended (the "Securities Act"), including,
without limiting the generality of the foregoing, to sign the Registration
Statement in the name and on behalf of each of the Company and Revlon or on
behalf of the undersigned as a director or officer of each of the Company and
Revlon, to sign any amendments and supplements relating thereto (including
post-effective amendments) under the Securities Act and to sign any instrument,
contract, document or other writing of or in connection with the Registration
Statement and any amendments and supplements thereto (including post-effective
amendments) and to file the same, with all exhibits thereto, and other documents
in connection therewith, including this power of attorney, with the Securities
and Exchange Commission and any applicable securities exchange or securities
self-regulatory body, granting unto said attorneys-in-fact and agents, each
acting alone, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, each acting alone, or
her substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS HEREOF, the undersigned has signed these presents
this 22nd day of February, 2002.
/s/ Linda Gosden Robinson
--------------------------
Linda Gosden Robinson
EXHIBIT 24.9
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints each of Robert K. Kretzman, Michael T. Sheehan and Laurence
Winoker, or any one of them, each acting alone, his true and lawful
attorney-in-fact and agent, with full power of substitution, for him and in his
name, place and stead, in any and all capacities, in connection with the
Registration Statement on Form S-1 or Form S-4, as applicable (the "Registration
Statement") of Revlon Consumer Products Corporation (the "Company"), Revlon,
Inc. ("Revlon"), Almay, Inc., Charles of the Ritz Group Ltd., Charles Revson
Inc., Cosmetics & More Inc., North America Revsale Inc., Pacific Finance &
Development Corp., PPI Two Corporation, Revlon Consumer Corp., Revlon Government
Sales, Inc., Revlon International Corporation, Revlon Products Corp., Revlon
Real Estate Corporation, RIROS Corporation, RIROS Group Inc., RIT Inc., under
the Securities Act of 1933, as amended (the "Securities Act"), including,
without limiting the generality of the foregoing, to sign the Registration
Statement in the name and on behalf of each of the Company and Revlon or on
behalf of the undersigned as a director or officer of each of the Company and
Revlon, to sign any amendments and supplements relating thereto (including
post-effective amendments) under the Securities Act and to sign any instrument,
contract, document or other writing of or in connection with the Registration
Statement and any amendments and supplements thereto (including post-effective
amendments) and to file the same, with all exhibits thereto, and other documents
in connection therewith, including this power of attorney, with the Securities
and Exchange Commission and any applicable securities exchange or securities
self-regulatory body, granting unto said attorneys-in-fact and agents, each
acting alone, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, each acting alone, or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS HEREOF, the undersigned has signed these presents
this 22nd day of February, 2002.
/s/ Terry Semel
--------------------------
Terry Semel
EXHIBIT 24.10
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints each of Robert K. Kretzman, Michael T. Sheehan and Laurence
Winoker, or any one of them, each acting alone, her true and lawful
attorney-in-fact and agent, with full power of substitution, for her and in her
name, place and stead, in any and all capacities, in connection with the
Registration Statement on Form S-1 or Form S-4, as applicable (the "Registration
Statement") of Revlon Consumer Products Corporation (the "Company"), Revlon,
Inc. ("Revlon"), Almay, Inc., Charles of the Ritz Group Ltd., Charles Revson
Inc., Cosmetics & More Inc., North America Revsale Inc., Pacific Finance &
Development Corp., PPI Two Corporation, Revlon Consumer Corp., Revlon Government
Sales, Inc., Revlon International Corporation, Revlon Products Corp., Revlon
Real Estate Corporation, RIROS Corporation, RIROS Group Inc., RIT Inc., under
the Securities Act of 1933, as amended (the "Securities Act"), including,
without limiting the generality of the foregoing, to sign the Registration
Statement in the name and on behalf of each of the Company and Revlon or on
behalf of the undersigned as a director or officer of each of the Company and
Revlon, to sign any amendments and supplements relating thereto (including
post-effective amendments) under the Securities Act and to sign any instrument,
contract, document or other writing of or in connection with the Registration
Statement and any amendments and supplements thereto (including post-effective
amendments) and to file the same, with all exhibits thereto, and other documents
in connection therewith, including this power of attorney, with the Securities
and Exchange Commission and any applicable securities exchange or securities
self-regulatory body, granting unto said attorneys-in-fact and agents, each
acting alone, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, each acting alone, or
her substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS HEREOF, the undersigned has signed these presents
this 22nd day of February, 2002.
/s/ Martha Stewart
--------------------------
Martha Stewart
EXHIBIT 24.11
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints each of Robert K. Kretzman, Michael T. Sheehan and Laurence
Winoker, or any one of them, each acting alone, his true and lawful
attorney-in-fact and agent, with full power of substitution, for him and in his
name, place and stead, in any and all capacities, in connection with the
Registration Statement on Form S-1 or Form S-4, as applicable (the "Registration
Statement") of Revlon Consumer Products Corporation (the "Company"), Revlon,
Inc. ("Revlon"), Almay, Inc., Charles of the Ritz Group Ltd., Charles Revson
Inc., Cosmetics & More Inc., North America Revsale Inc., Pacific Finance &
Development Corp., PPI Two Corporation, Revlon Consumer Corp., Revlon Government
Sales, Inc., Revlon International Corporation, Revlon Products Corp., Revlon
Real Estate Corporation, RIROS Corporation, RIROS Group Inc., RIT Inc., under
the Securities Act of 1933, as amended (the "Securities Act"), including,
without limiting the generality of the foregoing, to sign the Registration
Statement in the name and on behalf of each of the Company and Revlon or on
behalf of the undersigned as a director or officer of each of the Company and
Revlon, to sign any amendments and supplements relating thereto (including
post-effective amendments) under the Securities Act and to sign any instrument,
contract, document or other writing of or in connection with the Registration
Statement and any amendments and supplements thereto (including post-effective
amendments) and to file the same, with all exhibits thereto, and other documents
in connection therewith, including this power of attorney, with the Securities
and Exchange Commission and any applicable securities exchange or securities
self-regulatory body, granting unto said attorneys-in-fact and agents, each
acting alone, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, each acting alone, or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS HEREOF, the undersigned has signed these presents
this 22nd day of February, 2002.
/s/ Douglas H. Greeff
--------------------------
Douglas H. Greeff
EXHIBIT 25.1
Registration No.:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2)___
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
Revlon Consumer Products Corporation
(Exact name of obligor as specified in its charter)
Delaware 13-3662953
(State of incorporation) (I.R.S. employer identification no.)
625 Madison Avenue,
New York, New York 10022
(Address of principal executive offices) (Zip Code)
(Title of the indenture securities)
12% Senior Secured Exchange Notes due 2005
-1-
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust
powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
such affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the obligor
is not an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which
includes the certificate of authority of Wilmington Trust
Company to commence business and the authorization of
Wilmington Trust Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by
Section 321(b) of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 20th day
of February , 2002.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Anita Dallago By: /s/ Donald G. MacKelcan
------------------- --------------------------
Assistant Secretary Name: Donald G. MacKelcan
Title: Vice President
EXHIBIT A
AMENDED CHARTER
Wilmington Trust Company
Wilmington, Delaware
As existing on May 9, 1987
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
Wilmington Trust Company, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name
of which company was changed to "Wilmington Trust Company" by an amendment filed
in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter
or Act of Incorporation of which company has been from time to time amended and
changed by merger agreements pursuant to the corporation law for state banks and
trust companies of the State of Delaware, does hereby alter and amend its
Charter or Act of Incorporation so that the same as so altered and amended shall
in its entirety read as follows:
First: - The name of this corporation is Wilmington Trust Company.
Second: - The location of its principal office in the State of
Delaware is at Rodney Square North, in the City of Wilmington,
County of New Castle; the name of its resident agent is Wilmington
Trust Company whose address is Rodney Square North, in said City. In
addition to such principal office, the said corporation maintains
and operates branch offices in the City of Newark, New Castle
County, Delaware, the Town of Newport, New Castle County, Delaware,
at Claymont, New Castle County, Delaware, at Greenville, New Castle
County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate
branch offices at Ninth and Shipley Streets, 418 Delaware Avenue,
2120 Market Street, and 3605 Market Street, all in the City of
Wilmington, New Castle County, Delaware, and such other branch
offices or places of business as may be authorized from time to time
by the agency or agencies of the government of the State of Delaware
empowered to confer such authority.
Third: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this
Corporation are to do any or all of the things herein mentioned as
fully and to the same extent as natural persons might or could do
and in any part of the world, viz.:
(1) To sue and be sued, complain and defend in any Court of
law or equity and to make and use a common seal, and alter
the seal at pleasure, to hold, purchase, convey, mortgage or
otherwise deal in real and personal estate and property, and
to appoint such officers and agents as the business of the
Corporation shall require, to make by-laws not inconsistent
with the Constitution or laws of the United States or of
this State, to discount bills, notes or other evidences of
debt, to receive deposits of money, or securities for money,
to buy gold and silver bullion and foreign coins, to buy and
sell bills of exchange, and generally to use, exercise and
enjoy all the powers, rights, privileges and franchises
incident to a corporation which are proper or necessary for
the transaction of the business of the Corporation hereby
created.
(2) To insure titles to real and personal property, or any
estate or interests therein, and to guarantee the holder of
such property, real or personal, against any claim or
claims, adverse to his interest therein, and to prepare and
give certificates of title for any lands or premises in the
State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and
management of funds, and the purchase, sale, management and
disposal of property of all descriptions, and to prepare and
execute all papers which may be necessary or proper in such
business.
(4) To prepare and draw agreements, contracts, deeds,
leases, conveyances, mortgages, bonds and legal papers of
every description, and to carry on the business of
conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry,
plate, deeds, bonds and any and all other personal property
of every sort and kind, from executors, administrators,
guardians, public officers, courts, receivers, assignees,
trustees, and from all fiduciaries, and from all other
persons and individuals, and from all corporations whether
state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the two
parties, and in like manner may act as Treasurer of any
corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage,
bond or other instrument issued by any state, municipality,
body politic, corporation, association or person, either
alone or in conjunction with any other person or persons,
corporation or corporations.
(8) To guarantee the validity, performance or effect of any
contract or agreement, and the fidelity of persons holding
places of responsibility or trust; to become surety for any
person, or persons, for the faithful performance of any
trust, office, duty, contract or agreement, either by itself
or in conjunction with any other person, or persons,
corporation, or corporations, or in like manner become
surety upon any bond, recognizance, obligation, judgment,
suit, order, or decree to be entered in any court of record
within the State of Delaware or elsewhere, or which may now
or hereafter be required by any law, judge, officer or court
in the State of Delaware or elsewhere.
(9) To act by any and every method of appointment as
trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian, bailee, or
in any other trust capacity in the receiving, holding,
managing, and disposing of any and all estates and property,
real, personal or mixed, and to be appointed as such
trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian or bailee
by any persons, corporations, court, officer, or authority,
in the State of Delaware or elsewhere; and whenever this
Corporation is so appointed by any person, corporation,
court, officer or authority such trustee, trustee in
bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other
trust capacity, it shall not be required to give bond with
surety, but its capital stock shall be taken and held as
security for the performance of the duties devolving upon it
by such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake or
be called upon to perform, or for the assumption of any
responsibility the said Corporation may be entitled to
receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of any
private, public or municipal corporation within and without
the State of Delaware, or of the Government of the
United States, or of any state, territory, colony, or
possession thereof, or of any foreign government or country;
to receive, collect, receipt for, and dispose of interest,
dividends and income upon and from any of the bonds,
mortgages, debentures, notes, shares of capital stock,
securities, obligations, contracts, evidences of
indebtedness and other property held and owned by it, and to
exercise in respect of all such bonds, mortgages,
debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and other
property, any and all the rights, powers and privileges of
individual owners thereof, including the right to vote
thereon; to invest and deal in and with any of the moneys of
the Corporation upon such securities and in such manner as
it may think fit and proper, and from time to time to vary
or realize such investments; to issue bonds and secure the
same by pledges or deeds of trust or mortgages of or upon
the whole or any part of the property held or owned by the
Corporation, and to sell and pledge such bonds, as and when
the Board of Directors shall determine, and in the promotion
of its said corporate business of investment and to the
extent authorized by law, to lease, purchase, hold, sell,
assign, transfer, pledge, mortgage and convey real and
personal property of any name and nature and any estate or
interest therein.
(b) In furtherance of, and not in limitation, of the powers
conferred by the laws of the State of Delaware, it is hereby
expressly provided that the said Corporation shall also have the
following powers:
(1) To do any or all of the things herein set forth, to the
same extent as natural persons might or could do, and in any
part of the world.
(2) To acquire the good will, rights, property and
franchises and to undertake the whole or any part of the
assets and liabilities of any person, firm, association or
corporation, and to pay for the same in cash, stock of this
Corporation, bonds or otherwise; to hold or in any manner to
dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any
part of any business so acquired, and to exercise all the
powers necessary or convenient in and about the conduct and
management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien,
and to lease, sell, exchange, transfer, or in any manner
whatever dispose of property, real, personal or mixed,
wherever situated.
(4) To enter into, make, perform and carry out contracts of
every kind with any person, firm, association or
corporation, and, without limit as to amount, to draw, make,
accept, endorse, discount, execute and issue promissory
notes, drafts, bills of exchange, warrants, bonds,
debentures, and other negotiable or transferable
instruments.
(5) To have one or more offices, to carry on all or any of
its operations and businesses, without restriction to the
same extent as natural persons might or could do, to
purchase or otherwise acquire, to hold, own, to mortgage,
sell, convey or otherwise dispose of, real and personal
property, of every class and description, in any State,
District, Territory or Colony of the United States, and in
any foreign country or place.
(6) It is the intention that the objects, purposes and
powers specified and clauses contained in this paragraph
shall (except where otherwise expressed in said paragraph)
be nowise limited or restricted by reference to or inference
from the terms of any other clause of this or any other
paragraph in this charter, but that the objects, purposes
and powers specified in each of the clauses of this
paragraph shall be regarded as independent objects, purposes
and powers.
Fourth: - (a) The total number of shares of all classes of stock
which the Corporation shall have authority to issue is forty-one
million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par
value $10.00 per share (hereinafter
referred to as "Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par
value $1.00 per share (hereinafter referred to as "Common
Stock").
(b) Shares of Preferred Stock may be issued from time to time in one
or more series as may from time to time be determined by the Board
of Directors each of said series to be distinctly designated. All
shares of any one series of Preferred Stock shall be alike in every
particular, except that there may be different dates from which
dividends, if any, thereon shall be cumulative, if made cumulative.
