\nUAW Affected Employees……………………………………………………………………………(Section) 6.8(d)
\nUAW Agreement……………………………………………………………………………………(Section) 6.8(d)
\nunder common control with…………………………………………………………………………..(Section) 4.22
\nU.S. GAAP ………………………………………………………………………………………..(Section) 6.25
\nWARN…………………………………………………………………………………………..(Section) 4.21(b)
\nwelfare………………………………………………………………………………………..(Section) 4.17(a)
\n<\/c><\/s><\/caption>\n<\/c><\/s><\/caption>\n
<\/c><\/s><\/caption>\n
<\/c><\/s><\/caption>\n
<\/c><\/s><\/caption>\n
<\/c><\/s><\/caption>\n
<\/c><\/s><\/caption>\n<\/table>\n
ARTICLE II<\/p>\n
PURCHASE AND SALE<\/p>\n
Section 2.1 Purchase and Sale of Shares. Upon the terms and subject to
\nthe conditions of this Agreement, at the Closing provided for in Section 2.4
\nhereof (the “Closing”), the Sellers shall, directly or indirectly, sell,
\ntransfer and deliver to Buyer or its Affiliates, and Buyer or its Affiliates
\nshall, directly or indirectly, purchase, acquire and accept from the Sellers,
\nthe Shares free and clear of all Liens and restrictions on transfer (other than
\nsuch restrictions as set forth in the relevant certificate of incorporation,
\nby-laws, or other organizational or analogous documents, excluding any
\nshareholder agreement (the “Organizational Documents”). Notwithstanding the
\nprior sentence, Buyer and Sellers intend that part of the purchase of Shares of
\nRoux by Buyer or its Affiliates from Sellers shall actually occur as the result
\nof a redemption transaction in which Roux and each of A.P. Products Ltd.,
\nCreative Nail Design, Inc., and American Crew, Inc. shall enter into loans with
\nBuyer or its Affiliates in amounts to be mutually agreed to by Buyer and
\nSellers, and the proceeds of such loans shall be used at the Closing by Roux to
\nredeem from Sellers an amount of shares held by Sellers in Roux.<\/p>\n
Section 2.2 Purchase and Sale of Certain Assets. Upon the terms and
\nsubject to the conditions of this Agreement, at the Closing (a) the Sellers or
\ntheir Affiliates shall sell, transfer and deliver to the Buyer or its Affiliates
\nall of the Sellers’ or their Affiliates’ right, title and interest in and to the
\nAcquired Assets free and clear of all Liens and restrictions on transfer (other
\nthan such restrictions as set forth in the Sellers’ Organizational Documents and
\nother than Permitted Encumbrances); and (b) the Buyer or its Affiliates shall
\npurchase, acquire and accept from the Sellers or their Affiliates the Acquired
\nAssets free and clear of all Liens and restrictions on transfer (other than such
\nrestrictions as set forth in the Sellers’ Organizational Documents and other
\nthan Permitted Encumbrances) and shall assume the Assumed Liabilities.<\/p>\n
Section 2.3 Consideration. Upon the terms and subject to the conditions
\nof this Agreement, in consideration of the aforesaid sale, transfer and<\/p>\n
20<\/p>\n
delivery of the Shares contemplated by Section 2.1 (Purchase and Sale of
\nShares), the sale and transfer of Acquired Assets contemplated by Section 2.2
\n(Purchase and Sale of Certain Assets), and the rights and obligations of the
\nparties under this Agreement and the Ancillary Agreements, at the Closing Buyer
\nshall, by wire transfer of immediately available funds to the bank accounts set
\nforth on Section 2.3 of the Disclosure Letter, paid in accordance with
\napplicable law and allocated in a manner based in all material respects on the
\nPurchase Price allocation set forth in Section 6.9(i) herein, pay the Estimated
\nPurchase Price (as defined in Section 2.7 (Determination of Estimated Purchase
\nPrice) below) and shall assume the Assumed Liabilities.<\/p>\n
Section 2.4 Closing.<\/p>\n
(a) Subject to the satisfaction or waiver of the conditions set
\nforth in Article VII, the Closing will take place at the offices of Skadden,
\nArps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York and at
\nthe other locations provided for in the Ancillary Agreements, as soon as
\npracticable, but not later than three Business Days, following the expiration or
\ntermination of any required waiting periods under the Hart-Scott-Rodino
\nAntitrust Improvements Act of 1976, as amended (the “HSR Act”), and any
\nconsents, approvals or filings under other Competition Laws, provided that, the
\nBuyer has had at least three Business Days to review any consents to be
\ndelivered pursuant to Section 2.5 (Deliveries by Sellers) and all bills of sale,
\nIntellectual Property instruments of assignment, releases of all Liens on
\nAcquired Assets (other than Permitted Encumbrances) and the Shares, deeds,
\nconsents to the assignment of contracts and leases, Acquired Companies and
\nSubsidiaries stock powers, copies of Acquired Companies and Subsidiaries stock
\ncertificates, assignments of accounts receivable and any other material
\ninstruments or documents to be delivered at the Closing pursuant to Section 2.5
\n(Deliveries by Sellers) or at such other place or time or both as the parties
\nmay agree in writing. “Business Day” shall mean any day excluding (i) Saturday
\nand Sunday, (ii) any day which shall be in New York State, England or Spain a
\nlegal holiday, or (iii) a day on which banking institutions in New York State,
\nEngland or Spain are authorized or required by law or other government action to
\nclose.<\/p>\n
(b) Each of the parties hereto shall cause each of their respective
\nAffiliates which is a party to any Ancillary Agreement in which Acquired Assets
\non the Closing Date are being transferred to the Buyer or its designated
\nAffiliates, to consummate the closing contemplated under such Ancillary
\nAgreement on the Closing Date, except as otherwise set forth therein. The date
\nof the Closing is sometimes referred to herein as the “Closing Date.”<\/p>\n
21<\/p>\n
Section 2.5 Deliveries by the Sellers. At the Closing, Sellers shall
\ndeliver or cause to be delivered to Buyer (unless delivered previously) the
\nfollowing:<\/p>\n
(a) The stock certificates representing all of the Shares,
\naccompanied by stock powers duly executed in blank or duly executed stock
\ntransfer forms or instruments of transfer, with any applicable transfer stamps
\naffixed, which validly transfer title to the Shares to Buyer (or its designated
\nAffiliates) free and clear of any Liens and restrictions on transfer other than
\nsuch restrictions set forth in the relevant Organizational Documents;<\/p>\n
(b) Duly executed bills of sale in a form to be agreed upon by Buyer
\nand Sellers or pro forma purchase agreements and in the case of France and
\nArgentina, such other purchase agreement as mutually agreed to by Buyer and RCPC
\n(provided that, in no event shall such Argentinian and French agreements alter
\nthe Liability allocation of Buyer or Sellers under this Agreement), in each case
\nmodified or drafted as necessary to conform to local law (the “Bill of Sale”)
\ntransferring to the Buyer or its designated Affiliates all of the assets which
\nare included in the Acquired Assets;<\/p>\n
(c) Duly executed instruments of assignment relating to the Acquired
\nContracts;<\/p>\n
(d) A duly executed instrument of assignment relating to the
\nAcquired Real Property Leases;<\/p>\n
(e) Duly executed counterparts of the license agreements
\ncontemplated in Section 6.11 including:<\/p>\n
(i) a License Agreement (COLORLOCK), having the material terms
\n set forth on the term sheet attached hereto as Exhibit B (the “License
\n Agreement (COLORLOCK)”);<\/p>\n
(ii) a Patent and Formula and Know-How License Agreement having
\n the material terms set forth on the term sheet attached hereto as Exhibit C
\n (the “Patent Formula and Know-How License Agreement (Revlon to Buyer)”);<\/p>\n
(iii) License Agreement (Revlon Marks), substantially in the form
\n attached hereto as Exhibit D (collectively, the “License Agreement (Revlon
\n Marks)”);<\/p>\n
22<\/p>\n
(iv) A License Agreement (INTERACTIVES) having the material terms
\n set forth on the term sheet attached hereto as Exhibit E (the “License
\n Agreement (INTERACTIVES)”);<\/p>\n
(v) A Toiletries Manufacturing Distribution and License Agreement
\n for Spain, Portugal and Andorra having the material terms set forth on the
\n term sheet attached hereto as Exhibit F (the “Toiletries Agreement”);<\/p>\n
(vi) a Cosmetics Distribution Agreement for Spain, Portugal and
\n Andorra having the material terms set forth on the term sheet attached
\n hereto as Exhibit G (the “Cosmetics Agreement”);<\/p>\n
(vii) a Manufacturing and Distribution Services Agreement for
\n South Africa having the material terms set forth on the term sheet attached
\n hereto as Exhibit H (the “South Africa Agreement”);<\/p>\n
(viii) a Distribution Agreement for Charlie Cosmetics in Italy
\n having the material terms set forth on the term sheet attached hereto as
\n Exhibit I (the “Charlie Agreement”); and<\/p>\n
(ix) a Manufacturing and Distribution License Agreement(s) for
\n Natural Honey having the material terms set forth on the term sheet
\n attached hereto as Exhibit J (the “Natural Honey Agreement”).<\/p>\n
(f) Duly executed instruments of assignment relating to the Acquired
\nIntellectual Property as a whole and additional separate assignments each in a
\nform suitable for recording in the United States Patent and Trademark Office for
\nthe Acquired Intellectual Property which is the subject of registrations or
\napplications in the U.S. and in the applicable Intellectual Property registry
\noffices in such other country or countries as are required by any secured lender
\nto Buyer as a condition of providing financing (as provided to Sellers in
\nwriting no later than one week prior to Closing) (the remaining assignments in
\nrecordable terms shall be delivered to Buyer post-Closing pursuant to Section
\n3.2(b));<\/p>\n
(g) The resignations, effective immediately prior to the Closing, of
\nall officers and members of the Board of Directors of the Acquired Companies and
\nthe Subsidiaries other than those specified by Buyer at least five Business Days
\nprior to the Closing Date;<\/p>\n
23<\/p>\n
(h) The officer’s certificates referred to in Section 7.3(e)
\n(Conditions to Obligations of Buyer) hereof and the consents, approvals,
\nterminations, and certificates set forth in Section 2.5(h) of the Disclosure
\nLetter;<\/p>\n
(i) the documents, instruments and agreements contemplated by the
\nRPHC Term Sheet (as defined herein);<\/p>\n
(j) One or more agreements, to be effective as of the Closing Date,
\nbetween the Sellers or one or more of their respective Affiliates on the one
\nhand, and the Buyer or one or more of its Affiliates or the Acquired Companies
\nor Subsidiaries or one or more of their respective Affiliates on the other hand,
\npursuant to which (A) the Sellers or their Affiliates would obtain certain
\ntransitional services from the Acquired Companies or the Subsidiaries, and (B)
\nthe Acquired Companies or one or more of the Subsidiaries or Buyer or one or
\nmore of its Affiliates would obtain certain transitional services from the
\nSellers or their Affiliates, substantially on the terms of the term sheets
\nannexed as Exhibits K attached hereto (collectively, the “Transitional Services
\nAgreements” and together with the agreements identified in Section 2.5(e),
\nSection 2.5(i) and the MIS Agreement, the “Ancillary Agreements”), duly executed
\nby the Sellers and\/or their Affiliates; and<\/p>\n
(k) All other documents, instruments and writings required or
\nreasonably requested to be delivered by the Sellers at or prior to the Closing
\npursuant to this Agreement or otherwise required in connection herewith or
\ntherewith.<\/p>\n
Section 2.6 Deliveries by Buyer. At the Closing, Buyer shall tender or
\ncause to be tendered to the Sellers (unless previously delivered) the following:<\/p>\n
(a) The Estimated Purchase Price;<\/p>\n
(b) Instruments of assumption in a form to be agreed upon by Buyer
\nand Sellers (the “Instruments of Assumption”) under which the Buyer shall assume
\nthe Assumed Liabilities, duly executed by Buyer and one or more of the Acquired
\nCompanies or one or more of the Subsidiaries;<\/p>\n
(c) The officer’s certificate referred to in Section 7.2(c)
\n(Conditions to Obligations of the Sellers) hereof;<\/p>\n
(d) Duly executed counterparts of the license agreements
\ncontemplated in Section 6.11 including;<\/p>\n
24<\/p>\n
(i) the License Agreement (COLORLOCK);<\/p>\n
(ii) the Patent Formula and Know-How License Agreement (Revlon to
\n Buyer);<\/p>\n
(iii) the License Agreement (Revlon Marks);<\/p>\n
(iv) the License Agreement (INTERACTIVES);<\/p>\n
(v) the Toiletries Agreement;<\/p>\n
(vi) the Cosmetics Agreement;<\/p>\n
(vii) the South Africa Agreement;<\/p>\n
(viii) the Charlie Agreement; and<\/p>\n
(ix) the Natural Honey Agreement.<\/p>\n
(e) The Transitional Services Agreements, duly executed by Buyer or
\none or more of its Affiliates; and<\/p>\n
(f) All other documents, instruments or writings required or
\nreasonably requested to be delivered by the Buyer at or prior to the Closing
\npursuant to this Agreement or otherwise required in connection herewith or
\ntherewith.<\/p>\n
Section 2.7 Determination of Estimated Purchase Price.<\/p>\n
(a) The “Estimated Purchase Price” (and with respect to calculating
\nthe “Purchase Price” under Section 2.9 below, the “Purchase Price”) shall be
\nequal to: U.S. $315,000,000 minus the sum of (i) the amount, if any, by which
\nthe Net Assets as set forth on the Estimated Statement of Net Assets is less
\nthan the Target Net Assets; (ii) the aggregate “transfer amount” pursuant to
\nSection 6.8(d); and (iii) the amount of Funded Debt set forth on the Estimated
\nStatement of Net Assets (net of the amount of cash and cash equivalents other
\nthan statutory requirements, if any as set forth on the Estimated Statement of
\nNet Assets).<\/p>\n
(b) “Target Net Assets” means the sum of (A) U.S. $119,000,000,
\nrepresenting the Net Assets of the Business as set forth on the September 30,
\n1999 Statement of Net Assets plus (B) the Stub Period Operating Income for the<\/p>\n
25<\/p>\n
purposes of Section 2.7, set forth on the Estimated Stub Period Operating Income
\nStatement and for the purposes of Section 2.9, the Final Stub Period Operating
\nIncome. “Net Assets” means, with respect to the Business, the excess of total
\nassets over total liabilities, calculated in accordance with Adjusted U.S. GAAP.
\n“Stub Period Operating Income” means, the operating income of the Business (but
\nnot loss) for the period from October 1, 1999 to the Closing Date as set forth
\non the Estimated Stub Period Operating Income Statement prepared in accordance
\nwith Adjusted U.S. GAAP.<\/p>\n
(c) Sellers shall not allocate corporate overhead of the type
\nreflected in Section 4.6(c) of the Disclosure Letter to the Business (as
\nreflected on the Stub Period Operating Income Statement) on or prior to and
\nincluding February 15, 2000; thereafter, Sellers shall allocate corporate
\noverhead to the Business in an amount equal to U.S. $20,000 for each day from
\nFebruary 16, 2000 to and including the Closing Date.<\/p>\n
(d) Netting Adjustment. If, and to the extent that, the items set
\nforth in (A) below are greater than the items set forth in (B) below, the
\nSellers shall pay to the Buyer or its Affiliates, or the Buyer or its Affiliates
\nshall pay to the Sellers if, and to the extent that, the items set forth in (B)
\nare greater than the items set forth in (A), in either case, in four equal
\ninstallments on the 30th, 60th, 90th and 120th day following the Closing;
\nprovided, that the amounts under this Section 2.7(d) shall be adjusted, as
\nappropriate, in accordance with the determination of the Final Balance Sheet
\nIntercompany Liabilities in accordance with Section 2.9 and, for purposes of
\npayment, the conversion from the U.S. dollar to the local currency will be done
\nbased on the rate as of September 30, 1999 in accordance with Adjusted U.S.
\nGAAP. The items set forth in (A) are “Due From Sellers-Receivables” and “Due
\nFrom Sellers-Inventories” reflected on the Estimated Statement of Net Assets.
\nThe items set forth in (B) are “Due to Sellers-Receivables” (other than those
\nreceivables related to sales of cosmetics in Spain and Portugal to Hypermarket
\naccounts (the “Hypermarket Receivables”)) and “Due to Sellers-Inventories”(other
\nthan one-third of the cosmetics inventory in Spain and Portugal (the “Spain
\nCosmetics Inventory”)) set forth on the Estimated Statement of Net Assets. The
\nitems set forth in (A) and (B) are referred to herein as the “Balance Sheet
\nIntercompany Liabilities.” All Hypermarket Receivables shall be paid in cash by
\nthe Buyer or its Affiliates to the Sellers within five business days of
\ncollection thereof. All Spain Cosmetics Inventory shall be paid in cash by the
\nBuyer or its Affiliates to the Sellers on the 120th day following the Closing.<\/p>\n
(e) Five days prior to the Closing Date, Revlon in good faith shall
\n(and shall cause the other Sellers and the Acquired Companies to) prepare and
\ndeliver to the Buyer (i) an estimated unaudited statement setting forth an
\nestimate of the<\/p>\n
26<\/p>\n
Net Assets as of the Closing Date, reflecting Net Assets of U.S. $117,300,000
\n(the “Estimated Statement of Net Assets”) prepared in accordance with Adjusted
\nU.S. GAAP and based on the Business’ books and records and other information
\nthen available, (ii) an estimated unaudited operating income statement setting
\nforth an estimate of the Stub Period Operating Income of not less than U.S.
\n$7,500,000 (the “Estimated Stub Period Operating Income Statement”) prepared in
\naccordance with Adjusted U.S. GAAP and based on the Business’ books and records
\nand other information then available and (iii) a calculation of the Estimated
\nPurchase Price.<\/p>\n
Section 2.8 Contingent Consideration. In addition to the Purchase
\nPrice, the Buyer or its Affiliates shall pay to RCPC via wire transfer in
\nimmediately available funds, U.S. $10,000,000 in cash within thirty business
\ndays after the “internal rate of return” has been achieved or exceeded by CVC
\nCapital Partners Limited (“CVC”) on its investment in Buyer common stock.
\n“Internal rate of return” shall mean (i) if calculated on or prior to the third
\nanniversary of the Closing, a compound rate of return of 25% per annum; or (ii)
\nif calculated thereafter, that compound rate of return per annum that is the
\nweighted average of a compound rate of return of 25% per annum for 36 months and
\na compound rate of return of 20% per annum for that number of months (calculated
\nto the nearest whole month) from the third anniversary of the Closing to the
\ndate of such calculation, in either case, calculated based upon monthly cash
\noutflows and inflows with respect thereto from the date of the investment
\nthrough the date upon which the internal rate of return is achieved or exceeded.
\nCash outflows to and inflows from CVC used in the internal rate of return
\ncalculations will be documented by CVC through bank statements, and, in the
\nevent that bank statements are not available, other supporting evidence. For
\npurposes of the foregoing, CVC’s investment in Buyer common stock shall be
\ndetermined using the consideration paid by CVC to acquire, directly or
\nindirectly, Buyer common stock at or prior to the Closing or, in the event CVC
\npurchases, directly or indirectly, Buyer common stock in the future, the
\nconsideration paid by CVC for such Buyer common stock.<\/p>\n
(a) In calculating CVC’s internal rate of return, the following
\nshall be taken into account as of the time of the occurrence of the specified
\nevent:<\/p>\n
(i) All dividends or other distributions, whether or not in cash,
\n received in respect of Buyer common stock; provided that, any stock
\n dividend made prior to an initial public offering of Buyer’s equity shall
\n be excluded from this clause (i);<\/p>\n
27<\/p>\n
(ii) The fair market value of any securities of Buyer received as
\n a result of the reclassification of, or in exchange for, Buyer common
\n stock.<\/p>\n
(iii) Any cash or other consideration received by holders of
\n Buyer common stock in the event of sale or merger of Buyer; and<\/p>\n
(iv) Any consideration received by CVC as a result of the sale of
\n all or a portion of its shares of Buyer common stock. For purposes of the
\n foregoing, in the event of an “initial public offering” of Buyer common
\n stock and solely in order to calculate CVC’s then internal rate of return,
\n CVC shall be presumed to have sold all of its shares of Buyer Common Stock
\n at the net offering price thereof and any other equity securities of the
\n Buyer received in respect of the Buyer common stock and then held by CVC,
\n at the fair market value thereof. An initial public offering shall mean the
\n sale of at least 15% of Buyer common stock pursuant to a registration
\n statement, or series of registration statements, filed under the Securities
\n Act of 1933 with the Securities and Exchange Commission or any similar
\n filings under applicable rules, laws or regulations of any foreign
\n government or stock exchange.<\/p>\n
(b) CVC’s internal rate of return shall be calculated upon the
\noccurrence of each event set forth in subclause (a) above until the earlier of
\nthe time a payment is made to RCPC pursuant to this Section 2.8 and CVC no
\nlonger holds any shares of Buyer common stock.<\/p>\n
(c) Buyer and RCPC shall jointly determine in good faith the fair
\nmarket value of any non-cash dividends or distributions of such securities or
\nproperty and in the event of any disagreement in respect thereof, Buyer and RCPC
\nshall engage an internationally recognized investment bank unaffiliated with
\neither Buyer or RCPC for purposes of making such determination.<\/p>\n
(d) Buyer will promptly advise RCPC of the occurrence of any event
\nlisted under subclause (a) above.<\/p>\n
(e) Any amount paid pursuant to this Section 2.8 shall be treated as
\nan adjustment to the Purchase Price for all Tax purposes.<\/p>\n
Section 2.9 Post-Closing Adjustments.<\/p>\n
28<\/p>\n
(a) As promptly as practicable, but in no event later than 90 days
\nafter the Closing Date, the Sellers in good faith shall prepare and deliver to
\nBuyer (i) an audited special purpose statement setting forth the Sellers’
\ndetermination of the Net Assets as of the Closing Date prepared in accordance
\nwith Adjusted U.S. GAAP (the “Actual Statement of Net Assets”) based on the
\nBusiness’ books and records and other information then available, (ii) the
\nspecial purpose statement of operating income of the Business setting forth the
\nSellers’ determination of Stub Period Operating Income accompanied by a review
\nreport (the “Actual Stub Period Operating Income Statement”) prepared in
\naccordance with Adjusted U.S. GAAP, (iii) a calculation of the Purchase Price
\nand (iv) a statement of adjustments to the Balance Sheet Intercompany
\nLiabilities, if any (the “Intercompany Liability Statement”). During the
\npreparation of the Actual Statement of Net Assets and the Actual Stub Period
\nOperating Income Statement and the Intercompany Liability Statement, and all
\nactivities in connection therewith, the Buyer shall be entitled to designate one
\nor more representatives of Buyer’s independent accounting firm (the “Buyer
\nAccountant”) to observe and comment on the preparation of the Actual Statement
\nof Net Assets, the Actual Stub Period Operating Income Statement and the
\nIntercompany Liability Statement and the calculation of the Purchase Price and
\nprocedures relating thereto.<\/p>\n
(b) After the Sellers’ delivery of their calculation of the Actual
\nStatement of Net Assets, the Actual Stub Period Operating Income Statement and
\nthe Intercompany Liability Statement and the Purchase Price to Buyer, the
\nSellers shall permit the Buyer, Buyer Accountant and their representatives to
\nhave reasonable access to the books, records and other documents (including work
\npapers of the Sellers) pertaining to or used in connection with the Sellers’
\ncalculation of the Actual Statement of Net Assets, the Actual Stub Period
\nOperating Income Statement and the Purchase Price and the Intercompany Liability
\nStatement. If Buyer disagrees with the Sellers’ calculation of the Actual
\nStatement of Net Assets or the Actual Stub Period Operating Income Statement, or
\nany adjustment to the Balance Sheet Intercompany Liabilities or absence thereof
\nBuyer will notify the Sellers in writing of such disagreement (the “Objection
\nNotice”) (such Objection Notice setting forth the basis for such disagreement in
\nreasonable detail) within 60 days after Buyer’s receipt of the Actual Statement
\nof Net Assets and the Actual Stub Period Operating Income Statement (the “60-Day
\nObjection Period”). The Sellers and Buyer thereafter shall negotiate in good
\nfaith to resolve any such disagreements with respect to the calculation of the
\nActual Statement of Net Assets, the Purchase Price and the Actual Stub Period
\nOperating Income Statement and the Intercompany Liability Statement. If the
\nBuyer fails to notify the Sellers of any such dispute within the 60-Day
\nObjection Period, the Actual Statement of Net Assets, the Purchase Price and the
\nActual Stub Period Operating Income Statement and the Intercompany Liability
\nStatement shall be deemed accepted and approved by the Buyer.<\/p>\n
29<\/p>\n
(c) If the Sellers and Buyer are unable to resolve any such
\ndisagreements within 15 days after Buyer’s delivery of its Objection Notice to
\nthe Sellers, the Sellers and Buyer shall submit the dispute to a “Big Five”
\npublic accounting firm jointly selected by the Sellers and Buyer (the “Auditor”)
\nfor resolution. If the Sellers and Buyer are unable to agree upon the Auditor,
\nthe Auditor shall be a “Big Five” accounting firm selected by lot (after the
\nSellers and the Buyer each exclude one such accounting firm).<\/p>\n
(d) The Sellers and Buyer shall use their respective commercially
\nreasonable best efforts to cause the Auditor to resolve all disagreements over
\nthe Actual Statement of Net Assets, the Actual Stub Period Operating Income
\nStatement and the Purchase Price and the Intercompany Liability Statement as
\nsoon as practicable, but in any event shall direct the Auditor to render a
\ndetermination within 30 days of its retention. The parties shall make available
\nto the Auditor all work papers and all other information and material in their
\npossession relating to the matters in any dispute. The Auditor shall consider
\nonly those items and amounts which are identified in the Objection Notice which
\nthe Sellers and Buyer are unable to resolve. In addition, the Auditor’s
\ndetermination must be, with respect to each disputed item, (1) within the range
\nof values established for such item as determined by reference to the value
\nassigned to such amount by the Sellers, on the one hand, and Buyer, on the other
\nhand, in the Actual Statement of Net Assets, the Actual Stub Period Operating
\nIncome Statement and the Intercompany Liability Statement and Objection Notice,
\nrespectively, and (2) determined in accordance with Adjusted U.S. GAAP, this
\nSection 2.9 and the other definitions in this Agreement. The determination of
\nthe Auditor shall be made promptly and, if made in accordance with the preceding
\nsentence, shall be final, conclusive and binding upon the Sellers and the Buyer
\nand shall be deemed a final arbitration award that is enforceable pursuant to
\nall terms of the Federal Arbitration Act, 9 U.S.C. ss.ss. 1 et. seq. Any
\nexpenses relating to the engagement of the Auditor shall be shared equally by
\nthe Buyer and the Sellers. “Final Net Assets” means the Net Assets amount set
\nforth on the Actual Statement of Net Assets where an Objection Notice has not
\nbeen delivered in accordance with Section 2.9(b), or if such a notice has been
\nso delivered, then “Final Net Assets” means the Net Assets amount (A) as
\ndetermined by the Auditor in accordance with Section 2.9(d), or (B) as mutually
\nagreed in writing between the Sellers and Buyer pursuant to Section 2.9(b),
\nwhereupon the Actual Statement of Net Assets as so adjusted shall become the
\n“Final Statement of Net Assets.” “Final Stub Period Operating Income” means the
\nStub Period Operating Income amount determined on the Actual Stub Period
\nOperating Income Statement where an Objection Notice has not been delivered in
\naccordance with Section 2.9(b), or if such a notice has been so delivered, then
\n“Final Stub Period Operating Income”<\/p>\n
30<\/p>\n
means the Stub Period Operating Income amount (A) as determined by the Auditor
\nin accordance with Section 2.9(d), or (B) as mutually agreed in writing between
\nthe Sellers and Buyer pursuant to Section 2.9(b), whereupon the Actual Stub
\nPeriod Operating Income Statement shall become the “Final Stub Period Operating
\nIncome Statement” or the “Stub Period Operating Income Statement.”<\/p>\n
(e) Within five business days after the Final Net Assets and the
\nFinal Stub Period Operating Income are determined pursuant to this Section 2.9
\nthen the Purchase Price shall be determined in accordance with Section 2.7(a)
\nand the first sentence of Section 2.7(b) substituting (except for clause (A) of
\nthe first sentence of Section 2.7(b)) the Final Statement of Net Assets, Final
\nNet Assets, Final Stub Period Operating Income and the Final Stub Period
\nOperating Income Statement for the Estimated Statement of Net Assets, Net
\nAssets, estimate of the Stub Period Operating Income and the Estimated Stub
\nPeriod Operating Income Statement and shall be adjusted as follows:<\/p>\n
(i) if the final Purchase Price as determined above is less than
\n the Estimated Purchase Price (the difference, with interest at the rate of
\n 9.5% per annum from the Closing Date until the date of payment, being
\n defined as the “Deficiency Amount”), the Sellers shall pay to the Buyer an
\n amount equal to the Deficiency Amount by wire transfer of immediately
\n available funds to an account designated by the Buyer; or<\/p>\n
(ii) if the final Purchase Price as determined above is greater
\n than the Estimated Purchase Price (the difference, with interest at the
\n rate of 9.5% per annum from the Closing Date until the date of payment,
\n being defined as the “Excess Amount”), the Buyer shall pay to the Sellers
\n an amount equal to the Excess Amount, by wire transfer of immediately
\n available funds to an account designated by the Sellers.<\/p>\n
Any amount paid pursuant to Sections 2.9(e) and 2.9(f) shall be treated as
\nan adjustment to the Purchase Price for all Tax purposes.<\/p>\n
(f) Within five business days after the Final Net Assets are determined
\npursuant to this Section 2.9:<\/p>\n
(i) if Final Net Assets exceed Target Net Assets, then Buyer
\n shall pay to Sellers the lesser of (A) the amount calculated pursuant to
\n subclause (x) or (y), as applicable, and (B) the amount of the excess of
\n the Final Net Assets over the Target Net Assets.<\/p>\n
31<\/p>\n
(x) If the amount of cash and cash equivalents set forth on
\n the Final Statement of Net Assets is greater than the amount of Funded Debt
\n set forth on the Final Statement of Net Assets, the sum of (i) the amount
\n by which such cash and cash equivalents (other than statutory requirements,
\n if any) exceeds Funded Debt plus (ii) the amount (if any) by which the
\n Estimated Purchase Price was reduced pursuant to Section 2.7(a)(iii).<\/p>\n
(y) If the amount of cash and cash equivalents (other than
\n statutory requirements, if any) set forth on the Final Statement of Net
\n Assets is less than the amount of Funded Debt set forth on the Final
\n Statement of Net Assets (the amount of such deficiency, the “Final Cash
\n Deficiency”) and, the amount of cash and cash equivalents (other than
\n statutory requirements, if any) set forth on the Estimated Statement of Net
\n Assets is less than the amount of Funded Debt set forth on the Estimated
\n Statement of Net Assets (the amount of such deficiency, the “Estimated Cash
\n Deficiency”), and the Final Cash Deficiency is less than the Estimated Cash
\n Deficiency, an amount equal to the excess of the Estimated Cash Deficiency
\n over the Final Cash Deficiency.<\/p>\n
(ii) If the Final Cash Deficiency is greater than the Estimated
\n Cash Deficiency, then Sellers shall pay to Buyer an amount equal to the
\n excess of the Final Cash Deficiency over the Estimated Cash Deficiency.<\/p>\n
(iii) If there is a Final Cash Deficiency and the amount of cash
\n and cash equivalents (other than statutory requirements, if any) set forth
\n on the Estimated Statement of Net Assets is greater than or equal to the
\n amount of Funded Debt set forth on Estimated Statement of Net Assets, then
\n Sellers shall pay to Buyer the amount of the Final Cash Deficiency.<\/p>\n
(g) All payments made pursuant to subclause (f), above, shall be
\nwithout duplication of any other adjustment to the Purchase Price made pursuant
\nto this Section 2.9; (ii) shall be paid within five business days after the
\nFinal Net Assets are determined pursuant to this Section 2.9 by wire transfer of
\nimmediately available funds to an account designated by the Buyer or the
\nSellers, as the case may be; and (iii) shall be accompanied by interest in the
\namount of 9-1\/2% per annum from the Closing Date until the date of payment.<\/p>\n
(h) Buyer’s and Sellers’ rights to indemnification pursuant to
\nArticle VI or Article IX hereof (and any limitations on such rights) shall not
\nbe deemed to limit, supersede or otherwise affect Buyer’s or Sellers’ rights to
\na full Purchase Price<\/p>\n
32<\/p>\n
adjustment pursuant to this Section 2.9; provided however, that no party shall
\nbe entitled to indemnification pursuant to Article VI or Article IX hereof with
\nrespect to any matter that resulted in a Purchase Price adjustment, if and to
\nthe extent that such party is the beneficiary of a Purchase Price adjustment
\nwith respect to such matter pursuant to this Section 2.9.<\/p>\n
(i) Sellers acknowledge that Buyer’s execution of an engagement
\nletter with an independent public accounting firm to enable Buyer’s review of
\nSellers’ Books and Records pursuant to Section 3.1 herein (the “Accountant’s
\nEngagement Letter”), does not constitute a waiver of any claims Buyer may have
\nunder this Section 2.9, including Buyer’s ability to object to the Actual
\nStatement of Net Assets or the Actual Stub Period Operating Income Statement.<\/p>\n
Section 2.10 Intercompany Liabilities. Prior to the Closing, the
\nSellers and the Acquired Companies and the Subsidiaries shall settle or
\notherwise repay (and shall cause their respective Affiliates to settle or
\notherwise repay) all intercompany Liabilities between the Sellers and their
\nrespective Affiliates (other than the Acquired Companies and the Subsidiaries),
\non the one hand, and the Acquired Companies and the Subsidiaries on the other
\nhand, other than the Balance Sheet Intercompany Liabilities (the “Off-Balance
\nSheet Intercompany Liabilities” and the foregoing procedures being the
\n“Off-Balance Sheet Intercompany Liability Settlement”) such that none of Buyer,
\nthe Acquired Companies or the Subsidiaries shall have any Off-Balance Sheet
\nIntercompany Liabilities to any Seller or Affiliate of any Seller. To the extent
\nthere are any Off-Balance Sheet Intercompany Liabilities which are not fully
\nsettled as of the Closing Date, Buyer and Sellers shall cooperate in using their
\nrespective commercially reasonable efforts to complete the Off-Balance Sheet
\nIntercompany Liability Settlement as to such remaining Liabilities through
\njournal entries on the books and records of the Sellers, and their respective
\nAffiliates, on the one hand, and the Acquired Companies and Subsidiaries, on the
\nother hand, or through credits or other adjustments in continuing arrangements
\nbetween the Sellers and their respective Affiliates, on the one hand, and the
\nAcquired Companies and the Subsidiaries on the other hand, or contribution of
\ncash to the Acquired Companies in amounts necessary to repay any outstanding
\nOff-Balance Sheet Intercompany Liabilities owing from any of the Acquired
\nCompanies and Subsidiaries to Sellers or any of their Affiliates, provided that
\nBuyer shall, at Sellers’ sole expense, use reasonable efforts to cooperate with
\nSellers to settle such Off-Balance Sheet Intercompany Liabilities. In accordance
\nwith Section 9.2(a)(v) hereof, Sellers shall indemnify and hold harmless the
\nBuyer, the Acquired Companies, the Subsidiaries and their Affiliates from any
\nand all amounts incurred by the Buyer, the Acquired Companies and the
\nSubsidiaries to complete the Off-Balance Sheet Intercompany Liability Settlement
\nand for any Tax liabilities or other Liabilities<\/p>\n
33<\/p>\n
arising out of the Off-Balance Sheet Intercompany Liability Settlement, in each
\ncase whether occurring before, on, or after the Closing.<\/p>\n
34<\/p>\n
ARTICLE III<\/p>\n
RELATED MATTERS<\/p>\n
Section 3.1 Books and Records of the Acquired Companies. The Sellers
\nshall deliver to Buyer at or as soon as practicable after the Closing, all
\nAcquired Books and Records (including, but not limited to, correspondence,
\nmemoranda, minute books, books of account, personnel and payroll records and the
\nlike), except for books and records required pursuant to the performance of any
\nof the Ancillary Agreements and preparation of the Tax Returns (as defined in
\nSection 4.19(e) hereof) and any Letters, workpapers, memoranda, rulings or other
\ndocumentation related to the preparation of such Tax Returns relating to the
\nAcquired Companies or the Subsidiaries that contain material Tax information
\nregarding operations other than the Business. Any books and records of the
\nAcquired Companies or the Subsidiaries which are not delivered to Buyer
\nhereunder shall be preserved by the Sellers for the longer of (i) seven years
\nfollowing the Closing, or (ii) 30 days past the end of the applicable statute of
\nlimitations for Taxes, including all extensions thereof, and Sellers shall
\npermit Buyer and its authorized representatives to have reasonable access to,
\nand examine and make copies of, all such books and records as reasonably
\nrequested by Buyer. All books and records delivered by the Sellers to Buyer
\nshall be preserved by Buyer for the longer of (i) seven years following the
\nClosing, or (ii) 30 days past the end of the applicable statute of limitations
\nfor Taxes, including all extensions thereof, and Buyer shall permit the Sellers
\nand their authorized representatives to have reasonable access to, and examine
\nand make copies of, all such books and records as reasonably requested by the
\nSellers. The Sellers, on the one hand, and Buyer, on the other hand, shall each
\nprovide the other with 30 days’ notice before destroying any Tax records, and
\nshall provide the other party with the opportunity to inspect, copy or reclaim
\nthe Tax records.<\/p>\n
Section 3.2 No Ongoing or Transition Services.<\/p>\n
(a) Except (i) as provided in Sections 6.7 and 6.19 hereof and in
\nthe Transitional Services Agreements, (ii) as otherwise agreed to in writing by
\nSellers and Buyer, at the Closing or (iii) as set forth in Section 3.2(b) and
\nSection 3.2(c) below, all manufacturing, distribution, warehousing, sales,
\nadministration, data processing, accounting, tax, treasury, insurance, banking,
\npersonnel, legal, communications and other products or services provided to the
\nAcquired Companies or the Business by Sellers or any of their Affiliates,
\nincluding any agreements or understandings (written or oral) with respect
\nthereto, shall terminate on the Closing Date.<\/p>\n
35<\/p>\n
(b) Sellers shall prepare and deliver to Buyer, no later than three
\nmonths after Closing, assignments in recordable form, duly executed by Sellers
\nor its appropriate Subsidiary or Affiliate, for the Acquired Intellectual
\nProperty in all jurisdictions in which registrations therefor are issued or
\napplications therefor are pending, other than the jurisdictions as to which
\nassignments in recordable form were delivered at Closing. Sellers shall provide
\nreasonable assistance and shall cooperate with Buyer with respect to the
\ntransfer of the Acquired Intellectual Property including, but not limited to,
\nthe provision of copies of records and documents in Sellers’ possession or under
\ntheir control such as those required to fill in gaps in the chain of title,
\ndockets, information regarding local prosecuting counsel, copies of notices
\nreceived post-Closing from outside counsel and registry officials.<\/p>\n
(c) Upon Buyer’s written request, Sellers shall promptly as
\npracticable provide Buyer with such Transitional Services as are consistent with
\nservices provided to the Business by the Sellers prior to the Closing and as are
\nreasonably necessary in the operation of the Business, which had not been
\nidentified prior to the Closing. Such Transitional Services shall be provided by
\nSellers to Buyer at the historical costs associated with the provision of such
\nservices and on terms substantially similar to that set forth in the
\nTransitional Services Agreement, for a period not to exceed the lesser of (i)
\nsix months from the date upon which Buyer notifies Sellers of its request for
\nsuch services and (ii) nine months following the Closing.<\/p>\n
Section 3.3 Distributions. The Sellers may, on or prior to the Closing
\nDate, cause the Acquired Companies and\/or the Subsidiaries to distribute cash to
\nthe Sellers or their Affiliates, by one or more dividends, repurchase of
\nexisting stock and other distributions, including payment of intercompany fees
\nand Sellers’ ordinary cash sweeping and consolidation, subject to (i) the
\nobligations of the Sellers to deliver all of the Acquired Assets of the Business
\nas provided herein, (ii) the delivery of, at a minimum, the Net Assets shown on
\nthe September 30, 1999 Statement of Net Assets, and (iii) the Purchase Price
\nadjustments in Section 2.9 hereof.<\/p>\n
ARTICLE IV<\/p>\n
REPRESENTATIONS AND WARRANTIES OF SELLERS<\/p>\n
Each of the Sellers, jointly and severally, represents and warrants to
\nBuyer that the statements contained in this Article IV are correct and complete
\nas of the date of this Agreement and will be correct and complete as of the
\nClosing Date (except for representations and warranties that speak as of a
\nspecific date) as though made then and as though the Closing Date were
\nsubstituted for the date of this Agreement<\/p>\n
36<\/p>\n
throughout Article IV, except as fully set forth in the Disclosure Letter.
