UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 28, 2006 (July 28, 2006)
Revlon, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 1-11178 13-3662955
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
237 Park Avenue
New York, New York 10017
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(Address of Principal Executive Offices) (Zip Code)
(212) 527-4000
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(Registrant's telephone number, including area code)
None
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement
On July 28, 2006, Revlon Consumer Products Corporation ("RCPC"), Revlon, Inc.'s
wholly-owned operating subsidiary, entered into a second amendment (the "Credit
Agreement Amendment") to its Credit Agreement, dated as of July 9, 2004, among
RCPC, certain of its subsidiaries as local borrowing subsidiaries, a syndicate
of lenders, and Citicorp USA, Inc., as multi-currency administrative agent, term
loan administrative agent and collateral agent, filed as Exhibit 4.34 to the
Current Report on Form 8-K of RCPC filed with the Securities and Exchange
Commission (the "SEC") on July 13, 2004 (as amended by Amendment No. 1, dated as
of February 15, 2006, filed as Exhibit 10.2 to the Current Report on Form 8-K of
RCPC filed with the SEC on February 17, 2006, the "2004 Credit Agreement").
Among other things, the Credit Agreement Amendment increased the existing $700
million term loan facility under the 2004 Credit Agreement by $100 million and
amended the senior secured leverage ratio covenant.
A copy of the Credit Agreement Amendment is attached hereto as Exhibit 4.1, and
its terms are incorporated by reference herein.
For the convenience of investors, the following is a description of the 2004
Credit Agreement, after giving effect to the Credit Agreement Amendment (as
amended, the "Amended Credit Agreement"). Investors should refer to the 2004
Credit Agreement, including all amendments thereto. Unless otherwise indicated,
capitalized terms have the meanings given to them in the Amended Credit
Agreement.
The Amended Credit Agreement provides up to $960 million and consists of an
$800.0 million term loan facility (the "Term Loan Facility") and a $160.0
million asset-based multi-currency revolving credit facility (the
"Multi-Currency Facility" and, together with the Term Loan Facility, the "2004
Credit Facilities"). Availability under the Multi-Currency Facility varies based
upon a borrowing base that is determined by the value of eligible accounts
receivable, eligible inventory and eligible real property and equipment in the
U.S. and the U.K. from time to time. RCPC may request the Multi-Currency
Facility to be increased from time to time in an aggregate principal amount not
to exceed $50.0 million, subject to certain exceptions and subject to the
agreement of the lenders. The Multi-Currency Facility is available to: (i) RCPC
in revolving credit loans denominated in U.S. dollars; (ii) RCPC in swing line
loans denominated in U.S. dollars up to $25 million; (iii) RCPC in standby and
commercial letters of credit denominated in U.S. dollars and other currencies up
to $50 million; and (iv) RCPC and certain of its international subsidiaries
designated from time to time in revolving credit loans and bankers' acceptances
denominated in U.S. dollars and other currencies, in each case subject to
borrowing base availability. If the value of the eligible assets is not
sufficient to support the $160 million borrowing base under the Multi-Currency
Facility, RCPC will not have full access to the Multi-Currency Facility. RCPC's
ability to make borrowings under the Multi-Currency Facility is also conditioned
upon the satisfaction of certain conditions precedent and RCPC's compliance with
other covenants in the Amended Credit Agreement, including a fixed charge
coverage ratio that applies when the excess borrowing base (representing the
difference between (1) the borrowing base under the Multi-Currency Facility and
(2) the amounts outstanding under the Multi-Currency Facility) is less than
$30.0 million.
2
The Multi-Currency Facility will terminate on July 9, 2009, and the loans under
the Term Loan Facility will mature on July 9, 2010; provided that the Amended
Credit Agreement will terminate on October 30, 2007 if RCPC's 8 5/8% Senior
Subordinated Notes due 2008 (the "8 5/8% Senior Subordinated Notes") are not
redeemed, repurchased, defeased or repaid on or before such date such that not
more than $25.0 million in aggregate principal amount of the 8 5/8% Senior
Subordinated Notes remains outstanding.
Borrowings under the Multi-Currency Facility (other than loans in foreign
currencies) bear interest at a rate equal to, at RCPC's option, either (A) the
Alternate Base Rate plus 1.50%; or (B) the Eurodollar Rate plus 2.50%. Loans in
foreign currencies bear interest in certain limited circumstances, or if
mutually acceptable to RCPC and the relevant foreign lenders, at the Local Rate,
and otherwise at the Eurocurrency Rate, in each case plus 2.50%. The loans under
the Term Loan Facility bear interest at a rate equal to, at RCPC's option,
either (A) the Alternate Base Rate plus 5.00%; or (B) the Eurodollar Rate plus
6.00%. RCPC pays to those lenders under the Multi-Currency Facility a commitment
fee of 0.50% of the average daily unused portion of the Multi-Currency Facility,
which fee is payable quarterly in arrears. Under the Multi-Currency Facility,
RCPC pays: (i) to foreign lenders a fronting fee of 0.25% per annum on the
aggregate principal amount of specified Local Loans (which fee is retained by
foreign lenders out of the portion of the Applicable Margin payable to such
foreign lender); (ii) to foreign lenders an administrative fee of 0.25% per
annum on the aggregate principal amount of specified Local Loans; (iii) to the
multi-currency lenders a letter of credit commission equal to the product of (a)
the Applicable Margin for revolving credit loans that are Eurodollar Rate loans
(adjusted for the term that the letter of credit is outstanding) and (b) the
aggregate undrawn face amount of letters of credit; and (iv) to the issuing
lender, a letter of credit fronting fee of 0.25% per annum of the aggregate
undrawn face amount of letters of credit, which fee is a portion of the
Applicable Margin.