The voting powers and the preferences and relative, participating,
optional and other special rights of each such series, and the
qualifications, limitations or restrictions thereof, if any, may
differ from those of any and all other series at any time
outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article Fourth, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by
resolution or resolutions adopted prior to the issuance of any
shares of a particular series of Preferred Stock, the voting powers
and the designations, preferences and relative, optional and other
special rights, and the qualifications, limitations and restrictions
of such series, including, but without limiting the generality of
the foregoing, the following:
(1) The distinctive designation of, and the number of shares
of Preferred Stock which shall constitute such series, which
number may be increased (except where otherwise provided by
the Board of Directors) or decreased (but not below the
number of shares thereof then outstanding) from time to time
by like action of the Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred Stock
of such series shall be paid, the extent of the preference
or relation, if any, of such dividends to the dividends
payable on any other class or classes, or series of the same
or other class of stock and whether such dividends shall be
cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of
such series to convert the same into or exchange the same
for, shares of any other class or classes or of any series
of the same or any other class or classes of stock of the
Corporation and the terms and conditions of such conversion
or exchange;
(4) Whether or not Preferred Stock of such series shall be
subject to redemption, and the redemption price or prices
and the time or times at which, and the terms and conditions
on which, Preferred Stock of such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of
such series upon the voluntary or involuntary liquidation,
merger, consolidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of
such series; and
(7) The voting powers, if any, of the holders of such series
of Preferred Stock which may, without limiting the
generality of the foregoing include the right, voting as a
series or by itself or together with other series of
Preferred Stock or all series of Preferred Stock as a class,
to elect one or more directors of the Corporation if there
shall have been a default in the payment of dividends on any
one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of
Directors may determine.
(c) (1) After the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with the
provisions of section (b) of this Article Fourth), if any, shall
have been met and
after the Corporation shall have complied with all the requirements,
if any, with respect to the setting aside of sums as sinking funds
or redemption or purchase accounts (fixed in accordance with the
provisions of section (b) of this Article Fourth), and subject
further to any conditions which may be fixed in accordance with the
provisions of section (b) of this Article Fourth, then and not
otherwise the holders of Common Stock shall be entitled to receive
such dividends as may be declared from time to time by the Board of
Directors.
(2) After distribution in full of the preferential amount,
if any, (fixed in accordance with the provisions of section
(b) of this Article Fourth), to be distributed to the
holders of Preferred Stock in the event of voluntary or
involuntary liquidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation, the holders
of the Common Stock shall be entitled to receive all of the
remaining assets of the Corporation, tangible and
intangible, of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares
of Common Stock held by them respectively.
(3) Except as may otherwise be required by law or by the
provisions of such resolution or resolutions as may be
adopted by the Board of Directors pursuant to section (b) of
this Article Fourth, each holder of Common Stock shall have
one vote in respect of each share of Common Stock held on
all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock
or of options, warrants or other rights to purchase shares of any
class or series of stock or of other securities of the Corporation
shall have any preemptive right to purchase or subscribe for any
unissued stock of any class or series or any additional shares of
any class or series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or series,
or bonds, certificates of indebtedness, debentures or other
securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of
stock or securities convertible into or exchangeable for stock, or
carrying any right to purchase stock, may be issued and disposed of
pursuant to resolution of the Board of Directors to such persons,
firms, corporations or associations, whether such holders or others,
and upon such terms as may be deemed advisable by the Board of
Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and
rights of each other series of Preferred Stock shall, in each case,
be as fixed from time to time by the Board of Directors in the
resolution or resolutions adopted pursuant to authority granted in
section (b) of this Article Fourth and the consent, by class or
series vote or otherwise, of the holders of such of the series of
Preferred Stock as are from time to time outstanding shall not be
required for the issuance by the Board of Directors of any other
series of Preferred Stock whether or not the powers, preferences and
rights of such other series shall be fixed by the Board of Directors
as senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided,
however, that the Board of Directors may provide in the resolution
or resolutions as to any series of Preferred Stock adopted pursuant
to section (b) of this Article Fourth that the consent of the
holders of a majority (or such greater proportion as shall be
therein fixed) of the outstanding shares of such series voting
thereon shall be required for the issuance of any or all other
series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series
of Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the
Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of
Directors.
(h) The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased
from time to time by the affirmative vote of the holders of a
majority of the stock of the Corporation entitled to vote thereon.
Fifth: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of
directors constituting the entire Board shall be not less than five
nor more than twenty-five as fixed from time to time by vote of a
majority of the whole Board, provided, however, that the number of
directors shall not be reduced so as to shorten the term of any
director at the time in office, and provided further, that the
number of directors constituting the whole Board shall be
twenty-four until otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of one
class expiring each year. At the annual meeting of stockholders in
1982, directors of the first class shall be elected to hold office
for a term expiring at the next succeeding annual meeting, directors
of the second class shall be elected to hold office for a term
expiring at the second succeeding annual meeting and directors of
the third class shall be elected to hold office for a term expiring
at the third succeeding annual meeting. Any vacancies in the Board
of Directors for any reason, and any newly created directorships
resulting from any increase in the directors, may be filled by the
Board of Directors, acting by a majority of the directors then in
office, although less than a quorum, and any directors so chosen
shall hold office until the next annual election of directors. At
such election, the stockholders shall elect a successor to such
director to hold office until the next election of the class for
which such director shall have been chosen and until his successor
shall be elected and qualified. No decrease in the number of
directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding
the fact that some lesser percentage may be specified by law, this
Charter or Act of Incorporation or the By-Laws of the Corporation),
any director or the entire Board of Directors of the Corporation may
be removed at any time without cause, but only by the affirmative
vote of the holders of two-thirds or more of the outstanding shares
of capital stock of the Corporation entitled to vote generally in
the election of directors (considered for this purpose as one class)
cast at a meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the
Board of Directors or by any stockholder entitled to vote for the
election of directors. Such nominations shall be made by notice in
writing, delivered or mailed by first class United States mail,
postage prepaid, to the Secretary of the Corporation not less than
14 days nor more than 50 days prior to any meeting of the
stockholders called for the election of directors; provided,
however, that if less than 21 days' notice of the meeting is given
to stockholders, such written notice shall be delivered or mailed,
as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of
the meeting was mailed to stockholders. Notice of nominations which
are proposed by the Board of Directors shall be given by the
Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name,
age, business address and, if known, residence address of each
nominee proposed in such notice, (ii) the principal occupation or
employment of such nominee and (iii) the number of shares of stock
of the Corporation which are beneficially owned by each such
nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine
and declare to the meeting that a nomination was not made in
accordance with the foregoing procedure, and if he should so
determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any
annual or special meeting of
stockholders of the Corporation may be taken without a meeting, and
the power of stockholders to consent in writing, without a meeting,
to the taking of any action is specifically denied.
Sixth: - The Directors shall choose such officers, agents and
servants as may be provided in the By-Laws as they may from time to
time find necessary or proper.
Seventh: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon corporations
organized under the Act entitled "An Act Providing a General
Corporation Law", approved March 10, 1899, as from time to time
amended.
Eighth: - This Act shall be deemed and taken to be a private Act.
Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a majority
of the whole Board, may designate any of their number to constitute
an Executive Committee, which Committee, to the extent provided in
said resolution, or in the By-Laws of the Company, shall have and
may exercise all of the powers of the Board of Directors in the
management of the business and affairs of the Corporation, and shall
have power to authorize the seal of the Corporation to be affixed to
all papers which may require it.
Eleventh: - The private property of the stockholders shall not be
liable for the payment of corporate debts to any extent whatever.
Twelfth: - The Corporation may transact business in any part of the
world.
Thirteenth: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation
by a vote of the majority of the entire Board. The stockholders may
make, alter or repeal any By-Law whether or not adopted by them,
provided however, that any such additional By-Laws, alterations or
repeal may be adopted only by the affirmative vote of the holders of
two-thirds or more of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class).
Fourteenth: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time to time
designated by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be
from time to time designated by them.
Fifteenth: - (a) (1) In addition to any affirmative vote required by
law, and except as otherwise expressly provided in sections (b) and
(c) of this Article Fifteenth:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii) any
other corporation (whether or not itself an Interested
Stockholder), which, after such merger or consolidation,
would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of related
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate fair
market value of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate of
any Interested Stockholder in exchange for cash, securities
or
other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation, or
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect,
directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary
which is directly or indirectly owned by any Interested
Stockholder, or any Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article Fifteenth as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this
Article Fifteenth shall mean any transaction which is
referred to in any one or more of clauses (A) through
(E) of paragraph 1 of the section (a).
(b) The provisions of section (a) of this Article Fifteenth
shall not be applicable to any particular business
combination and such business combination shall require only
such affirmative vote as is required by law and any other
provisions of the Charter or Act of Incorporation or By-Laws
if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article Fifteenth:
(1) A "person" shall mean any individual, firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any
Subsidiary) who or which as of the record date for the determination
of stockholders entitled to notice of and to vote on such business
combination, or immediately prior to the consummation of any such
transaction:
(A) is the beneficial owner, directly or indirectly, of
more than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial owner,
directly or indirectly, of not less than 10% of the then
outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any
share of capital stock of the Corporation which were at any
time within two years prior thereto beneficially owned by
any Interested Stockholder, and such assignment or
succession shall have occurred in the course of a
transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and
Associates (as hereafter defined) beneficially own, directly
or indirectly, or
(B) which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether such right
is exercisable immediately or only after the passage of
time), pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights,
exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or
understanding, or
(C) which are beneficially owned, directly or indirectly, by
any other person with which such first mentioned person or
any of its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of capital stock
of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any
other Voting Shares which may be issuable pursuant to any agreement,
or upon exercise of conversion rights, warrants or options or
otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings
given those terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as in effect on December
31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of
any class of equity security (as defined in Rule 3a11-1 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as in effect on December 31, 1981) is owned, directly or
indirectly, by the Corporation; provided, however, that for the
purposes of the definition of Investment Stockholder set forth in
paragraph (2) of this section (c), the term "Subsidiary" shall mean
only a corporation of which a majority of each class of equity
security is owned, directly or indirectly, by the Corporation.
(d) majority of the directors shall have the power and duty
to determine for the purposes of this Article Fifteenth on
the basis of information known to them, (1) the number of
Voting Shares beneficially owned by any person (2) whether a
person is an Affiliate or Associate of another, (3) whether
a person has an agreement, arrangement or understanding with
another as to the matters referred to in paragraph (3) of
section (c), or (4) whether the assets subject to any
business combination or the consideration received for the
issuance or transfer of securities by the Corporation, or
any Subsidiary has an aggregate fair market value of
$1,000,000 or more.
(e) Nothing contained in this Article Fifteenth shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
Sixteenth: Notwithstanding any other provision of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and in
addition to any other vote that may be required by law, this Charter
or Act of Incorporation by the By-Laws), the affirmative vote of the
holders of at least two-thirds of the outstanding shares of the
capital stock of the Corporation entitled to vote generally in the
election of directors (considered for this purpose as one class)
shall be required to amend, alter or repeal any provision of
Articles Fifth, Thirteenth, Fifteenth or Sixteenth of this Charter
or Act of Incorporation.
Seventeenth: (a) a Director of this Corporation shall not be liable
to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a Director, except to the extent such
exemption from liability or limitation thereof is not permitted
under the Delaware General Corporation Laws as the same exists or
may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph
shall not adversely affect any right or protection of a
Director of the Corporation existing hereunder with respect
to any act or omission occurring prior to the time of such
repeal or modification."
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON FEBRUARY 20, 2000
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or at
such other date, time, or place as may be designated by resolution by the Board
of Directors.
Section 2. Special meetings of all stockholders may be called at any
time by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given
by mailing to each stockholder at least ten (10) days before said meeting, at
his last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each share of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
DIRECTORS
Section 1. The authorized number of directors that shall constitute
the Board of Directors shall be fixed from time to time by or pursuant to a
resolution passed by a majority of the Board within the parameters set by the
Charter of the Bank. No more than two directors may also be employees of the
Company or any affiliate thereof.
Section 2. Except as provided in these Bylaws or as otherwise
required by law, there shall be no qualifications for election or service as
directors of the Company. In addition to any other provisions of these Bylaws,
to be qualified for nomination for Election or appointment to the Board of
Directors each person must have not attained the age of sixty-nine years at the
time of such election or appointment, provided however, the Nominating and
Corporate Governance Committee may waive such qualification as to a particular
candidate otherwise qualified to serve as a director upon a good faith
determination by such committee that such a waiver is in the best interests of
the Company and its stockholders. The Chairman of the Board of Directors shall
not be qualified to continue to serve as a director upon the termination of his
or her services in that office for any reason.
Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed
and conducted by the Board of Directors.
Section 5. The Board of Directors shall meet at the principal office
of the Company or elsewhere in its discretion at such times to be determined by
a majority of its members, or at the call of the Chairman of the Board of
Directors or the President.
Section 6. Special meetings of the Board of Directors may be called
at any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall
be necessary to constitute a quorum for the transaction of business at any
meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of
any special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board of Directors,
although less than a quorum, shall have the right to elect the successor who
shall hold office for the remainder of the full term of the class of directors
in which the vacancy occurred, and until such director's successor shall have
been duly elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or divisions of the Company as it may deem
advisable.
ARTICLE III
COMMITTEES
Section 1. Executive Committee
(A) The Executive Committee shall be composed of
not more than nine members who shall be selected by the Board of Directors from
its own members and who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the
powers of the Board of Directors when it is not in session to transact all
business for and in behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the
principal office of the Company or elsewhere in its discretion at such times to
be determined by a majority of its members, or at the call of the Chairman of
the Executive Committee or at the call of the Chairman of the Board of
Directors. The majority of its members shall be necessary to constitute a quorum
for the transaction of business. Special meetings of the Executive Committee may
be held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive
Committee shall be kept and submitted to the Board of Directors at its next
meeting.
(E) The Executive Committee shall advise and
superintend all investments that may be made of the funds of the Company, and
shall direct the disposal of the same, in accordance with such rules and
regulations as the Board of Directors from time to time make.