\nNothing in the Disclosure Letter shall be deemed adequate to disclose an
\nexception to a representation or warranty made herein, however, unless the
\nDisclosure Letter identifies the exception with particularity and describes the
\nrelevant facts in detail. Without limiting the generality of the foregoing, the
\nmere listing (or inclusion of a copy) of a document or other item shall not be
\ndeemed adequate to disclose an exception to a representation or warranty made
\nherein (unless the representation or warranty has to do with the existence of
\nthe document or other item).<\/p>\n
Section 4.1 Organization.<\/p>\n
(a) As set forth on Section 4.1 of the Disclosure Letter, the
\nAcquired Companies and the Subsidiaries are corporations or companies duly
\norganized, validly existing and (except in such jurisdictions in which
\napplicable law does not provide for a corporation to be in good standing) in
\ngood standing under the laws of their state or jurisdiction of incorporation or
\norganization and have the requisite corporate and other power and corporate
\nauthority to own, lease and operate their properties and to carry on their
\nbusiness and operations and the Business as now being conducted, except where
\nany such failure to be so organized, existing and in good standing or to have
\nsuch power and authority would not individually or in the aggregate have a
\nBusiness Material Adverse Effect.<\/p>\n
(b) Sellers are corporations or companies duly organized, validly
\nexisting and (except in such jurisdictions in which applicable laws do not
\nprovide for a corporation or company to be in good standing) in good standing
\nunder the laws of their state or jurisdiction of incorporation.<\/p>\n
(c) The Acquired Companies and the Subsidiaries are duly qualified
\nor licensed and (except in jurisdictions in which applicable laws do not provide
\nfor a corporation or company to be in good standing) in good standing to do
\nbusiness in each jurisdiction in which property is owned, leased or operated by
\nany of the Acquired Companies or the Subsidiaries or the nature of the Business
\nconducted by any of the Acquired Companies or the Subsidiaries makes such
\nqualification necessary, except where any such failure to be so duly qualified
\nor licensed and in good standing would not individually or in the aggregate have
\na Business Material Adverse Effect and would not impair the ability of Sellers
\nto consummate the transactions contemplated by this Agreement.<\/p>\n
37<\/p>\n
(d) Sellers have heretofore made available to Buyer complete and
\ncorrect copies of the Acquired Companies’ and the Subsidiaries’ certificates of
\nincorporation and by-laws or analogous organizational documents, as currently in
\neffect.<\/p>\n
(e) As used in this Agreement, “Business Material Adverse Effect”
\nmeans any material adverse change in, or effect on, the business, financial
\ncondition or operations of the Business taken as a whole. As used in this
\nAgreement, the term “Person” shall mean and include an individual, a
\npartnership, a limited liability company, a joint venture, a corporation, a
\ntrust, an incorporated organization and a Governmental Entity or any other
\nentity, whether domestic or foreign.<\/p>\n
Section 4.2 Authorization; Validity of Agreement; Sellers Action. The
\nSellers have all necessary corporate power to perform their obligations
\nhereunder and authority to execute and deliver this Agreement and to consummate
\nthe transactions contemplated hereby. The execution, delivery and performance by
\nthe Sellers of this Agreement, and the consummation by them of the transactions
\ncontemplated hereby, have been duly authorized and approved by all necessary
\naction on the part of their respective Boards of Directors and no other
\ncorporate action on the part of the Sellers is necessary to authorize the
\nexecution, delivery and performance by the Sellers of this Agreement and the
\nconsummation by them of the transactions contemplated hereby. This Agreement has
\nbeen duly executed and delivered by the Sellers and, assuming due and valid
\nauthorization, execution and delivery hereof by the Buyer, is a valid and
\nbinding obligation of the Sellers, enforceable against each of the Sellers in
\naccordance with its terms, except that such enforcement may be subject to
\napplicable bankruptcy, insolvency, reorganization, moratorium or other similar
\nlaws, now or hereafter in effect, affecting creditors’ rights and remedies
\ngenerally, and the remedy of specific performance and injunctive and other forms
\nof equitable relief may be subject to equitable defenses and to the discretion
\nof the court before which any proceeding therefor may be brought.<\/p>\n
Section 4.3 Capital Stock. Set forth in Section 4.3 of the Disclosure
\nLetter is the number of authorized shares of capital stock of each of the
\nAcquired Companies and each Subsidiary and the number of such shares which are
\nissued and outstanding. No shares of capital stock of the Acquired Companies or
\nthe Subsidiaries are reserved for issuance or held in such Acquired Companies’
\nor the Subsidiaries’ treasury. All of the Shares and the shares of capital stock
\nof each Acquired Company are validly issued, fully paid and non-assessable.
\nThere are no outstanding or authorized options, warrants, purchase rights,
\nsubscription rights, conversion rights, exchange rights, or other commitments
\nthat require any of the Acquired Companies or the Subsidiaries to issue, sell,
\nor otherwise cause to become outstanding any of its<\/p>\n
38<\/p>\n
capital stock, nor are there outstanding or authorized any stock appreciation
\nrights, phantom stock, or similar rights or instruments. There is no action,
\nsuit, proceeding, hearing, charge, complaint, demand or notice pending, or, to
\nthe knowledge of Sellers, threatened by any present or former shareholder of the
\nAcquired Companies or of the Subsidiaries with respect to any of the Acquired
\nCompanies’ or Subsidiaries’ capital stock, nor do any facts exist to Sellers’
\nknowledge which could form the basis for any such claim.<\/p>\n
Section 4.4 Ownership of the Shares.<\/p>\n
(a) Sellers (or the Acquired Companies in the case of Shares of the
\nSubsidiaries) are the record and beneficial owners of the Shares as and to the
\nextent set forth in Section 4.4 of the Disclosure Letter, which comprise all of
\nthe issued and outstanding shares of all classes of capital stock of the
\nAcquired Companies except as set forth in Section 4.4 of the Disclosure Letter.
\nSellers (or the Acquired Companies in the case of Shares of the Subsidiaries)
\nhave good title to the Shares, free and clear of all Liens (as defined
\nhereafter) or restrictions on transfer (other than in the relevant
\nOrganizational Documents). Upon the transfer by Sellers to Buyer of the
\ncertificate or certificates evidencing the Shares (other than shares of the
\nSubsidiaries owned by the Acquired Companies) or registration in the share
\ntransfer records of the Acquired Companies where such is the method of transfer,
\nSellers shall have transferred to Buyer good title to the Shares free and clear
\nof all Liens or restrictions on transfer (other than in the relevant
\nOrganizational Documents).<\/p>\n
(b) As used herein, “Liens” shall mean any pledge, guarantees,
\nmortgage, charge, claim, security interest, conditional and installment sales
\nagreement, encumbrance or charge, of any kind.<\/p>\n
(c) Except as set forth in Section 4.4(c) of the Disclosure Letter,
\nthe Acquired Companies do not own, directly or indirectly, any capital stock or
\nequity securities of any Person or have any direct or indirect equity or
\nownership interest in any business other than the Business.<\/p>\n
(d) Subsidiaries. Section 4.4(d) of the Disclosure Letter sets forth
\nfor each Subsidiary (i) its name and jurisdiction of incorporation or
\norganization, (ii) the number of shares of authorized capital stock of each
\nclass of its capital stock, (iii) the number of issued and outstanding shares of
\neach class of its capital stock, the names of the holders thereof, and the
\nnumber of shares held by each such holder, and (iv) the number of shares of its
\ncapital stock held in treasury. All of the issued and outstanding shares of
\ncapital stock of each Subsidiary of each of the Acquired<\/p>\n
39<\/p>\n
Companies have been duly authorized and are validly issued, fully paid, and
\nnonassessable. Except as set forth in Section 4.4 of the Disclosure Letter, the
\nAcquired Companies hold of record and own beneficially all of the outstanding
\nshares of each Subsidiary, free and clear of any Liens. There are no outstanding
\nor authorized options, warrants, purchase rights, subscription rights,
\nconversion rights, exchange rights, or other contracts or commitments that
\nrequire any of the Acquired Companies or their Subsidiaries to sell, transfer,
\nor otherwise dispose of any capital stock of any of the Subsidiaries or any
\nSubsidiary of any Acquired Company to issue, sell, or otherwise cause to become
\noutstanding any of its own capital stock. There are no outstanding stock
\nappreciation, phantom stock or profit participation rights or other similar
\nrights with respect to any Subsidiary. There are no voting trusts, proxies, or
\nother agreements or understandings with respect to the voting of any capital
\nstock of any Subsidiary. None of the Acquired Companies and Subsidiaries
\ncontrols directly or indirectly or has any direct or indirect equity
\nparticipation in any corporation, partnership, trust, or other business
\nassociation which is not a Subsidiary.<\/p>\n
Section 4.5 Consents and Approvals; No Violations. Except as set forth
\nin Section 4.5 of the Disclosure Letter, neither the execution, delivery or
\nperformance of this Agreement by the Sellers nor the consummation by the Sellers
\nof the transactions contemplated hereby nor compliance by the Sellers, the
\nAcquired Companies or the Subsidiaries with any of the provisions hereof shall
\n(i) conflict with or result in any breach of any provision of the certificate of
\nincorporation or by-laws or similar organizational documents of the Sellers, the
\nAcquired Companies or the Subsidiaries, (ii) require on the part of the Sellers,
\nthe Acquired Companies or the Subsidiaries any filing with, or permit,
\nauthorization, consent or approval of, any Governmental Entity, (iii) result in
\na violation or breach of, or constitute (with or without due notice or lapse of
\ntime or both) a default (or give rise to any right of termination, cancellation
\nor acceleration) under, any of the terms, conditions or provisions of any
\nmaterial note, bond, mortgage, indenture, lease, license, contract, agreement or
\nother instrument or obligation (including those agreements and obligations set
\nforth in Section 4.16 of the Disclosure Letter) to which the Sellers with
\nrespect to the Business, the Acquired Companies or the Subsidiaries is a party
\nor by which any of them or any of their respective properties or assets may be
\nbound (the “Material Agreements”) or (iv) violate any order, writ, injunction,
\ndecree, statute, rule or regulation applicable to the Sellers, the Acquired
\nCompanies, the Subsidiaries or any of their respective properties or assets,
\nexcluding from the foregoing clauses (ii), (iii) or (iv) where the failure to
\nobtain such permits, authorizations, consents or approvals or to make such
\nfilings, or the existence of such violations, breaches or defaults, would not,
\nindividually or in the aggregate, have a Business Material Adverse Effect, and<\/p>\n
40<\/p>\n
which shall not materially impair the ability of the Sellers to consummate the
\ntransactions contemplated hereby.<\/p>\n
Section 4.6 Business Financial Statements.<\/p>\n
(a) Annexed hereto as Section 4.6(a) of the Disclosure Letter is an
\naudited special purpose statement of net assets as of September 30, 1999 (the
\n“September 30, 1999 Statement of Net Assets”). The September 30, 1999 Statement
\nof Net Assets has been derived from the books and records of the Sellers, the
\nAcquired Companies and the Subsidiaries relating to the Business and fairly
\npresents the assets and liabilities of the Business as of September 30, 1999 in
\naccordance with Adjusted U.S. GAAP.<\/p>\n
(b) Annexed hereto as Section 4.6(b) of the Disclosure Letter is an
\nunaudited summary of net sales, gross contribution, brand support, brand
\ncontribution, selling, general and administrative expenses, operating income and
\nEBITDA (operating income before depreciation and amortization) relating to the
\nBusiness (other than Natural Honey or as otherwise set forth in such summary)
\nfor the years ended December 31, 1997, 1998, and the 1999 budget (the
\n“Historical and Budgeted Financial Information”). The Historical and Budgeted
\nFinancial Information was prepared from the books and records of the Sellers,
\nthe Acquired Companies and the Subsidiaries relating to the Business, including
\nSellers’ Hyperion internal management reporting system. The Historical and
\nBudgeted Financial Information does not include data relating to the Natural
\nHoney brand. The Historical and Budgeted Financial Information presents the net
\nsales, gross contribution, brand support, brand contribution, selling, general
\nand administrative expenses, operating income and EBITDA for the years ended
\nDecember 31, 1997, 1998, and the 1999 budget in accordance with Sellers’
\nHyperion internal management reporting system and as otherwise noted in the
\nfootnotes. The Historical and Budgeted Financial Information is not audited and
\nwas not prepared in accordance with Adjusted U.S. GAAP.<\/p>\n
(c) The special statement of certain corporate overhead and research
\nand development expenses set forth in Section 4.6(c) of the Disclosure Letter
\nreflects, within $500,000, the Sellers’ budgeted amounts of certain corporate
\noverhead and research and development allocation for the Business in 1999. Such
\nallocation is not audited and was not prepared in accordance with Adjusted U.S.
\nGAAP. Such statement was prepared from the books and records of the Sellers, the
\nAcquired Companies and the Subsidiaries relating to the Business. Sellers make
\nno representation or warranty as to the actual cost Buyer, the Acquired
\nCompanies or the Subsidiaries<\/p>\n
41<\/p>\n
may incur for overhead, research and development and other services for the
\nBusiness heretofore provided by Sellers.<\/p>\n
Section 4.7 Assets Necessary to Business. Except for the assets (a)
\ndisposed of or let to lapse in the ordinary course of business, (b) set forth in
\nSection 4.7 of the Disclosure Letter, (c) Excluded Assets (other than the
\nExcluded Assets included in the Licensed Intellectual Property), or (d) the
\nassets of the Sellers and their Affiliates which will be used in the provision
\nof the transition services pursuant to the Transitional Services Agreements, the
\nAcquired Assets, the assets of the Acquired Companies, and the Subsidiaries and
\nthe Licensed Intellectual Property comprise all of the assets, properties and
\nrights used in the conduct of the Business (A) as conducted during the
\ntwelve-month period prior to the date hereof and (B) as presently conducted by
\nthe Acquired Companies and the Subsidiaries in the same manner as conducted
\nprior to Closing, including, without limitation, in a manner consistent with
\nsuch operations that generated the results of operations reflected in the
\nfinancial statements included in Section 4.6(a) and (b) of the Disclosure
\nLetter. Immediately following the Closing, neither Sellers nor any officer or
\ndirector of Sellers shall own, license or lease any Acquired Assets, any assets
\nof the Acquired Companies or any properties or rights which are used in the
\nBusiness as presently conducted, except for (A) the Licensed Intellectual
\nProperty and the Intellectual Property to be licensed back to Sellers pursuant
\nto the license agreements contemplated in Section 6.11(b), (B) the Excluded
\nAssets, and (C) the assets of the Sellers and their Affiliates which will be
\nused in the provision of the transition services pursuant to the Transitional
\nServices Agreements.<\/p>\n
Section 4.8 Title to Property and Assets. Except (i) as set forth in
\nSection 4.8 of the Disclosure Letter; (ii) with respect to Real Property, which
\nis covered by the provisions of Section 4.12 hereof; and (iii) with respect to
\nIntellectual Property, which is covered by Section 4.13 hereof, Sellers have
\ngood, valid and merchantable or marketable title to all of the Acquired Assets
\nand the Acquired Companies have good, valid and marketable title to the assets
\nof the Acquired Companies and the Subsidiaries, free and clear of any Liens,
\nexcept for Permitted Encumbrances.<\/p>\n
Section 4.9 Condition of Property. Other than real property covered by
\nSection 4.12, each material tangible asset, including the machinery and
\nequipment included in the Acquired Assets and the machinery and equipment which
\nare assets of the Acquired Companies is in good operating condition and repair
\n(subject to normal wear and tear), and is suitable for the purposes for which it
\npresently is used, except for any which are obsolete and reflected for no value
\non the Final Statements of Net Assets.<\/p>\n
42<\/p>\n
Section 4.10 No Undisclosed Liabilities. Neither the Business, the
\nAcquired Companies nor any of the Subsidiaries have any Liability of a kind
\nrequired by Adjusted U.S. GAAP to be reflected on a net assets statement except
\nfor (i) Liabilities reflected on or reserved against on the September 30, 1999
\nStatement of Net Assets, (ii) Liabilities which have arisen since September 30,
\n1999 in the ordinary course of business which will be reflected on the Final
\nStatement of Net Assets, if of a nature required to be so reflected by Adjusted
\nU.S. GAAP, (iii) contractual obligations under the agreements set forth in
\nSection 4.11 (including obligations created pursuant hereto) and under the
\nagreements set forth in Section 4.16 of the Disclosure Letter, and (iv)
\nLiabilities disclosed in Section 4.10 of the Disclosure Letter.<\/p>\n
Section 4.11 Absence of Certain Changes.<\/p>\n
(a) Except as set forth on Section 4.11 of the Disclosure Letter,
\nsince September 30, 1999, and as of the date hereof, there has not been any
\nchange in the Business of the Acquired Companies and the Subsidiaries, taken as
\na whole, which would result in a Business Material Adverse Effect (excluding any
\nchange, event, effect or circumstance arising in connection with the
\nannouncement or performance of the transactions contemplated by this Agreement).<\/p>\n
(b) Without limiting the generality of the foregoing, since
\nSeptember 30, 1999, and as of the date hereof, except as set forth in Section
\n4.11 of the Disclosure Letter, neither the Business, any of the Acquired
\nCompanies nor any of the Subsidiaries have (except as otherwise contemplated by
\nthis Agreement and except as to Excluded Assets or Excluded Liabilities):<\/p>\n
(i) sold, leased, transferred, or assigned any assets, tangible
\n or intangible, having a value, individually or in the aggregate in excess
\n of U.S. $50,000 except for inventory sold in the ordinary course of
\n business and obsolete assets sold or disposed of for fair value in the
\n ordinary course of business;<\/p>\n
(ii) entered into a material agreement, contract, lease, or
\n license (or series of related agreements, contracts, leases or licenses)
\n involving more than U.S. $50,000, nor modified in writing the terms of any
\n such existing contract or agreement;<\/p>\n
(iii) (nor has any other party thereto, to the Sellers’
\n knowledge) accelerated, terminated, made material modifications to, or
\n canceled<\/p>\n
43<\/p>\n
in writing any Material Agreement to which the Acquired Companies or
\n Sellers are a party or by which they are bound;<\/p>\n
(iv) engaged in any activity which has resulted in any
\n acceleration or delay of the collection of its accounts or notes receivable
\n or any delay in the payment of its accounts payable, in each case in an
\n amount in excess of U.S. $50,000;<\/p>\n
(v) made or delayed (in relation to the budget of the Business)
\n any capital expenditures in an amount in excess of U.S. $50,000
\n individually or in the aggregate;<\/p>\n
(vi) imposed any Liens upon any of its assets, tangible or
\n intangible (other than under existing Liabilities or Permitted
\n Encumbrances);<\/p>\n
(vii) made any equity or debt investment in, or any loan to, any
\n other Person in an amount in excess of U.S. $50,000 individually or in the
\n aggregate in each case;<\/p>\n
(viii) created, incurred, assumed, or guaranteed more than U.S.
