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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended DECEMBER 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from_______________________to_______________________
Commission file number 0-9008
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ANDREWS GROUP INCORPORATED
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(Exact name of registrant as specified in its charter)
DELAWARE 95-2683875
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(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification No.)
10880 WILSHIRE BOULEVARD, SUITE 1400, LOS ANGELES, CALIFORNIA 90024
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (310) 234-6737
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Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [check] No
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-
K or any amendment to this Form 10-K. [check]
State the aggregate market value of the voting stock held by
non-affiliates of the registrant, by reference to the price at which the stock
was sold as of a specified date within 60 days prior to the date of filing:
None
The number of shares of Registrant's Common Stock, $1.00 par
value, outstanding as of March 29, 1997 was 1,000 and all common stock was
indirectly held by Mafco Holdings Inc.
Documents Incorporated by Reference
Portions of the definitive Proxy Statements for the 1997 annual meeting of
stockholders of Marvel Entertainment Group Inc. are incorporated by reference
into Part III of this Form 10-K. If such proxy is not so filed, such
information will be filed as an amendment to Marvel's Form 10-K.
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
Andrews Group Incorporated ("Andrews", together with its
subsidiaries, the "Company") was incorporated in 1984 and is the successor to
a corporation incorporated in 1971. The Company is a wholly-owned subsidiary
of MacAndrews & Forbes Holdings Inc. ("MacAndrews Holdings"), a corporation
wholly-owned by Mafco Holdings Inc. ("Mafco"). At December 31, 1996, Andrews
had a 79% ownership interest in Marvel Entertainment Group, Inc. ("Marvel")
and a 41% ownership interest (86% voting interest) in New World Communications
Group Incorporated ("NWCG"), assuming conversion of the then-outstanding NWCG
Series B Preferred Stock. Through Marvel, the Company operates in the youth
entertainment business. Until its sale in January 1997, the Company owned NWCG
which operated in the television broadcasting and production and distribution
businesses.
Marvel is a leading creator, publisher and distributor of youth
entertainment products for domestic and international markets based on
fictional action adventure characters owned by Marvel (the "Marvel
Characters"), licenses from professional athletes, sports teams and popular
entertainment characters and other properties owned by third parties. Marvel
also licenses the Marvel Characters and properties for consumer products,
television and film projects, on-line and interactive software, and
advertising promotions.
Marvel's operations consist of (i) the publication and sale of
comic books and other children's publications, (ii) consumer products, media
advertising, promotions and licensing of Marvel Characters, (iii) the
manufacturing and distribution of sports and entertainment trading cards and
activity sticker collections, (iv) the design, marketing and distribution of
toys, and (v) the manufacture and distribution of adhesives and confectionery
products.
On December 27, 1996, Marvel Holdings, Marvel Parent, Marvel III,
Marvel and several of its subsidiaries filed voluntary petitions for
reorganization under Chapter 11 of the United States Bankruptcy Code (See
"Reorganization of Marvel and Marvel Holding Companies").
NWCG DISPOSITION
On January 22, 1997 (the "NWCG Merger Date"), a special meeting
(the "Special Meeting") of stockholders of NWCG was held. At the Special
Meeting, the Agreement and Plan of Merger dated as of September 24, 1996 (the
"NWCG Merger Agreement"), by and among NWCG, The News Corporation Limited, a
South Australian corporation ("News Corp."), Fox Television Stations, Inc., a
Delaware corporation in which News Corp. has an indirect interest ("Fox"), and
Fox Acquisition Co., Inc., a Delaware corporation and a wholly-owned
subsidiary of Fox ("Merger Sub"), was approved. Immediately following the
Special Meeting, the transactions contemplated by the NWCG Merger Agreement
were consummated, including the merger of Merger Sub with and into NWCG and a
stock purchase pursuant to the Stock Purchase Agreement dated as of September
24, 1996 (the "NWCG Stock Purchase Agreement"), by and among News Corp., Fox
and NWCG (Parent) Holdings Corporation ("NWCG Parent") (the transactions
contemplated by the NWCG Merger Agreement and the NWCG Stock Purchase
Agreement, collectively, the "NWCG Merger").
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Pursuant to the NWCG Stock Purchase Agreement, Fox purchased (the
"NWCG Disposition") from NWCG Parent 2,682,236 shares of common stock of NWCG
owned by NWCG Parent and all of the outstanding shares of capital stock of
NWCG Holdings Corp. ("NWCG Holdings"). The consideration for such purchase was
1.45 American Depositary Shares of News Corp. ("ADSs"), each of which
represents four fully paid and non-assessable Preferred Limited Voting
Ordinary Shares, par value A$.50 per share, of News Corp., for each share of
common stock of NWCG directly or indirectly acquired by Fox pursuant to the
NWCG Stock Purchase Agreement, with the aggregate number of ADSs issued to
NWCG Parent reduced by an amount which approximated the accreted amount of the
NWCG Holdings Senior Secured Discount Notes due 1999 (the "NWCG Discount
Notes") outstanding at the effective time of the NWCG Merger. In addition, in
connection with the NWCG Disposition, Fox agreed to assume an aggregate of
$46.2 million principal amount of debt of Four Star Holdings Inc. ("Four Star
Holdings"), a subsidiary of Andrews.