(F) In the event of a state of disaster of
sufficient severity to prevent the conduct and management of the affairs and
business of the Company by its directors and officers as contemplated by these
By-Laws any two available members of the Executive Committee as constituted
immediately prior to such disaster shall constitute a quorum of that Committee
for the full conduct and management of the affairs and business of the Company
in accordance with the provisions of Article III of these By-Laws; and if less
than three members of the Trust Committee is constituted immediately prior to
such disaster shall be available for the transaction of its business, such
Executive Committee shall also be empowered to exercise all of the powers
reserved to the Trust Committee under Article III Section 2 hereof. In the event
of the unavailability, at such time, of a minimum of two members of such
Executive Committee, any three available directors shall constitute the
Executive Committee for the full conduct and management of the affairs and
business of the Company in accordance with the foregoing provisions of this
Section. This By-Law shall be subject to implementation by Resolutions of the
Board of Directors presently existing or hereafter passed from time to time for
that purpose, and any provisions of these By-Laws (other than this Section) and
any resolutions which are contrary to the provisions of this Section or to the
provisions of any such implementary Resolutions shall be suspended during such a
disaster period until it shall be determined by any interim Executive Committee
acting under this section that it shall be to the advantage of the Company to
resume the conduct and management of its affairs and business under all of the
other provisions of these By-Laws.
Section 2. Audit Committee
(A) The Audit Committee shall be composed of five
members who shall be selected by the Board of Directors from its own members,
none of whom shall be an officer of the Company, and shall hold office at the
pleasure of the Board.
(B) The Audit Committee shall have general
supervision over the Audit Division in all matters however subject to the
approval of the Board of Directors; it shall consider all matters brought to its
attention by the officer in charge of the Audit Division, review all reports of
examination of the Company made by any governmental agency or such independent
auditor employed for that purpose, and make such recommendations to the Board of
Directors with respect thereto or with respect to any other matters pertaining
to auditing the Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and
wherever the majority of its members shall deem it to be proper for the
transaction of its business, and a majority of its Committee shall constitute a
quorum.
Section 3. Compensation Committee
(A) The Compensation Committee shall be composed of
not more than five (5) members who shall be selected by the Board of Directors
from its own members who are not officers of the Company and who shall hold
office during the pleasure of the Board.
(B) The Compensation Committee shall in general
advise upon all matters of policy concerning the Company brought to its
attention by the management and from time to time review the management of the
Company, major organizational matters, including salaries and employee benefits
and specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be
called at any time by the Chairman of the Compensation Committee, the Chairman
of the Board of Directors, or the President of the Company.
Section 4. Associate Directors
(A) Any person who has served as a director may be
elected by the Board of Directors
as an associate director, to serve during the pleasure of the Board.
(B) An associate director shall be entitled to
attend all directors meetings and participate in the discussion of all matters
brought to the Board, with the exception that he would have no right to vote. An
associate director will be eligible for appointment to Committees of the
Company, with the exception of the Executive Committee, Audit Committee and
Compensation Committee, which must be comprised solely of active directors.
Section 5. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any
member of any Committee created under Article III of the By-Laws of this
Company, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at
all meetings of the Board and shall have such further authority and powers and
shall perform such duties as the Board of Directors may from time to time confer
and direct. He shall also exercise such powers and perform such duties as may
from time to time be agreed upon between himself and the President of the
Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of the
Board of Directors shall preside at all meetings of the Board of Directors at
which the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining
to the office of the President conferred or imposed upon him by statute or
assigned to him by the Board of Directors. In the absence of the Chairman of the
Board the President shall have the powers and duties of the Chairman of the
Board.
Section 4. The Chairman of the Board of Directors or the President
as designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and such
other powers and duties as may from time to time be assigned to them by the
Board of Directors, the Executive Committee, the Chairman of the Board or the
President and by the officer in charge of the department or division to which
they are assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings and
to recording the same in the minute books of the Company. In addition to the
other notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all
assets and liabilities of the Company.
He shall be custodian of and responsible for all monies, funds and valuables of
the Company and for the keeping of proper records of the evidence of property or
indebtedness and of all the transactions of the Company. He shall have general
supervision of the expenditures of the Company and shall report to the Board of
Directors at each regular meeting of the condition of the Company, and perform
such other duties as may be assigned to him from time to time by the Board of
Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller
officers however denominated, who may perform the duties of the Controller and
such duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of the Auditor and
such duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank
to all Vice Presidents with such functional titles as shall be determined from
time to time by the Board of Directors, who shall ex officio hold the office
Assistant Secretary of this Company and who may perform such duties as may be
prescribed by the officer in charge of the department or division to whom they
are assigned.
Section 11. The powers and duties of all other officers of the
Company shall be those usually pertaining to their respective offices, subject
to the direction of the Board of Directors, the Executive Committee, Chairman of
the Board of Directors or the President and the officer in charge of the
department or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of
the Company and a transfer book shall be kept in which all transfers of stock
shall be recorded.
Section 2. Certificates of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of Directors
and countersigned by the Secretary or Treasurer or an Assistant Secretary, and
the seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of stock
shall be issued only upon giving such security as may be satisfactory to the
Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to
fix in advance a record date for the determination of the stockholders entitled
to notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the
date of any meeting of stockholders or the date for the payment of any dividend,
or the date for the allotment of rights, or the date when any change or
conversion or exchange of capital stock shall go into effect, or a date in
connection with obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the
following form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner circle
the words "Wilmington, Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar
year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as though
expressly authorized by the Board of Directors and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable honoraria
or fees for attending meetings of the Board of Directors as the Board of
Directors may from time to time determine. Directors and associate directors who
serve as members of committees, other than salaried employees of the Company,
shall be paid such reasonable honoraria or fees for services as members of
committees as the Board of Directors shall from time to time determine and
directors and associate directors may be employed by the Company for such
special services as the Board of Directors may from time to time determine and
shall be paid for such special services so performed reasonable compensation as
may be determined by the Board of Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless, to
the fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred
in defending any proceeding in advance of its final disposition, provided,
however, that the payment of expenses incurred by a Director or officer in his
capacity as a Director or officer in advance of the final disposition of the
proceeding shall be made only upon receipt of an undertaking by the Director or
officer to repay all amounts advanced if it should be ultimately determined that
the Director or officer is not entitled to be indemnified under this Article or
otherwise.
(C) If a claim for indemnification or payment of
expenses, under this Article X is not paid in full within ninety days after a
written claim therefor has been received by the Corporation the claimant may
file suit to recover the unpaid amount of such claim and, if successful in whole
or in part, shall be entitled to be paid the expense of prosecuting such claim.
In any such action the Corporation shall have the burden of proving that the
claimant was not entitled to the requested indemnification of payment of
expenses under applicable law.
(D) The rights conferred on any person by this
Article X shall not be exclusive of any other rights which such person may have
or hereafter acquire under any statute, provision of the Charter or Act of
Incorporation, these By-Laws, agreement, vote of stockholders or disinterested
Directors or otherwise.
(E) Any repeal or modification of the foregoing
provisions of this Article X shall not adversely affect any right or protection
hereunder of any person in respect of any act or omission occurring prior to the
time of such repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in
whole or in part, and any new By-Law or By-Laws adopted at any regular or
special meeting of the Board of Directors by a vote of the majority of all the
members of the Board of Directors then in office.
EXHIBIT C
SECTION 321(b) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of examinations
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: February 20, 2002 By: /s/ Donald G. MacKelcan
----------------- ------------------------
Name: Donald G. MacKelcan
Title: Vice President
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and
savings banks with state publication requirements. It has not
been approved by any state banking authorities. Refer to your
appropriate state banking authorities for your state
publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
------------------------ ----------
Name of Bank City
in the State of DELAWARE , at the close of business on December 31, 2001.
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins 196,974
Interest-bearing balances 0
Held-to-maturity securities 15,552
Available-for-sale securities 1,164,399
Federal funds sold and securities purchased under agreements to resell 355,893
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . . 5,099,672
LESS: Allowance for loan and lease losses. . . . . . 73,484
LESS: Allocated transfer risk reserve. . . . . . . . 0
Loans and leases, net of unearned income, allowance, and reserve 5,026,188
Assets held in trading accounts 0
Premises and fixed assets (including capitalized leases) 132,613
Other real estate owned 383
Investments in unconsolidated subsidiaries and associated companies 1,592
Customers' liability to this bank on acceptances outstanding 0
Intangible assets:
a. Goodwill 201
b. Other intangible assets 4,154
Other assets 142,841
Total assets 7,040,790
CONTINUED ON NEXT PAGE
LIABILITIES
Deposits:
In domestic offices 5,503,674
Noninterest-bearing . . . . . . . . 1,246,624
Interest-bearing. . . . . . . . . . 4,257,050
Federal funds purchased and Securities sold under agreements to repurchase 298,977
Trading liabilities (from Schedule RC-D) 0
Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases: 602,820
Bank's liability on acceptances executed and outstanding 0
Subordinated notes and debentures 0
Other liabilities (from Schedule RC-G) 100,806
Total liabilities 6,506,277
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common Stock 500
Surplus (exclude all surplus related to preferred stock) 62,118
a. Retained earnings 462,722
b. Accumulated other comprehensive income 9,173
Total equity capital 534,513
Total liabilities, limited-life preferred stock, and equity capital 7,040,790
EXHIBIT 25.2
Registration No.:
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)___
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
Revlon, Inc.
(Exact name of obligor as specified in its charter)
Delaware 13-3662953
(State of incorporation) (I.R.S. employer identification no.)
625 Madison Avenue,
New York, New York 10022
(Address of principal executive offices) (Zip Code)
(Title of the indenture securities)
Guarantees related to the 12% Senior Secured Exchange Notes due 2005
-1-
Schedule of Additional Obligors
Almay, Inc.
Charles of the Ritz Group Ltd.
Charles Revson Inc.
Cosmetics & More Inc.
North America Revsale Inc.
Pacific Finance & Development Corp.
PPI Two Corporation
Revlon Consumer Corp.
Revlon Government Sales, Inc.
Revlon International Corporation
Revlon Products Corp.
Revlon Real Estate Corporation
RIROS Corporation
RIROS Group Inc.
RIT Inc.
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust
powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
such affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the obligor
is not an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which
includes the certificate of authority of Wilmington Trust
Company to commence business and the authorization of
Wilmington Trust Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by
Section 321(b) of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington
Trust Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 20th day
of February, 2002.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Anita Dallago By: /s/ Donald G. MacKelcan
------------------- -----------------------
Assistant Secretary Name: Donald G. MacKelcan
Title: Vice President
EXHIBIT A
AMENDED CHARTER
Wilmington Trust Company
Wilmington, Delaware
As existing on May 9, 1987
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
Wilmington Trust Company, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name
of which company was changed to "Wilmington Trust Company" by an amendment filed
in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter
or Act of Incorporation of which company has been from time to time amended and
changed by merger agreements pursuant to the corporation law for state banks and
trust companies of the State of Delaware, does hereby alter and amend its
Charter or Act of Incorporation so that the same as so altered and amended shall
in its entirety read as follows:
First: - The name of this corporation is Wilmington Trust Company.
Second: - The location of its principal office in the State of
Delaware is at Rodney Square North, in the City of Wilmington,
County of New Castle; the name of its resident agent is Wilmington
Trust Company whose address is Rodney Square North, in said City. In
addition to such principal office, the said corporation maintains
and operates branch offices in the City of Newark, New Castle
County, Delaware, the Town of Newport, New Castle County, Delaware,
at Claymont, New Castle County, Delaware, at Greenville, New Castle
County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate
branch offices at Ninth and Shipley Streets, 418 Delaware Avenue,
2120 Market Street, and 3605 Market Street, all in the City of
Wilmington, New Castle County, Delaware, and such other branch
offices or places of business as may be authorized from time to time
by the agency or agencies of the government of the State of Delaware
empowered to confer such authority.
Third: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this
Corporation are to do any or all of the things herein mentioned as
fully and to the same extent as natural persons might or could do
and in any part of the world, viz.:
(1) To sue and be sued, complain and defend in any Court of
law or equity and to make and use a common seal, and alter
the seal at pleasure, to hold, purchase, convey, mortgage or
otherwise deal in real and personal estate and property, and
to appoint such officers and agents as the business of the
Corporation shall require, to make by-laws not inconsistent
with the Constitution or laws of the United States or of
this State, to discount bills, notes or other evidences of
debt, to receive deposits of money, or securities for money,
to buy gold and silver bullion and foreign coins, to buy and
sell bills of exchange, and generally to use, exercise and
enjoy all the powers, rights, privileges and franchises
incident to a corporation which are proper or necessary for
the transaction of the business of the Corporation hereby
created.
(2) To insure titles to real and personal property, or any
estate or interests therein, and to guarantee the holder of
such property, real or personal, against any claim or
claims, adverse to his interest therein, and to prepare and
give certificates of title for any lands or premises in the
State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and
management of funds, and the purchase, sale, management and
disposal of property of all descriptions, and to prepare and
execute all papers which may be necessary or proper in such
business.
(4) To prepare and draw agreements, contracts, deeds,
leases, conveyances, mortgages, bonds and legal papers of
every description, and to carry on the business of
conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry,
plate, deeds, bonds and any and all other personal property
of every sort and kind, from executors, administrators,
guardians, public officers, courts, receivers, assignees,
trustees, and from all fiduciaries, and from all other
persons and individuals, and from all corporations whether
state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the two
parties, and in like manner may act as Treasurer of any
corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage,
bond or other instrument issued by any state, municipality,
body politic, corporation, association or person, either
alone or in conjunction with any other person or persons,
corporation or corporations.
(8) To guarantee the validity, performance or effect of any
contract or agreement, and the fidelity of persons holding
places of responsibility or trust; to become surety for any
person, or persons, for the faithful performance of any
trust, office, duty, contract or agreement, either by itself
or in conjunction with any other person, or persons,
corporation, or corporations, or in like manner become
surety upon any bond, recognizance, obligation, judgment,
suit, order, or decree to be entered in any court of record
within the State of Delaware or elsewhere, or which may now
or hereafter be required by any law, judge, officer or court
in the State of Delaware or elsewhere.