\n $50,000 in aggregate indebtedness for borrowed money and capitalized lease
\n obligations, other than accounts payable for goods and services arising in
\n each case in the ordinary course of business;<\/p>\n
(ix) granted any license or sublicense of any rights under,
\n allowed to lapse, or disposed of any of the Acquired Intellectual Property,
\n Acquired Companies’ Intellectual Property or Licensed Revlon Marks, in each
\n case, other than in the ordinary course of business;<\/p>\n
(x) made or authorized any change in its charter, by-laws or
\n other analogous organizational documents;<\/p>\n
(xi) issued, sold, or otherwise disposed of any of its capital
\n stock, or granted any options, warrants, or other rights to purchase or
\n obtain (including upon conversion, exchange or exercise) any of its capital
\n stock;<\/p>\n
(xii) declared, set aside, or paid any dividend or made any
\n distribution with respect to its capital stock (whether in cash or in kind)
\n or redeemed, purchased or otherwise acquired any of its capital stock;<\/p>\n
44<\/p>\n
(xiii) experienced any damage, destruction or loss to its
\n property having a book value, individually or in the aggregate, in excess
\n of U.S. $50,000;<\/p>\n
(xiv) made any loan to, or entered into any other transaction
\n with, any of its directors, officers, and employees, other than employment
\n arrangements entered into, in each case, in the ordinary course of
\n business;<\/p>\n
(xv) experienced any material adverse changes in the amount or
\n scope of coverage of insurance now carried by it;<\/p>\n
(xvi) made or been subject to any change in its accounting
\n practices, procedures or methods or in its cash management practices;<\/p>\n
(xvii) entered into any employment agreement or arrangement with
\n senior management or collective bargaining agreement, or modified in
\n writing in any material respect the terms of any such existing agreement;<\/p>\n
(xviii) adopted, amended, modified, or terminated any bonus,
\n profit-sharing, incentive, severance or other plan, contract or commitment
\n for the benefit of any of its directors, officers, and employees (or taken
\n any such action with respect to any other Benefit Plan) or granted any
\n increase in the base compensation of or made any other change in the
\n employment terms of any of its directors, officers and senior employees;<\/p>\n
(xix) incurred any Tax liability other than in the ordinary
\n course of business, amended any Tax Return, or made any elections with
\n respect to Taxes except as otherwise disclosed; or<\/p>\n
(xx) committed in writing to do any of the foregoing.<\/p>\n
Section 4.12 Real Property.<\/p>\n
(a) Owned Real Property. Section 4.12 of the Disclosure Letter sets
\nforth a list of all Owned Real Property (as hereinafter defined). With respect
\nto each Owned Real Property, one of the Acquired Companies or Subsidiaries (as
\nthe<\/p>\n
45<\/p>\n
case may be) has good and marketable fee simple title to the Owned Real Property
\nlocated within the United States, and valid legal title to the Owned Real
\nProperty located outside the United States, free and clear of all Liens, except
\nPermitted Encumbrances. Except as set forth in Section 4.12 of the Disclosure
\nLetter (i) none of the Acquired Companies or the Subsidiaries is a party to any
\nagreement or option to purchase any real property or interest therein; (ii) such
\nAcquired Company or Subsidiary (as the case may be) has not leased, or except
\nfor Permitted Encumbrances otherwise granted to any Person the right to use or
\noccupy such Owned Real Property or any portion thereof; (iii) there are no
\noutstanding options, rights of first offer or rights of first refusal or other
\nagreements to purchase such Owned Real Property or any portion thereof or
\ninterest therein; and (iv) neither the Sellers or any of their Affiliates (other
\nthan the Acquired Companies or the Subsidiaries) own any real property which is
\nused exclusively or primarily in the Business.<\/p>\n
(b) “Owned Real Property” means all land (whether located within or
\noutside the United States), together with all buildings, structures,
\nimprovements and fixtures located thereon, and all easements and other rights
\nand interests appurtenant thereto, owned by any of the Acquired Companies or the
\nSubsidiaries.<\/p>\n
(c) “Permitted Encumbrances” means (i) Liens for Taxes or other
\nassessments or charges of Governmental Entities that are not yet due and payable
\nor that are being contested in good faith through appropriate proceedings and as
\nto which reserves have been established in accordance with Adjusted U.S. GAAP
\nand that exist on the Estimated, Actual or Final Statement of Net Assets, as
\nappropriate; (ii) mechanic’s, carriers’, workers’, materialmen’s, warehousemen’s
\nand similar Liens arising or incurred in the ordinary course of business for
\nsums not due and payable or payments which are being contested in good faith by
\nappropriate proceedings; (iii) leases or subleases disclosed in Section 4.12 of
\nthe Disclosure Letter; (iv) any Lien existing on any real property, covenants,
\nconditions, zoning restrictions, easements, rights-of-way, encumbrances,
\nencroachments, restrictions on use of real property and other matters affecting
\ntitle that are shown as exceptions on title policies, title commitments and
\nreports or other documents which have been made available to Buyer; (v) any Lien
\nexisting on any real property, covenants, conditions, zoning restrictions,
\neasements, rights-of-way, encumbrances, encroachments, restrictions on use of
\nreal property and other matters affecting title which do not materially detract
\nfrom the value or use of such real property for the uses and purposes to which
\nsuch property is currently employed or materially impair the operations of the
\nBusiness as performed in such location; and (vi) matters set forth in Section
\n4.12 of the Disclosure Letter.<\/p>\n
46<\/p>\n
(d) Leased Real Property. Section 4.12 of the Disclosure Letter sets
\nforth the address of each Leased Real Property (as hereinafter defined). Except
\nas set forth in Section 4.12 of the Disclosure Letter and except as would not
\nhave a Business Material Adverse Effect, with respect to each of the Real
\nProperty Leases and Acquired Real Property Leases: (i) each such lease is the
\nlegal, valid, binding obligation of the Lessee, is enforceable, and is in full
\nforce and effect (ii) the Lessee has not assigned its interest under such lease,
\nsublet any interest in any Leased Real Property or pledged its interest therein;
\n(iii) the Lessee’s possession and quiet enjoyment of the Leased Real Property
\nhas not been disturbed and no material default exists with respect to the Real
\nProperty Leases and the Acquired Real Property Leases, and no event has occurred
\nor circumstance exists which, with the delivery of notice, the passage of time
\nor both, would constitute such a material breach or material default or permit
\nthe termination, modification or acceleration of rent under such Real Property
\nLeases and Acquired Real Property Leases, and (iv) other than the Leased Real
\nProperty, the Lessee does not lease any other real property which is used
\nexclusively or primarily in the Business.<\/p>\n
(i) “Leased Real Property” means all real property subject to the
\n Real Property Leases and Acquired Real Property Leases.<\/p>\n
(ii) “Real Property Leases” means all real property leases,
\n subleases, licenses and other agreements to occupy real property pursuant
\n to which the Sellers, Acquired Companies or Subsidiaries is the lessee,
\n lessor, sublessor or sublessee and that are used exclusively or primarily
\n in the Business as listed on Section 4.12 to the Disclosure Letter.<\/p>\n
(iii) “Acquired Real Property Leases” means all real property
\n leases, subleases, licenses and other agreements to occupy real property
\n pursuant to which the Sellers or their Affiliates (other than the Acquired
\n Companies and the Subsidiaries) are the lessee or sublessee and that are
\n used exclusively or primarily in the Business as listed on Section 4.12 to
\n the Disclosure Letter.<\/p>\n
(iv) “Lessee” means, with respect to the each of the Real
\n Property Leases and Acquired Real Property Leases, respectively, the
\n Sellers or Affiliate (other than the Acquired Company or Subsidiary), the
\n Acquired Company, or Subsidiary which is a party thereto.<\/p>\n
(e) Improvements. Except as set forth on Section 4.12(e) of the
\nDisclosure Letter, to Sellers’ knowledge, all buildings, structures,
\nimprovements,<\/p>\n
47<\/p>\n
fixtures, building systems and equipment, and all components thereof, owned by
\nSellers and located on the Owned Real Property and the Leased Real Property
\n(collectively, the “Real Property”) (the “Improvements”) are in all material
\nrespects in operable condition and repair, taken as a whole, subject to normal
\nwear and tear sufficient for the operation of the Business.<\/p>\n
(f) Condemnation. Except as set forth on Section 4.12(f) of the
\nDisclosure Letter, to Sellers’ knowledge, there is no condemnation,
\nexpropriation or other proceeding in eminent domain pending or threatened in
\nwriting, affecting any Real Property or any portion thereof or interest therein.<\/p>\n
(g) Certificates of Occupancy. The Acquired Companies or their
\nSubsidiaries, as the case may be, have obtained all certificates of occupancy,
\nand material licenses, permits, easements and rights of way, including proofs of
\ndedication, required to own, use or operate the Real Property in the manner in
\nwhich the Real Property is currently being used and operated, the failure to
\nobtain which in the aggregate would not cause a Business Material Adverse
\nEffect.<\/p>\n
Section 4.13 Intellectual Property.<\/p>\n
(a) Sections 1.2(i) (R&D Projects at Sellers’ Facilities Dedicated
\nto the Business), 1.4 (Acquired Companies’ Intellectual Property), 1.6 (Acquired
\nIntellectual Property), 1.7 (Acquired Intellectual Property Contracts), 1.27
\n(Licensed Intellectual Property) and 1.28 (Licensed Revlon Marks) of the
\nDisclosure Letter, taken together, set forth a complete and accurate list of:
\n(i) all R&D Projects other than the R&D Projects that are at the facilities of
\nthe Acquired Companies and\/or the Subsidiaries; (ii) all patents and pending
\npatent applications included in the Business Intellectual Property which is
\nowned by the Acquired Companies, the Subsidiaries, Sellers or Sellers’
\nAffiliates; (iii) all registered and, with respect to certain of the currently
\nused marks, material unregistered trademarks, service marks, certification
\nmarks, and registered copyrights included in the Business Intellectual Property
\nwhich is owned by Acquired Companies, the Subsidiaries, or by Sellers or
\nSellers’ Affiliates; and (iv) all Acquired Intellectual Property Contracts,
\nexcluding licenses of software which are Excluded Assets used by the Sellers or
\ntheir respective Affiliates pursuant to the Transitional Services Agreements and
\nexcluding readily-available commercial software acquired or licensed for a cost
\nof less than U.S. $50,000). Except as set forth in Section 4.13 of the
\nDisclosure Letter and except for registrations allowed to lapse or were
\nabandoned in the ordinary course consistent with past practice, registrations
\nfor the patented and registered items of Business Intellectual Property included
\nin Sections 1.4<\/p>\n
48<\/p>\n
and 1.6 of the Disclosure Letter are valid and subsisting and all maintenance
\nand renewal fees due prior to the date hereof have been paid.<\/p>\n
(b) Except as otherwise set forth in Section 1.3 (Acquired
\nCompanies’ Intellectual Property), 1.5 (Acquired Intellectual Property) or 1.6
\n(Acquired Intellectual Property Contracts) of the Disclosure Letter, Sellers or
\ntheir Affiliates or the Acquired Companies or the Subsidiaries own and possess
\nall right, title and interest in, to and under the Business Intellectual
\nProperty, or have or will, at the Closing Date, have the right to use such
\nBusiness Intellectual Property in connection with the Business as currently
\nconducted pursuant to valid license agreements. Except as set forth on Section
\n4.13(b) of the Disclosure Letter, the Business Intellectual Property, along with
\nthe third party intellectual property rights licensed pursuant to the Acquired
\nIntellectual Property Contracts, and the software which are Excluded Assets or
\nused in the provision of transitional services under the Transitional Services
\nAgreements and any other Intellectual Property used in the provision of
\nTransitional Services that is licensed to Sellers or its Subsidiaries and its
\nAffiliates and cannot be sublicensed to Buyer, comprises all of the Patent
\nRights, Trademark Rights, Copyrights, Proprietary Information and software
\n(collectively, “Intellectual Property”) used in and necessary for the operation
\nof the Business as conducted by Sellers and their Affiliates and the Acquired
\nCompanies and any Subsidiaries as of the Closing Date. Except as set forth in
\nSection 4.13 of the Disclosure Letter and except to the extent that the failure
\nto disclose such claims would not in the aggregate have a Business Material
\nAdverse Effect: (i) no claim by any third party contesting the validity,
\nenforceability, use or ownership of any of the Business Intellectual Property
\nowned by Sellers, their Affiliates, the Acquired Companies or any Subsidiary has
\nbeen made in writing within the past two years and is currently outstanding or,
\nto the knowledge of Sellers, is threatened; (ii) none of Sellers, their
\nAffiliates, the Acquired Companies or the Subsidiaries has sent within the past
\ntwo years any written notices of, and none of such parties have knowledge of any
\nfacts which indicate a likelihood of, any infringement or misappropriation by
\nany third party with respect to the Business Intellectual Property; (iii) none
\nof Sellers, their Affiliates, the Acquired Companies or any Subsidiary has
\nreceived within the past two years any written notices of any infringement or
\nmisappropriation of any intellectual property rights of a third party (including
\nwithout limitation, any demand that Sellers, their Affiliates, the Acquired
\nCompanies or any Subsidiary license any rights from a third party) as a result
\nof the operation of the Business; and (iv) to the best of Sellers’ current
\nknowledge, the conduct of the Business as currently conducted does not infringe
\nor misappropriate any Intellectual Property rights of any third parties.<\/p>\n
49<\/p>\n
Section 4.14 Litigation. Except as disclosed in Section 4.14 of the
\nDisclosure Letter or which would not individually or in the aggregate, if
\ndetermined on a basis adverse to Sellers, the Acquired Companies, the
\nSubsidiaries or the Business, be reasonably likely to result in Liability
\nexceeding U.S. $100,000, (i) there is no suit, action, claim, arbitration or
\nproceeding pending or, to the knowledge of the Sellers, threatened or, to the
\nknowledge of Sellers, any investigation by any Governmental Entity against the
\nAcquired Companies or any of the Subsidiaries or against Sellers or any of their
\nAffiliates relating to the Business and (ii) none of the Acquired Companies or
\nSubsidiaries or with respect to the Business, the Sellers or their Affiliates,
\nis subject to any outstanding injunction, order, decree, judgment, ruling,
\nsettlement, claim or charge.<\/p>\n
Section 4.15 No Default; Compliance with Applicable Laws. Except as set
\nforth in Section 4.15 of the Disclosure Letter, none of the Sellers, the
\nAcquired Companies or the Subsidiaries are in default or violation of any term,
\ncondition or provision of (i) their respective articles of incorporation or
\nby-laws or similar organizational documents, (ii) any Material Agreement or
\n(iii) any federal, state, local or foreign statute, law, ordinance, rule,
\nregulation, judgment, code, decree, order, concession, Company Permit, or
\nlicense or other governmental authorization or approval applicable to the
\nAcquired Companies or any of the Subsidiaries or the Business, excluding from
\nthe foregoing clauses (ii) and (iii), defaults or violations which would not
\nhave a Business Material Adverse Effect.<\/p>\n
Section 4.16 Certain Contracts and Arrangements.<\/p>\n
(a) Except as set forth in Section 4.16 of the Disclosure Letter or
\nwith respect to Real Property Leases or Acquired Real Property Leases or
\ntransactions contemplated hereby or the Ancillary Agreements, none of the
\nSellers (with respect to agreements used exclusively in the Business), the
\nAcquired Companies or the Subsidiaries are parties to any written (a) collective
\nbargaining agreement, (b) employment or consulting agreement providing for
\nannual payments in excess of U.S. $100,000; (c) indenture, mortgage, note,
\ninstallment obligation, agreement or other instrument relating to the borrowing
\nof money (other than intercompany accounts which shall be governed by Section
\n2.9 hereof), or the guaranty of any obligation for the borrowing of money,
\nexcept any such agreements with an aggregate outstanding principal amount not
\nexceeding U.S. $100,000; (d) partnership, joint venture or other similar
\nagreement or arrangement; (e) material license or other similar agreement,
\nincluding but not limited to, any exclusive license or sublicense or any other
\nlicense or sublicense of any material rights under the Acquired Intellectual
\nProperty, the Acquired Companies’ Intellectual Property, and any licenses under
\nthe Licensed Intellectual<\/p>\n
50<\/p>\n
Property that would conflict with the licenses contemplated under Section 6.11;
\n(f) agency, sales representation, distribution or other similar agreement
\nproviding for annual payments by the Sellers, the Acquired Companies or the
\nSubsidiaries in excess of U.S. $100,000; (g) agreement for the purchase of
\nsupplies or materials other than in the ordinary course of business providing
\nfor annual payments by the Sellers, the Acquired Companies or the Subsidiaries
\nin excess of U.S. $100,000; (h) agreement for the sale of goods or services,
\nother than the sale of inventory in the ordinary course of business, providing
\nfor annual payments by the Sellers, the Acquired Companies or the Subsidiaries
\nin excess of U.S. $100,000; (i) any other agreement material to the Business
\ntaken as a whole; (j) agreement (or group of related agreements) for the lease
\nof personal property to or from any Person providing for lease payments by the
\nSellers, the Acquired Companies or the Subsidiaries in excess of U.S. $50,000
\nper annum; (k) agreement concerning confidentiality or noncompetition; (l)
\nagreement with any of the Sellers and their Affiliates (other than the Acquired
\nCompanies and the Subsidiaries); (m) profit sharing, stock option, stock
\npurchase, stock appreciation, deferred compensation, severance or other material
\nplan or arrangement for the benefit of its current or former directors,
\nofficers, and employees; (n) agreement under which it has advanced or loaned any
\namounts in each case in excess of U.S. $50,000 to any of its directors,
\nofficers, and employees; (o) agreement under which the consequences of a default
\nor termination would have a Business Material Adverse Effect; or (p) other
\nagreement (or group of related agreements) the performance of which involves
\nannual payment by the Sellers, the Acquired Companies or the Subsidiaries in
\nexcess of U.S. $100,000. Except as set forth in Section 4.16 of the Disclosure
\nLetter, all agreements set forth in Section 4.16 of the Disclosure Letter are
\nlegal, in full force and effect, valid, binding and enforceable in accordance
\nwith their terms, except that (i) such enforcement may be subject to applicable
\nbankruptcy, insolvency, reorganization, moratorium or other similar laws, now or
\nhereafter in effect, affecting creditors’ rights or remedies generally, and (ii)
\nthe remedy of specific performance and injunctive and other forms of equitable
\nrelief may be subject to equitable defenses and to the discretion of the court
\nbefore which any proceeding therefor may be brought. None of the Sellers, the
\nAcquired Companies nor any Subsidiary nor, to the knowledge of the Sellers, any
\nother party thereto is in default under any of the aforesaid agreements except
\nwith respect to any default by the other party thereto as would not,
\nindividually or in the aggregate, have a Business Material Adverse Effect.<\/p>\n
(b) The Sellers have provided to Buyer a correct and complete copy
\nof each written agreement listed on Section 4.16 of the Disclosure Letter (as
\namended to date).<\/p>\n
Section 4.17 Employee Benefit Plans; ERISA.<\/p>\n
51<\/p>\n
(a) Section 4.17(a) of the Disclosure Letter contains a true and
\ncomplete list of each deferred compensation and each incentive compensation
\nplan, equity compensation plan, “welfare” plan, fund or program (within the
\nmeaning of section 3(1) of the Employee Retirement Income Security Act of 1974,
\nas amended (“ERISA”)); “pension” plan, fund or program (within the meaning of
\nsection 3(2) of ERISA); employment, termination or severance agreement; and
\nother employee benefit plan, fund, program, agreement or arrangement, in each
\ncase, that is sponsored, maintained or contributed to or required to be
\ncontributed to by the Acquired Companies, the Subsidiaries or by any entity,
\nwhether or not incorporated (an “ERISA Affiliate”), that together with the
\nAcquired Companies or the Subsidiaries would be deemed a “single employer”
\nwithin the meaning of section 4001(b) of ERISA, which, in each case, provides
\nbenefits for any employee or former employee of the Acquired Companies or any
\nSubsidiary (the “Benefit Plans”).<\/p>\n
(b) Except as set forth in Section 4.17(b) of the Disclosure Letter:<\/p>\n
(i) With respect to each Benefit Plan, the Sellers, the Acquired
\n Companies or the Subsidiaries have provided or made available to Buyer true
\n and complete copies of such Benefit Plan and any amendments thereto (or if
\n such Benefit Plan is not a written Benefit Plan, a description thereof),
\n any related trust or other funding vehicle, any current annual reports on
\n Form 5500 or summary plan description required under ERISA or the Code and
\n the most recent determination letter received from the U.S. Internal
\n Revenue Service (the “IRS”) with respect to each Benefit Plan intended to
\n qualify under section 401 of the Code.<\/p>\n
(ii) No material Liability under Title IV or section 302 of ERISA
\n has been incurred by the Acquired Companies, the Subsidiaries or any ERISA
\n Affiliate that has not been satisfied in full, and no condition exists that
\n presents a risk to the Acquired Companies, the Subsidiaries or any ERISA
\n Affiliate of incurring any such Liability, other than Liability for
\n premiums due the Pension Benefit Guaranty Corporation (which premiums have
\n been paid when due).<\/p>\n
(iii) No Benefit Plan is a “multiemployer pension plan,” as
\n defined in section 3(37) of ERISA, nor is any Benefit Plan a plan described
\n in section 4063(a) of ERISA , and none of the Acquired Companies<\/p>\n
52<\/p>\n
or the Subsidiaries has any Liability under or with respect to any such
\n multiemployer plan.<\/p>\n
(iv) Each Benefit Plan intended to be “qualified” within the
\n meaning of section 401(a) of the Code has received a favorable
\n determination letter from the IRS, and nothing has occurred since the date
\n of such determination that is reasonably likely to adversely affect such
\n determination.<\/p>\n
(v) There are no pending, threatened in writing or material
\n claims anticipated by Sellers by or on behalf of any Benefit Plan, by any
\n employee or beneficiary covered under any such Benefit Plan, or otherwise
\n involving any such Benefit Plan (other than routine claims for benefits).<\/p>\n
(vi) Each Benefit Plan has been maintained and administered in
\n material compliance with its terms and with the terms of any applicable
\n collective bargaining agreement and in material compliance with all
\n applicable laws or regulations; and none of the Acquired Companies or any
\n Subsidiary has incurred any material penalty relating to a Benefit Plan.<\/p>\n
(vii) Each Benefit Plan which is subject to the health care
\n continuation requirements of Part 6 of Subtitle B of Title I of ERISA and
\n Code ss.4980B (“COBRA”) has been administered in all material respects in
\n compliance with such requirements. No Benefit Plan provides medical or life
\n or other welfare benefits to any current or future retired or terminated
\n employees other than as required pursuant to COBRA.<\/p>\n
53<\/p>\n
Section 4.18 Taxes.<\/p>\n
(a) The Acquired Companies and the Subsidiaries have (i) duly filed
\n(or there has been filed on their behalf) with the appropriate taxing
\nauthorities all Tax Returns of the Acquired Companies and the Subsidiaries,
\nrespectively, required to be filed by them on or prior to the date hereof, and
\nsuch Tax Returns are true, correct and complete in all respects, and (ii) duly
\npaid in full or made provision in accordance with Adjusted U.S. GAAP (or there
\nhas been paid or provision has been made on their behalf) for the payment of all
\nTaxes of the Acquired Companies and the Subsidiaries shown to be due on such Tax
\nReturns.<\/p>\n
(b) Except as set forth in Section 4.18 of the Disclosure Letter, no
\nfederal, state, local or foreign audits are presently pending with regard to any
\nTax Return of the Acquired Companies or the Subsidiaries.<\/p>\n
(c) Except as set forth in Section 4.18 of the Disclosure Letter,
\nthere are no outstanding written consents to extend or waive the statutory
\nperiod of limitations applicable to the assessment of any Taxes against the
\nAcquired Companies or any of the Subsidiaries, and no power of attorney granted
\nby any of the Sellers, the Acquired Companies or the Subsidiaries with respect
\nto any Taxes of the Acquired Companies or the Subsidiaries is currently in
\nforce.<\/p>\n
(d) Except as set forth in Section 4.18 of the Disclosure Letter,
\nnone of the Acquired Companies or any of the Subsidiaries is a party to any
\nagreement providing for the allocation or sharing of Taxes.<\/p>\n
(e) “Taxes” shall mean any and all taxes, charges, fees, levies or
\nother assessments, including, without limitation, income, gross receipts,
\nexcise, real or personal property, sales, withholding, social security (or
\nsimilar), occupation, use, service, service use, unemployment, disability,
\nregistration, estimated, custom duties, capital stock, severance, employment,
\nenvironmental, license, net worth, payroll, franchise, transfer, value added and
\nrecording taxes, fees and charges imposed by any taxing authority (domestic or
\nforeign), including, without limitation, any state, county, local or foreign
\nGovernmental Entity, whether computed on a separate, consolidated, unitary,
\ncombined or any other basis; and such term shall include any interest, penalties
\nor additional amounts attributable to, or imposed upon, or with respect to, any
\nsuch Taxes, whether disputed or not. “Tax Return” shall mean any report, return,
\ndocument, declaration or other information or filing required to be supplied to
\nany Governmental Entity with respect to Taxes, including any schedule or
\nattachment thereto, and including any amendment thereto.<\/p>\n
54<\/p>\n
(f) Each of the Acquired Companies and the Subsidiaries has withheld
\nand paid, or accrued on the September 30, 1999 Statement of Net Assets, or the
\nEstimated, Actual or Final Statement of Net Assets, as the case may be, all
\nTaxes required to have been withheld and paid in connection with amounts paid or
\nowing to any employee, independent contractor, creditor, stockholder, or other
\nthird party.<\/p>\n
(g) None of the Acquired Companies and the Subsidiaries has filed a
\nconsent under Code ss.341(f) concerning collapsible corporations. None of the
\nAcquired Companies and the Subsidiaries has been a United States real property
\nholding corporation within the meaning of Code ss.897(c)(2) during the
\napplicable period specified in Code ss.897(c)(1)(A)(ii). Each of the Acquired
\nCompanies and the Subsidiaries has disclosed on its federal income Tax Returns
\nall positions taken therein that could give rise to a substantial understatement
\nof federal income Tax within the meaning of Code ss.6662. Except as disclosed,
\nsince December 31, 1987 none of the Acquired Companies and the Subsidiaries, (A)
\nhas been a member of an affiliated group (or any other similar group defined
\nunder a similar provision of state, local or foreign law) filing a consolidated
\nfederal, state, local or foreign income Tax Return (other than a group the
\ncommon parent of which was M&F) or (B) has any liability for the Taxes of any
\nPerson (other than members of the affiliated group of which M&F is the parent)
\nunder Treasury Regulation ss.1.1502-6 (or any similar provision of state, local
\nor foreign law), as a transferee or successor, or by contract. None of Sellers
\nwith respect to the Business, the Acquired Companies and the Subsidiaries has
\nmade an election under Code ss. 897(i).<\/p>\n
(h) None of the Acquired Companies and the Subsidiaries currently is
\nthe beneficiary of any agreement providing for an extension of time within which
\nto file any Tax Return.<\/p>\n
(i) None of the Acquired Companies and the Subsidiaries is obligated
\nto make any payments, or is a party to any agreement that would obligate it to
\nmake any payments, that would not be deductible under Code ss.280G by reason of
\ntransactions contemplated by this Agreement.<\/p>\n
(j) Each of the Acquired Companies and the Subsidiaries shall not be
\nrequired to (A) as a result of any “closing agreement,” as described in ss.7121
\nof the Code (or any corresponding provision of state, local or foreign income
\nTax law), include any item of income in, or exclude any item of deduction from,
\ntaxable income for any taxable period (or portion thereof) ending after the
\nClosing Date, (B) as a result of any sale reported on the installment method
\nwhere such sale occurred on or prior to<\/p>\n
55<\/p>\n
the Closing Date, include any item of income in, or exclude any item of
\ndeduction from, taxable income for any taxable period (or portion thereof)
\nending after the Closing Date, or (C) as a result of any prepaid amount received
\non or prior to the Closing Date (other than amounts prepaid in the ordinary
\ncourse of business consistent with past custom or practice), include any item of
\nincome in, or exclude any item of deduction from, taxable income for any taxable
\nperiod (or portion thereof) ending after the Closing Date.<\/p>\n
(k) Sellers represent that as of December 31, 1998, the total amount
\nof losses available to be carried forward by Revlon S.L. which can be utilized
\nto offset taxable income of Revlon S.L. for taxable periods beginning on or
\nafter January 1, 1999 was approximately 1,398,000,000 Spanish Pesetas; provided,
\nhowever, that such losses shall be adjusted upward or downward by an amount
\nrepresenting either the taxable loss or income generated by Revlon S.L. during
\nthe taxable periods beginning January 1, 1999 and ending on the Closing Date;
\nand further provided however, that the absolute amount of losses available for
\ncarryforward to future periods is subject to adjustment as a result of any audit
\nby the Spanish tax authorities with respect to prior periods up to and including
\nthe Closing Date (the “Spanish Tax Loss Carryforwards”).<\/p>\n
Section 4.19 Environmental Protection.<\/p>\n
(a) Except as set forth in Section 4.19 of the Disclosure Letter:<\/p>\n
(i) Since January 1, 1997, neither (i) the Sellers, the Acquired
\n Companies or any Subsidiary have received any written communication from
\n any Person (including any Governmental Entity) alleging that the Sellers or
\n the Acquired Companies or any Subsidiary are potentially responsible
\n parties under Environmental Law (as defined in Section 4.19(b)) with
\n respect to any actual or alleged environmental contamination relating to a
\n facility used in or in connection with the Business (including any off-site
\n location where waste or hazardous materials generated or handled by the
\n Sellers, the Acquired Companies or any Subsidiary, in each case with
\n respect to the operation of the Business, have been released, disposed of
\n or otherwise come to be located); none of the Sellers, the Acquired
\n Companies or any Subsidiary, nor, to the Sellers’ knowledge, is any
\n Governmental Entity conducting or has conducted any environmental
\n remediation or environmental investigation which could reasonably be
\n expected to result in material Liability for the Acquired Companies or any
\n Subsidiary under Environmental Law; and none of the Sellers, the Acquired
\n Companies or any Subsidiary have received any written<\/p>\n
56<\/p>\n
request for information under Environmental Law from any Governmental
\n Entity or any other Person with respect to any actual or alleged
\n environmental contamination relating to the Business;<\/p>\n
(ii) Since January 1, 1997, neither the Sellers nor the Acquired
\n Companies nor any Subsidiary have violated any Environmental Laws in
\n respect of the Business or have caused or contributed to any material
\n environmental contamination relating to the Business that has caused any
\n material property damage or material personal injury under any
\n Environmental Law;<\/p>\n
(iii) To the knowledge of Sellers, none of the Sellers or their
\n Affiliates, with respect to the Business, the Acquired Companies or any of
\n their Subsidiaries has treated, stored, disposed of, arranged for or
\n permitted the disposal of, transported, handled, or released any substance,
\n including without limitation any hazardous substance, or owned or operated
\n any property or facility, in a manner that has given or is reasonably
\n likely to give rise to any liabilities of any of the Acquired Companies or
\n the Subsidiaries or the Business (including without limitation any
\n Liability for response costs, corrective action costs, personal injury,
\n property damage, natural resources damages or attorneys’ fees) pursuant to
\n the federal U.S. Comprehensive Environmental Response, Compensation and
\n Liability Act of 1980, as amended (“CERCLA”), or any other Environmental
\n Law; and<\/p>\n
(iv) None of the following exists at any property or facility
\n owned or operated by any of the Acquired Companies or the Subsidiaries: (1)
\n underground storage tanks containing hazardous materials, (2)
\n asbestos-containing material in any form or condition, (3) materials or
\n equipment containing polychlorinated biphenyls, or (4) landfills, surface
\n impoundments, or waste disposal areas, except in the case of each of the
\n foregoing subclauses in compliance with applicable Environmental Laws.<\/p>\n
(b) For purposes of this Section 4.19, “Environmental Law” means all
\napplicable state, federal, local and foreign laws, regulations and rules,
\nincluding common law, judgments, decrees and orders relating to pollution, the
\npreservation of the environment, or the release of hazardous materials, noise,
\nodors or radiation into the environment.<\/p>\n
Section 4.20 Insurance. Section 4.20 of the Disclosure Letter sets
\nforth a complete and correct list as of the date hereof of all current primary,
\nexcess and<\/p>\n
57<\/p>\n
umbrella Liability policies (including self-insurance arrangements), and other
\nforms of insurance, owned or held by or on behalf of or providing insurance
\ncoverage to or for the benefit of the Acquired Companies or the Subsidiaries or,
\nwith respect to the Business, the Sellers. All of such insurance policies are in
\nfull force and effect, all premiums currently due and payable or previously due
\nhave been paid, no written notice of cancellation or termination has been
\nreceived with respect to any such policy and no assignment of proceeds (other
\nthan mortgage clauses) or Lien exists with respect to the proceeds of any such
\npolicy. Except as and to the extent set forth in Section 4.20 of the Disclosure
\nLetter, as of the date hereof, there are no pending claims against any such
\npolicies relating to the Business (other than routine claims in the ordinary
\ncourse of the Business).<\/p>\n
Section 4.21 Labor Matters.<\/p>\n
(a) Except as and to the extent set forth in Section 4.21 of the
\nDisclosure Letter, (i) there is no labor strike, slowdown, stoppage or lockout
\nactually pending (for which written notice has been provided), or to the
\nknowledge of the Sellers, threatened against the Business and during the past
\nthree years there has not been any such action; (ii) none of the Acquired
\nCompanies or Subsidiaries is a party to or bound by any collective bargaining
\nagreement with any labor organization and there are no collective bargaining
\nagreements relating to the Business; (iii) none of the Affected Employees are
\nrepresented by any labor organization and the Sellers have no knowledge of any
\ncurrent union organizing activities among such employees; (iv) there is no
\nunfair labor practice charge or complaint against the Acquired Companies or
\nSubsidiaries pending or, to the knowledge of the Sellers, threatened before the
\nNational Labor Relations Board or any similar state or foreign agency; and (v)
\nto the knowledge of Sellers, no union organizing or decertification efforts are
\npending or threatened and no other dispute exists.<\/p>\n
(b) None of the Acquired Companies, Subsidiaries or Sellers has
\nimplemented any plant closing or mass layoff in the United States (as those
\nterms are defined in the Worker Adjustment Retraining and Notification (“WARN”)
\nAct of 1988) covering employees with respect to the Business which is subject to
\nthe notice requirements of WARN, and no layoffs of employees with respect to the
\nBusiness that could implicate the WARN notice requirements will be implemented
\nby the Sellers or their respective Affiliates before the Closing without advance
\nnotification to Buyer.<\/p>\n
Section 4.22 Affiliate Agreements. Section 4.22 of the Disclosure
\nLetter lists all material agreements, contracts, arrangements, payables,
\nobligations and understandings that relate to the Business between any of the
\nAcquired Companies or<\/p>\n
58<\/p>\n
the Subsidiaries, on the one hand, and any Sellers or any other Affiliate of the
\nSellers other than the Acquired Companies or the Subsidiaries, on the other
\nhand, or any other agreements between any of the Sellers and their Affiliates
\nincluding, but not limited to, the Acquired Companies and the Subsidiaries which
\naffect or relate to the Licensed Revlon Marks (the “Affiliate Agreements”). As
\nused in this Agreement, “Affiliate” shall mean, as to any Person, any other
\nPerson which, directly or indirectly, is in control of, is controlled by, or is
\nunder common control with, such Person. The term “control” (including, with
\ncorrelative meanings, the terms “controlled by” and “under common control
\nwith”), as applied to any Person, means the possession, direct or indirect, of
\nthe power to direct or cause the direction of the management and policies of
\nsuch Person.<\/p>\n
Section 4.23 Brokers. No broker, investment banker or other Person,
\nother than Goldman, Sachs & Co. and Lazard Freres & Co. LLC, the Sellers’
\nfinancial advisors, the fees and expenses of which shall be paid by the Sellers,
\nis entitled to any broker’s, finder’s or other similar fee or commission in
\nconnection with the transactions contemplated by this Agreement based upon
\narrangements made by or on behalf of the Sellers or any of their Affiliates.<\/p>\n
Section 4.24 Permits. Except as set forth on Section 4.24 of the
\nDisclosure Letter, the Acquired Companies and the Subsidiaries currently hold
\n(or are permitted to operate under) all material governmental and other material
\nthird party permits (including occupancy permits), licenses, consents and
\nauthorizations (including, without limitation, material permits issued under
\nEnvironmental Laws) (collectively “Company Permits”) required in connection with
\nthe ownership, use and operation of the Business. Any applications for the
\nrenewal of any such Company Permits due prior to the Closing Date have been, or
\nwill be, timely filed prior to the Closing Date. Except as set forth in Section
\n4.24 of the Disclosure Letter, no proceeding to modify, suspend, revoke,
\nwithdraw, terminate or otherwise limit any such Company Permit is pending or, to
\nthe knowledge of Sellers, is threatened. None of the Acquired Companies,
\nSubsidiaries or Sellers is in violation of any Company Permit and no written
\nnotice of violation, administrative order, claim or proceeding alleging a
\nviolation of any such Company Permit is pending or, to the knowledge of Sellers,
\nthreatened and, to the knowledge of Sellers, no administrative or governmental
\naction has been taken or, to the knowledge of Sellers, is threatened in
\nconnection with the expiration, continuance or renewal of any such Company
\nPermit.<\/p>\n
Section 4.25 Customers and Suppliers. Since September 30, 1999 nor
\nprior to September 30, 1999 to the extent the effect thereof would occur after
\nSeptember 30, 1999, except as set forth on Section 4.25 of the Disclosure
\nLetter, no material supplier of the Business has provided written notice to any
\nof the Sellers, the Acquired<\/p>\n
59<\/p>\n
Companies or the Subsidiaries that it shall stop, or materially decrease the
\nrate of, supplying materials, products or services to the Business, and no
\nmaterial customer has provided written notice to any of the Sellers, the
\nAcquired Companies or the Subsidiaries that it shall stop, or materially
\ndecrease the rate of, buying Products from the Business.<\/p>\n
Section 4.26 SEC Financial Statements. To the best knowledge of
\nSellers, as of the date hereof, books and records exist at the facilities of the
\nSellers, their Affiliates and the Acquired Companies and the Subsidiaries, that
\nwould be necessary to prepare audited primary financial statements of the
\nBusiness for the years ending December 31, 1999 and December 31, 1998, in
\naccordance with the rules and regulations of the Securities and Exchange
\nCommission as in effect on the date hereof for inclusion in a Registration
\nStatement for an initial public offering of securities of the Business (the “SEC
\nFinancial Statements”). Sellers make no representation or warranty as to the
\ntime, expense or personnel necessary to prepare the SEC Financial Statements.
\nSellers also do not represent as to the competency of Buyer and its auditors to
\nprepare and complete audited financial statements.<\/p>\n
Section 4.27 Anti-Loading.<\/p>\n
(a) Since September 30, 1999, neither the Sellers, the Acquired
\nCompanies, nor any of the Subsidiaries has, with respect to the Business or the
\nAcquired Assets (nor has any other party thereto), accelerated, terminated, made
\nmaterial modifications to, or cancelled any material agreement, contract, lease,
\nor license to which the Sellers, the Acquired Companies, or any of their
\nSubsidiaries is a party or by which it is bound.<\/p>\n
(b) Since September 30, 1999, no incentives have been offered to
\ncustomers of the Business with the primary intent of accelerating trade
\npurchases to meet volume or profit objectives.<\/p>\n
ARTICLE V<\/p>\n
REPRESENTATIONS AND WARRANTIES OF BUYER<\/p>\n
Buyer represents and warrants to Sellers that the statements contained
\nin this Article V are correct and complete as of the date of this Agreement and
\nwill be correct and complete as of the Closing Date (except for representations
\nand warranties that speak as of a specific date) as though made then and as
\nthough the Closing Date<\/p>\n
60<\/p>\n
were substituted for the date of this Agreement throughout Article V, except as
\nfully set forth in the Disclosure Letter.<\/p>\n
Section 5.1 Organization.<\/p>\n
(a) Buyer is a corporation duly organized, validly existing and
\n(except in such jurisdictions in which applicable law does not provide for a
\ncorporation to be in good standing) in good standing under the law of its state
\nor jurisdiction of incorporation and has the requisite corporate and other power
\nand corporate authority to own, lease and operate its properties and to carry on
\nits business and operations as now being conducted, except where any such
\nfailure to be so organized, existing and in good standing or to have such power
\nand authority would not individually or in the aggregate have a Buyer Material
\nAdverse Effect.<\/p>\n
(b) Buyer is duly qualified or licensed and (except in jurisdictions
\nin which applicable law does not provide for a corporation to be in good
\nstanding) in good standing to do business in each jurisdiction in which the
\nproperty owned, leased or operated by Buyer makes such qualification necessary.<\/p>\n
(c) Buyer has heretofore made available to Sellers complete and
\ncorrect copies of the Buyer’s certificates of incorporation, by-laws, and other
\nanalogous organizational documents as currently in effect.<\/p>\n
(d) As used in this Agreement, “Buyer Material Adverse Effect” means
\nany material adverse change in, or material adverse effect on, the business,
\nfinancial condition or operations of the Buyer.<\/p>\n
Section 5.2 Authorization; Validity of Agreement; Necessary Action.