In connection with the NWCG Merger, the Company received
37,954,211 ADSs (with a market price of $17.625 per ADS on January 22, 1997)
and 2,175,000 warrants to purchase ADSs (in exchange for 1,500,000 warrants to
purchase shares of NWCG previously held by the Company). The Company expects
to record a pre-tax gain in 1997 on the NWCG Disposition of approximately $720
million. Through March 26, 1997, the Company sold 15,562,300 ADSs for net
proceeds of $271.4 million.
REORGANIZATION OF MARVEL AND MARVEL HOLDING COMPANIES
Although Marvel's consolidated net revenues have increased through
1995 as a result of diversification into lines of business other than comic
book publishing, certain significant and long-term changes in market
conditions associated with Marvel's publishing and trading cards businesses
have significantly and adversely affected Marvel's net revenues and operating
results in recent periods.
Marvel experienced significant operating losses during 1995 and
1996, and failed to satisfy certain financial covenants contained in the
Marvel Credit Agreements (as defined below, see Note 6 of "Notes to
Consolidated Financial Statements") beginning in the Fall of 1996. Marvel
commenced discussions in the Fall of 1996 with Andrews regarding an equity
infusion in order to provide for Marvel's cash requirements and with The Chase
Manhattan Bank, agent bank for the Marvel Credit Agreements, regarding a
restructuring of the Marvel Credit Agreements.
On December 27, 1996, Marvel along with certain of its operating
and inactive subsidiaries, Fleer Corp. ("Fleer"); SkyBox International, Inc.
("SkyBox"); Marvel Characters, Inc.; Heroes World Distribution, Inc. ("Heroes
World"); The Asher Candy Company; Malibu Comics Entertainment, Inc.
("Malibu"); Frank H. Fleer Corp. and Marvel Direct Marketing Inc. (along with
Marvel, the "Debtor Companies"), filed petitions for relief and a plan of
reorganization under Chapter 11 of the United States Bankruptcy Code (the
"Bankruptcy Code") in the United States Bankruptcy Court for the District of
Delaware (the "Bankruptcy Court"). Panini S.p.A. ("Panini"), Marvel Restaurant
Venture Corp. ("Marvel Restaurants") (a general partner in the Joint Venture
developing the Marvel Mania restaurants (each as defined below), see "Business
- -- Strategic Initiatives -- Marvel Mania") and Toy Biz, Inc. ("Toy Biz") all
of which are active, as well as certain inactive subsidiaries did not file
petitions under the Bankruptcy Code.
A Plan of Reorganization, filed on December 27, 1996 (as amended,
the "Plan"), contemplated pursuant to the Stock Purchase Agreement dated
December 26, 1996, between Andrews and Marvel, Andrews, or an affiliate
thereof, would acquire from Marvel a number of shares of Common Stock (or its
equivalent) that would represent 80.1% of the shares of reorganized Marvel
after giving effect to such
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acquisition, in consideration for $365 million in cash or, at the option of
Andrews, shares of class A common stock, par value $.01 per share of Toy Biz
(the "Class A Common Stock") or a combination of the foregoing (the "Andrews
Investment"). The Plan contemplated that in connection with the Andrews
Investment, Marvel would acquire the Class A Common Stock not owned by Marvel,
Andrews or their affiliates pursuant to a Merger Agreement between Andrews and
Toy Biz and Stock Purchase Agreements with the two other principal
stockholders of Toy Biz. The Plan also contemplated a new $160 million credit
facility at Toy Biz to be used for working capital purposes of Marvel,
including Toy Biz, and to fund Marvel's strategic initiatives. See "Business
- -- Strategic Initiatives." As of March 27, 1997, Marvel owned 7,394,000 shares
of class B common stock of Toy Biz (the "Class B Common Stock"), representing
26.6% of the equity of Toy Biz, and 78.4% of the voting power relating to Toy
Biz. The Plan has since been withdrawn as described below.
The Debtor Companies received approval from the Bankruptcy Court
to pay on time and in full undisputed pre-petition obligations including
salaries, wages and benefits to all of its employees, trade creditors and
independent contractors and to continue funding its strategic initiatives. On
January 24, 1997 the Bankruptcy Court approved a $100 million
debtor-in-possession financing facility (the "DIP Loan"), which is provided by
a syndicate of lenders, including The Chase Manhattan Bank, as agent bank, and
is available to Marvel until June 30, 1997. The DIP Loan is subject to
covenants and events of default including a change of control of Marvel (as
defined therein). See Note 6 of "Notes to Consolidated Financial Statements"
and "Management Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources".
On February 12, 1997, the Office of the United States Trustee
appointed a committee of equity securityholders of the Debtor Companies under
section 1102(a)(1) of the Bankruptcy Code (the "Equity Committee"). The Equity
Committee presently consists of: Barclay's Global Investors, Marty Solomon,
Robert A. Della Camera, Peter E. Kelly, Jr., Gladys V. Veidemanis and Ronald
Cantor.
In 1993, Marvel Holdings Inc. ("Marvel Holdings"), an indirect
subsidiary of Andrews, issued $517.4 million principal amount at maturity of
Senior Secured Discount Notes due 1998. In 1993, Marvel (Parent) Holdings Inc.