(9) To act by any and every method of appointment as
trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian, bailee, or
in any other trust capacity in the receiving, holding,
managing, and disposing of any and all estates and property,
real, personal or mixed, and to be appointed as such
trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian or bailee
by any persons, corporations, court, officer, or authority,
in the State of Delaware or elsewhere; and whenever this
Corporation is so appointed by any person, corporation,
court, officer or authority such trustee, trustee in
bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other
trust capacity, it shall not be required to give bond with
surety, but its capital stock shall be taken and held as
security for the performance of the duties devolving upon it
by such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake or
be called upon to perform, or for the assumption of any
responsibility the said Corporation may be entitled to
receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of any
private, public or municipal corporation within and without
the State of Delaware, or of the Government of the
United States, or of any state, territory, colony, or
possession thereof, or of any foreign government or country;
to receive, collect, receipt for, and dispose of interest,
dividends and income upon and from any of the bonds,
mortgages, debentures, notes, shares of capital stock,
securities, obligations, contracts, evidences of
indebtedness and other property held and owned by it, and to
exercise in respect of all such bonds, mortgages,
debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and other
property, any and all the rights, powers and privileges of
individual owners thereof, including the right to vote
thereon; to invest and deal in and with any of the moneys of
the Corporation upon such securities and in such manner as
it may think fit and proper, and from time to time to vary
or realize such investments; to issue bonds and secure the
same by pledges or deeds of trust or mortgages of or upon
the whole or any part of the property held or owned by the
Corporation, and to sell and pledge such bonds, as and when
the Board of Directors shall determine, and in the promotion
of its said corporate business of investment and to the
extent authorized by law, to lease, purchase, hold, sell,
assign, transfer, pledge, mortgage and convey real and
personal property of any name and nature and any estate or
interest therein.
(b) In furtherance of, and not in limitation, of the powers
conferred by the laws of the State of Delaware, it is hereby
expressly provided that the said Corporation shall also have the
following powers:
(1) To do any or all of the things herein set forth, to the
same extent as natural persons might or could do, and in any
part of the world.
(2) To acquire the good will, rights, property and
franchises and to undertake the whole or any part of the
assets and liabilities of any person, firm, association or
corporation, and to pay for the same in cash, stock of this
Corporation, bonds or otherwise; to hold or in any manner to
dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any
part of any business so acquired, and to exercise all the
powers necessary or convenient in and about the conduct and
management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien,
and to lease, sell, exchange, transfer, or in any manner
whatever dispose of property, real, personal or mixed,
wherever situated.
(4) To enter into, make, perform and carry out contracts of
every kind with any person, firm, association or
corporation, and, without limit as to amount, to draw, make,
accept, endorse, discount, execute and issue promissory
notes, drafts, bills of exchange, warrants, bonds,
debentures, and other negotiable or transferable
instruments.
(5) To have one or more offices, to carry on all or any of
its operations and businesses, without restriction to the
same extent as natural persons might or could do, to
purchase or otherwise acquire, to hold, own, to mortgage,
sell, convey or otherwise dispose of, real and personal
property, of every class and description, in any State,
District, Territory or Colony of the United States, and in
any foreign country or place.
(6) It is the intention that the objects, purposes and
powers specified and clauses contained in this paragraph
shall (except where otherwise expressed in said paragraph)
be nowise limited or restricted by reference to or inference
from the terms of any other clause of this or any other
paragraph in this charter, but that the objects, purposes
and powers specified in each of the clauses of this
paragraph shall be regarded as independent objects, purposes
and powers.
Fourth: - (a) The total number of shares of all classes of stock
which the Corporation shall have authority to issue is forty-one
million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par
value $10.00 per share (hereinafter
referred to as "Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par
value $1.00 per share (hereinafter referred to as "Common
Stock").
(b) Shares of Preferred Stock may be issued from time to time in one
or more series as may from time to time be determined by the Board
of Directors each of said series to be distinctly designated. All
shares of any one series of Preferred Stock shall be alike in every
particular, except that there may be different dates from which
dividends, if any, thereon shall be cumulative, if made cumulative.
The voting powers and the preferences and relative, participating,
optional and other special rights of each such series, and the
qualifications, limitations or restrictions thereof, if any, may
differ from those of any and all other series at any time
outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article Fourth, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by
resolution or resolutions adopted prior to the issuance of any
shares of a particular series of Preferred Stock, the voting powers
and the designations, preferences and relative, optional and other
special rights, and the qualifications, limitations and restrictions
of such series, including, but without limiting the generality of
the foregoing, the following:
(1) The distinctive designation of, and the number of shares
of Preferred Stock which shall constitute such series, which
number may be increased (except where otherwise provided by
the Board of Directors) or decreased (but not below the
number of shares thereof then outstanding) from time to time
by like action of the Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred Stock
of such series shall be paid, the extent of the preference
or relation, if any, of such dividends to the dividends
payable on any other class or classes, or series of the same
or other class of stock and whether such dividends shall be
cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of
such series to convert the same into or exchange the same
for, shares of any other class or classes or of any series
of the same or any other class or classes of stock of the
Corporation and the terms and conditions of such conversion
or exchange;
(4) Whether or not Preferred Stock of such series shall be
subject to redemption, and the redemption price or prices
and the time or times at which, and the terms and conditions
on which, Preferred Stock of such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of
such series upon the voluntary or involuntary liquidation,
merger, consolidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of
such series; and
(7) The voting powers, if any, of the holders of such series
of Preferred Stock which may, without limiting the
generality of the foregoing include the right, voting as a
series or by itself or together with other series of
Preferred Stock or all series of Preferred Stock as a class,
to elect one or more directors of the Corporation if there
shall have been a default in the payment of dividends on any
one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of
Directors may determine.
(c) (1) After the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with the
provisions of section (b) of this Article Fourth), if any, shall
have been met and
after the Corporation shall have complied with all the requirements,
if any, with respect to the setting aside of sums as sinking funds
or redemption or purchase accounts (fixed in accordance with the
provisions of section (b) of this Article Fourth), and subject
further to any conditions which may be fixed in accordance with the
provisions of section (b) of this Article Fourth, then and not
otherwise the holders of Common Stock shall be entitled to receive
such dividends as may be declared from time to time by the Board of
Directors.
(2) After distribution in full of the preferential amount,
if any, (fixed in accordance with the provisions of section
(b) of this Article Fourth), to be distributed to the
holders of Preferred Stock in the event of voluntary or
involuntary liquidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation, the holders
of the Common Stock shall be entitled to receive all of the
remaining assets of the Corporation, tangible and
intangible, of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares
of Common Stock held by them respectively.
(3) Except as may otherwise be required by law or by the
provisions of such resolution or resolutions as may be
adopted by the Board of Directors pursuant to section (b) of
this Article Fourth, each holder of Common Stock shall have
one vote in respect of each share of Common Stock held on
all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock
or of options, warrants or other rights to purchase shares of any
class or series of stock or of other securities of the Corporation
shall have any preemptive right to purchase or subscribe for any
unissued stock of any class or series or any additional shares of
any class or series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or series,
or bonds, certificates of indebtedness, debentures or other
securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of
stock or securities convertible into or exchangeable for stock, or
carrying any right to purchase stock, may be issued and disposed of
pursuant to resolution of the Board of Directors to such persons,
firms, corporations or associations, whether such holders or others,
and upon such terms as may be deemed advisable by the Board of
Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and
rights of each other series of Preferred Stock shall, in each case,
be as fixed from time to time by the Board of Directors in the
resolution or resolutions adopted pursuant to authority granted in
section (b) of this Article Fourth and the consent, by class or
series vote or otherwise, of the holders of such of the series of
Preferred Stock as are from time to time outstanding shall not be
required for the issuance by the Board of Directors of any other
series of Preferred Stock whether or not the powers, preferences and
rights of such other series shall be fixed by the Board of Directors
as senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided,
however, that the Board of Directors may provide in the resolution
or resolutions as to any series of Preferred Stock adopted pursuant
to section (b) of this Article Fourth that the consent of the
holders of a majority (or such greater proportion as shall be
therein fixed) of the outstanding shares of such series voting
thereon shall be required for the issuance of any or all other
series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series
of Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the
Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of
Directors.
(h) The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased
from time to time by the affirmative vote of the holders of a
majority of the stock of the Corporation entitled to vote thereon.
Fifth: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of
directors constituting the entire Board shall be not less than five
nor more than twenty-five as fixed from time to time by vote of a
majority of the whole Board, provided, however, that the number of
directors shall not be reduced so as to shorten the term of any
director at the time in office, and provided further, that the
number of directors constituting the whole Board shall be
twenty-four until otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of one
class expiring each year. At the annual meeting of stockholders in
1982, directors of the first class shall be elected to hold office
for a term expiring at the next succeeding annual meeting, directors
of the second class shall be elected to hold office for a term
expiring at the second succeeding annual meeting and directors of
the third class shall be elected to hold office for a term expiring
at the third succeeding annual meeting. Any vacancies in the Board
of Directors for any reason, and any newly created directorships
resulting from any increase in the directors, may be filled by the
Board of Directors, acting by a majority of the directors then in
office, although less than a quorum, and any directors so chosen
shall hold office until the next annual election of directors. At
such election, the stockholders shall elect a successor to such
director to hold office until the next election of the class for
which such director shall have been chosen and until his successor
shall be elected and qualified. No decrease in the number of
directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding
the fact that some lesser percentage may be specified by law, this
Charter or Act of Incorporation or the By-Laws of the Corporation),
any director or the entire Board of Directors of the Corporation may
be removed at any time without cause, but only by the affirmative
vote of the holders of two-thirds or more of the outstanding shares
of capital stock of the Corporation entitled to vote generally in
the election of directors (considered for this purpose as one class)
cast at a meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the
Board of Directors or by any stockholder entitled to vote for the
election of directors. Such nominations shall be made by notice in
writing, delivered or mailed by first class United States mail,
postage prepaid, to the Secretary of the Corporation not less than
14 days nor more than 50 days prior to any meeting of the
stockholders called for the election of directors; provided,
however, that if less than 21 days' notice of the meeting is given
to stockholders, such written notice shall be delivered or mailed,
as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of
the meeting was mailed to stockholders. Notice of nominations which
are proposed by the Board of Directors shall be given by the
Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name,
age, business address and, if known, residence address of each
nominee proposed in such notice, (ii) the principal occupation or
employment of such nominee and (iii) the number of shares of stock
of the Corporation which are beneficially owned by each such
nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine
and declare to the meeting that a nomination was not made in
accordance with the foregoing procedure, and if he should so
determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any
annual or special meeting of
stockholders of the Corporation may be taken without a meeting, and
the power of stockholders to consent in writing, without a meeting,
to the taking of any action is specifically denied.
Sixth: - The Directors shall choose such officers, agents and
servants as may be provided in the By-Laws as they may from time to
time find necessary or proper.
Seventh: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon corporations
organized under the Act entitled "An Act Providing a General
Corporation Law", approved March 10, 1899, as from time to time
amended.
Eighth: - This Act shall be deemed and taken to be a private Act.
Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a majority
of the whole Board, may designate any of their number to constitute
an Executive Committee, which Committee, to the extent provided in
said resolution, or in the By-Laws of the Company, shall have and
may exercise all of the powers of the Board of Directors in the
management of the business and affairs of the Corporation, and shall
have power to authorize the seal of the Corporation to be affixed to
all papers which may require it.
Eleventh: - The private property of the stockholders shall not be
liable for the payment of corporate debts to any extent whatever.
Twelfth: - The Corporation may transact business in any part of the
world.
Thirteenth: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation
by a vote of the majority of the entire Board. The stockholders may
make, alter or repeal any By-Law whether or not adopted by them,
provided however, that any such additional By-Laws, alterations or
repeal may be adopted only by the affirmative vote of the holders of
two-thirds or more of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class).
Fourteenth: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time to time
designated by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be
from time to time designated by them.
Fifteenth: - (a) (1) In addition to any affirmative vote required by
law, and except as otherwise expressly provided in sections (b) and
(c) of this Article Fifteenth:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii) any
other corporation (whether or not itself an Interested
Stockholder), which, after such merger or consolidation,
would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of related
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate fair
market value of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate of
any Interested Stockholder in exchange for cash, securities
or
other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation, or
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect,
directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary
which is directly or indirectly owned by any Interested
Stockholder, or any Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article Fifteenth as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this
Article Fifteenth shall mean any transaction which is
referred to in any one or more of clauses (A) through
(E) of paragraph 1 of the section (a).
(b) The provisions of section (a) of this Article Fifteenth
shall not be applicable to any particular business
combination and such business combination shall require only
such affirmative vote as is required by law and any other
provisions of the Charter or Act of Incorporation or By-Laws
if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article Fifteenth:
(1) A "person" shall mean any individual, firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any
Subsidiary) who or which as of the record date for the determination
of stockholders entitled to notice of and to vote on such business
combination, or immediately prior to the consummation of any such
transaction:
(A) is the beneficial owner, directly or indirectly, of
more than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial owner,
directly or indirectly, of not less than 10% of the then
outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any
share of capital stock of the Corporation which were at any
time within two years prior thereto beneficially owned by
any Interested Stockholder, and such assignment or
succession shall have occurred in the course of a
transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and
Associates (as hereafter defined) beneficially own, directly
or indirectly, or
(B) which such person or any of its Affiliates or Associates
has (i) the right to acquire (whether such right is
exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (ii) the right to vote
pursuant to any agreement, arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly, by
any other person with which such first mentioned person or
any of its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of capital stock
of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any
other Voting Shares which may be issuable pursuant to any agreement,
or upon exercise of conversion rights, warrants or options or
otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings
given those terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as in effect on December
31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of
any class of equity security (as defined in Rule 3a11-1 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as in effect on December 31, 1981) is owned, directly or
indirectly, by the Corporation; provided, however, that for the
purposes of the definition of Investment Stockholder set forth in
paragraph (2) of this section (c), the term "Subsidiary" shall mean
only a corporation of which a majority of each class of equity
security is owned, directly or indirectly, by the Corporation.
(d) majority of the directors shall have the power and duty
to determine for the purposes of this Article Fifteenth on
the basis of information known to them, (1) the number of
Voting Shares beneficially owned by any person (2) whether a
person is an Affiliate or Associate of another, (3) whether
a person has an agreement, arrangement or understanding with
another as to the matters referred to in paragraph (3) of
section (c), or (4) whether the assets subject to any
business combination or the consideration received for the
issuance or transfer of securities by the Corporation, or
any Subsidiary has an aggregate fair market value of
$1,000,000 or more.
(e) Nothing contained in this Article Fifteenth shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
Sixteenth: Notwithstanding any other provision of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and in
addition to any other vote that may be required by law, this Charter
or Act of Incorporation by the By-Laws), the affirmative vote of the
holders of at least two-thirds of the outstanding shares of the
capital stock of the Corporation entitled to vote generally in the
election of directors (considered for this purpose as one class)
shall be required to amend, alter or repeal any provision of
Articles Fifth, Thirteenth, Fifteenth or Sixteenth of this Charter
or Act of Incorporation.
Seventeenth: (a) a Director of this Corporation shall not be liable
to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a Director, except to the extent such
exemption from liability or limitation thereof is not permitted
under the Delaware General Corporation Laws as the same exists or
may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph
shall not adversely affect any right or protection of a
Director of the Corporation existing hereunder with respect
to any act or omission occurring prior to the time of such
repeal or modification."