\nBuyer has all necessary corporate power to perform its obligations hereunder and
\nauthority to execute and deliver this Agreement and to consummate the
\ntransactions contemplated hereby. The execution, delivery and performance by
\nBuyer of this Agreement, and the consummation by the Buyer of the transactions
\ncontemplated hereby, have been duly authorized and approved by all necessary
\naction on the part of its Board of Directors and no other corporate action on
\nthe part of Buyer is necessary to authorize the execution, delivery and
\nperformance by Buyer of this Agreement and the consummation by it of the
\ntransactions contemplated hereby. This Agreement has been duly executed and
\ndelivered by Buyer and assuming due and valid authorization, execution and
\ndelivery hereof by the Sellers, is a valid and binding obligation of Buyer
\nenforceable against Buyer in accordance with its respective terms, except that
\n(i) such enforcement may be subject to applicable bankruptcy, insolvency,
\nreorganization,<\/p>\n
61<\/p>\n
moratorium or other similar laws, now or hereafter in effect, affecting
\ncreditors’ rights and remedies generally, and (ii) the remedy of specific
\nperformance and injunctive and other forms of equitable relief may be subject to
\nequitable defenses and to the discretion of the court before which any
\nproceeding therefor may be brought.<\/p>\n
Section 5.3 Consents and Approvals; No Violations. Except as set forth
\nin Section 5.3 of the Disclosure Letter, neither the execution, delivery or
\nperformance of this Agreement by the Buyer nor the consummation by Buyer of the
\ntransactions contemplated hereby nor compliance by Buyer with any of the
\nprovisions hereof shall (i) conflict with or result in any breach of any
\nprovision of the certificate of incorporation or by-laws or similar
\norganizational documents of the Buyer, (ii) require on the part of the Buyer any
\nfiling with, or permit, authorization, consent or approval of, any Governmental
\nEntity, (iii) result in a violation or breach of, or constitute (with or without
\ndue notice or lapse of time or both) a default (or give rise to any right of
\ntermination, cancellation or acceleration) under, any of the terms, conditions
\nor provisions of any material note, bond, mortgage, indenture, lease, license,
\ncontract, agreement or other instrument or obligation to which the Buyer is a
\nparty or by which Buyer or any of its respective properties or assets may be
\nbound or (iv) violate any order, writ, injunction, decree, statute, rule or
\nregulation applicable to Buyer or any of its properties or assets, excluding
\nfrom the foregoing clauses (ii), (iii) or (iv) where the failure to obtain such
\npermits, authorizations, consents or approvals or to make such filings, or the
\nexistence of such violations, breaches or defaults, would not, individually or
\nin the aggregate, have a Buyer Material Adverse Effect, and which shall not
\nmaterially impair the ability of the Buyer to consummate the transactions
\ncontemplated hereby.<\/p>\n
Section 5.4 Financing. Buyer agrees that it shall not, without the
\nprior consent of Revlon, enter into any amendment to, or modification or waiver
\nof, any of the commitment letters attached hereto as Section 5.4 of the
\nDisclosure Letter (the “Commitment Letters”), if such amendment, modification or
\nwaiver would (i) reduce the aggregate amount of funds committed under the
\nCommitment Letters or (ii) add additional conditions to the consummation of the
\ntransactions contemplated by the Commitment Letters, unless in each case it
\nwould not have a material adverse effect on or delay the consummation of the
\ntransactions contemplated by this Agreement. Buyer shall use commercially
\nreasonable efforts to (i) enforce the performance of the lenders under the
\nCommitment Letters, (ii) fulfill all of its obligations under the Commitment
\nLetters and (iii) cause all conditions to funding under the Commitment Letters
\n(other than (x) conditions to funding that are conditions to Buyer’s
\nconsummation of the transactions contemplated by this Agreement or (y)
\nconditions not in the control of Buyer) to be fulfilled as promptly as
\nreasonably practicable. In the event Buyer believes<\/p>\n
62<\/p>\n
that the consummation of the financing is not likely to occur, Buyer shall give
\nRevlon prompt written notice thereof.<\/p>\n
Section 5.5 Solvency of the Buyer, Acquired Companies and Subsidiaries
\nat the Closing Date. Immediately after the Closing Date and after giving effect
\nto the transactions contemplated hereby, to the knowledge of Buyer, the Buyer
\nand the Acquired Companies and their Subsidiaries will not (i) be insolvent
\n(either because its financial condition is such that the sum of its debts is
\ngreater than the fair market value of its assets or because the fair saleable
\nvalue of its assets is less than the amount required to pay its probable
\nLiability on its existing debts as they mature), (ii) have unreasonably small
\ncapital with which to engage in its business, or (iii) have incurred debts
\nbeyond its ability to pay as they become due.<\/p>\n
Section 5.6 Litigation. There is no suit, action, claim, arbitration or
\nproceeding pending or, to the knowledge of Buyer, threatened in writing against
\nBuyer which would adversely affect Buyer’s performance of its obligations under
\nthis Agreement.<\/p>\n
Section 5.7 Brokers. No broker, investment banker or other Person, the
\nBuyer’s financial advisor, the fees and expenses of which shall be paid by the
\nBuyer, is entitled to any broker’s, finder’s or other similar fee or commission
\nin connection with the transactions contemplated by this Agreement based upon
\narrangements made by or on behalf of Buyer or any of its Affiliates.<\/p>\n
Section 5.8 Acquisition of Capital Stock of Acquired Companies for
\nInvestment. Buyer is acquiring the Shares for investment and not with a view
\ntoward the distribution thereof. Buyer acknowledges that such shares may not be
\nsold or otherwise disposed of in violation of the United States Securities Act
\nof 1933, as amended, (the “Act”).<\/p>\n
ARTICLE VI<\/p>\n
COVENANTS<\/p>\n
Section 6.1 Interim Operations of the Business by Sellers. During the
\nperiod from the date hereof to the Closing, except as disclosed in Section 6.1
\nof the Disclosure Letter or otherwise provided for in, or contemplated by, this
\nAgreement or except with the prior written consent of the Buyer, the Sellers
\nshall operate the Business only in the ordinary and usual course of business
\nconsistent with past practice and,<\/p>\n
63<\/p>\n
without limiting the generality of the foregoing (in each case with respect to
\nthe Business):<\/p>\n
(a) Sellers and the Acquired Companies shall not, directly or
\nindirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge
\nany common stock or capital stock of any of the Acquired Companies or
\nSubsidiaries beneficially owned by them, either directly or indirectly; (ii)
\namend their certificate of incorporation or by-laws or similar organizational
\ndocuments of the Acquired Companies or Subsidiaries; or (iii) split, combine or
\nreclassify the outstanding common stock or any outstanding capital stock of any
\nof the Acquired Companies or Subsidiaries;<\/p>\n
(b) neither the Acquired Companies nor any of the Subsidiaries
\nshall: (i) issue, sell, pledge, dispose of or encumber any additional shares of,
\nor securities convertible into or exchangeable for, or options, warrants, calls,
\ncommitments or rights of any kind to acquire, any shares of capital stock of any
\nclass of the Acquired Companies or the Subsidiaries; (ii) incur or modify any
\nindebtedness or other Liability, other than in the ordinary and usual course of
\nbusiness and consistent with past practice, provided that, the Acquired
\nCompanies and the Subsidiaries may borrow money, in an aggregate amount not to
\nexceed U.S. $50,000, and may discount receivables and engage in overdraft
\nfinancing in the ordinary course of business and consistent with past practice,
\nfor use in the ordinary and usual course of business; or (iii) redeem, purchase
\nor otherwise acquire directly or indirectly any of their capital stock;<\/p>\n
(c) neither the Sellers with respect to the Acquired Assets or the
\nLicensed Intellectual Property nor the Acquired Companies nor the Subsidiaries
\nshall transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber
\nany assets other than in the ordinary and usual course of business and
\nconsistent with past practice;<\/p>\n
(d) the Sellers with respect to the Acquired Assets and the Acquired
\nCompanies and the Subsidiaries shall not cancel and shall use their commercially
\nreasonable efforts to maintain (and to prevent the termination or cancellation
\nof) any insurance policy naming them as beneficiaries or loss payable payees
\nunless cancelled and replaced with similar coverage, except in the ordinary and
\nusual course of business consistent with past practice;<\/p>\n
(e) neither the Acquired Companies nor any of the Subsidiaries
\nshall: (i) assume, guarantee, endorse or otherwise become liable or responsible
\n(whether directly, contingently or otherwise) for the obligations of any other
\nPerson; (ii) make any loans, advances or capital contributions to, or
\ninvestments in, any other Person (other than to another one of the Acquired
\nCompanies or one of the<\/p>\n
64<\/p>\n
Subsidiaries); or (iii) enter into any commitment or transaction with respect to
\nany of the foregoing (including, but not limited to, any borrowing, capital
\nexpenditure or purchase, sale or lease of assets);<\/p>\n
(f) neither the Acquired Companies nor any of the Subsidiaries shall
\nchange any of their accounting principles (including Tax accounting principles)
\nunless required by applicable law;<\/p>\n
(g) neither the Acquired Companies nor any of the Subsidiaries shall
\nadopt a plan of complete or partial liquidation, dissolution, merger,
\nconsolidation, restructuring, recapitalization or other reorganization of the
\nAcquired Companies or any of the Subsidiaries;<\/p>\n
(h) the Sellers shall not and shall cause the Acquired Companies and
\nthe Subsidiaries not to, take, or commit to take, any action that would make any
\nrepresentation or warranty of the Sellers contained herein inaccurate in any
\nmaterial respect at, or as of any time prior to, the Closing (except for
\nrepresentations and warranties made as of a specific date);<\/p>\n
(i) Sellers shall not, and shall cause the Acquired Companies and
\nthe Subsidiaries not to, sell, encumber, lease, license, transfer or dispose of
\nany Acquired Assets or Licensed Intellectual Property or any assets of the
\nAcquired Companies or Subsidiaries or rights to acquire any assets or rights
\nwhich would be included in the Acquired Assets or Licensed Intellectual Property
\nor any assets of the Acquired Companies or Subsidiaries, except pursuant to
\nobligations in effect on the date hereof and set forth in Section 6.1 of the
\nDisclosure Letter and except for Permitted Encumbrances;<\/p>\n
(j) Sellers shall not permit and shall cause the Acquired Companies
\nand the Subsidiaries to not permit any Acquired Asset or Licensed Intellectual
\nProperty or asset of the Acquired Companies or Subsidiaries to suffer any Lien
\nthereupon, except for such Liens, if existing on the date hereof, as would be
\nPermitted Encumbrances;<\/p>\n
(k) neither the Sellers, the Acquired Companies nor any of the
\nSubsidiaries shall authorize or enter into an agreement to do any of the
\nforegoing;<\/p>\n
(l) the Sellers shall not, and the Sellers shall cause the Acquired
\nCompanies and the Subsidiaries to not, engage in any practice, take any action<\/p>\n
65<\/p>\n
or enter into any transaction (i) of the sort described in Section 4.11(b) or
\n(ii) which would require disclosure under Section 4.11(b);<\/p>\n
(m) neither the Sellers, the Acquired Companies nor any of the
\nSubsidiaries shall, with respect to the Business or the Acquired Assets,
\naccelerate, terminate, make material modifications to, or cancel any agreement,
\ncontract, lease, or license to which any of the Sellers, with respect to the
\nBusiness or the Acquired Assets, the Acquired Companies or any of their
\nSubsidiaries is a party or by which any of them is bound; and<\/p>\n
(n) no incentives shall be offered to customers of the Business
\nwith the primary intent of accelerating trade purchases to meet volume or profit
\nobjectives.<\/p>\n
Section 6.2 Preservation of Business. From the date hereof to the
\nClosing, the Sellers shall use their commercially reasonable efforts (and shall
\nuse their commercially reasonable best efforts to cause the Acquired Companies
\nand the Subsidiaries to):<\/p>\n
(a) preserve the Business and its properties intact;<\/p>\n
(b) keep available to the Business the services of the employees of
\nthe Business listed in Section 6.2 of the Disclosure Letter;<\/p>\n
(c) preserve the Business’ relationships with customers, suppliers,
\nlicensors, licensees, contractors, distributors and others having material
\nbusiness dealings with the Business including under Material Agreements;<\/p>\n
(d) preserve the Business Intellectual Property and the goodwill of
\nthe Business including the payment of all maintenance and renewal fees which
\ncome due prior to Closing;<\/p>\n
(e) enforce the rights in the Business Intellectual Property against
\nthird parties;<\/p>\n
(f) continue to maintain, in all material respects, the Acquired
\nAssets and the assets of the Acquired Companies and Subsidiaries; and<\/p>\n
(g) maintain all files, books and records with respect to the
\nBusiness.<\/p>\n
66<\/p>\n
None of the Sellers will take any action (and Sellers shall cause their
\nAffiliates not to take any action) that is designed or intended to have the
\neffect of discouraging any lessor, licensor, customer, supplier, or other
\nbusiness associate of the Business, the Acquired Companies or the Subsidiaries
\nfrom maintaining the same business relationships with the Business, the Acquired
\nCompanies or the Subsidiaries after the Closing as it maintained with the
\nBusiness, the Acquired Companies or the Subsidiaries prior to the Closing. From
\nand after the Closing, each of the Sellers will (and shall cause their
\nAffiliates to) refer all customer inquiries relating to the Business to the
\nBuyer and the Buyer and its Affiliates shall refer all customer inquiries
\nregarding the Sellers’ retained business to the Sellers.<\/p>\n
Section 6.3 Access to Information. Upon reasonable notice, the Sellers
\nshall (and shall cause each of the Acquired Companies and the Subsidiaries to)
\nafford to the officers, employees, accountants, counsel and other
\nrepresentatives of Buyer, reasonable access, during normal business hours, to
\nall their properties, books, contracts, commitments and records (other than
\nconsolidated or combined Tax information but including Tax information relating
\nsolely to the Business or the Acquired Companies) as they relate to the Business
\nand, during such period, the Sellers shall (and shall cause each of the Acquired
\nCompanies to) furnish promptly to the Buyer all other information concerning the
\nBusiness as Buyer may reasonably request. Unless otherwise required by law
\n(including the rules and regulations of any stock exchange on which the shares
\nof the respective party or its Affiliates are publicly traded), Buyer and
\nSellers, and each of their respective Affiliates, shall hold any such
\ninformation which is nonpublic in confidence in accordance with the provisions
\nof the Confidentiality Agreement by and Among Revlon, Inc. and CVC European
\nEquity Partners II, L.P., and Carlos Colomer for Himself and Certain Investors,
\ndated October 20, 1999 (the “Confidentiality Agreement”) and Section 6.18
\n(Confidentiality) hereof.<\/p>\n
Section 6.4 Consents and Approvals.<\/p>\n
(a) As soon as reasonably practicable, Buyer and Sellers shall make,
\nor cause to be made, all filings and submissions under the HSR Act and any other
\napplicable Competition Laws as may be reasonably required in connection with
\nthis Agreement and the transactions contemplated hereby. Subject to Section 6.3
\nhereof, Sellers shall furnish to Buyer and Buyer shall furnish to Sellers, such
\ninformation and assistance as the other may reasonably request in connection
\nwith the preparation of any such filings or submissions. Subject to Section 6.3
\nhereof, Sellers shall provide Buyer, and Buyer shall provide Sellers, with
\ncopies of all correspondence, filings or communications (or memoranda setting
\nforth the substance thereof) between such party<\/p>\n
67<\/p>\n
or any of its representatives, on the one hand, and any Governmental Entity or
\nauthority or members of their respective staffs, on the other hand, with respect
\nto this Agreement and the transactions contemplated hereby. The Sellers and
\nBuyer shall consult with one another with respect to any such correspondence,
\nfilings or communications and shall engage in any discussions with any
\nGovernmental Entity on a joint basis. The filing fees for filings made under the
\nHSR Act and any other applicable Competition Laws shall be borne by the party
\nobligated under such laws to submit the filing, or in the absence of any such
\nobligation, by the party that under the applicable business practices and
\ncustoms is the primary party responsible for such filing and the expenses
\nassociated therewith. As used in this Agreement, “Competition Laws” shall mean
\nforeign statutes, rules, regulations, orders, decrees, administrative and
\njudicial doctrines, and other foreign laws that are designed or intended to
\nprohibit, restrict or regulate actions having the purpose or effect of
\nmonopolization, lessening of competition or restraint of trade or laws regarding
\nthe registration of investments, acquisitions or the like.<\/p>\n
(b) Each of Sellers, the Acquired Companies, the Subsidiaries and
\nthe Buyer shall take all actions necessary to comply promptly with all legal
\nrequirements which may be imposed on them with respect to this Agreement and the
\ntransactions contemplated hereby. At Sellers’ sole expense, except as expressly
\nset forth herein or in the Ancillary Agreements, each of Sellers and the
\nAcquired Companies shall, and shall cause the Subsidiaries to, take all actions
\nnecessary to obtain or make (and shall cooperate with Buyer in obtaining or
\nmaking) any consent, authorization, termination, filing, certificate, order,
\nseparation of agreement (on substantially similar terms) or approval of or from,
\nor any exemption by, any Governmental Entity or other public or private third
\nparty required to be obtained or made by Sellers, the Acquired Companies or any
\nof the Subsidiaries or the Business in connection with (A) the separation of the
\nBusiness from the Sellers as set forth in Section 6.14 or (B) the taking of any
\naction contemplated by this Agreement or the Ancillary Agreements. The Buyer
\nshall take all actions necessary to obtain (and shall cooperate with Sellers in
\nobtaining) any consent, authorization, order, separation or approval of, or any
\nexemption by, any Governmental Entity or other public or private third party
\nrequired to be obtained or made by the Buyer in connection with the taking of
\nany action contemplated by this Agreement. Without limiting the generality of
\nthe foregoing, prior to the Closing, the Sellers, at their sole expense, will
\nuse their commercially reasonable best efforts to cause the Acquired Companies
\nand the Subsidiaries to give any notices to third parties required to complete
\nthe transactions contemplated by this Agreement, and will cause the Acquired
\nCompanies and the Subsidiaries to use their commercially reasonable best
\nefforts, to obtain or make any third party consents, filings, certificates,
\napprovals, terminations, separation or orders required to complete the
\ntransactions contemplated by this Agreement or the Ancillary Agreements, that
\nthe Buyer may request. Without<\/p>\n
68<\/p>\n
limiting the generality of the foregoing, after the Closing (i) Sellers shall,
\nat their sole expense, except as expressly set forth herein or in the Ancillary
\nAgreements, obtain or make any necessary consents, authorizations, terminations,
\nfilings, certificates, orders, separation of agreement (on substantially similar
\nterms) or approvals of or from, or any exemption by, any Governmental Entity or
\nother public or private third party required to be obtained or made by Sellers,
\nthe Acquired Companies, the Subsidiaries or the Business in connection with (A)
\nthe separation of the Business from the Sellers as set forth in Section 6.14 or
\n(B) the taking of any action contemplated by this Agreement or the Ancillary
\nAgreements, including, without limitation, those consents, authorizations,
\nterminations, filings, certificates, orders, separation and approvals set forth
\non Sections 4.5 and 4.16 of the Disclosure Letter, (ii) to the extent such
\nconsent, authorization, termination, filing, certificate, order, separation of
\nagreement (on substantially similar terms) or approval is obtained or made by
\nBuyer or its Affiliates (whether before, on or after the Closing Date), Sellers
\nshall reimburse Buyer for all costs and expenses arising out of or associated
\nwith acquiring or making such consent, authorization, termination, filing,
\ncertificate, order, separation or approval and (iii) Sellers shall indemnify
\nBuyer and its Affiliates against any Liability or damages (including
\nconsequential damages) as and when incurred by Buyer or its Affiliates asserted
\nagainst or incurred by Buyer or its Affiliates as a result of or arising out of
\nSellers’ failure to obtain or make prior to the Closing Date any necessary
\nconsents, authorization, termination, filings, certificates, order, separation
\nof agreement (on substantially similar terms) or approval of or from, or any
\nexemption by, any Governmental Entity or other public or private third party
\nrequired to be obtained or made by Sellers, the Acquired Companies, the
\nSubsidiaries or the Business in connection with (A) the separation of the
\nBusiness from the Sellers as set forth in Section 6.14 or (B) taking of any
\naction contemplated by this Agreement or the Ancillary Agreements, including,
\nwithout limitation, those consents, authorizations, terminations, filings,
\ncertificates, orders, separations and approvals set forth on Sections 4.5 and
\n4.16 of the Disclosure Letter. Notwithstanding the foregoing, Buyer and its
\nAffiliates shall, at Sellers’ expense, use their commercially reasonable efforts
\nto mitigate any Liability or damages (including consequential damages) incurred
\nby Buyer or its Affiliate with respect to this Section 6.4(b)(iii).<\/p>\n
Section 6.5 Publicity. The initial press release with respect to the
\nexecution of this Agreement and any press release relating to the consummation
\nof the transactions contemplated by this Agreement shall be a joint press
\nrelease reasonably acceptable to Buyer and Sellers. Thereafter, so long as this
\nAgreement is in effect, neither Sellers, Buyer nor any of their respective
\nAffiliates or representatives shall issue or cause the publication of any press
\nrelease or other public announcement with respect to this Agreement or the other
\ntransactions contemplated hereby without the prior notice to and consultation
\nwith the other party, except as may be required by law or by any<\/p>\n
69<\/p>\n
listing agreement with a national securities exchange or as required in
\nconnection with any financing or refinancing or sale or merger of Buyer, the
\nBusiness or the Acquired Companies.<\/p>\n
Section 6.6 Notification of Certain Matters. The Sellers shall give
\nprompt notice to Buyer and Buyer shall give prompt notice to the Sellers, of (i)
\nany matter which would cause any representation or warranty contained in this
\nAgreement to be untrue or inaccurate in any material respect at or prior to the
\nClosing and (ii) any material failure of Sellers or Buyer, as the case may be,
\nto comply with or satisfy any covenant, condition or agreement to be complied
\nwith or satisfied by it hereunder; provided, however, that the delivery of any
\nnotice pursuant to this Section 6.6 shall not limit or otherwise affect the
\nremedies available hereunder to the party receiving such notice. No notice or
\ndisclosure by the Sellers pursuant to this Section 6.6, however, shall be deemed
\nto amend or supplement the Disclosure Letter or to prevent or cure any
\nmisrepresentation, breach of warranty or breach of covenant.<\/p>\n
Section 6.7 Further Assurances. Subject to the terms and conditions
\nherein provided, each of the parties hereto shall use their respective
\ncommercially reasonable best efforts to take, or cause to be taken, all action,
\nand to do, or cause to be done, all things necessary, proper or advisable under
\napplicable laws and regulations to consummate and make effective the
\ntransactions contemplated by this Agreement. If at any time after the Closing
\nDate any further action is necessary or desirable to carry out the purposes of
\nthis Agreement, the parties hereto shall take or cause to be taken all such
\nnecessary action, including, without limitation, the execution and delivery of
\nsuch further instruments (including, if the License Agreement (Revlon Marks) is
\nfound by a Governmental Entity to be illegal, invalid or unenforceable, an
\namended or new trademark license agreement containing such provisions as will
\nset forth the original intent of the parties to the maximum extent possible
\nunder applicable law) and documents as may be reasonably requested by the other
\nparty for such purposes or otherwise to consummate and make effective the
\ntransactions contemplated hereby; provided that, to the extent not indemnified
\nor required hereunder the cost of such action or of such instruments and
\ndocuments related thereto shall be borne by the party requesting them. The
\nforegoing covenant will survive the Closing of the transactions contemplated
\nherein.<\/p>\n
Section 6.8 Employees; Employee Benefits.<\/p>\n
(a) Immediately following the Closing, Buyer shall, or shall cause
\nthe Acquired Companies and each Subsidiary to, employ or continue to employ each
\nPerson identified in Section 6.8(a) of the Disclosure Letter as an employee of
\nthe<\/p>\n
70<\/p>\n
Acquired Companies or any Subsidiary immediately prior to the Closing and any
\nemployee of Sellers dedicated to the Business and set forth on Section 6.8(a)(i)
\nof the Disclosure Letter (all such employees of the Acquired Companies,
\nSubsidiaries and Sellers identified in Section 6.8(a) of the Disclosure Letter,
\nthe “Affected Employees”). Buyer or its Affiliates shall offer the Affected
\nEmployees, in the aggregate, benefits, including without limitation, severance,
\nsalary and bonus opportunity in accordance with the compensation and benefit
\nplans described in Section 6.8(a)(ii) of the Disclosure Letter. Except as
\nrequired by applicable law or any collective bargaining agreement, under no
\ncircumstances shall Buyer or its Affiliates be required to provide or maintain
\nany particular plan or benefit which was provided to or maintained for Affected
\nEmployees prior to the Closing. Any Affected Employee who is receiving benefits
\nas of the Closing under Sellers’ short-term or long-term disability program
\nshall be deemed to be an employee of Sellers until such time as such employee
\nreturns to active service and if such employee returns to active service within
\nsix months of the Closing Date, then such employee shall be deemed an Affected
\nEmployee and employed by Buyer in accordance with the terms of this Section.
\nSuch employment of such employees dedicated to the Business who do not have
\nemployment agreements shall be, if permitted under applicable law, employment at
\nwill for the purposes of this Section. For purposes of all employee benefit
\nplans (including, but not limited to, all “employee benefit plans” within the
\nmeaning of Section 3(3) of ERISA, and all policies and employee fringe benefit
\nprograms, including vacation policies) of the Buyer (such plans, programs,
\npolicies and arrangements, the “Buyer Plans”) in which the Affected Employees
\nmay participate following the Closing under which an employee’s eligibility or
\nbenefit depends, in whole or in part, on length of service, Buyer shall cause
\ncredit to be given to the Affected Employees for service previously credited
\nwith the Acquired Companies and the Subsidiaries and the Sellers, as the case
\nmay be, prior to the Closing, provided, that such crediting of service does not
\nresult in duplication of benefits, and provided, that except as provided in
\nsubsection (d) below, such crediting of service shall not be required for
\nbenefit accrual purposes under any Buyer Plan that is a defined benefit plan.
\nAffected Employees shall also be given credit for any deductible or co-payment
\namounts paid in respect of the plan year in which the Closing occurs, to the
\nextent that, following the Closing, they participate in any Buyer Plan for which
\ndeductibles or co-payments are required. Buyer shall also use its commercially
\nreasonable best efforts to cause each Buyer Plan to waive (A) any preexisting
\ncondition restriction with respect to conditions which were covered under the
\nterms of any analogous plan immediately prior to the Closing or (B) waiting
\nperiod limitation which would otherwise be applicable to an Affected Employee on
\nor after the Closing to the extent such Affected Employee had satisfied any
\nsimilar waiting period limitation under an analogous plan prior to the Closing.<\/p>\n
71<\/p>\n
(b) Prior to the Closing Date, Sellers shall take all such action as
\nshall be necessary or appropriate such that the accrued benefit as of the
\nClosing Date of each Affected Employee under the Revlon Employee Retirement
\nPlan, the Revlon Foreign Service Employees’ Pension Plan and the Amended and
\nRestated Pension Equalization Plan, dated as of December 14, 1998 (collectively,
\nthe “Revlon Pension Plans”) shall be fully 100% vested. Following the Closing
\nDate, the Sellers shall cause to be made distributions of benefits under the
\nRevlon Employee Retirement Plan to Affected Employees as and when required in
\naccordance with the terms of the Revlon Employee Retirement Plan.<\/p>\n
(c) Prior to the Closing Date, Sellers shall take all such action as
\nshall be necessary or appropriate such that the account balance as of the
\nClosing Date of each Affected Employee under the Revlon Employee Savings,
\nInvestment and Profit Sharing Plan (the “Revlon Savings Plan”) and the Revlon
\nExcess Savings Plan for Key Employees (collectively, the “Revlon DC Plans”)
\nshall be fully 100% vested. As soon as practicable after the Closing Date, but
\nin no event later than 120 days after the Clos ing Date, Buyer shall establish a
\ndefined contribution plan and trust intended to qualify under Section 401(a) and
\nSection 501(a) of the Code (the “Buyer Savings Plan”). Sellers shall, within 160
\ndays following the Closing Date, but in no event prior to the receipt by Sellers
\nof written evidence of the adoption of the Buyer Savings Plan and the trust
\nthereunder by Buyer and either (A) the receipt by the Sellers of a copy of a
\nfavorable determination letter issued by the IRS with respect to the Buyer
\nSavings Plan or (B) an opinion, reasonably satisfactory to Sellers’ counsel, of
\nBuyer’s counsel to the effect that the terms of the Buyer Savings Plan and its
\nrelated trust qualify under Section 401(a) and Section 501(a) of the Code,
\ndirect the trustee of the Revlon Savings Plan to transfer to the trustee of the
\nBuyer Savings Plan the account balances under the Revlon Savings Plan as of the
\ndate of transfer in respect of Affected Employees. Except to the extent mutually
\nagreed to by Sellers and Buyer, the transfer of assets pursuant to this Section
\n6.8(c) shall be in cash (except that any promissory notes or other evidence of
\nindebtedness with respect to outstanding loans under the Revlon Savings Plan
\nmade to any Affected Employee shall also be transferred). From the Closing Date,
\nuntil the date of such transfer, to the extent allowable by applicable law, the
\nBuyer shall make continuous payroll deductions each pay period from the pay of
\neach Affected Employee who has a loan or loans outstanding from the Revlon
\nSavings Plan of amounts sufficient to pay the installment payments of principal
\nand interest on each such loan as required by the promissory note or other
\nevidence of indebtedness related to such loan or loans. Such deducted amounts
\nshall be paid by the Buyer to the trustee of the Revlon Savings Plan, whom the
\nSellers shall direct to accept such payments for a credit against such loans.
\nUpon such transfer, the Buyer Savings Plan shall assume all liabilities for all
\naccrued benefits under the Revlon Savings Plan in respect of Affected Employees
\nthat<\/p>\n
72<\/p>\n
are transferred to the Buyer Savings Plan and the Revlon Savings Plan shall be
\nrelieved of all liabilities for such accrued benefits. Sellers and Buyer shall
\ncooperate in the filing of documents required by the transfer of assets and
\nliabilities described herein. Notwithstanding anything contained herein to the
\ncontrary, no such transfer shall take place until the 31st day following the
\nfiling of all required Forms 5310-A in connection therewith.<\/p>\n
(d) Effective as of the Closing Date, the Buyer shall assume or
\nshall cause to remain in full force and effect all obligations of the Acquired
\nCompanies and Subsidiaries arising under any collective bargaining agreement or
\nother arrangement with any unions or other labor organizations, which agreement
\nor arrangement is scheduled on Section 4.21 of the Disclosure Letter, including
\nwithout limitation the Labor Agreement between Roux Laboratories Inc. and Local
\n6520 International Union, United Automobile Aerospace and Agricultural Implement
\nWorkers of America (UAW) UAW, AFL-CIO (the “UAW Agreement”). Effective as of the
\nClosing Date, the Buyer shall establish a defined benefit pension plan qualified
\nunder Section 401(a) of the Code (the “Buyer UAW DB Plan”) for the benefit of
\nAffected Employees the terms of whose employment are subject to the UAW
\nAgreement (the “UAW Affected Employees”) and a defined contribution pension plan
\nqualified under Section 401(a) of the Code (the “Buyer UAW DC Plan”) for the
\nbenefit of UAW Affected Employees. The Buyer UAW DB Plan and the Buyer UAW DC
\nPlan shall (i) recognize all service with Sellers prior to the Closing Date by
\neach UAW Affected Employee for all purposes thereunder and (ii) be substantially
\nidentical to the Revlon UAW Pension Plan dated as of October 1, 1991 (the
\n“Sellers UAW DB Plan”) and the Putnam Flexible 401(k) and Profit Sharing Plan,
\nrespectively. Sellers shall transfer (or cause to be transferred) from the
\nSellers UAW DB Plan to the Buyer UAW DB Plan the assets (determined as set forth
\nbelow) and liabilities which are attributable to the UAW Affected Employees who
\nare participants in the Sellers UAW DB Plan as of the Closing Date. Within 30
\ndays after the Closing Date, Sellers shall file or cause to be filed any IRS
\nForms 5310-A required to be submitted to the IRS in respect to the transfer
\ncontemplated by this Section 6.8(d). The asset transfer shall be made as soon as
\npracticable following the determination of the “transfer amount”, as described
\nbelow, but in no event prior to the thirtieth day following the filing of such
\nIRS Forms 5310-A with the IRS (or, in the event the IRS raises any objections to
\nthe transfer, the date as of which the IRS withdraws such objections or is
\nsatisfied that the terms of the transfer have been modified to the extent
\nnecessary to meet such objections). The “transfer amount” shall be determined as
\nfollows:<\/p>\n
(i) the total benefits under the Sellers UAW DB Plan, for
\n purposes of section 4044 of ERISA, shall be calculated as if (A) all<\/p>\n
73<\/p>\n
participants (not just Affected Employees) ceased accruing any additional
\n benefits thereunder immediately prior to the Closing Date and (B) the
\n Sellers UAW DB Plan thereupon terminated, for purposes of section 4044 of
\n ERISA, as of the Closing Date; with such resulting benefits with respect to
\n all participants (and beneficiaries) under the Sellers UAW DB Plan, for
\n purposes of section 4044 of ERISA, being determined based on the 1983 Group
\n Annuity Mortality Table, the then applicable PBGC interest rates used to
\n value annuities upon plan termination, and the then applicable PBGC
\n expected retirement ages;<\/p>\n
(ii) there shall then be determined the amount of cash which, had
\n the Sellers UAW DB Plan in fact so terminated as of the Closing Date, would
\n have been then allocated to the benefits of each participant (and
\n beneficiary) (with such benefits determined in accordance with the
\n preceding clause (i)), had cash equal to the aggregate fair market value of
\n the assets of the Sellers UAW DB Plan (with such fair market value being
\n determined as of the Closing Date) been allocated as of the Closing Date,
\n in accordance with the requirements of section 4044 of ERISA, among such
\n total benefits; and<\/p>\n
(iii) there shall then be determined the aggregate amount of such
\n cash which would have been so allocated (pursuant to the foregoing clause
\n (ii)) to the aggregate benefits (as determined under the foregoing clause
\n (i)) of the UAW Affected Employees.<\/p>\n
Notwithstanding the foregoing, in the event that the transfer amount determined
\nunder clause (iii) above is less than the projected benefit obligation (“PBO”),
\nwhether or not vested as determined in accordance with Financial Accounting
\nStandards Board Statement 87 which is attributable to the Affected Employees who
\nare participants in the Sellers UAW DB Plan as of the Closing Date, Sellers
\nshall transfer to Buyer in cash the amount of the difference between such PBO
\nand the transfer amount determined under clause (iii) above. For purposes of the
\npreceding sentence, determination of the PBO shall be calculated in accordance
\nwith the actuarial assumptions used for purposes of the 1999 fiscal year
\ndisclosures for the Sellers UAW DB Plan and an annual interest rate of 7.5%,
\n1983 Group Annuity Mortality Table, 5.25% salary scale and retirement age of the
\nearlier of age 62 with ten years of service or age 65. The “transfer amount”
\nshall be entirely in cash, shall be in compliance with the requirements of
\nsection 414(1) of the Code, and shall be equal to the amount determined under
\nthe foregoing clause (iii) (as such amount shall be reduced by the amount of all
\npayments, if any, from the Sellers UAW DB Plan pursuant to the following
\nsentence) and as adjusted to reflect (A) the actual investment experience of the
\nSellers UAW DB Plan for the period commencing on the Closing Date and ending 31
\ndays prior to the date of the asset transfer to the<\/p>\n
74<\/p>\n
Buyer UAW DB Plan and (B) earnings at a rate equal to the rate of interest on
\n30-year Treasury securities (with such interest rate determined for the month
\npreceding the month in which such asset transfer occurs) for the 30-day period
\nending on the date of such asset transfer; with such investment experience and
\n30-year Treasury rate adjustments taking into account such reductions, if any,
\nbeing made from time to time, from such amount described under the foregoing
\nclause (iii) on account of the payments described in the following sentence.
\nPending completion of the asset transfer contemplated by this Section 6.8(d), to
\nthe extent that any benefits are otherwise then payable to any Affected Employee
\nunder the Buyer UAW DB Plan, such Affected Employee shall have the right to have
\nsuch person’s vested benefits under the Sellers UAW DB Plan paid out of the
\nSellers UAW DB Plan at the same time as benefits are so payable to such person
\nout of the Buyer UAW DB Plan, and the amount to be transferred to the Buyer UAW
\nDB Plan shall, as described under the immediately preceding sentence, be reduced
\nby the amount of all such payments. Pending the completion of such transfer, (i)
\nSellers shall, with respect to the Sellers UAW DB Plan, cooperate fully with
\nBuyer with respect to all aspects of plan administration, disbursement of
\nbenefits and other pertinent information and (ii) Buyer shall provide Sellers
\nwith such pertinent information, and otherwise cooperate fully with Sellers,
\nwith respect to coordinating any benefit payments described in the immediately
\npreceding sentence.<\/p>\n
(e) Except as otherwise specifically provided in Section 6.8 or
\nexcept to the extent reflected on the Estimated, Actual or Final Statement of
\nNet Assets, on and after the Closing Date, Sellers shall retain and have sole
\nresponsibility for all liabilities, obligations, and commitments of Sellers, the
\nAcquired Companies or any Subsidiary arising under or in connection with any
\nBenefit Plan of the Sellers and their Affiliates, including (but not limited to)
\nsuch liabilities, obligations and commitments arising under or in connection
\nwith any severance plans, policies or programs of the Sellers, and including the
\nguarantee of 50% of target bonuses for 1999, under all management incentive,
\nsales incentive, profit sharing and other bonus plans. Sellers shall be solely
\nresponsible for satisfying the continuation coverage requirements of COBRA for
\nall employees or former employees of the Acquired Companies, any Subsidiary or
\nthe Sellers in connection with the Business (and any dependents of such
\nemployees and former employees) who are receiving COBRA continuation coverage as
\nof the Closing Date or who are entitled to elect such coverage on account of a
\nqualifying event occurring on or before the Closing Date; and Sellers shall be
\nsolely responsible for providing any and all short-term and long-term disability
\nbenefits (and all other pension and\/or welfare benefits to which any such person
\nis entitled on account of disability after becoming eligible for such short-term
\nand long-term disability<\/p>\n
75<\/p>\n
benefits) which become payable on or after the Closing Date to any Affected
\nEmployee who was disabled or was in a disability waiting period as of the
\nClosing Date.<\/p>\n
(f) In the event that any Affected Employee is discharged by the
\nAcquired Companies, Buyer or any Subsidiary within twelve months after the
\nClosing Date, Buyer shall be solely responsible for severance, termination,
\nindemnity or pay in lieu of notice and other severance benefits for an amount
\ncalculated in accordance with Section 6.8(a) of the Disclosure Letter. If Buyer
\ntakes any action or makes any omission which causes any Affected Employee to
\nresign for “good reason” (as defined in the Revlon Severance Policies in Section
\n4.17 of the Disclosure Letter) within twelve months after the Closing Date,
\nBuyer shall, at the sole cost and expense of Sellers, cooperate with the Sellers
\nto take commercially reasonable best efforts to reduce or mitigate any severance
\nexposure Sellers would have to such Affected Employee under such Revlon
\nSeverance Policies. Any severance benefits provided by the Buyer to an Affected
\nEmployee pursuant to this Section 6.8(f) shall be an offset to the Sellers’
\nseverance obligation to such Affected Employee pursuant to Section 6.8(e).