("Parent Holdings"), an indirect subsidiary of Andrews, issued $251.7 million
principal amount at maturity of Senior Secured Discount Notes due 1998 (the
"Parent Holdings Notes"). In 1994, Marvel III Holdings Inc. ("Marvel III" and
collectively with Marvel Holdings and Parent Holdings, the "Marvel Holding
Companies"), an indirect subsidiary of Andrews, issued $125 million principal
amount of 9-1/8% Senior Secured Notes due 1998 (the "Marvel III Notes").
Marvel Holdings and Parent Holdings have, in the aggregate, pledged 77,302,326
shares of Marvel's common stock to secure such notes (the "Pledged Common
Stock"), and an additional approximately 2.9 million shares of Marvel common
stock are subject to a negative pledge under the indenture to the notes issued
by Marvel Holdings. In addition, Parent Holdings has pledged the common stock
of Marvel Holdings, which it owns, to secure the Parent Holding Notes, and
Marvel III has pledged the common stock of Parent Holdings, which it owns, to
secure the Marvel III Notes (collectively with the Pledged Common Stock, the
"Pledged Stock").
On December 27, 1996, the Marvel Holding Companies filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code with the
Bankruptcy Court. The Chapter 11 cases commenced by the Marvel Holding
Companies have not been procedurally consolidated and are not jointly
administered with the Debtor Companies' Chapter 11 cases.
On January 9, 1997, the United States Trustee appointed a
committee of creditors holding unsecured claims against the Marvel Holding
Companies (the "Creditors Committee") under section 1102(a) of the Bankruptcy
Code. The members of the Creditors Committee, as originally appointed,
include: The Bank of
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New York, High River Limited Partnership, Westgate International, L.P.,
Schultz Investments, WHERCO, Inc., M3, LLC and United Equities Commodities
Company.
On January 13, 1997, the Creditors Committee filed a motion (the
"Stay Relief Motion") in the Marvel Holdings Companies' Chapter 11 cases
seeking (i) relief from the automatic stay to permit LaSalle National Bank, as
successor indenture trustee (the "Holding Companies' Trustee"), on behalf of
the holders of the notes issued by the Marvel Holding Companies, to foreclose
upon, and vote, the Pledged Stock and (ii) dismissal of the Marvel Holding
Companies' Chapter 11 cases. On February 26, 1997, the Bankruptcy Court
entered an order granting relief from the automatic stay to allow the Holding
Companies' Trustee to vote and to foreclose upon the Pledged Stock. On
February 27, 1997, Marvel and the Marvel Holding Companies filed a notice of
appeal with respect to such order.
On March 7, 1997, Andrews exercised its right to terminate the
Stock Purchase Agreement with Marvel. On the same date, Andrews informed Toy
Biz and the two principal stockholders of Toy Biz that, as a result of the
termination of the Andrews Investment, a condition to closing under the Merger
Agreement with Toy Biz and the Stock Purchase Agreement would not be
satisfied, that Andrews did not intend to waive the satisfaction of such
condition and therefore the transaction contemplated by such agreements would
not be consummated. As a consequence of the termination of the Stock Purchase
Agreement, the Plan has been withdrawn.
On March 7, 1997, the Creditors Committee indicated that it would
make a proposal whereby the holders of Marvel common stock (other than Mafco
and its affiliates) and holders of the notes of the Marvel Holding Companies
would make a $365 million infusion into Marvel as part of a new Plan of
Reorganization through a rights offering that would be backstopped by certain
members of the Creditors Committee, including an entity controlled by Carl
Icahn (the "Icahn Group") (as subsequently amended, the "Committee Proposal").
The Committee Proposal did not specify whether all of the $365 million would
be added to the equity of Marvel or whether a portion of the proceeds would be
used to repay borrowings under the Marvel Credit Agreements, and does not
contemplate Toy Biz becoming a wholly-owned subsidiary of Marvel. The
Committee Proposal contemplated that prior to confirmation of any plan of
reorganization reflecting the Committee Proposal, the current Board of
Directors of Marvel would be replaced by designees of the Creditors Committee.
Such proposal was subject to further negotiations with Marvel and Marvel's
bank lenders, but an agreement with these entities was never reached.
On March 19, 1997, the Creditors Committee notified Marvel that on
March 25, 1997 it would cause the Holding Companies' Trustee to vote the
Pledged Stock to replace the Board of Directors of Marvel and the Marvel
Holding Companies. On March 24, 1997, the Court in the Debtor Companies'
bankruptcy cases issued a restraining order preventing the Creditors Committee
and the Holding Companies' Trustee from voting the Pledged Stock or otherwise
replacing the Board of Directors of Marvel and determined that the Creditors
Committee and the Holding Companies' Trustee must comply with the procedural
requirements of Section 362 of the Bankruptcy Code to seek relief from the
automatic stay to take such action. The Court, however, also ruled that the
Creditors Committee and Holding Companies' Trustee could replace the Board of
Directors of Marvel Holdings and Parent Holdings. On March 28, 1997, the
Creditors Committee and the Holding Companies' Trustee filed a motion to lift
the automatic stay in the Debtor Companies' cases in order to permit the
Creditors Committee and the Holding Companies' Trustee to replace the Board of
Directors of Marvel. A hearing date on such motion has been set for May 14,
1997. On March 28, 1997, the Creditors Committee also filed an emergency
appeal of the restraining order of the Bankruptcy Court issued on March 24,
1997 preventing the replacement of the Board of Directors of Marvel. A
briefing schedule has been set for the emergency appeal and a hearing date for
such appeal has been set for May 1, 1997.