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON FEBRUARY 20, 2000
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or at
such other date, time, or place as may be designated by resolution by the Board
of Directors.
Section 2. Special meetings of all stockholders may be called at any
time by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given
by mailing to each stockholder at least ten (10) days before said meeting, at
his last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each share of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
DIRECTORS
Section 1. The authorized number of directors that shall constitute
the Board of Directors shall be fixed from time to time by or pursuant to a
resolution passed by a majority of the Board within the parameters set by the
Charter of the Bank. No more than two directors may also be employees of the
Company or any affiliate thereof.
Section 2. Except as provided in these Bylaws or as otherwise required
by law, there shall be no qualifications for election or service as directors of
the Company. In addition to any other provisions of these Bylaws, to be
qualified for nomination for Election or appointment to the Board of Directors
each person must have not attained the age of sixty-nine years at the time of
such election or appointment, provided however, the Nominating and Corporate
Governance Committee may waive such qualification as to a particular candidate
otherwise qualified to serve as a director upon a good faith determination by
such committee that such a waiver is in the best interests of the Company and
its stockholders. The Chairman of the Board of Directors shall not be qualified
to continue to serve as a director upon the termination of his or her services
in that office for any reason.
Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed
and conducted by the Board of Directors.
Section 5. The Board of Directors shall meet at the principal office
of the Company or elsewhere in its discretion at such times to be determined by
a majority of its members, or at the call of the Chairman of the Board of
Directors or the President.
Section 6. Special meetings of the Board of Directors may be called
at any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall
be necessary to constitute a quorum for the transaction of business at any
meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of
any special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board of Directors,
although less than a quorum, shall have the right to elect the successor who
shall hold office for the remainder of the full term of the class of directors
in which the vacancy occurred, and until such director's successor shall have
been duly elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or divisions of the Company as it may deem
advisable.
ARTICLE III
COMMITTEES
Section 1. Executive Committee
(A) The Executive Committee shall be composed of not
more than nine members who shall be selected by the Board of Directors from its
own members and who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers
of the Board of Directors when it is not in session to transact all business for
and in behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the
principal office of the Company or elsewhere in its discretion at such times to
be determined by a majority of its members, or at the call of the Chairman of
the Executive Committee or at the call of the Chairman of the Board of
Directors. The majority of its members shall be necessary to constitute a quorum
for the transaction of business. Special meetings of the Executive Committee may
be held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive
Committee shall be kept and submitted to the Board of Directors at its next
meeting.
(E) The Executive Committee shall advise and
superintend all investments that may be made of the funds of the Company, and
shall direct the disposal of the same, in accordance with such rules and
regulations as the Board of Directors from time to time make.
(F) In the event of a state of disaster of sufficient
severity to prevent the conduct and management of the affairs and business of
the Company by its directors and officers as contemplated by these By-Laws any
two available members of the Executive Committee as constituted immediately
prior to such disaster shall constitute a quorum of that Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the provisions of Article III of these By-Laws; and if less than three
members of the Trust Committee is constituted immediately prior to such disaster
shall be available for the transaction of its business, such Executive Committee
shall also be empowered to exercise all of the powers reserved to the Trust
Committee under Article III Section 2 hereof. In the event of the
unavailability, at such time, of a minimum of two members of such Executive
Committee, any three available directors shall constitute the Executive
Committee for the full conduct and management of the affairs and business of the
Company in accordance with the foregoing provisions of this Section. This By-Law
shall be subject to implementation by Resolutions of the Board of Directors
presently existing or hereafter passed from time to time for that purpose, and
any provisions of these By-Laws (other than this Section) and any resolutions
which are contrary to the provisions of this Section or to the provisions of any
such implementary Resolutions shall be suspended during such a disaster period
until it shall be determined by any interim Executive Committee acting under
this section that it shall be to the advantage of the Company to resume the
conduct and management of its affairs and business under all of the other
provisions of these By-Laws.
Section 2. Audit Committee
(A) The Audit Committee shall be composed of five
members who shall be selected by the Board of Directors from its own members,
none of whom shall be an officer of the Company, and shall hold office at the
pleasure of the Board.
(B) The Audit Committee shall have general
supervision over the Audit Division in all matters however subject to the
approval of the Board of Directors; it shall consider all matters brought to its
attention by the officer in charge of the Audit Division, review all reports of
examination of the Company made by any governmental agency or such independent
auditor employed for that purpose, and make such recommendations to the Board of
Directors with respect thereto or with respect to any other matters pertaining
to auditing the Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and
wherever the majority of its members shall deem it to be proper for the
transaction of its business, and a majority of its Committee shall constitute a
quorum.
Section 3. Compensation Committee
(A) The Compensation Committee shall be composed of
not more than five (5) members who shall be selected by the Board of Directors
from its own members who are not officers of the Company and who shall hold
office during the pleasure of the Board.
(B) The Compensation Committee shall in general
advise upon all matters of policy concerning the Company brought to its
attention by the management and from time to time review the management of the
Company, major organizational matters, including salaries and employee benefits
and specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be
called at any time by the Chairman of the Compensation Committee, the Chairman
of the Board of Directors, or the President of the Company.
Section 4. Associate Directors
(A) Any person who has served as a director may be
elected by the Board of Directors
as an associate director, to serve during the pleasure of the Board.
(B) An associate director shall be entitled to attend
all directors meetings and participate in the discussion of all matters brought
to the Board, with the exception that he would have no right to vote. An
associate director will be eligible for appointment to Committees of the
Company, with the exception of the Executive Committee, Audit Committee and
Compensation Committee, which must be comprised solely of active directors.
Section 5. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member
of any Committee created under Article III of the By-Laws of this Company, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any such absent or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at
all meetings of the Board and shall have such further authority and powers and
shall perform such duties as the Board of Directors may from time to time confer
and direct. He shall also exercise such powers and perform such duties as may
from time to time be agreed upon between himself and the President of the
Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of the
Board of Directors shall preside at all meetings of the Board of Directors at
which the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining
to the office of the President conferred or imposed upon him by statute or
assigned to him by the Board of Directors. In the absence of the Chairman of the
Board the President shall have the powers and duties of the Chairman of the
Board.
Section 4. The Chairman of the Board of Directors or the President
as designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and such
other powers and duties as may from time to time be assigned to them by the
Board of Directors, the Executive Committee, the Chairman of the Board or the
President and by the officer in charge of the department or division to which
they are assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings and
to recording the same in the minute books of the Company. In addition to the
other notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all
assets and liabilities of the Company.
He shall be custodian of and responsible for all monies, funds and valuables of
the Company and for the keeping of proper records of the evidence of property or
indebtedness and of all the transactions of the Company. He shall have general
supervision of the expenditures of the Company and shall report to the Board of
Directors at each regular meeting of the condition of the Company, and perform
such other duties as may be assigned to him from time to time by the Board of
Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller
officers however denominated, who may perform the duties of the Controller and
such duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of the Auditor and
such duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank
to all Vice Presidents with such functional titles as shall be determined from
time to time by the Board of Directors, who shall ex officio hold the office
Assistant Secretary of this Company and who may perform such duties as may be
prescribed by the officer in charge of the department or division to whom they
are assigned.
Section 11. The powers and duties of all other officers of the
Company shall be those usually pertaining to their respective offices, subject
to the direction of the Board of Directors, the Executive Committee, Chairman of
the Board of Directors or the President and the officer in charge of the
department or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of
the Company and a transfer book shall be kept in which all transfers of stock
shall be recorded.
Section 2. Certificates of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of Directors
and countersigned by the Secretary or Treasurer or an Assistant Secretary, and
the seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of stock
shall be issued only upon giving such security as may be satisfactory to the
Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to
fix in advance a record date for the determination of the stockholders entitled
to notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the
date of any meeting of stockholders or the date for the payment of any dividend,
or the date for the allotment of rights, or the date when any change or
conversion or exchange of capital stock shall go into effect, or a date in
connection with obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the
following form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner circle
the words "Wilmington, Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar
year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as though
expressly authorized by the Board of Directors and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable honoraria
or fees for attending meetings of the Board of Directors as the Board of
Directors may from time to time determine. Directors and associate directors who
serve as members of committees, other than salaried employees of the Company,
shall be paid such reasonable honoraria or fees for services as members of
committees as the Board of Directors shall from time to time determine and
directors and associate directors may be employed by the Company for such
special services as the Board of Directors may from time to time determine and
shall be paid for such special services so performed reasonable compensation as
may be determined by the Board of Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless, to
the fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred
in defending any proceeding in advance of its final disposition, provided,
however, that the payment of expenses incurred by a Director or officer in his
capacity as a Director or officer in advance of the final disposition of the
proceeding shall be made only upon receipt of an undertaking by the Director or
officer to repay all amounts advanced if it should be ultimately determined that
the Director or officer is not entitled to be indemnified under this Article or
otherwise.
(C) If a claim for indemnification or payment of
expenses, under this Article X is not paid in full within ninety days after a
written claim therefor has been received by the Corporation the claimant may
file suit to recover the unpaid amount of such claim and, if successful in whole
or in part, shall be entitled to be paid the expense of prosecuting such claim.
In any such action the Corporation shall have the burden of proving that the
claimant was not entitled to the requested indemnification of payment of
expenses under applicable law.
(D) The rights conferred on any person by this
Article X shall not be exclusive of any other rights which such person may have
or hereafter acquire under any statute, provision of the Charter or Act of
Incorporation, these By-Laws, agreement, vote of stockholders or disinterested
Directors or otherwise.
(E) Any repeal or modification of the foregoing
provisions of this Article X shall not adversely affect any right or protection
hereunder of any person in respect of any act or omission occurring prior to the
time of such repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in
whole or in part, and any new By-Law or By-Laws adopted at any regular or
special meeting of the Board of Directors by a vote of the majority of all the
members of the Board of Directors then in office.
EXHIBIT C
SECTION 321(b) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of examinations
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: February 20, 2002 By: /s/ Donald G. MacKelcan
----------------- -----------------------
Name: Donald G. MacKelcan
Title: Vice President
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and
savings banks with state publication requirements. It has not
been approved by any state banking authorities. Refer to your
appropriate state banking authorities for your state
publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
------------------------ ----------
Name of Bank City
in the State of DELAWARE , at the close of business on December 31, 2001.
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins 196,974
Interest-bearing balances 0
Held-to-maturity securities 15,552
Available-for-sale securities 1,164,399
Federal funds sold and securities purchased under agreements to resell 355,893
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . . 5,099,672
LESS: Allowance for loan and lease losses. . . . . . 73,484
LESS: Allocated transfer risk reserve. . . . . . . . 0
Loans and leases, net of unearned income, allowance, and reserve 5,026,188
Assets held in trading accounts 0
Premises and fixed assets (including capitalized leases) 132,613
Other real estate owned 383
Investments in unconsolidated subsidiaries and associated companies 1,592
Customers' liability to this bank on acceptances outstanding 0
Intangible assets:
a. Goodwill 201
b. Other intangible assets 4,154
Other assets 142,841
Total assets 7,040,790
CONTINUED ON NEXT PAGE
LIABILITIES
Deposits:
In domestic offices 5,503,674
Noninterest-bearing . . . . . . . . 1,246,624
Interest-bearing. . . . . . . . . . 4,257,050
Federal funds purchased and Securities sold under agreements to repurchase 298,977
Trading liabilities (from Schedule RC-D) 0
Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases: 602,820
Bank's liability on acceptances executed and outstanding 0
Subordinated notes and debentures 0
Other liabilities (from Schedule RC-G) 100,806
Total liabilities 6,506,277
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common Stock 500
Surplus (exclude all surplus related to preferred stock) 62,118
a. Retained earnings 462,722
b. Accumulated other comprehensive income 9,173
Total equity capital 534,513
Total liabilities, limited-life preferred stock, and equity capital 7,040,790
EXHIBIT 99.1
LETTER OF TRANSMITTAL
REVLON CONSUMER PRODUCTS CORPORATION
OFFER FOR ALL OUTSTANDING
12% SENIOR SECURED NOTES DUE 2005
IN EXCHANGE FOR 12% SENIOR SECURED EXCHANGE NOTES DUE 2005
WHICH HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED,
PURSUANT TO THE PROSPECTUS, DATED , 2002
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M. NEW YORK CITY TIME, ON , 2002,
UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN PRIOR TO
5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
- --------------------------------------------------------------------------------
Delivery To:
WILMINGTON TRUST COMPANY,
Exchange Agent
By Hand Before 5:00 p.m.: By Registered or Certified Mail:
Wilmington Trust Company Wilmington Trust Company
311 West 11th Street Rodney Square North
Wilmington, DE 19801-1615 1100 N. Market Street
Wilmington, DE 19890
Attention: Corporate Trust Reorg Services, 1st Floor, Attention: Corporate Trust Reorg Services, 1st Floor,
Aubrey Rosa Aubrey Rosa
For Information Call:
(302) 636-6472
By Facsimile Transmission
(for Eligible Institutions only):
(302) 636-4145
Attention: Corporate Trust Reorg Services
Aubrey Rosa
Confirm by Telephone:
(302) 636-6472
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE,
OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE,
WILL NOT CONSTITUTE A VALID DELIVERY.
The undersigned acknowledges that he or she has received the Prospectus,
dated , 2002 (the "Prospectus"), of Revlon Consumer Products
Corporation, a Delaware corporation (the "Company"), and this Letter of
Transmittal (the "Letter"), which together constitute the Company's offer (the
"Exchange Offer") to exchange an aggregate principal amount of up to
$363,000,000 of the Company's 12% Senior Secured Exchange Notes due 2005 (the
"Exchange Notes") which have been registered under the Securities Act of 1933,
as amended (the "Securities Act"), for a like principal amount of the Company's
issued and outstanding 12% Senior Secured Notes due 2005 (the "Original Notes")
from the registered holders thereof (the "Holders").
For each Original Note accepted for exchange, the Holder of such Original
Note will receive an Exchange Note having a principal amount equal to that of
the surrendered Original Note. The Exchange Notes will bear interest from the
most recent date to which interest has been paid on the Original Notes or, if
no interest has been paid on the Original Notes, from November 26, 2001.
Accordingly, registered Holders of Exchange Notes on the relevant record date
for the first interest payment date following the consummation of the Exchange
Offer will receive interest accruing from the most recent date to which
interest has been paid or, if no interest has been paid, from November 26,
2001. Original Notes accepted for exchange will cease to accrue interest from
and after the date of consummation of the Exchange Offer. Holders of Original
Notes whose Original Notes are accepted for exchange will not receive any
payment in respect of accrued interest on such Original Notes otherwise payable
on any interest payment date the record date for which occurs on or after
consummation of the Exchange Offer.