\nNothing herein shall be construed to require the Buyer to provide the Sellers
\nwith any notification or information regarding any action or omission with
\nrespect to any Affected Employee, except that if the Buyer receives actual
\nnotice that an Affected Employee with annual salary and bonus in excess of
\n$100,000 has resigned or expects to resign for “good reason” (as previously
\ndefined) the Buyer shall notify the Sellers of such resignation or expected
\nresignation and the stated reasons therefor as soon as practicable following the
\nBuyer’s receipt of such notice, and except further, the Buyer shall notify the
\nSellers if its officers responsible for design and oversight over employee
\nbenefit plans have actual knowledge of anticipated action or actions which are
\nlikely to cause 25 or more Affected Employees to resign for “good reason” (as
\npreviously defined).<\/p>\n
(g) Effective as of the Closing Date, provided Buyer makes the
\npayments provided below in this Section 6.8(g), Sellers shall provide medical
\nand dental coverage to non-union Affected Employees in the United States for a
\nperiod not to exceed six months (the “Continuation Period”); provided that,
\nBuyer shall have the right to terminate such coverage by giving RCPC thirty days
\nprior written notice. Such coverage shall be provided on the same terms and
\nconditions as in effect for, and elected by, each Affected Employee immediately
\nprior to the Closing Date. Buyer agrees to pay RCPC a fee of $153,640.96 per
\nmonth for medical coverage, and a fee of $13,525.40 per month for dental
\ncoverage which is equal to Sellers administrative service cost (including cost
\nof anticipated claims) with respect to such coverage (the “Monthly Fees”). Buyer
\nshall pay such Monthly Fees to RCPC on the first day of each month for which
\ncoverage is provided and shall provide RCPC with a minimum of 30<\/p>\n
76<\/p>\n
days prior written notice when it no longer requires Sellers to provide such
\ncoverage provided the notice period ends on the last day of the calendar month.
\nBuyer shall indemnify and hold Seller Indemnitees harmless from and against all
\nof Seller’s Damages arising out of any medical and dental claims of Affected
\nEmployees relating to the Continuation Period which in the aggregate exceed the
\nrespective medical and dental Monthly Fees paid to RCPC during such month.<\/p>\n
(h) Prior to the Closing Date, Sellers shall, at their option,
\neither (i) take all such action as shall be necessary or appropriate such that
\nthe accrued benefit as of the Closing Date of each Affected Employee under the
\nRevlon Canada Pension Plan (the “Canada Plan”) shall be fully 100% vested and
\nfollowing the Closing Date shall pay benefits under the Canada Plan to Affected
\nEmployees in accordance with the Canada Plan, including, but not limited to,
\ntransferring such accrued benefits to an account designated by any such Affected
\nEmployee or (ii) transfer the assets and liabilities with respect to Affected
\nEmployees in Canada under the Canada Plan to a Group Registered Retirement
\nSavings Plan (the “RRSP”) in accordance with Canadian law. In the event Sellers
\nelect option (ii) specified above, Buyer shall maintain and administer the RRSP
\nestablished by Sellers for a minimum period of 2 years and with a minimum
\nbenefit of 7.5% of salary. For purposes of clause (ii) of this subsection (h),
\naccrued benefits shall be determined using the assumptions and methodologies in
\nthe Canada Plan’s most recent valuation report, including a 8% discount rate and
\na 6% salary scale.<\/p>\n
(i) Prior to the Closing Date, Sellers shall take all such action as
\nshall be necessary or appropriate such that the accrued benefit as of the
\nClosing Date of each Affected Employee under the Revlon South Africa Pension
\nPlan (the “South Africa Plan”) shall be fully 100% vested and following the
\nClosing Date shall pay benefits under the South Africa Plan to Affected
\nEmployees in accordance with the South Africa Plan, including, but not limited
\nto, transferring each Affected Employee’s actuarial reserve under the South
\nAfrica Plan to a plan established by Buyer for the benefit of such Affected
\nEmployees or, if no such plan is established, to an account designated by any
\nsuch Affected Employee, as may be permissible under applicable law. For purposes
\nof this subsection (i), actuarial reserve shall be determined using the
\nassumptions and methodologies in the South Africa Plan’s most recent valuation
\nreport, including a 13% pre-retirement interest, 8% post-retirement interest,
\n11% salary scale and the SA72\/77 mortality table.<\/p>\n
(j) Prior to the Closing Date, Sellers shall take all such action as
\nshall be necessary or appropriate such that the accrued benefit as of the
\nClosing Date of each Affected Employee under the Pension Plan Nationale
\nNederlanden (the<\/p>\n
77<\/p>\n
“Nederlanden Plan”) shall be fully 100% vested and the following the Closing
\nDate shall either (i) if an Affected Employee so elects, permit benefits accrued
\nunder the Nederlanden Plan for such Affected Employee to remain in the
\nNederlanden Plan until such Affected Employee attains age 65, at which time
\nbenefits shall be paid to such Affected Employee, or (ii) transferring each
\nAffected Employee’s accrued benefit to a plan established by the Buyer for the
\nbenefit of such Affected Employees or, if no such plan is established, to an
\naccount designated by such Affected Employee as may be permissible under
\napplicable law. For purposes of this subsection (j), accrued benefits shall be
\ndetermined using the assumptions and methodologies in the Nederlanden Plan’s
\nmost recent valuation report, including a 4% interest rate, Coll ’93 mortality
\ntable, 0% interest discount and the evenredig deel method of back service
\ncalculation.<\/p>\n
(k) Prior to the Closing Date, Sellers shall take all such action as
\nshall be necessary or appropriate such that the accrued benefit as of the
\nClosing Date of each Affected Employee under the Revlon Group Pension Plan (the
\n“Group Pension Plan”) shall be fully 100% vested and following the Closing Date
\nshall either (i) if an Affected Employee so elects, permit benefits accrued
\nunder the Group Pension Plan for such Affected Employee to remain in the Group
\nPension Plan until such Affected Employee attains age 65, at which time benefits
\nshall be paid to such Affected Employee, or (ii) pay all benefits under the
\nGroup Pension Plan to Affected Employees in accordance with the Group Pension
\nPlan including, but not limited to, transferring each Affected Employee’s
\naccrued benefit to a plan established by Buyer for the benefit of such Affected
\nEmployees or, if no such plan is established, to an account designated by such
\nAffected Employee as may be permissible under applicable law. For purposes of
\nthis subsection (k), accrued benefits shall be determined using the assumptions
\nand methodologies in the Group Pension Plan’s most recent valuation report,
\nincluding a 6.5% discount rate, 4% salary scale and 3% Social Security increase.<\/p>\n
(l) In order for the Sellers to administer the Revlon Pension Plans
\nand the Revlon DC Plans, the Sellers UAW DB Plan, the Putnam Flexible 401(k) and
\nProfit Sharing Plan, the Group Pension Plan, the Canada Plan, the Nederlanden
\nPlan and the South Africa Plan following the Closing Date, it is necessary that
\ninformation relating to Affected Employees who participated in such plans prior
\nto the Closing Date be provided to the Sellers by the Buyer, the Acquired
\nCompanies and the Subsidiaries. As such, the Buyer, the Acquired Companies and
\nthe Subsidiaries shall use commercially reasonable best efforts to share
\ninformation with respect to Affected Employees to the extent reasonably
\nnecessary in order to permit compliance by the aforementioned plans with
\nreporting and disclosure requirements under applicable law, or to the extent
\nreasonably necessary or helpful to the administration of such plans.<\/p>\n
78<\/p>\n
(m) On the Closing Date, the Sellers will transfer to the Buyer cash
\nequal to the amount of (i) any Affected Employees’ accrued benefit under the
\nRevlon Foreign Service Employees Pension Plan, on an accumulated benefit
\nobligation basis (calculated in accordance with the actuarial assumptions used
\nfor purposes of the 1999 fiscal year disclosures including a 7.5% discount
\nrate), (ii) any Affected Employee’s accrued benefit under the Amended and
\nRestated Pension Equalization Plan, dated as of December 14, 1998, on an
\naccumulated benefit obligation basis (calculated in accordance with the
\nactuarial assumptions used for purposes of the 1999 fiscal year disclosure),
\n(iii) any Affected Employees’ account balance under the Revlon Executive
\nDeferred Compensation Plan and (iv) any Affected Employees’ account balance
\nunder the Revlon Excess Savings Plan for Key Employees. The Sellers make no
\nrepresentation or warranty as to the tax effect on any Affected Employee of any
\nsuch transfer. Alternatively, if requested by Buyer at or prior to the Closing
\nDate, the Sellers shall cause to be made distributions of benefits under such of
\nthe non-qualified plans referred to in this Section 6.8(m) as shall be
\ndesignated by the Buyer as and when required in accordance with the terms of
\nsuch plans or at such other date following the Closing as Buyer and RCPC shall
\nagree.<\/p>\n
(n) Sellers shall recommend to the Compensation Committee of the
\nBoard of Directors of Revlon that options held by any Affected Employees shall
\nbe provided “retiree treatment” which means they shall continue to vest in
\naccordance with their terms and each award shall remain exercisable until the
\none-year anniversary of the date on which such award is fully vested.<\/p>\n
Section 6.9 Certain Tax Matters.<\/p>\n
(a) Sellers and Mafco Holdings Inc. Tax Indemnification.<\/p>\n
(i) Separate Return Taxes. Sellers shall indemnify Buyer and its
\n Affiliates and hold them harmless from and against any liability for: (A)
\n Income Taxes of the Acquired Companies, the Subsidiaries or the Business,
\n (other than those indemnified for by M&F, as set forth in 6.9(a)(ii) below)
\n for or related to taxable periods ending on or before the Closing Date as
\n determined pursuant to Section 6.9(e)(i), (B) Non-Income Taxes of the
\n Acquired Companies, the Subsidiaries or the Business, for or related to
\n taxable periods ending on or before September 30, 1999 (the “Cut-Off Date”)
\n as determined pursuant to Section 6.9(e)(ii) in excess of the accruals
\n therefor set forth on the September 30, 1999 Statement of Net Assets and
\n (C) interest and penalties incurred as a result of Sellers’ failure to
\n timely file Tax Returns relating to, or to pay, Non-Income Taxes on or
\n before the Closing Date, in each case, net of<\/p>\n
79<\/p>\n
Tax benefit to the Buyer (such Taxes under the preceding clauses (A), (B)
\n and (C), the “Sellers’ Separate Return Taxes”).<\/p>\n
(ii) Consolidated or Combined Taxes. Mafco Holdings Inc., a
\n Delaware corporation (“M&F”) shall indemnify Buyer and its Affiliates and
\n hold them harmless from and against any liability for: (A) Taxes of any
\n member of the “affiliated group” (within the meaning of Section 1504(a) of
\n the Internal Revenue Code of 1986, as amended (the “Code”)) of which M&F
\n (or any predecessor or successor) is the common parent, except for the
\n Taxes related to income of the Acquired Companies and the Subsidiaries,
\n that arise (I) under the provisions of Treasury Regulation Section
\n 1.1502-6(a) (or any successor provision or similar provision under state,
\n local or foreign law), (II) as a transferee or successor, or (III) by
\n contract, and (B) Taxes of the Acquired Companies and the Subsidiaries for
\n taxable periods or portions thereof ending on or before the Closing Date
\n for which the Acquired Companies or the Subsidiaries were included in a
\n consolidated or combined Tax Return of the Sellers or M&F, in each case,
\n net of Tax benefit to the Buyer (such Taxes under preceding clauses (A) and
\n (B), the “Sellers’ Consolidated Group Taxes,” together with the Sellers’
\n Separate Return Taxes, the “Sellers’ Covered Taxes”).<\/p>\n
(iii) Breach by Buyer. Notwithstanding anything in this Agreement
\n to the contrary, neither Sellers nor M&F shall indemnify or hold harmless
\n Buyer or its Affiliates (including without limitation the Acquired
\n Companies and the Subsidiaries after the Closing Date) from or against any
\n liability for Taxes attributable to a breach by Buyer or its Affiliates
\n (including without limitation the Acquired Companies and the Subsidiaries
\n after the Closing Date) of their obligations under this Agreement.<\/p>\n
(iv) Acts of Buyer. Notwithstanding anything in this Agreement to
\n the contrary, neither Sellers nor M&F shall have any liability under this
\n Agreement in respect of Taxes of the Acquired Companies or the Subsidiaries
\n relating to any taxable periods or portions thereof ending after the
\n Closing Date as determined pursuant to Section 6.9(e) which is attributable
\n to any action of Buyer or any of its Affiliates (including, without
\n limitation, the Acquired Companies and the Subsidiaries after the Closing
\n Date) that occurs after the Closing Date.<\/p>\n
(v) Breach by Sellers or M&F. Notwithstanding anything in this
\n Agreement to the contrary, with respect to liabilities for Taxes, Sellers
\n and M&F shall indemnify Buyer and its Affiliates and hold them<\/p>\n
80<\/p>\n
harmless from and against any liability for Taxes attributable to a breach
\n by Sellers or M&F of their obligations under this Agreement.<\/p>\n
(b) Buyer Tax Indemnification.<\/p>\n
(i) Taxes. Buyer shall indemnify Sellers and their Affiliates and
\n hold them harmless from and against any liability for: (A) Income Taxes of
\n the Acquired Companies, the Subsidiaries or the Business, for or related to
\n taxable periods or portions thereof beginning after the Closing Date as
\n determined pursuant to Section 6.9(e)(i) and (B) Non-Income Taxes of the
\n Acquired Companies, the Subsidiaries or the Business, for or related to
\n taxable periods or portions thereof (i) prior to the Cut-Off Date to the
\n extent accrued on the September 30, 1999 Statement of Net Assets and (ii)
\n beginning after the Cut-Off Date determined pursuant to Section 6.9(e)(ii)
\n but excluding any penalties and interest indemnified by Sellers pursuant to
\n Section 6.9(a)(i)(C), in each case, net of any Tax benefit to Sellers or
\n M&F (such Taxes under the preceding clauses (A) and (B), the “Buyer Covered
\n Taxes”).<\/p>\n
(ii) Breach by Buyer. Notwithstanding anything in this Agreement
\n to the contrary, with respect to liabilities for Taxes, Buyer shall
\n indemnify Sellers and M&F and hold them harmless from and against any
\n liability for Taxes attributable to a breach by Buyer or its Affiliates
\n (including, without limitation, the Acquired Companies and the Subsidiaries
\n after the Closing Date) of their obligations under this Agreement.<\/p>\n
(iii) Breach by Sellers or M&F. Notwithstanding anything in the
\n Agreement to the contrary, Buyer shall not indemnify or shall not hold
\n harmless Sellers or M&F from or against any liability for Taxes
\n attributable to a breach by Sellers or M&F of their obligations under this
\n Agreement.<\/p>\n
(iv) Acts of Sellers or M&F. Other than as contemplated by this
\n Agreement, notwithstanding anything in this Agreement to the contrary,
\n neither Buyer nor its Affiliates shall have any liability under this
\n Agreement in respect of Taxes of the Acquired Companies or the Subsidiaries
\n relating to any periods ending on or before the Closing Date, as determined
\n pursuant to Section 6.9(e) which is attributable to any action of Sellers,
\n M&F, the Acquired Companies or the Subsidiaries that occurs on or before
\n the Closing Date.<\/p>\n
81<\/p>\n
(c) Procedures Relating to Tax Indemnification.<\/p>\n
(i) Notice of Tax Claims. If a claim for Taxes, including,
\n without limitation, notice of a pending or threatened audit, shall be made
\n by any taxing authority to the party seeking indemnification (the “Tax
\n Indemnified Party”), which, if successful, could result in an indemnity
\n payment pursuant to this Section 6.9 (a “Tax Claim”), the Tax Indemnified
\n Party shall notify the other party (the “Tax Indemnifying Party”) in
\n writing of the Tax Claim as soon as practicable but in any event not later
\n than 10 days after the receipt or notice of such Tax Claim. If written
\n notice of a Tax Claim is not given to the Tax Indemnifying Party within
\n such 10-day period or in detail sufficient to apprise the Tax Indemnifying
\n Party of the nature of the Tax Claim, the Tax Indemnifying Party shall not
\n be liable to the Tax Indemnified Party to the extent that the Tax
\n Indemnifying Party’s position is prejudiced as a result thereof.<\/p>\n
(ii) Defense of Tax Claims by Tax Indemnifying Party. Any Tax
\n Indemnifying Party will have the right to defend the Tax Indemnified Party
\n against any Tax Claim asserted against the Tax Indemnified Party with
\n counsel of its choice reasonably satisfactory to the Tax Indemnified Party
\n so long as the Tax Indemnifying Party notifies the Tax Indemnified Party in
\n writing within 12 days after the Tax Indemnified Party has given the Tax
\n Indemnifying Party written notice of such Tax Claim. Further, if at any
\n time the settlement of, or an adverse judgment with respect to, such Tax
\n Claim is, in the good faith judgment of the Tax Indemnified Party, likely
\n to establish a precedential custom or practice materially adverse to the
\n continuing business interests of the Tax Indemnified Party, the Tax
\n Indemnified Party may at its election waive its rights to indemnification
\n for such Tax Claim, which waiver will release the Tax Indemnifying Party
\n from its obligation hereunder with respect to, and only with respect to,
\n such Tax Claim.<\/p>\n
(iii) Resolution of Tax Claims. So long as the Tax Indemnifying
\n Party is conducting the defense of the Tax Claim in accordance with Section
\n 6.9(c)(ii) above, (A) the Tax Indemnified Party may retain separate
\n co-counsel at its sole cost and expense and participate in the defense of
\n the Tax Claim, (B) the Tax Indemnified Party will not consent to the entry
\n of any judgment or enter into any settlement with respect to a Tax Claim
\n without the prior written consent of the Tax Indemnifying Party (not to be
\n unreasonably withheld or delayed), and (C) the Tax Indemnifying Party will
\n not consent to the entry of any judgment or enter into any settlement with
\n respect to any Tax<\/p>\n
82<\/p>\n
Claim without the prior written consent of the Tax Indemnified Party (such
\n consent not to be unreasonably withheld or delayed) and, if such consent is
\n unreasonably withheld, the Tax Indemnifying Party’s obligation to indemnify
\n the Tax Indemnified Party with respect to such Tax Claim shall not exceed
\n the amount of such judgment or settlement for which consent was withheld by
\n the Tax Indemnified Party.<\/p>\n
(iv) Defense of Tax Claims by Tax Indemnified Party. In the event
\n that the Tax Indemnifying Party elects not to conduct the defense of the
\n Tax Claim and the Tax Indemnified Party defends such Tax Claim, (A) the Tax
\n Indemnified Party may conduct the defense against and consent to the entry
\n of any judgment or enter into any settlement with respect to such Tax Claim
\n in any manner that it reasonably may deem appropriate, provided, however,
\n that the Tax Indemnified Party will not consent to such judgment or enter
\n into such settlement without the prior written consent of the Tax
\n Indemnifying Party (not to be unreasonably withheld or delayed) and (B) the
\n Tax Indemnifying Party will reimburse the Tax Indemnified Party promptly
\n and periodically for the costs of defending against such Tax Claim
\n (including reasonable attorneys’ fees and expenses).<\/p>\n
(v) Tax Dispute Resolution Mechanism. Any dispute arising in
\n connection with the application of this Section 6.9 shall be submitted to a
\n jointly selected “Big Five” nationally recognized Tax accounting firm (the
\n “Settlement Accountants”) for resolution, which resolution shall be final,
\n conclusive and binding on the parties. Notwithstanding anything in this
\n Agreement to the contrary, the fees and expenses of the Settlement
\n Accountants in resolving a dispute shall be paid by Buyer and Sellers or
\n M&F in proportion to each party’s respective liability for Taxes which are
\n the subject of the dispute as determined by the Settlement Accountants. Any
\n such settlement shall be deemed a final arbitration award that is
\n enforceable pursuant to all terms of the Federal Arbitration Act, 9 U.S.C.
\n ss.ss. 1 et. seq.<\/p>\n
(vi) Survival of Tax Provisions. Any Tax Claim to be made
\n pursuant to this Section 6.9 must be made within a reasonable period of
\n time before the expiration (with valid extensions) of the applicable
\n statutes of limitations relating to the Taxes at issue provided that if
\n claimant complies with Section 6.9(c)(i) and such compliance results in
\n notification being delivered to the Tax Indemnifying Party after the
\n expiration of the applicable statute of limitation, such claim shall
\n survive.<\/p>\n
83<\/p>\n
(vii) Overlap. To the extent that an indemnification obligation
\n pursuant to this Section 6.9 may overlap with an indemnification obligation
\n pursuant to Article IX, the provisions of this Section 6.9 shall govern
\n such indemnification and the party entitled to such indemnification shall
\n be limited to only one of such indemnification payments.<\/p>\n
(viii) Purchase Price Adjustment. All indemnification payments
\n under this Section 6.9 shall be deemed adjustments to the Purchase Price.<\/p>\n
(d) Return Filings, Refunds and Credits.<\/p>\n
(i) Sellers and M&F. Sellers or M&F shall prepare or cause to be
\n prepared and file or cause to be filed (i) all consolidated or combined Tax
\n Returns for Income Taxes of or including the Acquired Companies and the
\n Subsidiaries for all periods ending on or prior to the Closing Date, (ii)
\n all Tax Returns for Income Taxes of or including the Acquired Companies and
\n the Subsidiaries (excluding Tax Returns in Section 6.9(d)(i) above) that
\n are due on or prior to the Closing Date, and (iii) all Tax Returns for
\n Non-Income Taxes of or including the Acquired Companies and the
\n Subsidiaries due on or prior to the Closing Date. Unless required by law or
\n consistent with past practices, M&F will take no position on such returns
\n that relate to the Acquired Companies and the Subsidiaries that would
\n adversely affect the Acquired Companies and the Subsidiaries after the
\n Closing Date. Sellers or M&F will allow Buyer an opportunity to review such
\n Tax Returns for Non-Income Taxes (including any amended returns) accrued on
\n the September 30, 1999 Statement of Net Assets or attributable to Tax
\n periods or portions thereof between the Cut-Off Date and the Closing Date
\n to the extent that they relate solely to the Acquired Companies and the
\n Subsidiaries. Sellers or M&F will prepare in a timely manner, and provide
\n to Buyer, pro forma Tax Returns for the Acquired Companies and the
\n Subsidiaries in the case of any combined, consolidated or unitary Tax
\n Returns that Sellers or M&F are required to file under this Section
\n 6.9(d)(i) and that include any entity other than the Acquired Companies and
\n the Subsidiaries. Buyer will cooperate fully with Sellers or M&F in
\n providing the information in a timely manner and access to books and
\n records necessary to prepare and file such Tax Returns. The Acquired
\n Companies and the Subsidiaries will furnish timely Tax information to M&F
\n for inclusion in M&F’s federal consolidated income Tax Return for any
\n period ending on or before the Closing Date in accordance with the past
\n custom and practice of the applicable Acquired Companies and the
\n Subsidiaries. According<\/p>\n
84<\/p>\n
to past practices and if possible, M&F will include the income of the
\n Acquired Companies and the Subsidiaries (including any deferred income
\n triggered into income by Reg. ss.1.1502-13 and Reg. ss.1.1502-14 and any
\n excess loss accounts taken into income under Reg. ss.1.1502-19) on the M&F
\n consolidated federal income Tax Returns for all periods through the Closing
\n Date and pay any federal income Taxes attributable to such income. Buyer
\n shall pay to Sellers or M&F amounts due under Section 6.9(b) within fifteen
\n days before payment is required by law to be made by Sellers, M&F, the
\n Acquired Companies or the Subsidiaries. Buyer shall receive written notice
\n from Sellers or M&F of the amount of each payment that Buyer must make
\n under the prior sentence within 10 days before Buyer is required to make
\n such payment.<\/p>\n
(ii) Buyer. Buyer shall prepare or cause to be prepared and file
\n or cause to be filed (A) all Tax Returns for Income Tax for the Acquired
\n Companies and the Subsidiaries due for all tax periods beginning after the
\n Closing Date, and (B) all other Tax Returns for the Acquired Companies and
\n the Subsidiaries that are not covered under Section 6.9(d)(i) or Section
\n 6.9(d)(ii)(A) that are to be filed. Buyer will allow Sellers and M&F an
\n opportunity to review and comment upon such Tax Returns (including any
\n amended returns) to the extent that they relate to the Sellers’ Covered
\n Taxes. Sellers or M&F shall reimburse Buyer for Taxes of the Acquired
\n Companies and the Subsidiaries pursuant to Section 6.9(a) within five days
\n before payment by Buyer, the Acquired Companies or the Subsidiaries.<\/p>\n
(iii) Cooperation. Sellers, M&F, the Acquired Companies, the
\n Subsidiaries and Buyer shall reasonably cooperate, and shall cause their
\n respective Affiliates and such parties’ respective directors, officers,
\n employees, agents, auditors and representatives reasonably to cooperate, in
\n preparing and filing all Tax Returns (including claims for refund),
\n including maintaining and making available to each other all records
\n necessary in connection with Taxes and in resolving all disputes and audits
\n with respect to all taxable periods relating to Taxes. Buyer, Sellers and
\n M&F recognize that Sellers, M&F and their Affiliates shall need access,
\n from time to time, after the Closing Date, to certain accounting and Tax
\n records and information held by the Acquired Companies and the Subsidiaries
\n to the extent such records and information pertain to Sellers’ Covered
\n Taxes or Buyer Covered Taxes and to events occurring prior to the Closing
\n Date; therefore, Buyer shall from and after the Closing Date, and shall
\n cause the Acquired Companies, their Affiliates and their successors to
\n (subject to Section 3.1), (A) retain and maintain such records until such
\n time as Sellers and M&F agree in writing (which cannot be<\/p>\n
85<\/p>\n
unreasonably withheld or delayed) that such retention and maintenance is no
\n longer necessary and (B) allow Sellers, M&F and their agents and
\n representatives (and agents and representatives of any of their
\n Affiliates), to inspect, review and make copies of such records as Sellers
\n and M&F may reasonably deem necessary or appropriate from time to time
\n under reasonable circumstances in a reasonable manner at Sellers’ and M&F’s
\n cost. Buyer and Sellers further agree, upon request, to provide the other
\n party with all information that either party may be required to report
\n pursuant to Section 6043 of the Code and all Treasury Regulations
\n promulgated thereunder.<\/p>\n
(iv) Mitigation of Taxes. Buyer and Sellers further agree, upon
\n request, to use their commercially reasonable best efforts to obtain any
\n certificate or other document from any Governmental Entity or any other
\n Person as may be necessary to mitigate, reduce or eliminate any Tax that
\n could be imposed (including, but not limited to, with respect to the
\n transactions contemplated hereby).<\/p>\n
(v) Refunds and Credits.<\/p>\n
(A) Sellers’ Covered Taxes. Any refunds or credits of Taxes
\nof the Acquired Companies or the Subsidiaries to the extent not reflected on the
\nFinal Statement of Net Assets plus any interest received with respect thereto
\nfrom the applicable taxing authority for any Sellers’ Covered Taxes (including,
\nwithout limitation, refunds or credits arising by reason of amended Tax Returns
\nfiled after the Closing Date) shall be for the account of Sellers or M&F and
\nshall be paid by Buyer to Sellers or M&F within 10 days after Buyer receives
\nsuch refund or after the relevant Tax Return is filed in which the credit is
\napplied against Buyer’s, any of its Affiliates’ or any of its successors’
\nliability for Taxes. Sellers or M&F agree to indemnify Buyer, up to the amount
\nreceived by Sellers or M&F pursuant to this Section 6.9(d)(v), for Taxes arising
\nfrom the disallowance of the position taken on a Tax Return by the Buyer that
\nwas the primary determinant for the refund or credit for which the Sellers or
\nM&F were paid under this Section 6.9(d)(v).<\/p>\n
(B) Carryforwards and Carrybacks. M&F will immediately pay
\nto the Buyer any Tax refund (or reduction in Tax liability) resulting from a
\ncarryback of a Tax attribute accrued after the Closing Date of any of the
\nAcquired Companies and the Subsidiaries into the M&F consolidated Tax Return,
\nwhen such refund or reduction is realized by the M&F group. M&F shall use its
\ncommercially reasonable best efforts to cooperate with the Acquired Companies
\nand the Subsidiaries in obtaining such refunds (or reduction in Tax liability),
\nincluding through the filing of<\/p>\n
86<\/p>\n
amended Tax Returns or refund claims. The Buyer agrees to indemnify M&F for any
\nTaxes resulting from the disallowance of such Tax attribute on audit or
\notherwise. Buyer will immediately pay to M&F any Tax refund (or reduction in Tax
\nliability) resulting from a carryforward of a Tax attribute attributable to a
\ntaxable period ending prior to the Closing Date or any adjustments to items of
\nincome, gain, loss, deductions or credits arising in a taxable period ending
\nprior to the Closing Date which give rise to, or result in, a corresponding
\nadjustment in such items in periods after the Closing Date of the Acquired
\nCompanies or the Subsidiaries when such refund or reduction is realized by
\nBuyer, the Acquired Companies or the Subsidiaries, provided, however, that Buyer
\nwill not be required to pay M&F or Sellers for any benefits resulting from
\nutilization of net operating losses of Revlon S.L. generated prior to the
\nClosing Date. Buyer, the Acquired Companies and the Subsidiaries, shall use
\ntheir respective commercially reasonable best efforts to cooperate with M&F in
\nobtaining such adjustments, refunds (or reduction in Tax liability), including,
\nwithout limitation, through the filing of amended Tax Returns or refund claims.
\nM&F agrees to indemnify Buyer for any Taxes resulting from the disallowance of
\nsuch Tax attribute or adjustment on audit or otherwise.<\/p>\n
(e) Allocation and Apportionment of Taxes.<\/p>\n
(i) Income Taxes. For purposes of determining the liability of
\n Sellers, M&F or Buyer pursuant to Section 6.9(a)(i)(A) or Section
\n 6.9(b)(i)(A), or as otherwise set forth in this Agreement or where
\n applicable even if not indicated, in the case of Income Taxes that are
\n payable for a taxable period that includes (but does not end on) the
\n Closing Date, the Tax shall be allocated between the portion of such
\n taxable period ending on the Closing Date and the portion of such taxable
\n period beginning after the Closing Date on an interim closing of the books
\n method.<\/p>\n
(ii) Non-Income Taxes. For purposes of determining the liability
\n of Sellers, M&F or Buyer pursuant to Section 6.9(a)(i)(B) or Section
\n 6.9(b)(i)(B), or as otherwise indicated in this Agreement or where
\n applicable even if not indicated, in the case of Non-Income Taxes that are
\n imposed on a periodic basis and that are payable for a taxable period that
\n includes (but does not end on) the Cut-Off Date, the portion of such Tax
\n which is related to the taxable period ending on the Cut-Off Date shall be
\n determined by multiplying the entire Tax for the period by a fraction, the
\n numerator of which is the number of days in the taxable period ending on
\n the Cut-Off Date and the denominator of which is the number of days in the
\n entire taxable period, and the portion of such Tax which is related to the
\n taxable period beginning after the Cut-Off Date<\/p>\n
87<\/p>\n
shall be determined by multiplying the entire Tax for the period by a
\n fraction, the numerator of which is the number of days in the taxable
\n period from the Cut-Off Date through the last day of the entire taxable
\n period and the denominator of which is the number of days in the entire
\n taxable period.<\/p>\n
(iii) Method of Allocation. All determinations necessary to give
\n effect to the foregoing allocations shall be made in a manner consistent
\n with prior practice of the Acquired Companies and the Subsidiaries.<\/p>\n
(f) Elections. Except as otherwise specifically provided in this
\nAgreement, or as required by law, Buyer shall not, and shall cause the Acquired
\nCompanies or the Subsidiaries not to make, amend or revoke any election or
\nchange any method of Tax accounting with respect to Taxes, if such action would
\nadversely affect the Tax liability or refund of any member of the affiliated
\ngroup, as defined in Section 1504(a) of the Code, of which Sellers are a member
\n(the “Sellers Affiliated Group”) in any taxable period or increase the Sellers’
\nor M&F’s indemnification obligation pursuant to Section 6.9(a).<\/p>\n
(g) Exclusivity. This Section 6.9 shall be the sole provision
\ngoverning the retention of records of the Acquired Companies or the Subsidiaries
\nand the procedures for all indemnification claims, in each case with respect to
\nTaxes.<\/p>\n
(h) Tax Sharing Agreements. Any and all existing agreements relating
\nto the allocation and sharing of Taxes (the “Tax Sharing Agreements”),
\nincluding, without limitation, the M&F Group Tax Sharing Agreement, between the
\nAcquired Companies or the Subsidiaries and any member of the Sellers Affiliated
\nGroup shall be terminated as of the end of the Closing Date. After the Closing
\nDate, none of the Acquired Companies or the Subsidiaries nor any member of the
\nSellers Affiliated Group shall have any further rights or obligations under any
\nsuch Tax Sharing Agreement.<\/p>\n
(i) Allocation of Purchase Price. The Buyer and Sellers hereby agree
\nthat the Purchase Price, including any adjustments thereto, will be allocated
\n(i) to the Acquired Assets and the shares of Revlon Coiffure in an amount equal
\nto the estimated net book value of each of the Acquired Assets and the shares of
\nRevlon Coiffure as of the Closing Date; (ii) U.S. $9,990,000 to the License
\nAgreement (Revlon Marks); (iii) U.S. $10,000 to the one-percent (1.0%) interest
\nin RPHC to be acquired by Buyer or its Affiliates; and (iv) the remainder of the
\nPurchase Price, after subtracting the amounts determined under (i), (ii) and
\n(iii) of this sentence, to be allocated sixty percent (60%) to the shares of
\nRoux and Fermodyl, together with the<\/p>\n
88<\/p>\n
Subsidiaries owned directly and indirectly by Roux, and forty percent (40%) to
\nthe shares of Revlon S.L., together with the Subsidiaries owned directly and
\nindirectly by Revlon S.L. The Buyer and Sellers will make all reasonable best
\nefforts to duly execute Bills of Sale in connection with the transfer of the
\nAcquired Assets in a manner consistent with such Purchase Price allocation, upon
\nthe Closing Date. Sellers and Buyer shall (A) be bound by the allocation
\ndetermined pursuant to this paragraph for purposes of determining all Taxes; (B)
\nprepare and file all Tax Returns in a manner consistent with such allocation;
\nand (C) take no position inconsistent with such allocation in any Tax Return or
\nin any proceeding before any taxing authority. In the event that such allocation
\nis disputed by any taxing authority, the party receiving notice of such dispute
\nshall promptly notify and consult with the other party or parties hereto
\nconcerning resolution of such dispute. To the extent that the allocation to the
\nshares of Revlon S.L., together with the Subsidiaries owned directly and
\nindirectly by Revlon S.L., in clause (iv) of the first sentence of this section
\nwould exceed U.S. $100,000,000, Buyer and Sellers agree that U.S. $100,000,000
\nwill be allocated to the shares of Revlon S.L., together with the Subsidiaries
\nowned directly and indirectly by Revlon S.L., and the remainder of the purchase
\nprice (after subtracting such amount and the amounts determined under clauses
\n(i), (ii) and (iii) of the first sentence of this section) will be allocated to
\nthe shares of Roux and Fermodyl, together with the Subsidiaries owned directly
\nand indirectly by Roux and Fermodyl, unless Buyer elects to apply the provisions
\nof such clause (iv), in which event Buyer shall indemnify Sellers for any
\nadditional tax cost incurred in connection with the allocation of more than U.S.