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There can be no assurance that any plan of reorganization under
the Bankruptcy Code reflecting the Committee Proposal or a proposal made by
any other party will be proposed, or that if a plan is proposed, such plan of
reorganization will be confirmed under the Bankruptcy Code.
If Marvel is unable to obtain confirmation of a plan of
reorganization, its creditors or equity securityholders may seek other
alternatives for Marvel, including bids for Marvel or parts thereof through an
auction process.
Because the Marvel Holding Companies have no assets other than
common stock of Marvel and/or stock in the Marvel Holding Companies, the
securityholders of the Marvel Holding Companies will likely receive only their
pro rata share of the Pledged Stock upon consummation of the Chapter 11 cases.
See "Management Discussion and Analysis of Financial Condition and
Results of Operations - Liquidity and Capital Resources" and "Legal
Proceedings".
PUBLISHING
COMICS
Marvel is the largest creator and publisher of comic books in
North America and, through Panini, Marvel publishes comic books in Italy, the
United Kingdom and certain other parts of Western Europe. Marvel, through
Panini, also licenses the publication of comic books based on other Marvel
Characters throughout the world.
Marvel has been publishing comic books since 1939 and has
developed a roster of more than 3,500 Marvel Characters, including the
following popular Marvel Characters: SPIDER-MAN; X-MEN (including WOLVERINE,
NIGHTCRAWLER, COLOSSUS, STORM, CYCLOPS, BISHOP and GAMBIT); CAPTAIN AMERICA;
FANTASTIC FOUR (including MR. FANTASTIC, HUMAN TORCH, INVISIBLE WOMAN and
THING); INCREDIBLE HULK; THOR; SILVER SURFER; DAREDEVIL; IRON MAN; DR. STRANGE
and GHOST RIDER. The Company's Marvel SUPER HEROES exist in the "MARVEL
UNIVERSE," a fictitious universe which provides a unifying historical and
contextual background for the storylines. Marvel's titles feature classic
Marvel SUPER HEROES and X-MEN, newly developed Marvel Characters and
characters created by other entities and licensed to Marvel, and, as a result
of its 1994 acquisition of Malibu, Malibu's "ULTRAVERSE" characters.
In developing comic books, Marvel targets particular age groups or
types of readers. Currently in development are young children's products such
as EASY TO READ, MY FIRST MARVEL and Marvel coloring books. Certain of the
Marvel Characters such as X-MEN are aimed at readers at the older end of the 4
to 17 year-old age group. Established readership of Marvel's comic books also
extends to the 18 to 35 year-old age group.
Marvel's approach to super heroes is a contemporary drama based on
real people with real problems. This enables the characters to evolve, remain
fresh, and, therefore, attract and retain new readers in each succeeding
generation. The "Marvel Universe" concept permits Marvel to use the popularity
of its Marvel Characters to introduce a new character in an existing Marvel
SUPER HEROES or X-MEN comic or to develop more fully an existing but lesser
known character. In this manner, formerly lesser known Marvel Characters such
as PUNISHER and WOLVERINE have been developed and are now popular characters
in their own right and are featured in their own monthly comic books. The
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"Marvel Universe" concept also allows Marvel to use its more popular
characters to make "guest appearances" in the comic books of lesser-known or
newer characters to attempt to increase the circulation of a particular issue
or issues.
MARKET
Marvel's primary target market for its comic books is children and
teenagers in the 10 to 17 year old age group, however, the majority of
Marvel's readers currently are teenagers and young adults. There are two
primary types of purchasers of Marvel's comic books. One is the traditional
purchaser who buys comic books like any other magazine. The other audience is
the reader-saver who purchases comic books, typically from a comic book
specialty store, and maintains them as part of a collection.
CREATIVE AND PRODUCTION PROCESS
Marvel's full-time editorial staff consists of an editor-in-chief,
two executive editors and approximately eighteen editors, associate editors
and assistant editors who oversee the quality and consistency of the artwork
and editorial copy and manage the production schedule of each issue. The
production of each issue requires the editors to coordinate over a six month
period the activities of a writer, a pencil artist, an inker, a colorist and a
printer. The majority of this work is performed by third parties outside of
Marvel's premises.
The artists and writers include freelancers who generally are paid
on a per-page basis. They are eligible to receive incentives or royalties
based on the number of copies sold (net of returns) of the comics books in
which their work appears. Marvel has entered into agreements with certain
artists and writers under which such persons have agreed to provide their
services to Marvel on an exclusive basis, generally for a period of one to
three years, and generally begin to expire in 1997. These contracts were
entered into when the comic book market was stronger and in light of the
decline in the comic book market, Marvel will seek to renew these contracts
with more favorable terms.
The creative process begins with the development of a story line.