Prior to the termination date of the Term Loan Facility, on October 15, January
15, April 15 and July 15 of each year (commencing October 15, 2006), RCPC shall
repay $2.0 million in aggregate principal amount of the term loans outstanding
under the Term Loan Facility on each respective date. In addition, the loans
under the Term Loan Facility are required to be prepaid with: (i) the net
proceeds in excess of $10.0 million each year (subject to limited carryover to
subsequent years, which amount, as of July 28, 2006, is $25 million as a result
of carryovers) received during such year from sales of Term Loan First Lien
Collateral (as defined below) by RCPC or any of its subsidiary guarantors (and
in excess of an additional $25.0 million in the aggregate during the term of the
2004 Credit Facilities with respect to certain specified dispositions), subject
to certain limited exceptions, (ii) certain net proceeds from equity offerings
by Revlon, Inc. that are not used to redeem, repurchase or defease RCPC's 8 5/8%
Senior Subordinated Notes or certain other indebtedness, (iii) the net proceeds
from the issuance by RCPC or any of its subsidiaries of certain additional debt
and (iv) 50% of RCPC's Excess Cash Flow.
3
The 2004 Credit Facilities are supported by, among other things, guarantees from
Revlon, Inc. and, subject to certain limited exceptions, the domestic
subsidiaries of RCPC. The obligations of RCPC under the 2004 Credit Facilities
and the obligations under the guarantees are secured by, subject to certain
limited exceptions, substantially all of the assets of RCPC and the subsidiary
guarantors, including: (i) mortgages on owned real property, including RCPC's
facilities in Oxford, North Carolina and Irvington, New Jersey; (ii) the capital
stock of RCPC and the subsidiary guarantors and 66% of the capital stock of
RCPC's and the subsidiary guarantors' first-tier foreign subsidiaries; (iii)
intellectual property and other intangible property of RCPC and the subsidiary
guarantors; and (iv) inventory, accounts receivable, equipment, investment
property and deposit accounts of RCPC and the subsidiary guarantors. The liens
on, among other things, inventory, accounts receivable, deposit accounts,
investment property (other than the capital stock of RCPC and its subsidiaries),
real property, equipment, fixtures and certain intangible property related
thereto secure the Multi-Currency Facility on a first priority basis and the
Term Loan Facility on a second priority basis, while the liens on the capital
stock of RCPC and its subsidiaries and intellectual property and certain other
intangible property (the "Term Loan First Lien Collateral") secure the Term Loan
Facility on a first priority basis and the Multi-Currency Facility on a second
priority basis, all as set forth in an Intercreditor and Collateral Agency
Agreement by and among RCPC and the lenders, which also provides that the first
priority liens referred to above may be shared from time to time, subject to
certain limitations, with specified types of other obligations incurred or
guaranteed by RCPC, such as foreign exchange and interest rate hedging
obligations and foreign working capital lines, provided that to the extent such
obligations and lines share in the collateral, the borrowing base is reduced by
a reserve established from time to time by the bank agent in respect of such
obligations and lines.