\n$100,000,000 of the Purchase Price to the shares of Revlon S.L. and Sellers’
\nrepatriation of amounts in excess of U.S. $100,000,000 (to the extent allocable
\nto the shares of Revlon S.L. together with the subsidiaries owned directly and
\nindirectly by Revlon S.L.) from the proceeds of this transaction to the United
\nStates.<\/p>\n
(j) Conveyance Taxes. Notwithstanding any other provision of this
\nAgreement to the contrary (i) except as provided in Section 6.9(j)(ii) and
\nSection 6.9(j)(iii) each of the Buyer and the Sellers shall pay, or cause to be
\npaid one-half of sales, use, transfer, stamp, duties, gains, recording and
\nsimilar Taxes (collectively “Conveyance Taxes”), arising pursuant to this
\nAgreement and the transactions contemplated hereby, but not including the
\nRestructuring, (ii) Buyer shall pay or cause to be paid all VAT incurred
\npursuant to this Agreement, and the transactions contemplated hereby, other than
\nthe Restructuring, and (iii) Buyer shall pay or cause to be paid all VAT imposed
\nin connection with the Restructuring but only to the extent recoverable by
\nBuyer, all as imposed in accordance with the laws or customs of the applicable
\njurisdiction.<\/p>\n
(k) Section 338 Election.<\/p>\n
89<\/p>\n
(i) Buyer shall timely make the election provided for by Section
\n 338 of the Code and Section 1.388-1 of the Treasury Regulations on Form
\n 8023 and any comparable election under state or local tax law
\n (collectively, the “Election”) for each of the foreign Acquired Companies.
\n Buyer and Sellers shall cooperate with each other to take all actions
\n necessary and appropriate (including filing such additional forms, returns,
\n elections, schedules and other documents as may be required to effect and
\n preserve a timely Election in accordance with the provisions of Section 338
\n of the Code and Section 1.338-1 of the Treasury Regulations (or any
\n comparable provisions of state or local tax law) or any successor
\n provisions. Sellers and Buyer shall report the purchase by Buyer of the
\n Shares pursuant to this Agreement consistent with the Election and shall
\n take no position inconsistent therewith in any Tax Return, any proceeding
\n before any taxing authority or otherwise.<\/p>\n
(ii) Notwithstanding anything in this Agreement to the contrary,
\n Buyer shall indemnify and hold harmless Sellers and M&F for any and all
\n Incremental Tax Liability of Sellers and M&F (as defined below) resulting
\n from the Election. As used herein, the term “Incremental Tax Liability of
\n Sellers and M&F” shall mean the excess of the Sellers’ and M&F’s actual
\n liability for Taxes over what the Sellers’ and M&F’s liability for Taxes
\n would have been if no Election had been made. Sellers and M&F shall provide
\n to Buyer, in a timely manner, the calculation of Tax liability if no
\n Election had been made. If the parties cannot agree on such calculation,
\n the parties shall utilize the dispute resolution procedures set forth in
\n ss. 6.9(c)(v).<\/p>\n
Section 6.10 Supplemental Disclosure. Sellers, on the one hand, and
\nBuyer, on the other hand, shall have the right from time to time prior to the
\nClosing to supplement or amend the Disclosure Letter with respect to only those
\nevents which arise after the date hereof which if existing at the date of this
\nAgreement would have been required to be set forth or described in such
\nDisclosure Letter. Any such supplemental or amended disclosure shall be deemed
\nto have cured any breach of any representation or warranty made in this
\nAgreement for purposes of Article IX to the extent of such breach as a result of
\nthe non-disclosure of such fact or event, but shall not be deemed to have cured
\nany such breach made in this Agreement and to have been disclosed as of the date
\nof this Agreement for purposes of determining whether the conditions set forth
\nin Article VII hereof have been satisfied.<\/p>\n
Section 6.11 Licensing Arrangements.<\/p>\n
90<\/p>\n
(a) Upon the Closing Date, Sellers and their Affiliates and Buyer or
\none or more of the Acquired Companies or the Subsidiaries shall execute and
\ndeliver the following Intellectual Property license agreements whereby Buyer
\nshall obtain rights to use the Licensed Intellectual Property:<\/p>\n
(i) the License Agreement (COLORLOCK);<\/p>\n
(ii) the Patent and Formula and Know-How License Agreement
\n (Revlon to Buyer); and<\/p>\n
(iii) the License Agreement (Revlon Marks).<\/p>\n
(b) Upon the Closing Date, Sellers and their Affiliates and Buyer
\nand one or more of the Acquired Companies or the Subsidiaries shall execute and
\ndeliver the following Intellectual Property license agreements whereby Sellers
\nshall obtain the rights to use certain Acquired Companies Intellectual Property
\nand\/or Acquired Intellectual Property:<\/p>\n
(i) the License Agreement (INTERACTIVES).<\/p>\n
(c) Upon the Closing Date, Sellers and their Affiliates and Buyer
\nand one or more of its Affiliates shall execute and deliver (i) the Toiletries
\nAgreement, (ii) the Cosmetics Agreement, (iii) the South Africa Agreement, (iv)
\nthe Natural Honey Agreement and (v) the Charlie Agreement.<\/p>\n
(d) As soon as practicable after the Closing Date, but no later than
\nsixty (60) days after the Closing Date, Buyer shall, or shall cause the Acquired
\nCompanies to, change their corporate names, trade names and “d\/b\/a’s” to delete
\ntherefrom the Revlon Marks, including the Licensed Revlon Marks and to adopt new
\ncorporate names, trade names, and “d\/b\/a’s” that do not include the Revlon
\nMarks, or any word or phrase confusingly similar thereto (including without
\nlimitation any contractions, abbreviations or variations thereof).<\/p>\n
(e) Buyer and Sellers hereby agree that (i) the License Agreement
\n(Revlon Marks) is an integral part of the Business and (ii) damages to Buyer and
\nits Affiliates in connection with any early termination, invalidation or other
\nimpairment of the License Agreement (Revlon Marks) shall not be limited to, or
\ndefined by, the allocation set forth in Section 6.9(i).<\/p>\n
91<\/p>\n
Section 6.12 Transitional Use of Excluded Intellectual Property Rights.<\/p>\n
(a) Other than as permitted under Section 6.11(d) hereof, the
\nLicense Agreements set forth in Section 6.11 above, or any other license granted
\nto Buyer, and as follows under this Section, from and after the Closing Date,
\nBuyer shall and shall cause the Acquired Companies and the Subsidiaries to cease
\nall use of all trademarks and other Intellectual Property of Sellers and their
\nAffiliates (other than the Business Intellectual Property).<\/p>\n
(b) Notwithstanding the foregoing, except to the extent that the
\nsubject matter is covered in the License Agreements set forth under Section 6.11
\nabove, Sellers hereby grant to Buyer, effective upon the Closing, a
\nnon-exclusive, royalty-free, worldwide right and license under the Intellectual
\nProperty Rights of Sellers which are not included in the Acquired Assets or
\nAcquired Companies’ Intellectual Property (the “Sellers Intellectual Property
\nRights”), and which are embodied in any stationery, business cards, internal
\ndocuments in general circulation such as employee manuals, advertising and
\npromotional materials, and inventory which is in existence at Closing and is
\nbeing used in the conduct of the Business (“Business Materials”). Such license
\nshall be solely for the purpose of continuing to use such Business Materials in
\nthe conduct of the Business for transitional purposes and shall run for the
\nshorter of (i) the Buyer’s exhaustion of the stock of Business Materials and
\n(ii) twelve (12) months after the . The Business Materials shall be used solely
\nin the form and consistent with the manner in which such Business Materials have
\nbeen used in the Business as of September 30, 1999.<\/p>\n
(1) All rights and goodwill arising from the use of the Sellers
\n Intellectual Property Rights shall inure solely to Sellers’ benefit. Buyer
\n and its Affiliates shall have no interest in the Sellers Intellectual
\n Property Rights, except as expressly provided in this Agreement (or in any
\n other license agreements between the parties), and neither Buyer nor its
\n Affiliates shall claim any other rights therein.<\/p>\n
(2) Buyer shall assist Sellers in protecting and maintaining
\n Sellers’ rights in the Sellers Intellectual Property Rights, including the
\n execution of documents necessary or appropriate to register the Sellers
\n Intellectual Property Rights and\/or record this Agreement. As between the
\n parties, Sellers shall have the sole right to, and in their sole discretion
\n may, commence, prosecute or defend, control, and settle any action
\n concerning the Sellers Intellectual Property Rights.<\/p>\n
92<\/p>\n
(3) Buyer agrees to maintain the quality of the Business (e.g.,
\n products and services, advertising) which is conducted in connection with
\n the Business Materials at a level that meets or exceeds those standards
\n maintained by the Sellers and Sellers’ Affiliates as of the Closing Date.<\/p>\n
(4) Buyer’s rights under this license are personal and may not be
\n sublicensed, assigned, or otherwise transferred.<\/p>\n
(5) Buyer and its Affiliates shall indemnify, defend and hold
\n harmless Sellers and their Affiliates, and their respective officers,
\n directors, shareholders, employees, and agents from any Liability arising
\n out of or resulting from use of the Business Materials by or on behalf of
\n Buyer or its Affiliates. Such indemnification, defense, and hold harmless
\n rights shall be exercised in accordance with the indemnification procedures
\n contained in Article IX of this Agreement and shall be in addition to any
\n other indemnification available hereunder or under any other agreement
\n between the parties.<\/p>\n
(6) Upon termination of the license granted under Section
\n 6.12(b), Buyer shall immediately cease use of the Sellers’ Intellectual
\n Property Rights (except to the extent permitted under any other license
\n agreement between the parties), and either destroy, or obliterate the
\n Sellers’ Intellectual Property Rights on, all Business Materials.<\/p>\n
Section 6.13 Insurance; Risk of Loss. The Sellers shall keep, or cause
\nto be kept, all current insurance policies including self insurance programs
\nrelating to the Business and the Acquired Companies and the Subsidiaries
\n(including those set forth in Section 4.21 of the Disclosure Letter), or
\nreplacements therefor, in full force and effect through the close of business on
\nthe Closing Date. As of the close of business on the Closing Date, the Sellers
\nshall terminate or cause their Affiliates to terminate all coverage, including
\nwithout limitation, self-insurance programs, relating to the Business and the
\nAcquired Companies and the Subsidiaries and their respective businesses, assets,
\nand employees under the general corporate policies of insurance of the Sellers
\nor its Affiliates for the benefit of all their controlled Affiliates, including
\nthe Acquired Companies and the Subsidiaries; provided, however, that (i) no such
\ntermination of any occurrence based policy in force as of the Closing Date shall
\nbe effected so as to prevent the Acquired Companies and the Subsidiaries from
\nasserting a claim under such policies, subject to all policy deductibles, self
\ninsured retention policy limits and all<\/p>\n
93<\/p>\n
other terms and conditions thereof, for losses from events occurring prior to
\nthe Closing Date to the extent that Revlon’s Risk Management department shall
\nhave received written notice related to such events; (ii) no such termination of
\nany “claims made” policy in force as of the Closing Date shall be effected so as
\nto prevent the Acquired Companies and the Subsidiaries from asserting a claim
\nunder such policies, to the extent that such claim was filed with the applicable
\ninsurer prior to the Closing Date, subject to all policy limits and all other
\nterms and conditions thereof, for losses from events occurring prior to the
\nClosing Date to the extent Revlon’s Risk Management department shall have
\nreceived written notice related to such events. The Sellers and Buyer shall
\njointly notify each applicable insurance company for any claims made prior to
\nthe Closing Date. In order to remove or release Sellers from standby irrevocable
\nletter of credit obligations maintained by the Sellers for the Business as a
\nresult of applicable law requirements, Buyer shall at its expense establish and
\nmaintain standby irrevocable letters of credit in respect to the Business and
\nthe Affected Employees from and after the Closing Date.<\/p>\n
Section 6.14 Separation of the Business from Sellers.<\/p>\n
(a) Sellers, at their sole expense, shall take (and shall cause
\ntheir Affiliates to take) all actions necessary prior to the Closing to separate
\nthe Acquired Assets and the Assumed Liabilities from the other businesses,
\nassets and operations, Excluded Assets and Excluded Liabilities of Sellers and
\ntheir Affiliates and that after the Closing, Sellers, at their sole expense
\nshall, including upon the reasonable request of Buyer, take (and shall cause
\ntheir Affiliates to take), all action necessary to transfer to Buyer or one of
\nits Affiliates, the Acquired Companies or the Subsidiaries as requested by
\nBuyer, the Acquired Assets and the Assumed Liabilities but which have not been
\ntransferred or assumed at or prior to the Closing and which were not
\nspecifically excluded as Excluded Assets or Excluded Liabilities and Buyer shall
\naccept or assume, as the case may be, such assets or liabilities. Buyer shall,
\nupon the reasonable request of Sellers and at the sole cost of Sellers, take all
\naction necessary to transfer (or cause one of the Acquired Companies and the
\nSubsidiaries to transfer) to Sellers or any of their Affiliates, as requested by
\nSellers, any Excluded Assets and Excluded Liabilities (in each case, to the
\nextent not reflected on the Final Statement of Net Assets), but which have been
\ntransferred to or are held by Buyer, one of the Acquired Companies or the
\nSubsidiaries and Sellers shall accept or assume, as the case may be, such assets
\nor liabilities.<\/p>\n
(b) To the extent any of the agreements or any other contracts used
\nexclusively or primarily in the Business, or any of the Acquired Assets,
\nincluding the Company Permits, would terminate or be terminable at the election
\nof another<\/p>\n
94<\/p>\n
Person or would be breached if assigned to one of the Acquired Companies or the
\nSubsidiaries as part of the Restructuring or assigned or transferred as part of
\nthe transactions contemplated by this Agreement (including the separation of any
\nagreement or contract used jointly by the Business and any of the Sellers and
\ntheir Affiliates), as the case may be, without the consent of another Person,
\nthis Agreement shall not be deemed to require an assignment or an attempted
\nassignment thereof if such consent shall not have been obtained prior to the
\nRestructuring or the Closing, as the case may be. Except as otherwise provided
\nherein, Sellers shall (at Sellers’ sole expense) use their commercially
\nreasonable best efforts and Buyer (at Sellers’ sole expense) agrees to cooperate
\nwith Sellers, to obtain the consent of each such Person to such assignment prior
\nto the Closing. If such consent is not obtained at or prior to the Closing,
\nSection 6.4(b) shall apply and, until and unless such consent is obtained (but
\nnot beyond the term thereof, including any renewals permitted to Sellers), in
\nany reasonable arrangements which are permitted under such agreements or
\ncontracts or with respect to the Acquired Assets, designed to provide to one of
\nthe Acquired Companies or the Subsidiaries as designated by Buyer after the
\nClosing the benefits under any such contract or agreement or with respect to the
\nAcquired Assets, including by consenting to the enforcement by Buyer or one of
\nthe Acquired Companies or the Subsidiaries in Sellers’ name (as the case may be)
\nof any and all rights of Sellers against each other party thereto. The Sellers
\nshall promptly (but no later than 15 business days after receipt) pay to the
\nBuyer, when received, all monies received by the Sellers under any such contract
\nor agreement or with respect to the Acquired Assets or any benefit arising
\nthereunder. Sellers shall use their commercially reasonable best efforts to
\ncollect full payment from their customers under such contracts and agreements.
\nTo the extent that Buyer is provided the benefits, pursuant to this Section
\n6.14, of any contract or agreement or with respect to the Acquired Assets, Buyer
\nshall perform for the benefit of the other party or parties thereto, the
\nobligations of Sellers thereunder or in connection therewith, and if Buyer shall
\nfail to materially perform to the extent required herein, Sellers shall cease to
\nbe obligated under this Section 6.14 in respect of the item which is the subject
\nof such failure to perform and subject to Sellers’ compliance with this Section
\n6.14 with respect thereto Buyer shall indemnify Sellers from any claims arising
\nout of such non-performance. If Sellers shall have complied with their
\nobligations under this Section 6.14, the inability to secure the consent to the
\nassignment thereof shall not constitute a breach of any of Sellers’
\nrepresentations, covenants or obligations under this Agreement and Sellers shall
\nhave no Liability with respect thereto other than their obligations under this
\nSection 6.14.<\/p>\n
(c) Sellers shall pay all search, filing, application, prosecution
\nand registration costs, fees and expenses (including attorneys’ and agents’ fees
\nand expenses) for the registration of Licensed Revlon Marks in an amount not to
\nexceed<\/p>\n
95<\/p>\n
U.S. $1,000,000. Buyer, the Acquired Companies and\/or the Subsidiaries shall be
\nresponsible for such amounts in excess of U.S. $1,000,000 and for all search,
\nfiling, application, prosecution, registration and maintenance costs, fees and
\nexpenses (including attorneys’ and agents’ fees and expenses) incurred
\nthereafter in connection with the Licensed Marks throughout the term of the
\nLicense Agreement (Revlon Marks).<\/p>\n
Section 6.15 Guarantees and Other Commitments.<\/p>\n
(a) Prior to the Closing, Sellers shall use commercially reasonable
\nbest efforts (except neither shall be required to commence any litigation or
\nproceedings in connection therewith) to cause Sellers and their Affiliates
\n(other than any of the Acquired Companies and the Subsidiaries) to be released,
\neffective as of the Closing, from any and all obligations for or Liability under
\nthe guarantees, letters of comfort or other contractual commitments of Sellers
\nand their Affiliates (other than any of the Acquired Companies and the
\nSubsidiaries), listed in Section 6.15 of the Disclosure Letter to the extent
\nrelated to the Business, the Acquired Assets, the Acquired Companies or the
\nSubsidiaries (individually, a “Guaranty” and collectively, the “Guarantees”);
\nprovided that Sellers agree that in no event shall the terms and conditions of
\nany Material Agreements be amended or altered (other than the release of such
\nGuarantees).<\/p>\n
(b) With respect to any Guarantees as to which Sellers and their
\nAffiliates are not released prior to the Closing, notwithstanding Sellers’
\nefforts pursuant to subsection (a) hereof, Buyer shall, at Sellers’ sole
\nexpense, use commercially reasonable best efforts to secure the written
\nagreement of such third Persons releasing Sellers and their Affiliates (other
\nthan any of the Acquired Companies and the Subsidiaries) from any Liability
\nunder such Guarantees arising out of products sold, transactions occurring,
\ncredit extended or other obligations or liabilities accruing on or after the
\nClosing Date; provided that nothing herein shall require Buyer to amend or alter
\nany Material Agreement (other than the release of such Guarantee under such
\nagreement).<\/p>\n
(c) With respect to any Guarantee as to which (i) Sellers and their
\nAffiliates are not released prior to the Closing, and (ii) a written agreement
\nhas not been secured pursuant to Section 6.15(b), Buyer and its Affiliates shall
\nrefrain from either increasing the scope of its commitments thereunder or
\nexercising a renewal option or otherwise extending the term of any Guaranteed
\ncommitment without first obtaining a Guaranty release therefor.<\/p>\n
96<\/p>\n
(d) In the event that Buyer transfers a Guaranteed commitment to a
\nthird party, such third party shall expressly agree to be subject to the
\nobligations of Buyer set forth in this Section 6.15.<\/p>\n
(e) Buyer shall indemnify, defend and hold harmless the Sellers from
\nand against any claim or loss (i) arising from and after the Closing Date under
\nany Guarantees, and (ii) related to any commitments of Sellers or their
\nAffiliates referred to in Section 6.15(c), in each case with respect to Products
\nsold, transactions occurring or other obligations or liabilities (A) accruing on
\nor after the Closing Date, (B) accruing prior to the Closing Date to the extent
\nthe underlying obligation or Liability is an Assumed Liability, or (C) of the
\nAcquired Companies or the Subsidiaries other than Excluded Liabilities.<\/p>\n
Section 6.16 Exclusivity. Except as disclosed in Section 6.16 of the
\nDisclosure Letter (Restructuring), until consummation of the transactions
\ncontemplated hereby or the termination of this Agreement pursuant to Article
\nVIII, none of the Sellers nor any of their respective Affiliates, or their
\nrespective representatives, officers, employees, directors or agents will (and
\nthe Sellers shall cause the Acquired Companies and its Subsidiaries not to)
\ndirectly or indirectly, (i) submit, solicit, initiate or discuss any proposal or
\noffer from any Person or enter into any agreement or accept any offer relating
\nto any (a) reorganization, liquidation, dissolution, or recapitalization of any
\nof the Acquired Companies, the Subsidiaries or the Business, (b) merger or
\nconsolidation involving any of the Acquired Companies, the Subsidiaries and the
\nBusiness, (c) purchase or sale of any assets or capital stock (other than a
\npurchase or sale of inventory and equipment in the ordinary and usual course of
\nbusiness consistent with past practice) of any of the Acquired Companies or the
\nSubsidiaries or (d) similar transaction or business combination involving any of
\nthe Acquired Companies, the Subsidiaries, the Business and the assets of any of
\nthem (other than purchases or sales of inventory and equipment in the ordinary
\nand usual course of business consistent with past practice) (each of the
\nforegoing actions described in clauses (a) through (d), a “Company Transaction”)
\nor (ii) furnish any information with respect to, assist or participate in or
\nfacilitate in any other manner any effort or attempt by any Person to do or seek
\nto do any of the foregoing. The Sellers agree to notify the Buyer immediately if
\nany Person makes any proposal, offer, inquiry, or contact with respect to a
\nCompany Transaction.<\/p>\n
Section 6.17 Noncompete and Nonsolicitation. In further consideration
\nof the transactions contemplated by this Agreement:<\/p>\n
97<\/p>\n
(a) During the period from the Closing Date to and including the
\nfifth anniversary of the Closing Date (the “Noncompete Period”), (i) the Sellers
\nand their Affiliates shall not and (ii) the Sellers shall not have, and shall
\ncause their Affiliates, successors and assigns not to have, any affiliation (as
\ndefined below) with any Person, anywhere in the world which owns, operates or
\nfranchises any Professional Salon or Spa, excluding Reserved Spas as defined in
\nthe License Agreement (Revlon Marks), or which manufactures, markets,
\ndistributes or sells:<\/p>\n
(i) Professional Products to the Professional Field (each as
\n defined in the License Agreement (Revlon Marks)), other than the
\n manufacture, marketing, distribution or sale of (A) Professional Products
\n (other than Hair Care Products and Nail Care Products each as defined in
\n the License Agreement (Revlon Marks)), to Reserved Spas and (B) products
\n under the “Gatineau” or “Ultima II” brands to the extent Sellers conduct
\n any of such activities pursuant to this subclause (i) (B) on or prior to
\n the Closing Date;<\/p>\n
(ii) retail or professional Ethnic Products including Hair
\n Relaxer Products (each, as defined in the License Agreement (Revlon
\n Marks));<\/p>\n
(iii) retail permanent hair waves and retail temporary hair color
\n rinses, provided that this clause (iii) shall continue to apply upon
\n expiration of the Non-Compete Period and until the seventh anniversary of
\n the Closing with respect to retail temporary hair color rinses under the
\n “Revlon” brand name or a derivative thereof;<\/p>\n
(iv) Skin Care Products (as defined in the License Agreement
\n (Revlon Marks)) and Natural Honey Products (as defined in the Patent
\n Formula and Know-How License Agreement (Revlon to Buyer)) in each case
\n marketed or advertised as containing honey, other than the manufacture,
\n marketing, distribution or sale of the “Dry Skin Relief” brand in Ireland,
\n the United Kingdom, Puerto Rico and South Africa; provided that, nothing
\n herein shall be construed to permit the Sellers and their Affiliates to,
\n and the Sellers and their Affiliates hereby agree not to, export any “Dry
\n Skin Relief” brand from such jurisdictions; and<\/p>\n
(v) Skin Care Products (excluding Facial Skin Care Products and
\n other than those Skin Care Products containing or marketed or advertised as
\n containing honey which are covered by Section 6.17(a)(iv)), other than
\n products sold under existing brands of Sellers in the jurisdictions and to
\n the<\/p>\n
98<\/p>\n
extent Sellers conduct any of such activities on or prior to the Closing
\n Date (the “Current Skin Care Products”); provided that this clause (v)
\n shall continue to apply upon the expiration of the Non-Compete Period and
\n until the seventh anniversary of the Closing except with respect to Current
\n Skin Care Products and products that would otherwise be covered by this
\n clause (v) that are distributed in containers that are 200 ml or less,
\n provided further that this clause (v) shall not apply to Skin Care Products
\n sold exclusively in the United States and its territories and possessions.<\/p>\n
(b) During the period from the Closing Date to and including 18
\nmonths following the later of the termination of the sales services or
\nmanufacturing services under the South Africa Agreement, the Sellers shall not,
\nand shall cause their Affiliates, successors and assigns not to, nor shall they
\nhave any affiliation with any Person who, directly or indirectly, manufactures,
\nmarkets, distributes or sells Ethnic Products as defined in the License
\nAgreement (Revlon Marks) in South Africa.<\/p>\n
Each of the activities described in Section 6.17(a) or 6.17(b) above shall be a
\n“Buyer Competitive Activity”.<\/p>\n
(c) For so long as the License Agreement (Revlon Marks) remains in
\nfull force and effect, Sellers shall not distribute, manufacture, market,
\nadvertise or sell (i) Skin Care Products or Natural Honey Products marketed or
\nadvertised as containing honey, (ii) the “Dry Skin Relief” brand (other than in
\nIreland, the United Kingdom, Puerto Rico and South Africa, so long as subsequent
\nto the expiration of the Non-Compete Period, it is not marketed or advertised
\nunder the “Revlon” brand name or a derivative thereof or exported from such
\njurisdictions), (iii) body lotion products and for a period of seven years
\nfollowing the Closing, bath gels, body splashes, deodorant, waxes, and body oils
\nin a “D” shaped bottle similar to that used for products marketed or advertised
\nby Sellers or their Affiliates under the “Natural Honey” brand on the date
\nhereof, provided that this clause (iii) shall not apply to Skin Care Products or
\nNatural Honey Products sold exclusively in the United States, its territories
\nand possessions or restrict activities permissible under clause (ii).<\/p>\n
(d) Nothing contained in Section 6.17 shall prohibit the Sellers
\nfrom entering into arm’s length agreements with third parties who distribute
\nproducts other than the Sellers’, whose products would otherwise be competitive
\nwith the products of the Business, with respect to the manufacture,
\nadvertisement, promotion, distribution or sale of Sellers’ products that are not
\nincluded in the Business or purchasing, in the aggregate, up to an aggregate of
\n5% of any class of the outstanding voting securities of any Person whose
\nsecurities are listed on a national securities<\/p>\n
99<\/p>\n
exchange or traded in the NASDAQ national market system (a “Public Company”)
\n(including, for purposes of calculating the percentage of such securities which
\nmay be purchased by the Sellers, the securities of such Public Company then
\nowned by all Affiliates of the Sellers to the extent such Persons are acting in
\nconcert or otherwise constitute a “group” for purposes of Section 13(d)(3) of
\nthe Securities Exchange Act of 1934, as amended), if the Sellers do not have an
\nactive role in the management of such Public Company (it being understood that
\nthe exercise of voting rights with respect to any such voting securities, in and
\nof itself, shall not constitute such a role).<\/p>\n
(e) The provisions of this Section 6.17 shall not restrict the
\nactions of any Person that acquires, merges with, or engages in a business
\ncombination with, any Sellers, so long as the action that would otherwise
\nconstitute a Buyer Competitive Activity is not conducted by or through any one
\nor more of the Sellers and their Affiliates (other than any affiliation that has
\nresulted from such transaction) and does not use any tangible or intangible
\nassets of Sellers.<\/p>\n
(f) For purposes of this Section 6.17, the term “affiliation” shall
\nmean any direct or indirect interest in a Person whether as an officer,
\ndirector, employee, investor, stockholder, partner, member, joint venturer, sole
\nproprietor, trustee, consultant, agent, representative, broker, promoter or
\notherwise; and<\/p>\n
(g) Except to the extent contemplated by the Cosmetics Agreement,
\nfrom and after the Closing Date, until the second anniversary of the Closing
\nDate, the Sellers, on the one hand, and the Buyer, on the other hand, shall not
\n(and shall cause their respective Affiliates, successors and assigns not to) (a)
\ninduce or attempt to induce in the case of Sellers any employee of the Business,
\nthe Acquired Companies or the Subsidiaries or in the case of Buyer any employee
\nof RCPC or any of its Affiliates to leave the employ of such Person, (b) hire
\ndirectly or through an Affiliate any Person who is or was, within the one year
\nperiod prior to the date of hire, (i) an employee of the Business, the Acquired
\nCompanies or the Subsidiaries, in the case of the Sellers, or (ii) an employee
\nof RCPC or any of its Affiliates (other than the Acquired Companies, the
\nSubsidiaries or Business), in the case of the Buyer, or (c) initiate,
\nparticipate in or contribute to any interference with (i) the Buyer’s
\nrelationship with the employees of the Business, the Acquired Companies or the
\nSubsidiaries, in the case of the Sellers or (ii) RCPC’s or any of its
\nAffiliates’ (other than the Acquired Companies, the Subsidiaries or Business)
\nrelationship with its employees, in the case of the Buyer. The placing of an
\nadvertisement of a position of employment by either party to members of the
\npublic generally and the recruitment of a Person through an employment agency
\nshall not constitute a breach of this paragraph, provided that such party does
\nnot, nor does any<\/p>\n
100<\/p>\n
of its representatives, encourage or advise such agency to approach any employee
\nof the other party.<\/p>\n
Notwithstanding anything in this Section 6.17 to the contrary, if at any time,
\nin any judicial proceeding, any of the restrictions stated in this Section 6.17
\nare found by a final order of a court of competent jurisdiction to be
\nunreasonable or otherwise unenforceable under circumstances then existing, the
\nperiod, scope or geographical area, as the case may be, shall be reduced to the
\nextent necessary to enable the court to enforce the restrictions to the extent
\nsuch provisions are allowable under law, giving effect to the agreement and
\nintent of the parties that the restrictions contained herein shall be effective
\nto the fullest extent permissible. Each of the Sellers, on the one hand, and the
\nBuyer on the other, acknowledge and agree that money damages may not be an
\nadequate remedy for any breach or threatened breach of the provisions of this
\nSection 6.17 and that, in such event, the parties hereto or their respective
\nsuccessors or assigns may, in addition to any other rights and remedies existing
\nin their favor, apply to any court of competent jurisdiction for specific
\nperformance, injunctive and other relief in order to enforce or prevent any
\nviolations of the provisions of this Section 6.17. Any injunction shall be
\navailable without the posting of any bond or other security. In the event of an
\nalleged breach or violation by any party (or their respective Affiliates,
\nsuccessors and assigns) of any of the provisions of this Section 6.17, the
\nNoncompete Period or other restrictive period will be tolled for it until such
\nalleged breach or violation is resolved; provided that if it is found to have
\nnot violated the provisions of this Section 6.17, then the Noncompete Period or
\nother restrictive period will not be deemed to have been tolled. Each of the
\nSellers, on the one hand, and the Buyer, on the other, agrees that the
\nrestrictions contained in this Section 6.17 are reasonable in all respects.<\/p>\n
Section 6.18 Confidentiality.<\/p>\n
(a) Each of the Sellers on the one hand, and the Buyer, on the other
\nhand, shall (and shall cause their respective Affiliates, successors and assigns
\nto) treat and hold as confidential all of the Confidential Information, and
\nrefrain from using any of the Confidential Information except in connection with
\nthis Agreement and the Ancillary Agreements. In the event that any of the
\nSellers, on the one hand, and the Buyer on the other hand, or their respective
\nAffiliates, successors and assigns is requested or required (by law or by oral
\nquestion or request for information or documents in any legal proceeding,
\ninterrogatory, subpoena, civil investigative demand, or similar process) to
\ndisclose any Confidential Information, that Person will notify the other party
\npromptly of the request or requirement so that the other party may seek an
\nappropriate protective order or waive compliance with the provisions of this
\nSection<\/p>\n
101<\/p>\n
6.18. If, in the absence of a protective order or the receipt of a waiver
\nhereunder, any of the Sellers, on the one hand, or Buyer, on the other, or their
\nrespective Affiliates, successors and assigns is, on the advice of counsel,
\ncompelled to disclose any Confidential Information to any Governmental Entity or
\nelse stand liable for contempt, then that Person may disclose the Confidential
\nInformation to such Governmental Entity; provided, however, that the disclosing
\nPerson shall use her, his or its commercially reasonable best efforts to obtain,
\nat the request of the other party, an order or other assurance that confidential
\ntreatment will be accorded to such portion of the Confidential Information
\nrequired to be disclosed as the other party shall designate. The foregoing
\nprovisions shall not apply to any Confidential Information which is generally
\navailable to the public prior to the time of disclosure or from a third party
\nnot known to be under any obligation of confidentiality to Buyer or Sellers.