From the established story line, the writer develops a character's actions and
motivations into a plot. After a writer has developed the plot, the pencil
artist translates it into an action-filled pictorial sequence of events. The
penciled story is returned to the writer who dialogues it, indicating where
the balloons and captions should be placed. The completed dialogue and artwork
are forwarded to a letterer who letters the dialogue and captions in the
balloons. Next, an inker enhances the pencil artist's work in order to give
the drawing three-dimensionality.
The artwork is then sent to a coloring artist. Typically using
only four colors in varying shades, the color artist uses overlays to create
over 100 different tones. This artwork is subcontracted to a color separator
who produces separations and sends the finished material to the printer.
Unaffiliated entities produce color separations and print all of Marvel's
comic books. Marvel currently uses several color separators and two printers
to produce its comic books.
DISTRIBUTION
Marvel's publications are distributed through three channels: (i)
to comic book specialty stores on a nonreturnable basis (the "direct market"),
(ii) traditional retail outlets on a returnable basis (the "retail returnable
market") and (iii) on a subscription sales basis.
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Net publishing revenues were $103.1 million, $147.7 million and
$129.4 million for the years ended December 31, 1996, 1995 and 1994,
respectively. The increase in revenues from 1994 to 1995 primarily relates to
revenues from Heroes World, Marvel's comic book direct market distribution
subsidiary, which was purchased in December 1994 and subsequently closed (as
described more fully below). See "Management Discussion and Analysis of
Financial Condition and Results of Operations".
Overall industry comic book sales declined primarily as a result
of reduced readership, lower speculative purchases and lower selling prices,
which in turn caused a contraction in the number of comic book specialty
stores. The decrease in the overall comic book business has resulted in a
decrease in the number of, and has negatively affected the financial condition
of, the comic book specialty stores, which has further negatively impacted
Marvel's net publishing revenues.
For the year ended December 31, 1996, approximately 62.6% of net
publishing revenues were derived from sales to the direct market. In 1995 and
1996, Marvel exclusively distributed its publications through Heroes World. In
this time period, however, the comic book direct market and Marvel's sales in
such market have continued to decline. In light of such declines and related
inefficiencies at Heroes World, in late 1996 Marvel decided to close Heroes
World and in early 1997 Marvel entered into an agreement with an unaffiliated
entity to service specialty market retailers and direct market comic book
shops. Marvel believes that in the event of a termination of this agreement
Marvel will be able to provide service to its customers and that any such
termination would not have a long-term material adverse effect on its
publishing business.
For the year ended December 31, 1996, approximately 24.6% of
Marvel's net publishing revenues were derived from sales to the retail
returnable market and 9.5% of net publishing revenues were through a single
unaffiliated distributor. The retail returnable market consists of
approximately 50,000 traditional periodical retailers such as newsstands,
convenience stores, drug stores, supermarkets, mass merchandise and national
bookstore chains. The distributors sell Marvel's publications to wholesalers,
who in turn sell to the retail outlets. Marvel issues credit to these
distributors for unsold and returned copies. Distribution to national
bookstore chains is accomplished through a separate distributor. Marvel
believes it could obtain comparable services from other distributors in the
retail returnable market should such replacement become necessary or
desirable.
For the year ended December 31, 1996, approximately 5.5% of
Marvel's net publishing revenues were derived from subscription sales.
Subscription copies of Marvel's publications are mailed for Marvel by an
unaffiliated subscription fulfillment service.
For the year ended December 31, 1996, approximately 7.3% of
Marvel's net publishing revenues were derived from advertising sales. In most
of Marvel's comic publications, ten pages (three glossy cover pages and seven
inside pages) are allocated for advertising. The products advertised include
sports and entertainment trading cards, video games, role playing games,
movies, candy, cereals, toys, models and other consumer packaged goods. Marvel
permits advertisers to advertise in a broad range of Marvel's comic
publications which target specific groups of titles that have a younger or
older readership.
CONSUMER PRODUCTS, MEDIA AND ADVERTISING-PROMOTION LICENSING
Marvel's consumer products, media and advertising-promotion
licensing operations are organized in several areas: the licensing of or joint
ventures involving the Marvel Characters for use
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with (i) merchandise, (ii) promotions, (iii) publishing, (iv) television and
film, (v) on-line and interactive software and (vi) restaurants, theme parks
and site-based entertainment. Marvel's licensees sell Marvel's character-based
products through their normal distribution channels and occasionally in
specialty comic book stores. Marvel's characters appear on hundreds of items,
including shirts, shoes and a myriad of other types of apparel, gifts, toys
and games, software, housewares and domestic items and consumer packaged
goods. Marvel generally receives a percentage of wholesale sales as a royalty
including a guarantee of minimum royalties, and an advance against royalties
upon execution of a license agreement. Marvel also licenses the Marvel
Characters for the production of television programs and feature films and for
use in theme parks.
Marvel, through Panini, also enters into publishing license
agreements with international publishers for the publication of comic and
non-comic books employing Marvel's titles and the Marvel Characters and third
party titles and characters in approximately 50 countries and 19 languages.
Marvel receives a percentage of the publishers' revenues as a royalty. Marvel
also acts as an agent for third party owners of characters seeking to obtain
licensing opportunities for their characters.
For the year ended December 31, 1996, the revenue from consumer
products, media and advertising-promotions licensing comprised 2.5% of
Marvel's consolidated net revenues.