This Letter is to be completed by a holder of Original Notes either if
certificates are to be forwarded herewith or if a tender of certificates for
Original Notes, if available, is to be made by book-entry transfer to the
account maintained by the Exchange Agent at The Depository Trust Company (the
"Book-Entry Transfer Facility") pursuant to the procedures set forth in "The
Exchange Offer--Book-Entry Transfer" section of the Prospectus and an Agent's
Message is not delivered. Tenders by book-entry transfer may also be made by
delivering an Agent's Message in lieu of this Letter. The term "Agent's
Message" means a message, transmitted by the Book-Entry Transfer Facility to,
and received by, the Exchange Agent and forming a part of a Book-Entry
Confirmation (as defined below), which states that the Book-Entry Transfer
Facility has received an express acknowledgment from the tendering participant,
which acknowledgment states that such participant has received and agrees to be
bound by this Letter and that the Company may enforce this Letter against such
participant. Holders of Original Notes whose certificates are not immediately
available, or who are unable to deliver their certificates or confirmation of
the book-entry tender of their Original Notes into the Exchange Agent's account
at the Book-Entry Transfer Facility (a "Book-Entry Confirmation") and all other
documents required by this Letter to the Exchange Agent on or prior to the
Expiration Date, must tender their Original Notes according to the guaranteed
delivery procedures set forth in "The Exchange Offer--Guaranteed Delivery
Procedures" section of the Prospectus. See Instruction 1.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
The undersigned has completed the appropriate boxes below and signed this
Letter to indicate the action the undersigned desires to take with respect to
the Exchange Offer.
List below the Original Notes to which this Letter relates. If the space
provided below is inadequate, the certificate numbers and principal amount of
Original Notes should be listed on a separate signed schedule affixed hereto.
2
- -------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF ORIGINAL NOTES 1 2 3
- -------------------------------------------------------------------------------------------------------------------
AGGREGATE PRINCIPAL PRINCIPAL
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) CERTIFICATE AMOUNT OF AMOUNT
(PLEASE FILL IN, IF BLANK) NUMBER(S)* ORIGINAL NOTE(S) TENDERED**
- -------------------------------------------------------------------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
TOTAL
- -------------------------------------------------------------------------------------------------------------------
* Need not be completed if Original Notes are being tendered by book-entry transfer.
** Unless otherwise indicated in this column, a holder will be deemed to have tendered ALL of the Original Notes
represented by the Original Notes represented by the Original Notes indicated in column 2. See Instruction 2.
Original Notes tendered hereby must be in denominations of principal amount of $1,000 and any integral
multiple thereof. See Instruction 1.
- -------------------------------------------------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE
BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
---------------------------------------------
Account Number Transaction Code Number
------------------- ---------------
By crediting the Original Notes to the Exchange Agent's account at the
Book-Entry Transfer Facility's Automated Tender Offer Program ("ATOP") and
by complying with applicable ATOP procedures with respect to the Exchange
Offer, including transmitting to the Exchange Agent a computer-generated
Agent's Message in which the holder of the Original Notes acknowledges and
agrees to be bound by the terms of, and makes the representations and
warranties contained in, this Letter, the participant in the Book-Entry
Transfer Facility confirms on behalf of itself and the beneficial owners
of such Original Notes all provisions of this Letter (including all
representations and warranties) applicable to it and such beneficial owner
as fully as if it had completed the information required herein and
executed and transmitted this Letter to the Exchange Agent.
[ ] CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND
COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s)
--------------------------------------------
Window Ticket Number (if any)
----------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
-------------------------
Name of Institution Which Guaranteed Delivery
------------------------------
IF DELIVERED BY BOOK-ENTRY TRANSFER, COMPLETE THE FOLLOWING:
Account Number Transaction Code Number
---------------- --------------------
3
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
NAME:
----------------------------------------------------------------------
ADDRESS:
--------------------------------------------------------------------
- --------------------------------------------------------------------------------
If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to engage in, a distribution of
Exchange Notes. If the undersigned is a broker-dealer that will receive
Exchange Notes for its own account in exchange for Original Notes that were
acquired as a result of market-making activities or other trading activities,
it acknowledges that such Original Notes were acquired by such broker-dealer as
a result of market-making or other trading activities and that it must comply
with the registration and prospectus delivery requirements of the Securities
Act in connection with any resale transaction, including the delivery of a
prospectus that contains information with respect to any selling holder
required by the Securities Act in connection with any resale of the Exchange
Notes; however, by so acknowledging and by delivering such a prospectus, the
undersigned will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. If the undersigned is a broker-dealer that will
receive Exchange Notes, it represents that the Original Notes to be exchanged
for the Exchange Notes were acquiredas a result of market-making activities or
other trading activities.
4
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the aggregate principal amount of
Original Notes indicated above. Subject to, and effective upon, the acceptance
for exchange of the Original Notes tendered hereby, the undersigned hereby
sells, assigns and transfers to, or upon the order of, the Company all right,
title and interest in and to such Original Notes as are being tendered hereby.
The undersigned hereby irrevocably constitutes and appoints the Exchange
Agent as the undersigned's true and lawful agent and attorney-in-fact with
respect to such tendered Original Notes, with full power of substitution, among
other things, to cause the Original Notes to be assigned, transferred and
exchanged. The undersigned hereby represents and warrants that the undersigned
has full power and authority to tender, sell, assign and transfer the Original
Notes, and to acquire Exchange Notes issuable upon the exchange of such
tendered Original Notes, and that, when the same are accepted for exchange, the
Company will acquire good and unencumbered title thereto, free and clear of all
liens, restrictions, charges and encumbrances and not subject to any adverse
claim when the same are accepted by the Company. The undersigned hereby further
represents that any Exchange Notes acquired in exchange for Original Notes
tendered hereby will have been acquired in the ordinary course of business of
the person receiving such Exchange Notes, whether or not such person is the
undersigned, that neither the Holder of such Original Notes nor any such other
person is participating in, intends to participate in or has an arrangement or
understanding with any person to participate in the distribution of such
Exchange Notes and that neither the Holder of such Original Notes nor any such
other person is an "affiliate," as defined in Rule 405 under the Securities
Act, of the Company.
The undersigned acknowledges that this Exchange Offer is being made in
reliance on interpretations by the staff of the Securities and Exchange
Commission (the "SEC"), as set forth in no-action letters issued to third
parties, that the Exchange Notes issued pursuant to the Exchange Offer in
exchange for the Original Notes may be offered for resale, resold and otherwise
transferred by Holders thereof (other than any such Holder that is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act), without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such Exchange Notes are
acquired in the ordinary course of such Holders' business and such Holders have
no arrangement with any person to participate in the distribution of such
Exchange Notes. However, the SEC has not considered the Exchange Offer in the
context of a no-action letter and there can be no assurance that the staff of
the SEC would make a similar determination with respect to the Exchange Offer
as in other circumstances. If the undersigned is not a broker-dealer, the
undersigned represents that it is not engaged in, and does not intend to engage
in, a distribution of Exchange Notes and has no arrangement or understanding to
participate in a distribution of Exchange Notes. If any Holder is an affiliate
of the Company, is engaged in or intends to engage in or has any arrangement or
understanding with respect to the distribution of the Exchange Notes to be
acquired pursuant to the Exchange Offer, such Holder (i) could not rely on the
applicable interpretations of the staff of the SEC and (ii) must comply with
the registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. If the undersigned is a broker-dealer
that will receive Exchange Notes for its own account in exchange for Original
Notes, it represents that the Original Notes to be exchanged for the Exchange
Notes were acquired by it as a result of market-making activities or other
trading activities and acknowledges that it will deliver a prospectus meeting
the requirements of the Securities Act in connection with any resale of such
Exchange Notes; however, by so acknowledging and by delivering a prospectus,
the undersigned will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Company to be necessary or desirable to complete the
sale, assignment and transfer of the Original Notes tendered hereby. All
authority conferred or agreed to be conferred in this Letter and every
obligation of the undersigned hereunder shall be binding upon the successors,
assigns, heirs, executors, administrators, trustees in bankruptcy and legal
representatives of the undersigned and shall not be affected by, and shall
survive, the death or incapacity of the undersigned. This tender may be
withdrawn only in accordance with the procedures set forth in "The Exchange
Offer--Withdrawal Rights" section of the Prospectus.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, please deliver the Exchange Notes (and, if applicable,
substitute certificates representing Original Notes for any Original Notes not
exchanged) in the name of the undersigned or, in the case of a book-entry
delivery of Original Notes, please credit the account indicated above
maintained at the Book-Entry Transfer Facility. Similarly, unless otherwise
indicated under the box entitled "Special Delivery Instructions" below, please
send the Exchange Notes (and, if applicable, substitute certificates
representing Original Notes for any Original Notes not exchanged) to the
undersigned at the address shown above in the box entitled "Description of
Original Notes."
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF ORIGINAL
NOTES" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE
ORIGINAL NOTES AS SET FORTH IN SUCH BOX ABOVE.
5
- --------------------------------------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4)
- --------------------------------------------------------------------------------
To be completed ONLY if certificates for Original Notes not exchanged
and/or Exchange Notes are to be issued in the name of and sent to someone other
than the person or persons whose signature(s) appear(s) on this Letter above,
or if Original Notes delivered by book-entry transfer which are not accepted for
exchange are to be returned by credit to an account maintained at the
Book-Entry Transfer Facility other than the account indicated above.
Issue Exchange Notes and/or Original Notes to:
Name(s)
------------------------------------------------------------------------
(PLEASE TYPE OR PRINT)
------------------------------------------------------------------------
(PLEASE TYPE OR PRINT)
Address
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(ZIP CODE)
(COMPLETE SUBSTITUTE FORM W-9)
[ ] Credit unexchanged Original Notes delivered by book-entry transfer to the
Book-Entry Transfer Facility account set forth below.
- --------------------------------------------------------------------------------
(BOOK-ENTRY TRANSFER FACILITY
ACCOUNT NUMBER, IF APPLICABLE)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4)
- --------------------------------------------------------------------------------
To be completed ONLY if certificates for Original Notes not exchanged
and/or Exchange Notes are to be sent to someone other than the person or persons
whose signature(s) appear(s) on this Letter above or to such person or persons
at an address other than shown in the box entitled "Description of Original
Notes" on this Letter above.
Mail Exchange Notes and/or Original Notes to:
Name(s)
------------------------------------------------------------------------
(PLEASE TYPE OR PRINT)
------------------------------------------------------------------------
(PLEASE TYPE OR PRINT)
Address
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(ZIP CODE)
- --------------------------------------------------------------------------------
IMPORTANT: THIS LETTER OR A FACSIMILE HEREOF OR AN AGENT'S MESSAGE IN LIEU
THEREOF (TOGETHER WITH THE CERTIFICATES FOR ORIGINAL NOTES OR A BOOK-ENTRY
CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS OR THE NOTICE OF GUARANTEED
DELIVERY) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK
CITY TIME, ON THE EXPIRATION DATE.
6
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.
- --------------------------------------------------------------------------------
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
(COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9 BELOW)
X ..................................... ............................ , 2002
X ..................................... ........................... , 2002
(Signature(s) of Owner) (Date)
Area Code and Telephone Number ...............................................
If a holder is tendering any Original Notes, this Letter must be signed by the
registered holder(s) as the name(s) appear(s) on the certificate(s) for the
Original Notes or by any person(s) authorized to become registered holder(s) by
endorsements and documents transmitted herewith. If signature is by a trustee,
executor, administrator, guardian, officer or other person acting in a fiduciary
or representative capacity, please set forth full title. See Instruction 3.
Name(s): .......................................................................
(Please Type or Print)
Capacity: ......................................................................
Address: .......................................................................
................................................................................
(Including Zip Code)
SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 3)
Signature(s) Guaranteed by
an Eligible Institution: .......................................................
(Authorized Signature)
................................................................................
(Title)
................................................................................
(Name and Firm)
Dated: .................................................................. , 2002
- --------------------------------------------------------------------------------
7
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER FOR THE
12% SENIOR SECURED NOTES DUE 2005 OF REVLON CONSUMER PRODUCTS CORPORATION
IN EXCHANGE FOR THE
12% SENIOR SECURED EXCHANGE NOTES DUE 2005 OF REVLON CONSUMER PRODUCTS
CORPORATION WHICH HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED
1. DELIVERY OF THIS LETTER AND NOTES; GUARANTEED DELIVERY PROCEDURES.
This Letter is to be completed by holders of Original Notes either if
certificates are to be forwarded herewith or if tenders are to be made pursuant
to the procedures for delivery by book-entry transfer set forth in "The
Exchange Offer--Book-Entry Transfer" section of the Prospectusand an Agent's
Message is not delivered. Tenders by book-entry transfer may also be made by
delivering an Agent's Message in lieu of this Letter. The term "Agent's
Message" means a message, transmitted by the Book-Entry Transfer Facility to
and received by the Exchange Agent and forming a part of a Book-Entry
Confirmation, which states that the Book-Entry Transfer Facility has received
an express acknowledgment from the tendering participant, which acknowledgment
states that such participant has received and agrees to be bound by the Letter
of Transmittal and that the Company may enforce the Letter of Transmittal
against such participant. Certificates for all physically tendered Original
Notes, or Book-Entry Confirmation, as the case may be, as well as a properly
completed and duly executed Letter (or manually signed facsimile hereof or
Agent's Message in lieu thereof) and any other documents required by this
Letter, must be received by the Exchange Agent at the address set forth herein
on or prior to the Expiration Date, or the tendering holder must comply with
the guaranteed delivery procedures set forth below. Original Notes tendered
hereby must be in denominations of principal amount of $1,000 and any integral
multiple thereof.