\n“Confidential Information” means (i) with respect to the Buyer prior to the
\nClosing Date and with respect to the Sellers and their Affiliates after the
\nClosing Date, any information concerning the businesses and affairs of the
\nBusiness, the Acquired Companies and the Subsidiaries, (ii) with respect to the
\nSellers, any information concerning the business and affairs of the Buyer and
\nits Affiliates, in each case other than (a) that is already generally available
\nto the public, (b) that becomes generally available to the public other than as
\na result of a disclosure by the other party or its Affiliates or their
\nrespective directors, officers, employees, agents or advisors, or (c) that
\nbecomes available to the other party or its Affiliates or their respective
\ndirectors, officers, employees, agents or advisors on a non-confidential basis
\nfrom a source other than the Buyer or Sellers or their Affiliates or their
\nrespective directors, officers, employees, agents or advisors, provided that
\nsuch source is not bound by a confidentiality agreement or other obligation of
\nsecrecy.<\/p>\n
(b) If the transactions contemplated hereby are not consummated,
\nthen Buyer shall promptly destroy (other than one copy for the files of outside
\ncounsel) and not use any Confidential Information relating to the Business, the
\nAcquired Companies, the Subsidiaries or the Sellers and shall treat all such
\ninformation in accordance with the Confidentiality Agreement and shall promptly
\ndestroy (other than one copy to be retained in the files of outside counsel) all
\ntangible embodiments (and all copies) of the Confidential Information which are
\nin Buyer’s or its Affiliates’ or their respective directors’, officers’,
\nemployees’, agents’ or advisors’ possession and Sellers shall promptly destroy
\n(other than one copy to be retained in the files of Sellers’ outside counsel)
\nand not use any Confidential Information relating to the Buyer (or its
\nAffiliates) and shall treat all such information in accordance with the
\nConfidentiality Agreement and shall promptly destroy (other than one copy for
\nthe files of Sellers’ outside counsel) all tangible embodiments (and all copies)
\nof the Confidential<\/p>\n
102<\/p>\n
Information which are in Sellers’ or their Affiliates’ or their respective
\ndirectors’, officers’, employees’, agents’ or advisors’ possession.<\/p>\n
Section 6.19 Litigation Support. In the event and for so long as any
\nparty hereto actively is contesting or defending against any action, suit,
\nproceeding, hearing, investigation, charge, complaint, claim, or demand in
\nconnection with (i) any transaction contemplated under this Agreement or (ii)
\nany fact, situation, circumstance, status, condition, activity, practice, plan,
\noccurrence, event, incident, action, failure to act, or transaction on or prior
\nto the Closing Date involving the Business, the Acquired Companies or the
\nSubsidiaries, each of the other parties hereto will reasonably cooperate with it
\nand its counsel in the contest or defense, make available their personnel, and
\nprovide such testimony and access to their books and records as shall be
\nnecessary in connection with the contest or defense, all at the sole cost and
\nexpense of the contesting or defending party (unless the contesting or defending
\nparty is entitled to indemnification therefor under Article IX hereof).<\/p>\n
Section 6.20 Restructuring. In connection with the transactions
\ncontemplated herein, the Sellers shall complete the Restructuring (including
\nmaking any capital infusions that may be required) and separate certain assets
\nfrom the Business pursuant to Section 6.14 above. Prior to any such
\nRestructuring and separation to occur after the date hereof, Sellers shall (and
\nshall cause the Acquired Companies and the Subsidiaries to) consult with Buyer
\nregarding the structuring and implementation of such Restructuring and
\nseparation and shall allow Buyer to comment on such structuring and
\nimplementation.<\/p>\n
Section 6.21 Estoppel Certificates. The Sellers shall obtain and
\ndeliver to Buyer an estoppel certificate (each an “Estoppel Certificate,” and
\ncollectively, the “Estoppel Certificates”) with respect to the Real Property
\nLeases listed in Section 6.21 of the Disclosure Letter from the other party to
\nsuch Real Property Lease, in form and substance reasonably satisfactory to
\nBuyer. In no event shall Sellers be required to obtain an estoppel certificate
\ncertifying to more than is provided for in the estoppel provisions expressly
\ncontained in any such Real Property Lease. Sellers shall use reasonable efforts
\nto cause the other party to such Real Property Lease to execute and return the
\nEstoppel Certificate dated not later than 10 days (or the time period for
\nresponse as provided for in the estoppel provision of such Real Property Lease,
\nif more than 10 days) prior to Closing.<\/p>\n
Section 6.22 Right of Offset. Each party acknowledges and agrees that,
\nin addition to any other remedies available, any Liabilities arising under this
\nAgreement or the Ancillary Agreements which are undisputed or if disputed, which
\nare<\/p>\n
103<\/p>\n
determined by binding and final arbitration or a decision of a court of
\ncompetent jurisdiction (either such determination, a “Judgment”), may be
\nsatisfied by exercise of a right of offset (an “Offset Right”) against any
\namounts that are or shall be payable to such party, including any amounts
\npayable in respect of the Ancillary Agreements. In connection therewith, the
\nparty seeking to exercise the Offset Right (the “Offsetting Party”) shall give
\nat least 15 days’ prior written notice to the party against whom the Judgment
\nhas been entered of its intention to exercise such Offset Right, after which
\nperiod the Offset Right may be exercised unless the Judgment has been satisfied
\nin full. The Offset Right shall be subject to the limitations set forth in
\nSections 9.2(b) or 9.3(b), as the case may be.<\/p>\n
Section 6.23 Interim Operations of the Business by Buyers. During the
\nperiod from the date hereof to the Closing, Buyer shall indemnify Sellers for
\nthe amount of any capital lease entered into by the Acquired Companies or
\ncapital expenditures outside the ordinary course of business and, which is in
\nexcess of U.S. $50,000 (in each case with respect to the Business) made at the
\ndirection of Carlos Colomer or Michael Powell, except those expenditures made
\nwith the prior written consent of the Sellers.<\/p>\n
Section 6.24 Transition Countries. Without limiting the provisions of
\nSections 6.7 and 6.14 above and in furtherance thereof, if by the Closing Date,
\nSellers, Buyer or their respective Affiliates have not received regulatory
\nclearance under applicable Competition Laws as referred to in Section 4.5 and
\nSection 5.3 of the Disclosure Letters in one or more countries to close the
\ntransactions contemplated by this Agreement or the Ancillary Agreements (a
\n“Transition Country”), it is agreed that the Sellers shall, directly or
\nindirectly, on and after the Closing Date, and during the period from the
\nClosing Date until receipt of such regulatory clearance in such country (the
\n“Transition Phase”), carry on in good faith and in the ordinary course of
\nbusiness consistent with past practice that part of the Business as agent and
\ntrustee and for the account of Buyer or its designated Affiliate (after the
\nClosing Date) in accordance with the following provisions:<\/p>\n
(a) Sellers shall within 30 days after the end of each calendar
\nmonth of the Transition Phase, and within 30 days after the end of the
\nTransition Phase, prepare, or cause to be prepared, an account for the Business
\nin each Transition Country, showing for each such calendar month or other
\nperiod:<\/p>\n
(i) all receipts received by Sellers and their Affiliates with
\n respect to the Business; and<\/p>\n
104<\/p>\n
(ii) all out-of-pocket expenses incurred by Sellers and their
\n Affiliates directly relating to the Business and the amounts that would
\n have been charged to the Business had the Sellers been providing
\n transitional services under the applicable Transitional Services Agreement
\n in such Transition Country during such month.<\/p>\n
The account shall show the net difference between (i) and (ii), and shall be
\naccompanied by payment of the difference to Buyer (or its designated Affiliate)
\nif (i) is greater than (ii), or an invoice to Buyer (or its designated
\nAffiliate) for the difference if (ii) is greater than (i), which invoice Buyer
\n(or its designated Affiliate) shall pay within five days after receipt.<\/p>\n
(b) Any comments or objections which Buyer may have with respect to
\nthe accounts rendered for that Transition Country under Section 6.24(a) above
\nshall be discussed promptly between Buyer and Revlon. If such comments or
\nobjections result in the matter under discussion being resolved, then any
\nappropriate amendment shall be made to such account and Buyer and Revlon shall
\naccount to each other accordingly.<\/p>\n
(c) If any claim which is covered by insurance of Sellers or any of
\ntheir Affiliates shall arise during the Transition Phase in respect of any of
\nthe Acquired Assets of the Business relating to a part of the Business carried
\non in a Transition Country, Sellers shall promptly submit, or cause to be
\nsubmitted, all relevant documents to the insurers to substantiate such claim in
\ntrust for Buyer (or its designated Affiliate) and turn over the proceeds to
\nBuyer net of self-insurance retentions, deductibles and costs of collection (or
\nits designated Affiliate). Sellers shall promptly inform Buyer of the
\ncircumstances giving rise to such insurance claim.<\/p>\n
Section 6.25 Preparation of GAAP Statement of Net Assets. Within 90
\ndays after the Closing Date, Sellers shall prepare and deliver to the Buyer an
\naudited statement setting forth the September 30, 1999 Statement of Net Assets
\nprepared in accordance with generally accepted accounting principles in the
\nUnited States (“U.S. GAAP”), omitting certain footnotes that U.S. GAAP would
\notherwise customarily require.<\/p>\n
Section 6.26 Sellers Cooperation in Buyer Preparation of SEC Financial
\nStatements. For a period of three years following the Closing Date, if Buyer
\ndetermines to prepare, or cause the preparation of, SEC Financial Statements,
\nSellers shall cooperate with Buyer (and Buyer shall cooperate with Sellers) in
\nconnection therewith, unless Sellers determine in good faith that any disclosure
\nrequired in<\/p>\n
105<\/p>\n
connection therewith could be materially detrimental to RCPC. Any such SEC
\nFinancial Statements shall be prepared solely at Buyer’s sole expense (and Buyer
\nshall reimburse Sellers promptly from time to time upon receipt of a written
\nrequest for all Sellers’ reasonable out-of-pocket and other costs (including
\nwithout limitation reasonable charges for internal labor usage) incurred in
\nconnection therewith). Sellers’ covenant to cooperate with Buyer pursuant to
\nthis Section 6.26 shall not require that Sellers hire additional personnel or
\nengage any outside advisors, provided that if Sellers require the assistance of
\nSellers’ outside auditors, whether in connection with issuance of any auditor’s
\nreports or opinions or the preparation of the SEC Financial Statements, such
\nshall be done at Buyer’s sole expense. If the preparation of the SEC Financial
\nStatements requires the assistance or engagement of Sellers’ outside auditors,
\nSellers shall use their commercially reasonable efforts to assist, and shall
\ncooperate with, Buyer in securing such assistance or engagement.<\/p>\n
Section 6.27 Amend User Agreements. On the Closing Date or as soon as
\npracticable thereafter, Sellers shall use reasonable best efforts to amend the
\nregistered user agreements between Nadri Cosmetics and Revlon Consumer Products
\nCorporation so that (i) Revlon Professional Holding Company, LLC, a limited
\nliability company organized under the laws of Delaware (“RPHC”) or another
\nSeller or Affiliates, as appropriate, is identified as the owner of the Licensed
\nRevlon Marks, and (ii) they cover only the Licensed Revlon Marks and no longer
\ncover any marks which are included within the Acquired Intellectual Property or
\nAcquired Companies’ Intellectual Property. Sellers shall promptly notify the
\nBuyer in writing of such filing.<\/p>\n
Section 6.28 Cease and Desist. From and after the Closing Date, Buyer
\nand its Affiliates shall cease the use of any and all materials, including but
\nnot limited to advertisements, promotional materials, and packaging (regardless
\nof their form and media) which embody or make reference to the names,
\nlikenesses, images, photographs, voices, signatures or biographical information
\nof spokespersons and models under exclusive contracts with Sellers and their
\nAffiliates, as follows: Halle Berry, Cindy Crawford, Kim Delaney, Karen Duffy,
\nEmme Aronson, Melanie Griffith, Salma Hayek, Sarah O’Hare, Cybill Shepherd,
\nCourtney Thorne-Smith, Vendela Thomesson, and Shania Twain, provided that
\nnothing herein shall require Buyer to collect or otherwise obtain any such
\nmaterials distributed to third parties prior to the Closing Date.<\/p>\n
Section 6.29 Buyer Cooperation with Respect to Certain Books and
\nRecords. Following the closing, Buyer shall maintain and make available (at
\nSellers’ expense) to the officers, employees, accountants, counsel and other
\nrepresentatives of Sellers, upon reasonable notice, books and records, and
\nearn-out and net sales statements reasonably necessary for Sellers to satisfy
\ntheir obligations, including, without limitation, the<\/p>\n
106<\/p>\n
obligation to make earn-out payments, under the following agreements: (1) the
\nAmerican Crew Agreement, (2) the A.P. Products Agreement, (3) the Creative Nail
\nAgreement, (4) Pan-African J.V. Agreement, (5) Stock Purchase Agreement dated as
\nof September 5, 1998 and amended as of September 28, 1998 by and among Aderans
\nCo., Ltd., as Buyer, Roux, as Seller, and RCPC, as Seller Guarantor, in
\nconnection with the sale by Roux of General Wig Manufacturers, Inc., (6) the
\nHuber Agreement, and (7) the Intercosmo Agreement.<\/p>\n
Section 6.30 Sellers’ Agreement to Indemnify for American Crew
\nEarnouts. Subject to Buyer’s satisfaction of its obligations pursuant to Section
\n6.29 (Buyer Cooperation with Respect to Certain Books and Records), from and
\nafter the Closing Date, Sellers shall, jointly and severally, repay and\/or
\nindemnify Buyer and its Affiliates from and against (A) any payment Buyer or its
\nAffiliates make on behalf of the Sellers and their Affiliates which was
\ncontractually required under, and (B) all Buyer Damages (as defined herein)
\nasserted against or incurred by any Buyer Indemnitee (as defined herein) as a
\nresult or arising out of, any earnout under the American Crew Agreement;
\nprovided that Sellers shall not be required to make such repayment or
\nindemnification if the payment of such earnout was not required under the terms
\nof the American Crew Agreement including, without limitation, the dispute
\nresolution mechanism set forth therein.<\/p>\n
Section 6.31 Third Party Beneficiary under Purchase Agreements. Sellers
\nshall use their commercially reasonable efforts to confer upon and provide Buyer
\nwith the rights of a third party beneficiary under the following agreements: (1)
\nthe American Crew Agreement, (2) the A.P. Products Agreement, (3) the Creative
\nNail Agreement, (4) Pan-African J.V. Agreement, (5) Stock Purchase Agreement
\ndated as of September 5, 1998 and amended as of September 28, 1998 by and among
\nAderans Co., Ltd., as Buyer, Roux, as Seller, and RCPC, as Seller Guarantor, in
\nconnection with the sale by Roux of General Wig Manufacturers, Inc., (6) the
\nHuber Agreement and (7) the Intercosmo Agreement.<\/p>\n
Section 6.32 Revlon S.L. Tax Losses. The Sellers covenant that from
\nDecember 31, 1998 until the Closing Date, they will utilize Spanish Tax Loss
\nCarryforwards only to offset the Income Tax liability of Revlon S.L. as
\npermitted under Spanish law and regulations.<\/p>\n
Section 6.33 Creation of RPHC.<\/p>\n
(a) Prior to the Closing Date, Sellers shall organize and take such
\nother actions with respect to RPHC in accordance with the terms set forth in the<\/p>\n
107<\/p>\n
term sheet attached hereto as Exhibit L (the “RPHC Term Sheet”), in each case,
\nin form and substance reasonably satisfactory to Buyer.<\/p>\n
(b) Sellers and Buyer shall share on an equal basis all costs
\nrelated to (i) the creation of RPHC, (ii) the transfer of assets, including the
\nLicensor Marks (as defined in the License Agreement (Revlon Marks)), into RPHC,
\n(iii) the creation and perfection of any liens related to such trademarks, and
\n(iv) the ongoing operation of RPHC except as otherwise set forth in the License
\nAgreement (Revlon Marks).<\/p>\n
Section 6.34 Research & Development Projects. The Sellers shall use
\ntheir respective commercially reasonable best efforts to complete their research
\nand development projects marked by an asterisk on Section 1.2(i) of the
\nDisclosure Letter prior to the Closing and the other projects on such schedule
\nshall be delivered at whatever stage of completion they are in and in a
\ncommercially reasonable manner to the Buyer on the Closing Date (with Sellers
\nmaking available to Buyer Alan Paster in making such delivery provided such
\nassistance does not materially interfere with his responsibilities for Sellers).
\nOther than its obligations under this Section 6.34 to use commercially
\nreasonable best efforts to complete certain research and development projects
\nand to deliver the remaining projects in a commercially reasonable manner,
\nSellers make no representations and warranties as to such services, including
\nthe merchantability, fitness for a particular purpose or non-infringement of
\nsuch services and shall not be liable for their failure, or non-completion.<\/p>\n
Section 6.35 Delivery of Formula Documentation. Sellers shall deliver
\nthe product formula information and related documentation as set forth on
\nExhibit M attached hereto with respect to the Acquired Proprietary Information
\nand Acquired Companies Proprietary Information.<\/p>\n
Section 6.36 Spanish Headquarters. Sellers shall pay all costs and
\nexpenses associated with the removal and replacement of any sign, banner or
\nsimilar structural element of the facade containing the name “Revlon” from the
\nheadquarters of the Business in Barcelona, Spain.<\/p>\n
Section 6.37 MIS. Sellers and Buyer hereby agree that Exhibit N
\nattached hereto sets forth the understanding and agreement of Buyer and Sellers
\nwith respect to the treatment of the management information system (“MIS”) of
\nthe Business and the separation thereof from the Sellers’ management information
\nsystem (the “MIS Agreement”), including (i) the determination of Excluded Assets
\nand Acquired Assets with respect to MIS (including software and hardware), (ii)
\nthe method of separation of<\/p>\n
108<\/p>\n
such system from the Sellers and (iii) the cost of both (A) transitional
\nservices to be provided by the Sellers (and their Affiliates) to Buyer (and its
\nAffiliates) after the Closing Date and (B) certain start-up or replacement costs
\nwhich Buyer will incur in connection with the separation of the Business from
\nthe Sellers, which costs shall be paid by the Sellers in accordance with Exhibit
\nN.<\/p>\n
Section 6.38 Revlon Coiffure. Prior to the Closing Date, Sellers shall
\ntransfer the Acquired Assets which are used or held for use primarily or
\nexclusively in the Business in France to Revlon Coiffure.<\/p>\n
Section 6.39 Transitional Services. Sellers hereby agree and covenant
\nthat the services set forth in the Transitional Services Agreements and the MIS
\nAgreement will be provided to Buyer and its Affiliates in a timely manner
\nconsistent with past practices and at the same level of quality historically
\nprovided to the Business by Sellers and their Affiliates.<\/p>\n
Section 6.40 Accrued Italian Severance. In connection with the
\nRestructuring in Italy (the “Italian Restructuring”), approximately
\n1,036,000,000 Italian Lira of accruals (the “Italian Reserves”) relating to the
\nseverance of Italian agents and a corresponding and equal amount of cash (the
\n“Severance Fund”) were transferred from EBP Italy to Intercosmo S.p.A.
\n(“Intercosmo”). Sellers hereby agree and covenant to (and shall cause their
\nAffiliates to) (i) prior to the Closing Date, to the extent permitted under
\napplicable law, (A) remove the Italian Reserves and the Severance Fund from the
\nbooks and records of Intercosmo and place the Italian Reserves and the Severance
\nFund on the books and records of a Seller or an Affiliate of the Sellers (other
\nthan the Acquired Companies and the Subsidiaries) and (B) if removed, treat the
\nItalian Reserves consistently by excluding such reserves from the September 30,
\n1999 Statement of Net Assets, the Estimated Statement of Net Assets and the
\nFinal Statement of Net Assets, and (ii) to the extent that applicable law does
\nnot allow the Italian Reserves and Severance Fund to be removed from the books
\nand records of Intercosmo, treat any claim for Taxes asserted with respect to
\nthe transfer of the Italian Reserves and the Severance Fund to the books and
\nrecords of Intercosmo in accordance with the provisions of Section 6.9 as if the
\nLiability for such a claim were part of Sellers’ Covered Taxes. If the Italian
\nReserves are removed from the books and records of Intercosmo and from the
\nSeptember 30, 1999 Statement of Net Assets, the Estimated Statement of Net
\nAssets, and the Final Statement of Net Assets, the Liability underlying such
\nreserves shall nevertheless be Assumed Liabilities.<\/p>\n
Section 6.41 Italian Receivables. In connection with the Italian
\nRestructuring, as of the termination of the Affitto Agreement, Sellers hereby
\nagree and<\/p>\n
109<\/p>\n
covenant that trade receivables (the “Intercosmo Receivable”) shall be
\ntransferred from EBP Italy to Intercosmo at the gross value of such receivables
\nstated on the books and records of the Intercosmo division of EBP Italy, as of
\nthe termination of the Affitto Agreement, less a reserve for bad debts equal to
\nthree percent (3%) of the gross value of the Intercosmo Receivable.<\/p>\n
ARTICLE VII<\/p>\n
CONDITIONS TO OBLIGATIONS OF THE PARTIES<\/p>\n
Section 7.1 Conditions to Each Party’s Obligation. The respective
\nobligation of each party to consummate the transactions contemplated hereby is
\nsubject to the satisfaction at or prior to the Closing of the following
\nconditions:<\/p>\n
(a) No statute, law, rule or regulation shall have been enacted,
\npromulgated or enforced by any Governmental Entity which prohibits or restricts
\nthe consummation of the transactions contemplated hereby;<\/p>\n
(b) There shall not be in effect any judgment, order, injunction,
\nruling, charge or decree of any Governmental Entity (i) enjoining or preventing
\nthe consummation of the transactions contemplated hereby (ii) with respect to
\nthe obligations of only the Buyer to consummate the transactions contemplated
\nhereby, (1) causing any of the transactions contemplated by this Agreement to be
\nrescinded following consummation, (2) affecting adversely the right of the Buyer
\nto own the Shares or the share capital of the Subsidiaries and to control the
\nAcquired Companies or any of the Subsidiaries, or (3) affecting adversely the
\nright of the Acquired Companies or any of the Subsidiaries to own their
\nrespective assets and to operate their respective businesses (and no such
\ninjunction, judgment, order, decree, ruling, or charge shall be in effect); and<\/p>\n
(c) Any waiting periods applicable to the transactions contemplated
\nby this Agreement under the HSR Act and applicable Competition Laws shall have
\nexpired or been terminated and all Governmental Entity authorizations or
\napprovals required in connection with the transactions contemplated by this
\nAgreement shall have been obtained or given, other than those authorizations and
\napprovals, the failure of which to have been obtained, would not (in the good
\nfaith judgment of Buyer), in the aggregate, have a Business Material Adverse
\nEffect or a Buyer Material Adverse Effect.<\/p>\n
110<\/p>\n
Section 7.2 Conditions to Obligations of the Sellers. The obligations
\nof the Sellers to consummate the transactions contemplated hereby are further
\nsubject to the satisfaction (or waiver) at or prior to the Closing of the
\nfollowing conditions:<\/p>\n
(a) The representations and warranties of the Buyer contained herein
\nshall be true and correct in all material respects on the date hereof and on and
\nas of the Closing Date (without giving effect to any limitation as to
\n“materiality” or “Material Adverse Effect” set forth in such representation or
\nwarranty), with the same force and effect as though such representations and
\nwarranties had been made on and as of the Closing Date, except to the extent
\nthat any such representation or warranty is made as of a specified date, in
\nwhich case such representation or warranty shall have been true and correct in
\nall material respects as of such date (without giving effect to any limitation
\nas to “materiality” or “Material Adverse Effect” set forth in such
\nrepresentation or warranty);<\/p>\n
(b) Buyer shall have performed in all material respects its
\nobligations, covenants and agreements under this Agreement required to be
\nperformed by it at or prior to the Closing pursuant to the terms hereof;<\/p>\n
(c) Buyer shall have delivered to Sellers a certificate reasonably
\nrequested by Sellers, dated as of the Closing and executed by an officer of such
\nentity; and<\/p>\n
(d) Buyer shall have delivered to Sellers or their Affiliates those
\nitems set forth in Section 2.6 hereof.<\/p>\n
Section 7.3 Conditions to Obligations of the Buyer. The obligations of
\nBuyer to consummate the transactions contemplated hereby are further subject to
\nthe satisfaction (or waiver) at or prior to the Closing of the following
\nconditions:<\/p>\n
(a) The representations and warranties of Sellers contained herein
\nshall be true and correct in all material respects on the date hereof and on and
\nas of the Closing Date (without giving effect to any limitation as to
\n“materiality” or “Material Adverse Effect” set forth in such representation or
\nwarranty), with the same force and effect as though such representations and
\nwarranties had been made on and as of the Closing Date, except to the extent
\nthat any such representation or warranty is made as of a specified date, in
\nwhich case such representation or warranty shall have been true and correct in
\nall material respects as of such date (without giving effect to any limitation
\nas to “materiality” or “Material Adverse Effect” set forth in such
\nrepresentation or warranty);<\/p>\n
111<\/p>\n
(b) The Sellers shall have performed in all material respects their
\nobligations, covenants, and agreements under this Agreement required to be
\nperformed by them at or prior to the Closing pursuant to the terms hereof;<\/p>\n
(c) All consents, notices, terminations, certificates, filings and
\napprovals set forth on Section 2.5(h) of the Disclosure Letter shall have been
\nobtained, filed or made;<\/p>\n
(d) Except as set forth on Section 4.11 of the Disclosure Letter on
\nthe date hereof, from and after October 1, 1999, no change has or shall have
\noccurred or is likely to occur, that would reasonably be expected to have a
\nBusiness Material Adverse Effect (excluding any change, event, effect or
\ncircumstance arising in connection with the announcement or performance of the
\ntransactions contemplated by this Agreement;<\/p>\n
(e) The Sellers shall have delivered to Buyer certificates
\nreasonably requested by Buyer, dated as of the Closing and executed by an
\nofficer or director of each of the Sellers;<\/p>\n
(f) The Sellers or their Affiliates shall have delivered to Buyer
\nthose items set forth in Section 2.5 hereof;<\/p>\n
(g) Buyer shall have received from Sellers’ counsel in the United
\nStates of America and Spain opinions in form and substance as set forth in
\nExhibit O attached hereto, each such opinion addressed to the Buyer and dated as
\nof the Closing Date;<\/p>\n
(h) Buyer shall have received the cash proceeds of the financing
\ntransactions contemplated by the Commitment Letters (or replacements thereof on
\nterms reasonably satisfactory to Buyer) necessary to consummate the transactions
\ndescribed herein and provide for the ongoing working capital needs of the
\nBusiness;<\/p>\n
(i) the Compensation Committee of the Board of Directors of Revlon
\nshall have approved the treatment of the options held by Affected Employees in
\naccordance with Section 6.8(n); and<\/p>\n
112<\/p>\n
(j) Sellers shall have organized and taken such other actions with
\nrespect to RPHC in accordance with the RPHC Term Sheet, in each case, in form
\nand substance reasonably satisfactory to Buyer.<\/p>\n
ARTICLE VIII<\/p>\n
TERMINATION; AMENDMENT; WAIVER<\/p>\n
Section 8.1 Termination. This Agreement may be terminated and the
\ntransactions contemplated hereby may be abandoned:<\/p>\n
(a) at any time, by mutual written consent of Sellers and Buyer;<\/p>\n
(b) at any time on or after February 29, 2000 by either Sellers, on
\nthe one hand, or Buyer, on the other hand, if the Closing shall not have
\noccurred on or prior to such date (in each case provided that such failure to
\nclose was not due to the breach of this Agreement by the terminating party);<\/p>\n
(c) by the Sellers in the event that (i) the Buyer has breached any
\nrepresentation, warranty or covenant contained in this Agreement in any material
\nrespect, (ii) the Sellers have notified the Buyer in writing of such breach, and
\n(iii) such breach has continued without cure for a period of 15 days after the
\nnotice of breach; or<\/p>\n
(d) by the Buyer in the event that (i) any of the Sellers have
\nbreached any representation, warranty or covenant contained in this Agreement in
\nany material respect, (ii) the Buyer has notified Revlon in writing of such
\nbreach, and (iii) such breach has continued without cure for a period of 15 days
\nafter the notice of breach.<\/p>\n
Section 8.2 Procedure and Effect of Termination. In the event of the
\ntermination of this Agreement and the abandonment of the transactions
\ncontemplated hereby pursuant to Section 8.1(b) hereof, written notice thereof
\nshall forthwith be given by the party so terminating to the other party hereto
\nand this Agreement shall terminate and the transactions contemplated hereby
\nshall be abandoned, without further action by Sellers, on the one hand, or
\nBuyer, on the other hand. If this Agreement is terminated pursuant to Section
\n8.1 hereof:<\/p>\n
(a) each party shall redeliver or destroy all documents, work papers
\nand other materials of the other parties relating to the transactions
\ncontemplated<\/p>\n
113<\/p>\n
hereby, whether so obtained before or after the execution hereof, to the party
\nfurnishing the same, and all Confidential Information received by any party
\nhereto with respect to the other party shall be treated in accordance with the
\nConfidentiality Agreement and Section 6.18 above;<\/p>\n
(b) all filings, applications and other submissions made pursuant
\nhereto shall, at the mutual agreement of Buyer and Revlon, and to the extent
\npracticable, be withdrawn from the Governmental Entity or other Person to which
\nmade; and<\/p>\n
(c) there shall be no Liability hereunder on the part of Sellers or
\nBuyer or their respective Affiliates or any of their respective directors,
\nofficers, employees, agents or representatives, except that Sellers or Buyer, as
\nthe case may be, shall have Liability to the other party for any breach by
\nSellers or Buyer, as the case may be, of one or more of the covenants or
\nagreements of this Agreement, and except that the obligations provided for in
\nSections 6.18, 8.2(a), 8.2(b) and 10.1 hereof shall survive any such
\ntermination.<\/p>\n
Section 8.3 Amendment, Modification and Waiver. This Agreement may be
\namended, modified or supplemented at any time by written agreement of the Buyer
\nand Revlon. Any failure of the Sellers, on the one hand, or the Buyer, on the
\nother hand, to comply with any term or provision of this Agreement may be
\nwaived, with respect to the Buyer, by Revlon and, with respect to the Sellers,
\nby the Buyer, by an instrument in writing signed by or on behalf of the
\nappropriate party, but such waiver or failure to insist upon strict compliance
\nwith such term or provision shall not operate as a waiver of, or estoppel with
\nrespect to, any subsequent or other failure to comply.<\/p>\n
ARTICLE IX<\/p>\n
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION<\/p>\n
Section 9.1 Survival of Representations and Warranties and Agreements.<\/p>\n
(a) The representations and warranties of Sellers and Buyer (other
\nthan with respect to Taxes for which indemnification will be provided
\nexclusively in accordance with Section 6.9) made in Articles IV and V,
\nrespectively, of this Agreement shall survive the Closing for a period of 18
\nmonths, except that the representations and warranties in Section 4.19
\n(Environmental Protection) shall survive the Closing until 36 months following
\nthe Closing Date, and the representations and<\/p>\n
114<\/p>\n
warranties in Sections 4.1 (Organization), 4.2 (Authorization), 4.3 (Capital
\nStock), 4.4 (Ownership of Shares), 4.17 (Employee Benefit Plans), 4.22
\n(Affiliate Agreements) and 4.23 (Brokers) shall survive until thirty (30) days
\nafter the expiration of the applicable statute of limitations (including all
\nextensions) relating to any issue thereunder (each an “Indemnity Period”), but,
\nexcept as provided in Section 8.2(c) hereof, shall not survive any termination
\nof this Agreement.<\/p>\n
(b) The parties intend to shorten the statute of limitations and no
\nclaims or causes of action shall be brought by the parties against Sellers,
\nBuyer or their respective Affiliates or any of their respective directors,
\nofficers, employees, agents or representatives based upon, directly or
\nindirectly, any misrepresentations or breach of warranties contained in this
\nAgreement after the Indemnity Period or, except as provided in Section 8.2(c)
\nhereof, any termination of this Agreement unless notice thereof shall have been
\nprovided to such party prior to the end of the Indemnity Period. This Section
\n9.1 shall not limit any covenant or agreement of the parties which contemplates
\nperformance before, at, or after, the Closing, including, without limitation,
\nthe covenants and agreements set forth in Articles II and VI hereof.<\/p>\n
(c) With respect to the representations and warranties set forth in
\nArticles IV and V hereunder, the consummation by the Sellers or Buyer of the
\ntransactions contemplated by this Agreement with actual knowledge of a
\nmisrepresentation or breach of warranty by the other party shall be considered a
\nwaiver of any claim under this Article IX for indemnification with respect to
\nthat misrepresentation or breach of warranty. For purposes of this Section
\n9.1(c), Buyer will be deemed to have knowledge of any facts known by Carlos
\nColomer or Mike Powell as of the Closing Date.<\/p>\n
Section 9.2 Sellers’ Agreement to Indemnify.<\/p>\n
(a) Subject to the terms and conditions set forth herein, from and
\nafter the Closing, Sellers shall, jointly and severally, indemnify, defend and
\nhold harmless Buyer and its Affiliates and their respective directors, officers,
\nemployees, agents and representatives and their successors and assigns
\n(collectively, the “Buyer Indemnitees”) from and against all Liability, demands,
\nclaims, actions or causes of action, assessments, losses, damages, costs and
\nexpenses (including, without limitation, reasonable attorneys’ fees and