MARVEL STUDIOS
To enhance further the media exposure of the Marvel Characters,
Marvel and Toy Biz intend to form Marvel Studios, although documentation
relating to such formation has not been finalized (and pending such formation,
Marvel Studios is being operated as a division of Marvel). The objective of
Marvel Studios is to facilitate the release of live action and animated
feature films and television programming, and other media based on the Marvel
Characters in order to create greater consumer interest in the Marvel
Characters and related merchandise. Marvel believes that any feature film or
television programming, theatrical productions or other media and any
advertising and promotion associated with such media will create consumer
interest in the Marvel Characters and revenue opportunities for Marvel's
licensing and toy businesses. For example, Marvel believes that the popularity
of the X-MEN and SPIDER-MAN animated television shows have resulted in
significant increases in net sales by Toy Biz of X-MEN and SPIDER-MAN toys.
Marvel believes that Marvel Studios will facilitate the release of feature
films, television programming and other media by giving Marvel greater control
over the development of such projects compared to the present practice of only
licensing the use of the Marvel Characters in film or television projects to
an unrelated third party. See "Strategic Initiatives -- Marvel Studios".
INTERACTIVE MEDIA
During 1996, Marvel formed Marvel Interactive for the development
of on-line services and interactive software utilizing or based upon the
Marvel Characters. For a further description of these matters, see "Strategic
Initiatives -- Marvel Interactive."
RESTAURANTS
Marvel, through Marvel Restaurants, a wholly-owned subsidiary of
Marvel, has formed a joint venture (the "Joint Venture") with Planet Hollywood
("PHI") for the development of Marvel theme restaurants based on the Marvel
Characters ("Marvel Mania"). Three restaurants are currently
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contemplated, with the first restaurant expected to open in the second half of
1997. For a further description of these matters, see "Strategic Initiatives--
Marvel Mania".
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SPORTS AND ENTERTAINMENT TRADING CARDS; CHILDREN'S ACTIVITY STICKERS
In April 1995, Marvel acquired SkyBox and merged its operations
with the existing trading card operations of Fleer (collectively,
"Fleer/SkyBox"). Fleer/SkyBox is a leading marketer of sports and
entertainment trading cards. Fleer/SkyBox is best known for its sports trading
cards depicting professional athletes and sports teams, including professional
baseball, basketball, football and hockey players competing in Major League
Baseball, the National Basketball Association, the National Football League
and the National Hockey League and NASCAR(R) drivers. Sports trading cards
feature pictures of professional athletes and generally include statistical
and biographical information about the pictured athletes. Marvel's ability to
produce, market, and sell its sports trading cards is dependent upon the
continual renewal of license agreements with the organizations representing
the players and owners of the baseball, basketball, football and hockey
players, teams and leagues. These licenses are non-exclusive and generally are
granted for a two to four year period. In addition, Fleer/SkyBox manufactures
and distributes entertainment trading cards using Marvel's classic SUPER
HEROES characters as well as characters based on other licensed properties,
such as The Hunchback of Notre Dame and Hercules of the Walt Disney Company,
Time Warner's Batman and Robin and Paramount's Star Trek. Marvel's trading
card operations have been and continue to be negatively affected by the
general contraction in the sports and entertainment trading card markets and
the baseball, hockey and basketball labor situations. Marvel is required to
make minimum royalty and advertising payments under the license agreements
related to sports and entertainment trading cards. Generally, these licenses
were executed when the trading card market was larger and Marvel's trading
card net revenues were higher as compared to actual 1996 net revenues. Hence,
as a result of the minimum royalty and advertising commitments, declines in
Marvel's trading card net revenues significantly and adversely affect the
profitability of the trading card business. See "Management Discussion and
Analysis of Financial Condition and Results of Operations".
Panini is the largest manufacturer and distributor of sports and
entertainment sticker collections in the world, with a substantial portion of
its business conducted in Western Europe. Panini produces and distributes
stickers, which are pictures on self-adhesive paper designed primarily to be
collected and placed in albums. Panini maintains a broad portfolio of licenses
for characters or themes on which the stickers are based. Panini's prominent
position in the sticker industry has enabled it to secure many desirable
licenses, including exclusive and non-exclusive agreements with many sporting
federations and with major entertainment licensors such as Disney, Time Warner
and Mattel. Collections produced by Panini feature professional athletes and
teams in sports such as soccer (primarily athletes and teams competing in the
major European and Brazilian soccer leagues, including those competing in the
World Cup and European Cup competitions), baseball, basketball and hockey;
Disney characters such as 101 Dalmatians; variety characters and themes, such
as Mattel's Barbie, D.C. Comic's Batman and the Company's X-MEN; and other
characters popular in local European markets. Licenses generally are for a
term of one to three years and provide for minimum guaranteed royalty
payments. There have been significant improvements to self-adhesive stickers
in recent years with innovations such as the use of vinyl and foil paper and
textured surfaces.
Although there can be no assurance that, in the future, new
licenses for Marvel's sports and entertainment trading card and sticker
business will be granted to Marvel upon the expiration of the current
licenses, Marvel anticipates that it will obtain new licenses generally on
terms acceptable to it. In the future, Marvel intends to seek to negotiate
lower royalty guarantees and advertising commitments relating to its existing
trading card licenses, although there can be no assurance that any such
negotiations will be successful. Marvel considers its relationships with its
licensors to be good.