Holders whose certificates for Original Notes are not immediately
available or who cannot deliver their certificates and all other required
documents to the Exchange Agent on or prior to the Expiration Date, or who
cannot complete the procedure for book-entry transfer on a timely basis, may
tender their Original Notes pursuant to the guaranteed delivery procedures set
forth in "The Exchange Offer--Guaranteed Delivery Procedures" section of the
Prospectus. Pursuant to such procedures, (i) such tender must be made through
an Eligible Institution, (ii) prior to 5:00 P.M., New York City time, on the
Expiration Date, the (as defined below) Exchange Agent must receive from such
Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form provided by the Company (by
facsimile transmission, mail or hand delivery), setting forth the name and
address of the holder of Original Notes and the amount of Original Notes
tendered, stating that the tender is being made thereby and guaranteeing that
within three New York Stock Exchange ("NYSE") trading days after the date of
execution of the Notice of Guaranteed Delivery, the certificates for all
physically tendered Original Notes, in proper form for transfer, or a
Book-Entry Confirmation, as the case may be, together with a properly completed
and duly executed Letter (or facsimile thereof or Agent's Message in lieu
thereof) with any required signature guarantees and any other documents
required by this Letter will be deposited by the Eligible Institution with the
Exchange Agent, and (iii) the certificates for all physically tendered Original
Notes, in proper form for transfer, or a Book-Entry Confirmation, as the case
may be, together with a properly completed and duly executed Letter (or
facsimile thereof or Agent's Message in lieu thereof) with any required
signature guarantees and all other documents required by this Letter, are
received by the Exchange Agent within three NYSE trading days after the date of
execution of the Notice of Guaranteed Delivery.
The method of delivery of this Letter, the Original Notes and all other
required documents is at the election and risk of the tendering holders, but
the delivery will be deemed made only when actually received or confirmed by
the Exchange Agent. If Original Notes are sent by mail, it is suggested that
the mailing be registered mail, properly insured, with return receipt
requested, made sufficiently in advance of the Expiration Date to permit
delivery to the Exchange Agent prior to 5:00 P.M., New York City time, on the
Expiration Date.
See "The Exchange Offer" section of the Prospectus.
2. PARTIAL TENDERS (NOT APPLICABLE TO NOTEHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER).
If less than all of the Original Notes evidenced by a submitted
certificate are to be tendered, the tendering holder(s) should fill in the
aggregate principal amount of Original Notes to be tendered in the box above
entitled "Description of
8
Original Notes--Principal Amount Tendered." A reissued certificate representing
the balance of nontendered Original Notes will be sent to such tendering
holder, unless otherwise provided in the appropriate box on this Letter,
promptly after the Expiration Date. ALL OF THE ORIGINAL NOTES DELIVERED TO THE
EXCHANGE AGENT WILL BE DEEMED TO HAVE BEEN TENDERED UNLESS OTHERWISE INDICATED.
3. SIGNATURES ON THIS LETTER; BOND POWERS AND ENDORSEMENTS; GUARANTEE OF
SIGNATURES.
If this Letter is signed by the registered holder of the Original Notes
tendered hereby, the signature must correspond exactly with the name as written
on the face of the certificates without any change whatsoever.
If any tendered Original Notes are owned of record by two or more joint
owners, all of such owners must sign this Letter.
If any tendered Original Notes are registered in different names on
several certificates, it will be necessary to complete, sign and submit as many
separate copies of this Letter as there are different registrations of
certificates.
When this Letter is signed by the registered holder or holders of the
Original Notes specified herein and tendered hereby, no endorsements of
certificates or separate bond powers are required. If, however, the Exchange
Notes are to be issued, or any untendered Original Notes are to be reissued, to
a person other than the registered holder, then endorsements of any
certificates transmitted hereby or separate bond powers are required.
Signatures on such certificate(s) must be guaranteed by an Eligible
Institution.
If this Letter is signed by a person other than the registered holder or
holders of any certificate(s) specified herein, such certificate(s) must be
endorsed or accompanied by appropriate bond powers, in either case signed
exactly as the name or names of the registered holder or holders appear(s) on
the certificate(s) and signatures on such certificate(s) must be guaranteed by
an Eligible Institution.
If this Letter or any certificates or bond powers are signed by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and, unless waived by the Company,
proper evidence satisfactory to the Company of their authority to so act must
be submitted.
ENDORSEMENTS ON CERTIFICATES FOR ORIGINAL NOTES OR SIGNATURES ON BOND
POWERS REQUIRED BY THIS INSTRUCTION 3 MUST BE GUARANTEED BY A FIRM THAT IS A
FINANCIAL INSTITUTION (INCLUDING MOST BANKS, SAVINGS AND LOAN ASSOCIATIONS AND
BROKERAGE HOUSES) THAT IS A PARTICIPANT IN THE SECURITIES TRANSFER AGENTS
MEDALLION PROGRAM, THE NEW YORK STOCK EXCHANGE MEDALLION SIGNATURE PROGRAM OR
THE STOCK EXCHANGES MEDALLION PROGRAM (EACH AN "ELIGIBLE INSTITUTION").
SIGNATURES ON THIS LETTER NEED NOT BE GUARANTEED BY AN ELIGIBLE
INSTITUTION, PROVIDED THE ORIGINAL NOTES ARE TENDERED: (I) BY A REGISTERED
HOLDER OF ORIGINAL NOTES (WHICH TERM, FOR PURPOSES OF THE EXCHANGE OFFER,
INCLUDES ANY PARTICIPANT IN THE BOOK-ENTRY TRANSFER FACILITY SYSTEM WHOSE NAME
APPEARS ON A SECURITY POSITION LISTING AS THE HOLDER OF SUCH ORIGINAL NOTES)
WHO HAS NOT COMPLETED THE BOX ENTITLED "SPECIAL ISSUANCE INSTRUCTIONS" OR
"SPECIAL DELIVERY INSTRUCTIONS" ON THIS LETTER, OR (II) FOR THE ACCOUNT OF AN
ELIGIBLE INSTITUTION.
4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS.
Tendering holders of Original Notes should indicate in the applicable box
the name and address to which Exchange Notes issued pursuant to the Exchange
Offer and or substitute certificates evidencing Original Notes not exchanged
are to be issued or sent, if different from the name or address of the person
signing this Letter. In the case of issuance in a different name, the employer
identification or social security number of the person named must also be
indicated. Noteholders tendering Original Notes by book-entry transfer may
request that Original Notes not exchanged be credited to such account
maintained at the Book-Entry Transfer Facility as such noteholder may designate
hereon. If no such instructions are given, such Original Notes not exchanged
will be returned to the name and address of the person signing this Letter.
5. TAXPAYER IDENTIFICATION NUMBER.
Federal income tax law generally requires that a tendering holder whose
Original Notes are accepted for exchange must provide the Company (as payor)
with such holder's correct Taxpayer Identification Number ("TIN") on Substitute
Form W-9 below, which in the case of a tendering holder who is an individual,
is his or her social security number. If the
9
Company is not provided with the current TIN or an adequate basis for an
exemption from backup withholding, such tendering holder may be subject to a
$50 penalty imposed by the Internal Revenue Service. In addition, the Exchange
Agent may be required to withhold 30% of the amount of any reportable payments
made after the exchange to such tendering holder of Exchange Notes. If
withholding results in an overpayment of taxes, a refund may be obtained.
Exempt holders of Original Notes (including, among others, all
corporations and certain foreign individuals) are not subject to these backup
withholding and reporting requirements. See the enclosed Guidelines of
Certification of Taxpayer Identification Number on Substitute Form W-9 (the
"W-9 Guidelines") for additional instructions.
To prevent backup withholding, each tendering holder of Original Notes
must provide its correct TIN by completing the Substitute Form W-9 set forth
below, certifying, under penalties of perjury, that the TIN provided is correct
(or that such holder is awaiting a TIN) and that (i) the holder is exempt from
backup withholding, or (ii) the holder has not been notified by the Internal
Revenue Service that such holder is subject to backup withholding as a result
of a failure to report all interest or dividends or (iii) the Internal Revenue
Service has notified the holder that such holder is no longer subject to backup
withholding. If the tendering holder of Original Notes is a nonresident alien
or foreign entity not subject to backup withholding, such holder must give the
Exchange Agent a completed Form W-8, Certificate of Foreign Status. These forms
may be obtained from the Exchange Agent. If the Original Notes are in more than
one name or are not in the name of the actual owner, such holder should consult
the W-9 Guidelines for information on which TIN to report. If such holder does
not have a TIN, such holder should consult the W-9 Guidelines for instructions
on applying for a TIN, check the box in Part 2 of the Substitute Form W-9 and
write "applied for" in lieu of its TIN. Note: Checking this box and writing
"applied for" on the form means that such holder has already applied for a TIN
or that such holder intends to apply for one in the near future. If the box in
Part 2 of the Substitute Form W-9 is checked, the Exchange Agent will retain
30% of reportable payments made to a holder during the sixty (60) day period
following the date of the Substitute Form W-9. If the holder furnishes the
Exchange Agent with his or her TIN within sixty (60) days of the Substitute
Form W-9, the Exchange Agent will remit such amounts retained during such sixty
(60) day period to such holder and no further amounts will be retained or
withheld from payments made to the holder thereafter. If, however, such holder
does not provide its TIN to the Exchange Agent within such sixty (60) day
period, the Exchange Agent will remit such previously withheld amounts to the
Internal Revenue Service as backup withholding and will withhold 30% of all
reportable payments to the holder thereafter until such holder furnishes its
TIN to the Exchange Agent.
6. TRANSFER TAXES.
The Company will pay all transfer taxes, if any, applicable to the
transfer of Original Notes to it or its order pursuant to the Exchange Offer.
If, however, Exchange Notes and/or substitute Original Notes not exchanged are
to be delivered to, or are to be registered or issued in the name of, any
person other than the registered holder of the Original Notes tendered hereby,
or if tendered Original Notes are registered in the name of any person other
than the person signing this Letter, or if a transfer tax is imposed for any
reason other than the transfer of Original Notes to the Company or its order
pursuant to the Exchange Offer, the amount of any such transfer taxes (whether
imposed on the registered holder or any other persons) will be payable by the
tendering holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted herewith, the amount of such transfer
taxes will be billed directly to such tendering holder.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE ORIGINAL NOTES SPECIFIED IN THIS
LETTER.
7. WAIVER OF CONDITIONS.
The Company reserves the absolute right to waive satisfaction of any or
all conditions enumerated in the Prospectus.
8. NO CONDITIONAL TENDERS.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering holders of Original Notes, by execution of this Letter,
shall waive any right to receive notice of the acceptance of their Original
Notes for exchange.
Neither the Company, the Exchange Agent nor any other person is obligated
to give notice of any defect or irregularity with respect to any tender of
Original Notes nor shall any of them incur any liability for failure to give
any such notice.
10
9. MUTILATED, LOST, STOLEN OR DESTROYED ORIGINAL NOTES.
Any holder whose Original Notes have been mutilated, lost, stolen or
destroyed should contact the Exchange Agent at the address indicated above for
further instructions.
10. WITHDRAWAL RIGHTS.
Tenders of Original Notes may be withdrawn at any time prior to 5:00 P.M.,
New York City time, on the Expiration Date.
For a withdrawal of a tender of Original Notes to be effective, a written
notice of withdrawal must be received by the Exchange Agent at the address set
forth above prior to 5:00 P.M., New York City time, on the Expiration Date. Any
such notice of withdrawal must (i) specify the name of the person having
tendered the Original Notes to be withdrawn (the "Depositor"), (ii) identify
the Original Notes to be withdrawn (including certificate number or numbers and
the principal amount of such Original Notes), (iii) contain a statement that
such holder is withdrawing his election to have such Original Notes exchanged,
(iv) be signed by the holder in the same manner as the original signature on
the Letter by which such Original Notes were tendered (including any required
signature guarantees) or be accompanied by documents of transfer to have the
Trustee with respect to the Original Notes register the transfer of such
Original Notes in the name of the person withdrawing the tender and (v) specify
the name in which such Original Notes are registered, if different from that of
the Depositor. If Original Notes have been tendered pursuant to the procedure
for book-entry transfer set forth in "The Exchange Offer--Book-Entry Transfer"
section of the Prospectus, any notice of withdrawal must specify the name and
number of the account at the Book-Entry Transfer Facility to be credited with
the withdrawn Original Notes and otherwise comply with the procedures of such
facility. All questions as to the validity, form and eligibility (including
time of receipt) of such notices will be determined by the Company, whose
determination shall be final and binding on all parties. Any Original Notes so
withdrawn will be deemed not to have been validly tendered for exchange for
purposes of the Exchange Offer and no Exchange Notes will be issued with
respect thereto unless the Original Notes so withdrawn are validly retendered.
Any Original Notes that have been tendered for exchange but which are not
exchanged for any reason will be returned to the Holder thereof without cost to
such Holder (or, in the case of Original Notes tendered by book-entry transfer
into the Exchange Agent's account at the Book-Entry Transfer Facility pursuant
to the book-entry transfer procedures set forth in "The Exchange
Offer--Book-Entry Transfer" section of the Prospectus, such Original Notes will
be credited to an account maintained with the Book-Entry Transfer Facility for
the Original Notes) as soon as practicable after withdrawal, rejection of
tender or termination of the Exchange Offer. Properly withdrawn Original Notes
may be retendered by following the procedures described above at any time on or
prior to 5:00 P.M., New York City time, on the Expiration Date.
11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions relating to the procedure for tendering, as well as requests for
additional copies of the Prospectus and this Letter, and requests for Notices
of Guaranteed Delivery and other related documents may be directed to the
Exchange Agent, at the address and telephone number indicated above. All other
questions regarding the Exchange Offer should be directed to the following
address or phone number:
Revlon Consumer Products Corporation
625 Madison Avenue
New York, New York 10022
(212) 527-4000
Attention: Investor Relations
11
TO BE COMPLETED BY ALL TENDERING HOLDERS
(SEE INSTRUCTION 5)
PAYOR'S NAME: WILMINGTON TRUST COMPANY
- -------------------------------------------------------------------------------------------------------------
PART 1--PLEASE PROVIDE YOUR TIN IN TIN:_______________________________
SUBSTITUTE THE BOX AT RIGHT AND CERTIFY BY Social Security Number or
FORM W-9 SIGNING AND DATING BELOW. Employer Identification Number
-------------------------------------------------------------------------------------
DEPARTMENT OF THE PART 2--TIN Applied For [ ]
TREASURY INTERNAL -------------------------------------------------------------------------------------
REVENUE SERVICE CERTIFICATION: UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT:
PAYOR'S REQUEST (1) the number shown on this form is my correct TIN (or I am waiting for a number
FOR TAXPAYER to be issued to me),
IDENTIFICATION (2) I am not subject to backup withholding either because: (a) I am exempt from
NUMBER ("TIN") backup withholding, or (b) I have not been notified by the Internal Revenue
AND CERTIFICATION Service withholding, or (b) I have not been notified by the Internal Revenue
Service (the "IRS") that I am subject to backup withholding as a result of a
failure to report all interest or dividends, or (c) the IRS has notified me that
I am no longer subject to backup withholding and
(3) any other information provided on this form is true and correct.