\nexpenses) as and when incurred, all net of the present value of any Tax benefit,
\ninsurance proceeds (excluding self insurance) or amount received from any other
\nparty alleged to be responsible therefor actually received (less any costs or
\nexpenses arising out of or in connection with receiving and\/or collecting such
\namount) (collectively “Losses and Damages”) by Buyer or its Affiliates<\/p>\n
115<\/p>\n
(collectively “Buyer Damages”) asserted against or incurred by any Buyer
\nIndemnitee as a result of or arising out of (i) a breach of any representation
\nor warranty of Sellers contained in this Agreement (other than Section 4.18 for
\nwhich indemnification will be provided exclusively in accordance with Section
\n6.9), (ii) a breach of any agreement or covenant of Sellers in this Agreement
\n(other than with respect to Taxes for which indemnification will be provided
\nexclusively in accordance with Section 6.9) or any Ancillary Agreement subject
\nto the terms, conditions, and any damage limitations therein, (iii) any Excluded
\nLiabilities, (iv) any claim by Sellers against any independent accounting firm
\nin connection with access provided to Buyer to such accounting firm’s work
\npapers as described in Section 2.9 hereof, which results in such independent
\naccounting firm seeking indemnification from Buyer under such Accountant’s
\nEngagement Letter, or (v) the Off-Balance Sheet Intercompany Liability
\nSettlement (whether prior to, on or after the Closing Date, including Tax
\nliabilities relating thereto). The Buyer shall pay and discharge when due out of
\nthe funds of it, the Acquired Companies and the Subsidiaries, with no right of
\ncontribution or recourse against the assets of the Sellers, or contest in good
\nfaith at no cost or expense to the Sellers or their Affiliates, all of the
\nAssumed Liabilities.<\/p>\n
(b) Sellers’ obligations to indemnify and defend the Buyer
\nIndemnitees pursuant to Section 9.2(a)(i) hereof with respect to a breach of a
\nrepresentation or warranty contained in Article IV of this Agreement are subject
\nto the following limitations:<\/p>\n
(i) Except with respect to the representations and warranties set
\n forth in Sections 4.1 (Organization), 4.2 (Authorization), 4.3 (Capital
\n Stock), 4.4 (Ownership of Shares), 4.6.(c) (Business Financial Statements),
\n 4.22 (Affiliate Agreements) and 4.23 (Brokers), no indemnification shall be
\n made by Sellers unless and until and only to the extent that the aggregate
\n amount of Buyer Damages exceeds U.S. $6,000,000 (six million dollars);<\/p>\n
(ii) In no event shall Sellers’ aggregate obligation to indemnify
\n the Buyer Indemnitees exceed 100% of the Purchase Price except with respect
\n to the representations and warranties set forth in Sections 4.1
\n (Organization), 4.2 (Authorization), 4.3 (Capital Stock), 4.4 (Ownership of
\n Shares), 4.22 (Affiliate Agreements) and 4.23 (Brokers);<\/p>\n
(iii) The Buyer Indemnitees (at Seller’s expense) shall use their
\n commercially reasonable efforts to collect any amounts available under such
\n insurance coverage and from such other party alleged to have<\/p>\n
116<\/p>\n
responsibility. If a Buyer Indemnitee receives an amount under insurance
\n coverage or from such other party with respect to Buyer Damages at any time
\n subsequent to any indemnification provided by the Sellers pursuant to this
\n Section 9.2, then such Buyer Indemnitee shall promptly reimburse the
\n Sellers for any payment made or expense incurred by the Sellers in
\n connection with providing such indemnification up to such amount received
\n by the Buyer Indemnitee, but net of all reasonable costs or expenses
\n incurred by such Buyer Indemnitee in collecting such amount; and<\/p>\n
(iv) With respect to the Sellers’ obligation to indemnify the
\n Buyer Indemnitees with respect to any liability arising out of a breach of
\n Section 4.19 (Environmental Protection) that gives rise to or relates to an
\n obligation to undertake an environmental cleanup, Sellers shall have the
\n right to control (subject to Buyer’s right to be reasonably satisfied with
\n the timing, manner and procedures undertaken, to receive contemporaneous
\n copies of all correspondence and other documentation relating to such
\n matters, to be present at all scheduled meetings with regulators where such
\n matters are discussed, and to observe all on-site activities, all at
\n Buyer’s expense), and shall only be liable for amounts necessary to
\n complete remediation as required by Environmental Laws (and not ancillary
\n expenses for activities not required by Environmental Laws). Sellers shall
\n manage the matter in compliance with Environmental Laws, in good faith and
\n in a responsible and reasonably cost-effective manner, and any activities
\n conducted in connection therewith shall be undertaken promptly and
\n completed expeditiously using commercially reasonable efforts, subject to
\n the schedules and approvals required by the applicable Governmental Entity;<\/p>\n
(v) Sellers shall be obligated to indemnify the Buyer Indemnitees
\n only for those claims giving rise to Buyer Damages as to which the Buyer
\n Indemnitees have given Sellers written notice thereof promptly after
\n determination that a claim for Buyer Damages has occurred and, in any
\n event, and, with respect to a breach of a representation and warranty,
\n prior to the end of the Indemnity Period in the event that the Indemnity
\n Period applies to such Buyer Damages. Any written notice delivered by a
\n Buyer Indemnitee to Sellers with respect to Buyer Damages shall set forth
\n with as much specificity as is reasonably available and practicable the
\n basis of the claim for Buyer Damages and, to the extent reasonably
\n available and practicable, a reasonable estimate of the amount thereof;<\/p>\n
117<\/p>\n
(vi) Each of the Sellers hereby agrees that Sellers will not make
\n any claim for indemnification against the Buyer, the Business, the Acquired
\n Companies or the Subsidiaries by reason of the fact that the Sellers or any
\n of its Affiliates was a partner, trustee, director, officer, employee, or
\n agent of any such entity or was serving at the request of any such entity
\n as a partner, trustee, director, officer, employee, or agent of another
\n entity (whether such claim is for judgments, damages, penalties, fines,
\n costs, amounts paid in settlement, losses, expenses, or otherwise and
\n whether such claim is pursuant to any statute, charter document, by-law,
\n agreement or otherwise) with respect to any action, suit, proceeding,
\n complaint, claim or demand arising out of this Agreement brought by the
\n Buyer Indemnitees against such Sellers; and<\/p>\n
(vii) Other than a claim based on fraud, the remedies expressly
\n provided in this Agreement shall constitute the Buyer Indemnitees’
\n exclusive remedy against Sellers for any and all Buyer Damages. The
\n foregoing indemnification provisions are in addition to, and not in
\n derogation of, any statutory or common law remedy based on fraud and any
\n equitable remedy any party hereto may have with respect to the Business,
\n the Acquired Companies or the Subsidiaries, or the transactions
\n contemplated by this Agreement.<\/p>\n
Section 9.3 Buyer’s Agreement to Indemnify.<\/p>\n
(a) Subject to the terms and conditions set forth herein, from and
\nafter the Closing, Buyer shall indemnify, defend and hold harmless Sellers and
\ntheir Affiliates and their respective directors, officers, employees, agents and
\nrepresentatives and their successors and assigns (collectively, the “Sellers
\nIndemnitees”) from and against all Losses and Damages asserted against or
\nincurred by any Sellers Indemnitee (collectively “Sellers Damages”) as a result
\nof or arising out of (i) a breach of any representation or warranty of Buyer
\ncontained in this Agreement, (ii) a breach of any agreement or covenant of Buyer
\nin this Agreement (other than with respect to matters relating to Taxes for
\nwhich indemnification will be provided exclusively in accordance with Section
\n6.9) or any Ancillary Agreement subject to the terms, conditions and damage
\nlimitations therein, (iii) any claim made by any Affected Employee related to
\nthe benefits accrued by such Affected Employee under the Revlon Savings Plan
\nprior to the Closing Date provided that the assets attributable to the account
\nbalance of such Affected Employee have been transferred to the Buyer pursuant to
\nthe provisions of Section 6.8(c) hereof, (iv) any claim made by any Affected
\nEmployee related to the benefits accrued by such Affected Employee under the
\nSellers UAW DB Plan prior to the Closing Date provided that the assets
\nattributable to the accrued benefit of such<\/p>\n
118<\/p>\n
Affected Employee have been transferred to the Buyer pursuant to the provisions
\nof Section 6.8(d) hereof, (v) any claim made by any Affected Employee for the
\nbenefit accrued by any such Affected Employee under any of the four Revlon
\nnon-qualified deferred compensation plans identified in Section 6.8(m) prior to
\nthe Closing Date provided that the assets attributable to the accrued benefits
\nof such Affected Employee have been transferred to the Buyer pursuant to the
\nprovisions of Section 6.8(m) hereof, or (vi) any Assumed Liabilities. The
\nassumption by the Buyer of the Assumed Liabilities, and the transfer thereof by
\nthe Sellers shall in no way expand the rights or remedies of any third party
\nagainst the Buyer or the Sellers or their respective officers, directors,
\nemployees, members, managers and advisors as compared to the rights and remedies
\nwhich such third party would have had against such Parties had the Buyer not
\nassumed such liabilities. Without limiting the generality of the preceding
\nsentence, the assumption by the Buyer of said liabilities shall not create any
\nthird party beneficiary rights. The Sellers shall pay and discharge when due out
\nof their own funds, with no right of contribution or recourse against the assets
\nof the Buyer, or contest in good faith at no cost or expense to the Buyer or its
\nAffiliates, all of those Liabilities of the Sellers which the Buyer has not
\nspecifically agreed to assume hereunder.<\/p>\n
(b) Buyer’s obligations to indemnify and defend the Sellers
\nIndemnitees pursuant to Section 9.3 hereof with respect to a breach of a
\nrepresentation or warranty contained in Article V of this Agreement are subject
\nto the following limitations:<\/p>\n
(i) Except with respect to the representations and warranties set
\n forth in Sections 5.1 (Organization), 5.2 (Authorization) and 5.7
\n (Brokers), no indemnification shall be made by Buyer unless and until and
\n only to the extent that the aggregate amount of Sellers Damages exceeds
\n U.S. $6,000,000 (six million dollars);<\/p>\n
(ii) In no event shall Buyer’s aggregate obligation to indemnify
\n the Sellers Indemnitees exceed 100% of the Purchase Price except with
\n respect to the representations and warranties set forth in Sections 5.1
\n (Organization), 5.2 (Authorization) and 5.7 (Brokers);<\/p>\n
(iii) The Sellers Indemnitees (at Buyer’s expense) shall use
\n commercially reasonable best efforts to collect any amounts available under
\n such insurance coverage and from such other party alleged to have
\n responsibility. If a Sellers Indemnitee receives an amount under such
\n insurance coverage or from such other party with respect to Sellers Damages
\n at any time subsequent to any indemnification provided by the Buyer
\n pursuant to this<\/p>\n
119<\/p>\n
Section 9.3, then such Sellers Indemnitee shall promptly reimburse the
\n Buyer for any payment made or expense incurred by the Buyer in connection
\n with providing such indemnification up to such amount received by the
\n Sellers Indemnitee, but net of any expenses incurred by such Sellers
\n Indemnitee in collecting such amount; and<\/p>\n
(iv) Buyer shall be obligated to indemnify the Sellers
\n Indemnitees only for those claims giving rise to Sellers Damages as to
\n which the Sellers Indemnitees have given Buyer written notice thereof
\n promptly after determination that a claim for Sellers Damages has occurred
\n and, in any event, prior to the end of the Indemnity Period in the event
\n that the Indemnity Period applies to such Sellers Damages. Any written
\n notice delivered by a Sellers Indemnitee to Buyer with respect to Sellers
\n Damages shall set forth with as much specificity as is reasonably available
\n and practicable the basis of the claim for Sellers Damages and, to the
\n extent reasonably available and practicable, a reasonable estimate of the
\n amount thereof.<\/p>\n
Section 9.4 Third Party Indemnification. The obligations of any
\nindemnifying party under Sections 9.2 or 9.3 (the “Indemnifying Party”) to
\nindemnify any indemnified party (the “Indemnified Party”) under this Article IX
\nwith respect to Buyer Damages or Sellers Damages, as the case may be, resulting
\nfrom the assertion of Liability by a third party (a “Claim”), shall be subject
\nto the following terms and conditions:<\/p>\n
(a) Any party against which any Claim is asserted shall give the
\nparty required to provide indemnity hereunder written notice of any such Claim
\npromptly after learning of such Claim, and the Indemnifying Party may at its
\noption undertake the defense thereof by representatives of its own choosing,
\nprovided, that, before the Indemnifying Party assumes control of such defense it
\nmust first: enter into an agreement with the Indemnified Party (in form and
\nsubstance reasonably satisfactory to the Indemnified Party) pursuant to which
\nthe Indemnifying Party shall be fully responsible (with no reservation of any
\nrights other than the right to be subrogated to the rights of the Indemnified
\nParty) for all Damages relating to such Claim and unconditionally guarantees the
\npayment of any Liability resulting therefrom; and furnish the Indemnified Party
\nwith reasonable evidence that the Indemnifying Party is and will be able to
\nsatisfy any such Liability. Failure to give prompt notice of a Claim hereunder
\nshall not relieve the Indemnifying Party from any obligation under this Article
\nIX, except to the extent that the Indemnifying Party is materially prejudiced by
\nsuch failure to give prompt notice. If the Indemnifying Party, within 15 days
\nafter receiving written notice of any such Claim, fails to adequately assume the
\ndefense of such Claim (by<\/p>\n
120<\/p>\n
either notifying the Indemnified Party thereof, failing to taking action within
\nprescribed time periods in defense of such Claim or otherwise), the Indemnified
\nParty against which such Claim has been made shall (upon further written notice
\nto the Indemnifying Party) have the right to undertake the defense, compromise
\nor settlement of such Claim on behalf of and for the account and risk, and at
\nthe expense, of the Indemnifying Party, without obtaining the consent of the
\nIndemnifying Party and the Indemnifying Party shall be responsible for the
\ncosts, fees and expenses of counsel to the Indemnified Party in connection
\ntherewith. The Indemnified Party shall reasonably cooperate with the
\nIndemnifying Party in connection with any Claim.<\/p>\n
(b) Anything in Section 9.4(a) to the contrary notwithstanding:<\/p>\n
(i) if any Claim involves solely the recovery of a sum of money
\n (and does not seek injunctive or other equitable relief); or involves the
\n recovery of any combination of money, on the one hand, and seeks injunctive
\n or other equitable relief, on the other, or the Indemnified Party
\n reasonably believes that an adverse determination of such Claim could be
\n detrimental to or injure the Indemnified Party’s reputation or future
\n business prospects and notifies the Indemnified Party of such belief; the
\n Indemnifying Party shall not enter into any settlement or compromise of any
\n action, suit or proceeding or consent to the entry of any judgment without
\n the prior written consent of the Indemnified Party, which consent shall not
\n be unreasonably withheld or delayed. In the event the Indemnifying Party
\n receives a bona fide settlement proposal or compromise which includes
\n provisions that would bind the Indemnified Party other than with respect to
\n the payment of monetary damages, or which the Indemnified Party reasonably
\n believes could be detrimental to or injure its reputation or future
\n business prospects, and in either such case which the Indemnifying Party,
\n in good faith reasonably believes would not have an adverse effect on the
\n Indemnified Party, if such settlement or compromise is acceptable to the
\n Indemnifying Party but the non-monetary portion of such compromise or
\n settlement is not acceptable to the Indemnified Party (acting reasonably
\n and without delay), the Indemnified Party must either accept such
\n settlement or compromise or continue the defense of any such matter for its
\n own account, and the costs and expense of such defense from and after the
\n date that the Indemnifying Party notified the Indemnified Party of the
\n terms of such settlement or compromise as well as any Losses and Damages in
\n excess of the amount which the Indemnifying Party would have borne had the
\n settlement proposed by the Indemnifying Party been accepted, shall be for
\n the account of the Indemnified Party; provided that Indemnifying Party
\n shall pay to<\/p>\n
121<\/p>\n
the Indemnified Party the full amount of such proposed monetary settlement
\n at the time the Indemnified Party assumes such defense;<\/p>\n
(ii) if any Claim solely seeks injunctive or other equitable
\n relief, the Indemnifying Party shall not be entitled to have, and the
\n Indemnified Party shall, subject to the Indemnifying Party’s rights
\n pursuant to Section 9.4(a), have the sole right to undertake the defense
\n thereof by representatives of its own choosing by notifying the
\n Indemnifying Party of such election together with its initial notice of the
\n Claim pursuant to Section 9.4;<\/p>\n
(iii) No Indemnifying Party shall settle or compromise or consent
\n to the entry of any judgment with respect to any Claim unless such
\n settlement, compromise or consent includes an unconditional written release
\n of the Indemnified Party from all Liability arising out of such Claim.<\/p>\n
(c) Notwithstanding Section 9.4(b) above; (i) the Indemnified Party
\nwill be entitled to participate in the defense of any Claim and employ counsel
\nof its choice for such purpose at its own expense, beginning five days
\nsubsequent to the date upon which the Indemnified Party notified the
\nIndemnifying Party of the existence of such Claim (ii) the Indemnifying Party
\nwill not be entitled to assume control of the defense of such Claim and shall
\nenter into a joint defense agreement with the Indemnified Party and will pay the
\nreasonable fees and expenses of legal counsel retained by the Indemnified Party,
\nif the Indemnified Party reasonably believes that there exists or could arise a
\nconflict of interest which, under applicable principles of legal ethics, could
\nprohibit a single legal counsel from representing both the Indemnified Party and
\nthe Indemnifying Party in such Claim, and (iii) the Indemnifying Party will not
\nbe entitled to assume control of the defense of such Claim, and will pay the
\nreasonable fees and expenses of legal counsel retained by the Indemnified Party,
\nif a court of competent jurisdiction rules that the Indemnifying Party has
\nfailed or is failing to prosecute or defend vigorously such Claim.<\/p>\n
Section 9.5 Purchase Price Adjustment. All indemnification payments
\nunder this Article IX shall be deemed adjustments to the Purchase Price.<\/p>\n
122<\/p>\n
ARTICLE X<\/p>\n
MISCELLANEOUS<\/p>\n
Section 10.1 Fees and Expenses. Whether or not the transactions
\ncontemplated herein are consummated pursuant hereto, except as otherwise
\nprovided herein, each of Sellers, on the one hand, and Buyer, on the other hand,
\nshall pay all fees and expenses incurred by, or on behalf of, such party in
\nconnection with, or in anticipation of, this Agreement and the consummation of
\nthe transactions contemplated hereby. Notwithstanding anything to the contrary,
\nthe Sellers agree that the Buyer, the Business, the Acquired Companies and the
\nSubsidiaries have not borne or will not bear (i) any of the Sellers’ costs and
\nexpenses (including any of their legal fees and expenses) in connection with
\nthis Agreement, the Ancillary Agreements or any of the transactions contemplated
\nhereby or thereby (including, without limitation, expenses directly or
\nindirectly attributable to the Restructuring) other than as provided in Section
\n6.9(j), or (ii) any costs or expenses (including any severance costs) incurred
\nbetween October 1, 1999 and the Closing Date in connection with or arising out
\nof the termination, retirement, layoff, resignation or other separation of
\nemployment (for any reason) of any employee of the Sellers, the Acquired
\nCompanies, the Subsidiaries and their Affiliates, except to the extent accrued
\non the September 30, 1999 Statement of Net Assets or the Final Statement of Net
\nAssets.<\/p>\n
Section 10.2 Notices. All notices, requests, demands, waivers and other
\ncommunications required or permitted to be given under this Agreement shall be
\ndelivered in writing by any of the following methods: (a) personal delivery; (b)
\nregistered or certified mail, postage prepaid, return receipt requested; or (c)
\novernight delivery service, provided that, in each case a copy shall also be
\nsent via facsimile transmission. Notices shall be sent to the appropriate party
\nat its address or facsimile number given below (or at such other address or
\nfacsimile number for such party as shall be specified by notice given
\nhereunder):<\/p>\n
123<\/p>\n
If to the Buyer, to:<\/p>\n
Beauty Care Professional Products Luxembourg, S.a.r.l.
\n c\/o CVC Capital Partners
\n Hudson House
\n 8-10 Tavistock Street
\n London WC2E 7PP
\n England
\n Fax: +44-171-420-4231
\n Attention: Hardy M. McLain<\/p>\n
Carlos Colomer
\n Revlon S.A.
\n Calle Aragon, 499
\n 08013 Barcelona
\n Spain 13<\/p>\n
with copies (which shall not constitute notice to Buyer) to:<\/p>\n
Kirkland & Ellis
\n Citicorp Center
\n 153 East 53rd Street
\n New York, New York 10022
\n U.S.A.
\n Fax: +1-212-446-4900
\n Attention: Kirk A. Radke
\n Geoffrey W. Levin<\/p>\n
and<\/p>\n
Clifford Chance
\n Paseo de la Castellana
\n 110 28046 Madrid
\n Spain
\n Fax: +34-91-590-7575
\n Attention: Pablo Bieger<\/p>\n
124<\/p>\n
If to Sellers, to:<\/p>\n
Revlon Consumer Products Corporation
\n 625 Madison Avenue
\n New York, New York 10022
\n Fax No. (212) 527-5693
\n Attention: General Counsel<\/p>\n
with a copy (which shall not constitute notice to Sellers) to:<\/p>\n
Skadden, Arps, Slate,
\n Meagher & Flom LLP
\n Four Times Square
\n New York, New York 10036-6522
\n Fax No. (212) 735-2000
\n Attention: Franklin M. Gittes, Esq. and
\n Alan C. Myers, Esq.<\/p>\n
All such notices, requests, demands, waivers and communications shall be deemed
\nreceived (i) in the case of personal delivery, upon actual receipt thereof by
\nthe addressee, (ii) in the case of overnight delivery, on the day following
\ndelivery to the overnight delivery service, (iii) in the case of mail, upon
\nreceipt of the return receipt, provided that, in each case, there is issuance by
\nthe transmitting facsimile machine of a confirmation slip that the number of
\npages constituting the notice have been transmitted without error.<\/p>\n
Section 10.3 Severability. Should any provision of this Agreement for
\nany reason be declared invalid or unenforceable, such decision shall not affect
\nthe validity or enforceability of any of the other provisions of this Agreement,
\nwhich remaining provisions shall remain in full force and effect and the
\napplication of such invalid or unenforceable provision to Persons or
\ncircumstances other than those as to which it is held invalid or unenforceable
\nshall be valid and enforced to the fullest extent permitted by law.<\/p>\n
Section 10.4 Binding Effect; Assignment. This Agreement and all of the
\nprovisions hereof shall be binding upon and shall inure to the benefit of the
\nparties hereto and their respective successors and permitted assigns. Neither
\nthis Agreement nor any of the rights, interests or obligations hereunder shall
\nbe assigned, directly or indirectly, including, without limitation, by operation
\nof law, by any party hereto without the prior written consent of Revlon and
\nBuyer, provided, however, that either<\/p>\n
125<\/p>\n
party may (i) assign any or all of its rights and interests hereunder to one or
\nmore of its Affiliates, (ii) assign this Agreement (or any Ancillary Agreement
\nentered into in connection with the transactions contemplated hereby) or any of
\nits rights and interests hereunder and thereunder in connection with a merger,
\nconsolidation or sale involving a transfer of all or substantially all of the
\nassets of the Acquired Companies or Subsidiaries or the Business in the case of
\nBuyer, or, in the case of Sellers, a merger, consolidation or sale involving all
\nor substantially all of their respective assets and (iii) assign its rights
\nunder this Agreement (including its right to indemnification) to any of its or
\nits Affiliates’ lenders as collateral security; provided further that, (A)
\nnothing in this Section 10.4 shall be construed to allow any of the Sellers to
\nassign its Liability or obligations hereunder to any Person (whether an
\nAffiliate or not) and (B) if any of the Sellers makes an assignment pursuant to
\nthis Section 10.4, then such assigning Sellers shall agree in writing to remain,
\nand the transferee shall agree in writing to become, jointly and severally
\nliable with respect to the Liabilities of the Sellers hereunder.<\/p>\n
Section 10.5 No Third Party Beneficiaries. This Agreement is solely for
\nthe benefit of Sellers and their successors and permitted assigns, with respect
\nto the obligations of Buyer under this Agreement, and for the benefit of Buyer,
\nand its respective successors and permitted assigns, with respect to the
\nobligations of Sellers, under this Agreement, and this Agreement shall not be
\ndeemed to confer upon or give to any other third party any remedy, claim,
\nLiability, reimbursement, cause of action or other right.<\/p>\n
Section 10.6 Appointment of Seller Representative. By execution of a
\ncounterpart of this Agreement, Sellers hereby appoint RCPC to act as their
\nrepresentative (the “Seller Representative”) and take all actions in their name
\nand stead in all matters provided for herein, including without limitation the
\nresolution or dispute of any claims or matters related to Article II, Article VI
\nand Article IX. In the event of the bankruptcy, insolvency, incapacity, removal
\nor resignation of RCPC, a successor Seller Representative shall be appointed by
\nthe Sellers.<\/p>\n
Section 10.7 Interpretation. The article and section headings contained
\nin this Agreement are solely for the purpose of reference, are not part of the
\nagreement of the parties and shall not in any way affect the meaning or
\ninterpretation of this Agreement. Any reference to any domestic or foreign
\nstatute or law shall be deemed also to refer to all rules and regulations
\npromulgated thereunder, unless the context requires otherwise. If any party
\nhereto has breached any representation, warranty, or covenant contained herein
\nin any respect, the fact that there exists another representation, warranty, or
\ncovenant relating to the same subject matter (regardless of the relative levels
\nof specificity) which such party has not breached shall not detract<\/p>\n
126<\/p>\n
from or mitigate the fact that such party is in breach of the first
\nrepresentation, warranty, or covenant. The Exhibits, Annexes, Schedules and the
\nDisclosure Letter identified in this Agreement are incorporated herein by
\nreference and made a part hereof. Whenever the last day for the exercise of any
\nprivilege or the discharge of any duty hereunder shall fall upon any day which
\nis not a business day in the State of New York or in Barcelona, Spain, the party
\nhaving such privilege or duty may exercise such privilege or discharge such duty
\non the next succeeding business day. The word “including” shall mean including
\nwithout limitation. If there is any inconsistency between this Agreement and the
\nDisclosure Letter attached hereto, then the provisions of this Agreement will
\ncontrol. The parties hereto intend that each representation, warranty, and
\ncovenant contained herein shall have independent significance.<\/p>\n
Section 10.8 Exclusive Jurisdiction and Consent to Service.<\/p>\n
(a) Except as provided in any Ancillary Agreement, any suit, action
\nor proceeding arising out of or relating to this Agreement may only be brought
\nin the state or federal courts of New York;<\/p>\n
(b) Each of Sellers and Buyer consents to the exclusive jurisdiction
\nof each such state or federal court of New York in any suit, action or
\nproceeding relating to or arising out of this Agreement, except as provided in
\nany Ancillary Agreement;<\/p>\n
(c) Sellers and Buyer shall waive any objection which they may have
\nto the laying of venue in any such suit, action or proceeding in any such state
\nor federal court of New York; and<\/p>\n
(d) Service of any court paper may be made in such manner as may be
\nprovided under applicable laws or court rules governing service of process.<\/p>\n
Section 10.9 Entire Agreement. This Agreement, the Confidentiality
\nAgreement, the Disclosure Letter, and the Exhibits, Annexes, Schedules and the
\nAncillary Agreements and other documents referred to herein or delivered
\npursuant hereto which form a part hereof constitute the entire agreement among
\nthe parties with respect to the subject matter hereof and supersede all other
\nprior agreements and understandings, both written and oral, between the parties
\nor any of them with respect to the subject matter hereof.<\/p>\n
Section 10.10 Governing Law. This Agreement shall be governed by and
\nconstrued in accordance with the laws of the State of New York (regardless of
\nthe<\/p>\n
127<\/p>\n
laws that might otherwise govern under applicable principles of conflicts of
\nlaws thereof) as to all matters, including but not limited to matters of
\nvalidity, construction, effect, performance and remedies.<\/p>\n
Section 10.11 Counterparts. This Agreement may be executed in
\ncounterparts, each of which shall be deemed to be an original, but all of which
\nshall constitute one and the same agreement.<\/p>\n
128<\/p>\n
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
\nexecuted as of the date first above written.<\/p>\n
SELLERS:<\/p>\n
REVLON, INC.<\/p>\n
By:
\n —————————————
\n Name:
\n Title:<\/p>\n
REVLON CONSUMER PRODUCTS
\n CORPORATION<\/p>\n
By:
\n —————————————
\n Name:
\n Title:<\/p>\n
REMEA 2 B.V.<\/p>\n
By:
\n —————————————
\n Name:
\n Title:<\/p>\n
REVLON EUROPE, MIDDLE EAST AND
\n AFRICA, LTD.<\/p>\n
By:
\n —————————————
\n Name:
\n Title:<\/p>\n
129<\/p>\n
REVLON INTERNATIONAL
\n CORPORATION<\/p>\n
By:
\n ————————————-
\n Name:
\n Title:<\/p>\n
EUROPEENNE DE PRODUITS DE
\n BEAUTE S.A.<\/p>\n
By:
\n ————————————-
\n Name:
\n Title:<\/p>\n
DEUTSCHE REVLON GMBH & CO. K.G.<\/p>\n
By:
\n ————————————-
\n Name:
\n Title:<\/p>\n
REVLON CANADA, INC.<\/p>\n
By:
\n ————————————-
\n Name:
\n Title:<\/p>\n
130<\/p>\n
REVLON DE ARGENTINA, S.A.I.C.<\/p>\n
By:
\n ————————————-
\n Name:
\n Title:<\/p>\n
REVLON SOUTH AFRICA (PROPRIETARY)
\n LIMITED<\/p>\n
By:
\n ————————————-
\n Name:
\n Title:<\/p>\n
REVLON (SUISSE) S.A.<\/p>\n
By:
\n ————————————-
\n Name:
\n Title:<\/p>\n
REVLON OVERSEAS CORPORATION
\n C.A.<\/p>\n
By:
\n ————————————-
\n Name:
\n Title:<\/p>\n
CEIL -COMERCIAL, EXPORTADORA,
\n INDUSTRIAL LTDA.<\/p>\n
By:
\n ————————————-
\n Name:
\n Title:<\/p>\n
131<\/p>\n
REVLON MANUFACTURING LTD.<\/p>\n
By:
\n ————————————-
\n Name:
\n Title:<\/p>\n
REVLON BELGIUM N.V.<\/p>\n
By:
\n ————————————-
\n Name:
\n Title:<\/p>\n
REVLON (CHILE) S.A.<\/p>\n
By:
\n ————————————-
\n Name:
\n Title:<\/p>\n
REVLON (HONG KONG) LIMITED<\/p>\n
By:
\n ————————————-
\n Name:
\n Title:<\/p>\n
REVLON, S.A.<\/p>\n
By:
\n ————————————-
\n Name:
\n Title:<\/p>\n
132<\/p>\n
REVLON NEDERLAND B.V.<\/p>\n
By:
\n ————————————-
\n Name:
\n Title:<\/p>\n
REVLON NEW ZEALAND LIMITED<\/p>\n
By:
\n ————————————-
\n Name:
\n Title:<\/p>\n
EUROPEAN BEAUTY PRODUCTS S.p.A.<\/p>\n
By:
\n ————————————-
\n Name:
\n Title:<\/p>\n
BUYER:<\/p>\n
BEAUTY CARE PROFESSIONAL PRODUCTS
\n LUXEMBOURG, S.a.r.l.<\/p>\n
By:
\n ————————————-
\n Name: Carlos Colomer
\n Title:<\/p>\n
By:
\n ————————————-
\n Name: Hardy McLain
\n Title:<\/p>\n
133<\/p>\n
With respect to Section 6.9 only:<\/p>\n
MAFCO HOLDINGS INC.<\/p>\n
By:
\n ————————————-
\n Name:
\n Title:<\/p>\n
134<\/p>\n
ANNEX A
\nBRANDS<\/p>\n
Note: Marks are listed alphabetically by column.<\/p>\n
African Pride Mendex
\nAlfil Set Midollo
\nAll Ways Natural Modern Organic Products or MOP
\nAlpha Moell
\nAlpha 5 in 1 Moistcure
\nAlpha Set Moisture Recovery Treatment
\nAmerican Crew Muscle
\nArosci Nail Fresh
\nArtistic World Nail Intensity
\nArtwork Natural Honey
\nAttrezzature Natural Wonder
\nAxium Neutroperm
\nBiopoint Nice Change
\nBiopon Oksipul
\nBiotec Oxi Plus
\nCapvit PC2000
\nCitroperm Perfect Perm
\nCitroperm Henry Perfect Touch
\nClean Touch Perm & Care
\nColor Clean Perm Life
\nColor Lock* Perm No Perm
\nColorissimo Perm Up
\nCool Blue Personal Bio Point
\nCool Hue PH7
\nCool Hue Color PH7 Perm
\nCosmetic Touch Pointine
\nCreative Nail Porosity Control
\nCreme of Nature Porosity Equalizer
\nCreme Superoxide Licensed Revlon Marks**
\nD:Fi Radical Solar Nail
\nD:Stressed Realistic
\nDesigner Look Retention+
\nDiaffany Roulite
\nDry & Shine Roux
\nEclipse Formation Roux White
\nEco Ryellis
\nEco 12 Salon Perfection
\nEco 13 Scentsations <\/p>\n
135<\/p>\n
Ecologique Scrub
\nEkinos Scrub Fresh
\nEquave Sensor
\nFabu-laxer Sensor Body
\nFabusilk Sensor Perm
\nFanci-Full Sensor Prestige
\nFanci-Tone Sensor Supreme
\nFashion Onda Fix Sheer Delight
\nFashion Onda Perm Solar Nail
\nFashion Wave Perm Solaroil
\nFermodual Solar Seale
\nFermodyl Spa Manicure
\nFermopoint Spa Pedicure
\nFermostyle Special Feeling
\nFiesta Speed Bond
\nFinisheen Speedy
\nFixpray Spritzhold
\nFloid Super Blonde
\nFree Perm Super Quick Out
\nFrosty Roulite Super Shiney
\nGel Bond Supphold
\nGinseng Miracle Surgiva
\nGeniol Synaplex
\nGentle Blonde Thermal Tex
\nGentle Meche Tiazolin
\nGreat Feeling Tinturex
\nGreat Feeling Perm True Blue
\nHair Base True Cystem
\nHenry Tween Time
\nHerbal Deep Clean Ultra Clean Touch
\nHerbarich Ultra Pointe
\nInteractives Velocity
\nIntercosmo Voila
\nIntragen 5 Volumage 3
\nIroside Wrap’n & Tap’n
\nIvola Young Color
\nJean Doran Young Color II
\nLa mouse Young Color Cream
\nLanocolor Young Color Excel
\nLanofil Young Color Mask
\nLash & Brow Young Hair
\nLauripon Zelig
\nLiquid Tex Zelig Perm
\nLottabody Zuska <\/p>\n
136<\/p>\n
Lovely Color 911
\nLlongueras (subject to license)
\nLuminates <\/p>\n
* Licensed under and subject to the provisions of the License Agreement
\n (Color Lock)
\n** As defined in the Purchase Agreement, all of which are licensed under and
\n subject to the provisions of the License Agreement (Revlon Marks)<\/p>\n
137<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8683],"corporate_contracts_industries":[9395],"corporate_contracts_types":[9623,9622],"class_list":["post-43521","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-revlon-inc","corporate_contracts_industries-consumer__cleaning","corporate_contracts_types-planning__asset","corporate_contracts_types-planning"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43521","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43521"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43521"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43521"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43521"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}