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For additional information relating to these matters, see subsection entitled
"License Agreements and Trademarks".
MARKET
Although Marvel's sports and entertainment trading cards have
marketing categories and consumer profiles similar to those in the publishing
market, a significant portion of Fleer/SkyBox sales are made to a subset of
the market consisting of serious collectors. Panini sells its sticker
collections primarily to children between the ages of 4 and 14 in Western
European markets. During the year ended December 31, 1996, sales in Italy,
France, Germany, Spain and Brazil accounted for a substantial majority of
Panini's children activity sticker collection net revenues.
PRODUCTION PROCESS
Photographs used for Marvel's sports trading cards are usually
taken by independent photographers under contract with Marvel or by the
organizations representing the respective leagues and their member teams.
Artwork used Marvel's entertainment trading cards is developed from actual
medium (i.e movies and comic books) or created by in-house and freelance
artists some of whom create artwork for Marvel's comic books. Design and
coordination of the artwork is handled by Marvel's staff of artists.
Independent contractors print, cut, collate and wrap the trading cards.
Quality enhancements include dual-sided gloss coating and color corrected
photography. Additional enhancements of Fleer/SkyBox premium brand cards
utilize high-gloss ultraviolet coatings and gold foil stamping and super
premium brand cards utilize additional high-gloss clear plastic laminates and
gold foil stampings, heavier card stock and improved colorization.
Most of the manufacturing processes required in the production of
Panini's sticker collections, including self-adhesive paper production, film
layout, printing and packaging of the finished product are conducted in
Panini's own facilities in Modena, Italy and Sao Paolo, Brazil. These
manufacturing activities are supported by Marvel's editorial, art, studio and
photo lithography staff. Panini has separate production facilities for
stickers and self-adhesive paper in Modena, Italy and Sao Paolo, Brazil.
DISTRIBUTION
Marvel's sports and entertainment trading cards are distributed
through two channels: (i) to trading card specialty stores and (ii) through
mass merchandisers, price clubs and newsstand retail outlets (the "mass
market"). As a result of market conditions, Marvel has revamped its trading
card business such that distribution of its trading card products is
concentrated in trading card specialty stores and selected mass market
accounts. In addition, Marvel is testing a merchandising initiative to place
fixtures in mass market outlets with high traffic in order to simplify buying
and attract purchasers (see "Strategic Initiatives -- Trading and
Entertainment Cards"). Marvel's sports and entertainment trading cards are
distributed primarily in the United States and Canada. Marvel distributes its
trading cards internationally primarily through Panini in most of the world
and through third-party distributors in Japan, Australia and New Zealand.
Since 1994, Marvel believes that the overall trading card market
has declined by approximately 40%, which has resulted in a substantive
decrease in Marvel's trading card revenues. The decrease in the overall
trading card market has decreased the number of, or has negatively affected
the financial
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condition of, the trading card specialty stores, thereby negatively impacting
Marvel's trading card revenues.
Panini sells sticker packs and collection albums through
newsstands, confectioners and other retail locations. Panini sells primarily
to national and local third-party distributors in other countries where it
markets its products.
For the year ended December 31, 1996, approximately 45% of
Marvel's net sports and entertainment trading card revenues were derived from
sales through numerous unaffiliated distributors to specialty collectible
shops. None of the unaffiliated distributors individually represented a
significant percentage of Marvel's net sports and entertainment trading card
revenues for 1996. Marvel estimates that there are approximately 3,500 to
4,000 specialty collectible shops which are primarily located in the United
States and Canada. Marvel believes that one or more of its existing
distributors or others could replace any of Marvel's other distributors should
such replacement become necessary or desirable.
For the year ended December 31, 1996, approximately 49% of
Marvel's net sports and entertainment trading card revenues were derived from
sales to the mass market.
For the year ended December 31, 1996, substantially all of
Marvel's children's activity sticker collection net revenues were derived from
sales to the retail returnable market, of which approximately 55% were through
three unaffiliated distributors.
Total sports and entertainment trading card and children's
activity sticker revenues were $301.1 million, $357.9 million and $282.6
million in 1996, 1995 and 1994, respectively.
TOYS
Marvel presently owns a 26.6% equity interest in Toy Biz
representing, through its Class B Common Stock, 78.4% of the voting power. Toy
Biz is a toy entertainment company that designs, markets and distributes a
diverse product line comprised of boys' and girls', infant/pre-school and
activity toys in the United States and internationally, based on popular
entertainment properties, consumer brand names and proprietary designs. Marvel
licenses to Toy Biz more than 3,500 Marvel Characters on an exclusive,
perpetual and royalty-free basis, subject to certain limitations, for use in a
broad range of toys. Toy Biz capitalizes on the popularity generated by the
media exposure of certain of the Company's characters, such as X-MEN and
SPIDER-MAN by emphasizing those characters in its toy lines. Toy Biz also has
licenses to manufacture certain toy products based on non-Marvel Characters
depicted in television programs such as Hercules: The Legendary Journeys,
Xena: Princess Warrior(TM), and Muppet Babies(TM), all of which are broadcast
on network, syndicated or cable television. A number of motion pictures as to
which Toy Biz has obtained licenses to manufacture certain products have been
completed or are in the planning stages. These include a made-for-television
movie entitled Generation X(TM), which premiered in prime time on the Fox
Network, for which Toy Biz has manufactured and distributed mainly action
figures, as well as a feature film entitled Muppet Treasure Island(TM), a
widely distributed first run motion picture, for which Toy Biz has
manufactured and distributed certain plush items. Other motion pictures (both
related and unrelated to the Marvel Characters) for which Toy Biz has obtained
licenses to manufacture certain products, are planned for release by such
licensors as The Walt Disney Company and Universal City Studios, Inc.