SIGNATURE ____________________________ DATE ___________________________
- -------------------------------------------------------------------------------------------------------------
You must cross out item (2) of the above certification if you have been notified by the IRS that you are
subject to backup withholding because of underreporting of interest or dividends on your tax return and you
have not been notified by the IRS that you are no longer subject to backup withholding.
- -------------------------------------------------------------------------------------------------------------
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF
SUBSTITUTE FORM W-9
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (a) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (b) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number by the time of the exchange, 30 percent
of all reportable payments made to me thereafter will be withheld until I
provide a number.
- ------------------------------------------ -----------------------------
Signature Date
- --------------------------------------------------------------------------------
12
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY FOR
REVLON CONSUMER PRODUCTS CORPORATION
This form or one substantially equivalent hereto must be used to accept
the Exchange Offer of Revlon Consumer Products Corporation (the "Company") made
pursuant to the Prospectus, dated , 2002 (the "Prospectus"), if certificates
for the outstanding 12% Senior Secured Notes due 2005 of the Company (the
"Original Notes") are not immediately available or if the procedure for
book-entry transfer cannot be completed on a timely basis or time will not
permit all required documents to reach Wilmington Trust Company, as exchange
agent (the "Exchange Agent") prior to 5:00 P.M., New York City time, on the
Expiration Date of the Exchange Offer. Such form may be delivered or
transmitted by facsimile transmission, mail or hand delivery to the Exchange
Agent as set forth below. In addition, in order to utilize the guaranteed
delivery procedure to tender Original Notes pursuant to the Exchange Offer, a
completed, signed and dated Letter of Transmittal (or facsimile thereof or
Agent's Message in lieu thereof) must also be received by the Exchange Agent
prior to 5:00 P.M., New York City time, on the Expiration Date. Capitalized
terms not defined herein shall have the respective meanings ascribed to them in
the Prospectus.
Delivery To:
WILMINGTON TRUST COMPANY
Exchange Agent
By Hand Before 5:00 p.m.: By Registered or Certified Mail:
Wilmington Trust Company Wilmington Trust Company
311 West 11th Street Rodney Square North
Wilmington, DE 19801-1615 1100 N. Market Street
Wilmington, DE 19890
Attention: Corporate Trust Reorg Services, 1st Floor, Attention: Corporate Trust Reorg Services, 1st Floor,
Aubrey Rosa Aubrey Rosa
For Information Call:
(302) 636-6472
By Facsimile Transmission
(for Eligible Institutions only):
(302) 636-4145
Attention: Corporate Trust Reorg Services, Aubrey Rosa
Confirm by Telephone:
(302) 636-6472
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE,
OR TRANSMISSION OF THIS INSTRUMENT VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE,
WILL NOT CONSTITUTE A VALID DELIVERY.
1
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Prospectus and the
accompanying Letter of Transmittal, the undersigned hereby tenders to the
Company the principal amount of Original Notes set forth below pursuant to the
guaranteed delivery procedure described in "The Exchange Offer--Guaranteed
Delivery Procedures" section of the Prospectus.
Must be signed by the holder(s) of Original Notes as their name(s)
appear(s) on certificates for Original Notes or on a security position listing,
or by person(s) authorized to become registered holder(s) by endorsement and
documents transmitted with this Notice of Guaranteed Delivery. If signature is
by a trustee, executor, administrator, guardian, attorney-in-fact, officer or
other person acting in a fiduciary or representative capacity, such person must
set forth his or her full title below.
Principal Amount of Original Notes Tendered:*
$________________________________
Certificate Nos. (if available): If Original Notes will be delivered by
book-entry transfer to The Depository Trust
Company, provide account number.
_________________________________
Total Principal Amount Represented Account Number ------------------
by Original Notes Certificate(s):
$________________________________
PLEASE SIGN HERE
Principal Amount at Maturity of Old Notes Please Sign Here
Tendered:*_______________________________ X ______________________________________
_________________________________________ X ______________________________________
*Certificate Nos. (if available): Signature(s) of Owner(s) or Authorized
Signatory
If Old Notes will be delivered by Date ___________________________________
book-entry transfer to the Depository
Trust Company, provide account number. Area Code and Telephone Number:
_________________________________________ ________________________________________
Please Print Name(s) and Address(es)
Name(s):________________________________
Total Principal Amount at Maturity
Represented by Old Notes Certificate(s): ________________________________________
$________________________________________ ________________________________________
Capacity:_______________________________
Account Number __________________________
________________________________________
Address(es):____________________________
Must be in denominations of principal
amount at maturity of $1,000 and any ________________________________________
integral multiple thereof.
________________________________________
* Must be in denominations of principal amount at maturity of $1,000 and any
integral multiple thereof.
2
X ------------------------------ -------------------
X ------------------------------ -------------------
Signature(s) of Owner(s) Date
or Authorized Signatory
Area Code and Telephone Number: --------------------------------
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s): ---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
Capacity: ---------------------------------------------------------------------
Address(es):
---------------------------------------------------------------------
ALL AUTHORITY HEREIN CONFERRED OR AGREED TO BE CONFERRED SHALL SURVIVE THE DEATH
OR INCAPACITY OF THE UNDERSIGNED AND EVERY OBLIGATION OF THE UNDERSIGNED
HEREUNDER SHALL BE BINDING UPON THE HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS
AND ASSIGNS OF THE UNDERSIGNED.
3
GUARANTEE
(Not to be Used for Signature Guarantees)
The undersigned, a financial institution (including most banks, savings
and loan associations and brokerage houses) that is a participant in the
Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Program or the Stock Exchanges Medallion Program, hereby
guarantees that the certificates representing the principal amount of Original
Notes tendered hereby in proper form for transfer, or timely confirmation of
the book-entry transfer of such Original Notes into the Exchange Agent's
account at The Depository Trust Company pursuant to the procedures set forth in
"The Exchange Offer--Guaranteed Delivery Procedures" section of the Prospectus,
together with one or more properly and duly executed Letters of Transmittal (or
facsimile thereof or Agent's Message in lieu thereof) and any required
signature guarantee and any other documents required by the Letter of
Transmittal, will be received by the Exchange Agent at the address set forth
above, no later than three New York Stock Exchange trading days after the
Expiration Date.
Name of Firm ______________________________ ______________________________________
(Authorized Signature)
Address ___________________________________
Name _________________________________
___________________________________________ (Please Type or Print)
(Zip Code)
Title:________________________________
Area Code and
Telephone No.:_____________________________ Dated: _______________________________
NOTE: DO NOT SEND THE ORIGINAL NOTES WITH THIS FORM. ORIGINAL NOTES SHOULD BE
SENT ONLY WITH A COPY OF YOUR PREVIOUSLY EXECUTED LETTER OF TRANSMITTAL.
4
EXHIBIT 99.3
REVLON CONSUMER PRODUCTS CORPORATION
OFFER FOR ALL OUTSTANDING
12% SENIOR SECURED NOTES DUE 2005
IN EXCHANGE FOR
12% SENIOR SECURED EXCHANGE NOTES DUE 2005
WHICH HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933,
AS AMENDED
TO OUR CLIENTS:
Enclosed for your consideration is a Prospectus, dated , 2002 (the
"Prospectus"), and the related Letter of Transmittal (the "Letter of
Transmittal"), relating to the offer (the "Exchange Offer") of Revlon Consumer
Products Corporation (the "Company") to exchange its 12% Senior Secured
Exchange Notes due 2005, which have been registered under the Securities Act of
1933, as amended (the "Exchange Notes"), for its outstanding 12% Senior Secured
Notes due 2005 (the "Original Notes"), upon the terms and subject to the
conditions described in the Prospectus and the Letter of Transmittal. The
Exchange Offer is being made in order to satisfy certain obligations of the
Company contained in the Registration Agreement dated November 26, 2001, by and
among the Company, the Guarantors referred to therein and the initial
purchasers referred to therein.
This material is being forwarded to you as the beneficial owner of the
Original Notes held by us for your account but not registered in your name. A
TENDER OF SUCH ORIGINAL NOTES MAY ONLY BE MADE BY US AS THE HOLDER OF RECORD
AND PURSUANT TO YOUR INSTRUCTIONS.
Accordingly, we request instructions as to whether you wish us to tender
on your behalf the Original Notes held by us for your account, pursuant to the
terms and conditions set forth in the enclosed Prospectus and Letter of
Transmittal.
Your instructions should be forwarded to us as promptly as possible in
order to permit us to tender the Original Notes on your behalf in accordance
with the provisions of the Exchange Offer. The Exchange Offer will expire at
5:00 P.M., New York City time, on , 2002, unless extended by the Company.
Any Original Notes tendered pursuant to the Exchange Offer may be withdrawn at
any time before the Expiration Date.
Your attention is directed to the following:
1. The Exchange Offer is for any and all Original Notes.
2. The Exchange Offer is subject to certain conditions set forth in
the Prospectus in the section captioned "The Exchange Offer--Conditions to
the Exchange Offer."
3. Any transfer taxes incident to the transfer of Original Notes from
the holder to the Company will be paid by the Company, except as otherwise
provided in the Instructions in the Letter of Transmittal.
The Exchange Offer expires at 5:00 P.M., New York City time, on , 2002,
unless extended by the Company.
If you wish to have us tender your Original Notes, please so instruct us
by completing, executing and returning to us the instruction form on the back
of this letter. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR INFORMATION
ONLY AND MAY NOT BE USED DIRECTLY BY YOU TO TENDER ORIGINAL NOTES.
INSTRUCTIONS WITH RESPECT TO
THE EXCHANGE OFFER
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Exchange Offer made by Revlon
Consumer Products Corporation with respect to its Original Notes.
This will instruct you to tender the Original Notes held by you for the
account of the undersigned, upon and subject to the terms and conditions set
forth in the Prospectus and the related Letter of Transmittal.
The undersigned expressly agrees to be bound by the enclosed Letter of
Transmittal and that such Letter of Transmittal may be enforced against the
undersigned.
Please tender the Original Notes held by you for my account as indicated
below:
12% Senior Secured Notes due 2005 $_____ (Aggregate Principal Amount
of Original Notes)
[ ] Please do not tender any Original Notes held by you for my
account.
Dated: ________, 2002
Signature(s):
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Print Name(s) here:
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Print Address(es):
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Area Code and Telephone Number(s):
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Tax Identification or Social Security Number(s):
--------------------------------
None of the Original Notes held by us for your account will be tendered
unless we receive written instructions from you to do so. Unless a specific
contrary instruction is given in the space provided, your signature(s) hereon
shall constitute an instruction to us to tender all the Original Notes held by
us for your account.
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EXHIBIT 99.4
REVLON CONSUMER PRODUCTS CORPORATION
OFFER FOR ALL OUTSTANDING
12% SENIOR SECURED NOTES DUE 2005
IN EXCHANGE FOR
12% SENIOR SECURED EXCHANGE NOTES DUE 2005
WHICH HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933,
AS AMENDED
TO: BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES AND OTHER NOMINEES:
Revlon Consumer Products Corporation is offering, upon and subject to the
terms and conditions set forth in the Prospectus, dated , 2002 (the
"Prospectus"), and the enclosed letter of transmittal (the "Letter of
Transmittal"), to exchange (the "Exchange Offer") its 12% Senior Secured
Exchange Notes due 2005, which have been registered under the Securities Act of
1933, as amended, for its outstanding 12% Senior Secured Notes due 2005 (the
"Original Notes"). The Exchange Offer is being made in order to satisfy certain
obligations of the Company contained in the Registration Agreement dated
November 26, 2001 by and among the Company, the Guarantors referred to therein
and the initial purchasers referred to therein.
We are requesting that you contact your clients for whom you hold Original
Notes regarding the Exchange Offer. For your information and for forwarding to
your clients for whom you hold Original Notes registered in your name or in the
name of your nominee, or who hold Original Notes registered in their own names,
we are enclosing the following documents:
1. Prospectus dated , 2002;
2. The Letter of Transmittal for your use and for the information of your
clients;
3. A Notice of Guaranteed Delivery to be used to accept the Exchange Offer
if certificates for Original Notes are not immediately available or time will
not permit all required documents to reach the Exchange Agent prior to the
Expiration Date (as defined below) or if the procedure for book-entry transfer
cannot be completed on a timely basis;
4. A form of letter which may be sent to your clients for whose account
you hold Original Notes registered in your name or the name of your nominee,
with space provided for obtaining such clients' instructions with regard to the
Exchange Offer;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. Return envelopes addressed to Wilmington Trust Company, the Exchange
Agent for the Exchange Offer.
YOUR PROMPT ACTION IS REQUESTED. THE EXCHANGE OFFER WILL EXPIRE AT 5:00
P.M., NEW YORK CITY TIME, ON , 2002, UNLESS EXTENDED BY THE COMPANY (THE
"EXPIRATION DATE"). ORIGINAL NOTES TENDERED PURSUANT TO THE EXCHANGE OFFER MAY
BE WITHDRAWN AT ANY TIME BEFORE THE EXPIRATION DATE.
To participate in the Exchange Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof or Agent's Message in
lieu thereof), with any required signature guarantees and any other required
documents, should be sent to the Exchange Agent and certificates representing
the Original Notes should be delivered to the Exchange Agent, all in accordance
with the instructions set forth in the Letter of Transmittal and the
Prospectus.
If a registered holder of Original Notes desires to tender, but such
Original Notes are not immediately available, or time will not permit such
holder's Original Notes or other required documents to reach the Exchange Agent
before the Expiration Date, or the procedure for book-entry transfer cannot be
completed on a timely basis, a tender may be effected by following the
guaranteed delivery procedures described in the Prospectus under the caption
"The Exchange Offer--Guaranteed Delivery Procedures."
The Company will, upon request, reimburse brokers, dealers, commercial
banks and trust companies for reasonable and necessary costs and expenses
incurred by them in forwarding the Prospectus and the related documents to the
beneficial owners of Original Notes held by them as nominee or in a fiduciary
capacity. The Company will pay or cause to be paid all stock transfer taxes
applicable to the exchange of Original Notes pursuant to the Exchange Offer,
except as set forth in Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Exchange Offer, or requests
for additional copies of the enclosed materials, should be directed to
Wilmington Trust Company, the Exchange Agent for the Exchange Offer, at its
address and telephone number set forth on the front of the Letter of
Transmittal.
Very truly yours,
REVLON CONSUMER PRODUCTS CORPORATION
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AS AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR
ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF EITHER
OF THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY
MADE IN THE PROSPECTUS OR THE LETTER OF TRANSMITTAL.
Enclosures
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