The Amended Credit Agreement contains various restrictive covenants prohibiting
RCPC and its subsidiaries from: (i) incurring additional indebtedness or
guarantees, with certain exceptions; (ii) making dividend and other payments or
loans to Revlon, Inc. or other affiliates, with certain exceptions, including
among others, (a) exceptions permitting RCPC to pay dividends or make other
payments to Revlon, Inc. to finance the actual payment by Revlon, Inc. of
expenses and obligations incurred by Revlon, Inc. to enable Revlon, Inc. to,
among other things, pay expenses incidental to being a public holding company,
including, among other things, professional fees such as legal and accounting
fees, regulatory fees such as the SEC filing fees and other miscellaneous
expenses related to being a public holding company, (b) subject to certain
circumstances, to finance the purchase by Revlon, Inc. of its Class A Common
Stock in connection with the delivery of such Class A Common Stock to grantees
under the Amended and Restated Revlon, Inc. Stock Plan, and (c) subject to
certain limitations, to pay dividends or make other payments to finance the
purchase, redemption or other retirement for value by Revlon, Inc. of stock or
other equity interests or equivalents in Revlon, Inc. held by any current or
former director, employee or consultant in his or her capacity as such; (iii)
creating liens or other encumbrances on RCPC's or its subsidiaries' assets or
revenues, granting negative pledges or selling or transferring any of RCPC's or
its subsidiaries' assets, all subject to certain limited exceptions; (iv) with
certain exceptions, engaging in merger or acquisition transactions; (v)
prepaying indebtedness and modifying the terms of certain indebtedness and
specified material contractual obligations, subject to certain exceptions; (vi)
making investments, subject to certain exceptions; and (vii) entering into
transactions with affiliates of RCPC other than upon terms no less favorable to
RCPC or its subsidiaries than it would obtain in an arms' length transaction. In
addition to the foregoing, the Amended Credit Agreement contains financial
covenants limiting the senior secured leverage ratio of RCPC (the ratio of
RCPC's Senior Secured Debt to EBITDA, as each such term is defined in the
Amended Credit Agreement) to 5.5 to 1 for the period of four consecutive fiscal
quarters ending during the period from June 30, 2006 to June 30, 2007, stepping
down to 5.0 to 1 for the period of four consecutive fiscal quarters ending
during each subsequent fiscal quarter during the remaining term of the Amended
Credit Agreement, and, under circumstances when the difference between (1) the
borrowing base under the Multi-Currency Facility and (2) the amounts outstanding
under the Multi-Currency Facility is less than $30.0 million for a period of 30
consecutive days or more, requiring RCPC to maintain a consolidated fixed charge
coverage ratio (the ratio of EBITDA minus Capital Expenditures to Cash Interest
Expense for such period, as each such term is defined in the Amended Credit
Agreement) of 1.00 to 1.00.
4
The events of default under the Amended Credit Agreement include customary
events of default for such types of agreements, including: (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 Amended
Credit Agreement or the ancillary security documents, subject in certain
instances to grace periods; (iii) the institution of any bankruptcy, insolvency
or similar proceedings by or against RCPC, any of RCPC's subsidiaries or Revlon,
Inc., subject in certain instances to grace periods; (iv) default by Revlon,
Inc., or any of its subsidiaries (a) in the payment of certain indebtedness when
due (whether at maturity or by acceleration) in excess of $5.0 million in
aggregate principal amount or (b) in the observance or performance of any other
agreement or condition relating to such debt, provided that the amount of debt
involved is in excess of $5.0 million in aggregate principal amount, or the
occurrence of any other event, the effect of which default or other event is to
cause or permit the holders of such debt to cause the acceleration of payment of
such debt; (v) the failure by RCPC, certain of RCPC's subsidiaries or Revlon,
Inc., to pay certain material judgments; (vi) a change of control such that (a)
Revlon, Inc. shall cease to be the beneficial and record owner of 100% of RCPC's
capital stock, (b) Ronald O. Perelman (or his estate, heirs, executors,
administrator or other personal representative) and his or their controlled
affiliates shall cease to "control" RCPC, and any other person or group or
persons owns more than 25% of the total voting power of Revlon, Inc., (c) any
person or group of persons other than Ronald O. Perelman (or his estate, heirs,
executors, administrator or other personal representative) and his or their
controlled affiliates shall "control" RCPC or (d) the current directors serving
on RCPC's Board of Directors (or other directors nominated by at least 66 2/3%
of such continuing directors) shall cease to be a majority of the directors;
(vii) the failure by Revlon, Inc. to contribute to RCPC all of the net proceeds
it receives from any other sale of its equity securities or RCPC's capital
stock, subject to certain limited exceptions; (viii) the failure of any of
RCPC's, its subsidiaries' or Revlon, Inc.'s representations or warranties in any
of the documents entered into in connection with the Amended Credit Agreement to
be correct, true and not misleading 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 RCPC's capital stock) or the incurrence of debt,
in each case subject to limited exceptions; (x) MacAndrews & Forbes' failure to
fund any binding commitment under the 2004 Consolidated MacAndrews & Forbes Line
of Credit; and (xi) the failure of certain of RCPC's affiliates which hold
RCPC's or its subsidiaries' indebtedness to be party to a valid and enforceable
agreement prohibiting such affiliate from demanding or retaining payments in
respect of such indebtedness.
5
Item 8.01. Other Events.
On July 28, 2006, Revlon, Inc. issued a press release (the "Press Release")
announcing the consummation of the Credit Agreement Amendment.
A copy of the Press Release is attached to this report as Exhibit 99.1 and is
incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
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4.1 Amendment to Credit Agreement, dated July 28, 2006
(incorporated by reference to Exhibit 4.1 of the Current
Report on Form 8-K of Revlon Consumer Products Corporation
filed with the Securities and Exchange Commission on July
28, 2006).
99.1 Press Release, dated July 28, 2006.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
REVLON, INC.
By: /s/ Robert K. Kretzman
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Name: Robert K. Kretzman
Title: Executive Vice President and
General Counsel
Date: July 28, 2006
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EXHIBIT INDEX
Exhibit No. Description
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4.1 Amendment to Credit Agreement, dated July 28, 2006
(incorporated by reference to Exhibit 4.1 of the Current
Report on Form 8-K of Revlon Consumer Products Corporation
filed with the Securities and Exchange Commission on July
28, 2006).
99.1 Press Release, dated July 28, 2006.
8