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Marvel believes that media events associated with the characters
on which Toy Biz bases certain of its toy products increase overall consumer
awareness and popularity of these characters and Toy Biz has in part followed
a strategy intended to capitalize on the popularity generated by such media
exposure. Toy Biz has used its success in marketing the Marvel line as a means
of attracting licenses for use of recognized trademarks and brand names such
as Gerber(R), Coleman(R), and NASCAR(R).
During 1996, Toy Biz also continued its efforts to develop toys
under licenses for recognized consumer brands names and other popular
characters. Toy Biz continued to build on its line of dolls and infant and
toddler learning toys marketed under the Gerber(R) trademark. Toy Biz
continued to develop a line of children's toys with a camping and outdoor
theme sold under the Coleman(R) trademark. Toy Biz also licensed from
NASCAR(R) and several well-known stock car drivers the rights to manufacture
various toy products based upon such trademarks and personalities.
During 1996, Toy Biz also continued to manufacture and distribute
additional proprietary products in various categories including: Baby Tumbles
Surprise(TM), Baby Headstand Surprise(TM), Baby So Real(TM), Take Care of Me
Twins(TM) and the multi-activity game tables.
Since completing the acquisition of the assets of Spectra Star,
Inc. ("Spectra Star(R)") and Quest Aerospace Education, Inc. ("Quest(R)") in
1995, Toy Biz's specialized activity toy business has continued to grow, with
Spectra Star(R) brand kites comprising a substantial share of United States
domestic kite business, and Quest(R) brand rockets entering the growing mass
merchandise market and specialty store distribution channels.
Toy Biz's net revenues for 1996, 1995 and 1994 were $221.6
million, $196.4 million and $156.5 million, respectively. Prior to March of
1995, Marvel reported Toy Biz operations under the equity basis and did not
record Toy Biz net revenues in its consolidated revenues. In March of 1995,
Marvel began to consolidate Toy Biz operations and consolidated $180.2 million
of net revenues in 1995.
CUSTOMERS, MARKETING AND DISTRIBUTION
Toy Biz markets and distributes its products throughout the world
with sales to customers in the United States accounting for approximately 80%
of Toy Biz's net sales in 1996. Outlets for Toy Biz's products in the United
States include specialty toy retailers, mass merchandisers, mail order
companies and variety stores, as well as independent distributors who purchase
products directly from Toy Biz and ship them to retail outlets. Toy Biz's five
largest customers include Toys R US, Inc., Wal-Mart Stores, Inc., Kmart
Corporation, Target Stores, Inc., a division of Dayton-Hudson Corp. and
Kay-Bee Toys, a division of Consolidated Stores, Inc. which customers
accounted in the aggregate for approximately 74.8% of Toy Biz's domestic gross
sales and 59.6% of Toy Biz's total sales in 1996. Toy Biz's products currently
are sold outside the United States through independent distributors by its
Hong Kong subsidiary, under supervision of Toy Biz's management. Toy Biz's
international product line generally includes products currently or previously
offered in the United States, packaged to meet local regulatory and marketing
requirements.
Toy Biz maintains a product development staff and also obtains new
product ideas from third-party inventors. The time from concept to production
of a new toy can range from six to twenty four months, depending on product
complexity.
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Toy Biz relies on independent parties in the People's Republic of
China ("China") to manufacture a substantial portion of its products. The
remainder of its products are manufactured in Mexico or the United States. As
a matter of policy, Toy Biz uses several different manufacturers. By
concentrating its manufacturing among certain manufacturers, Toy Biz thereby
pursues a strategy of selecting manufacturers at which Toy Biz's product
volume qualifies Toy Biz as a significant customer. Toy Biz is not a party to
any long-term agreement with any manufacturer.
While Toy Biz is not dependent on any single manufacturer in China
to supply it with products, Toy Biz is subject to the risks of foreign
manufacturing, including currency exchange fluctuations, transportation delays
and interruptions, and political or economic disruptions affecting
international businesses generally. Toy Biz's ability to obtain products from
its Chinese manufactures is dependent upon the United States' trade
relationship with China. The "Most Favored Nation" status of China, which is
reviewed annually by the United States government is a regular topic of
political controversy. The loss of China's "Most Favored Nation Status" would
increase the cost of importing products from China significantly, which could
have a material adverse effect on Toy Biz. The imposition of further trade
sanctions on China could result in significant supply disruptions or higher
merchandise costs to Toy Biz. Toy Biz believes that alternate sources of
manufacturing are available outside China, although there can be no assurance
that these alternate sources will be available on acceptable terms.
OTHER PRODUCTS
CONFECTIONERY
Fleer manufactures and markets an array of confectionery products.
Fleer's confectionery operation is best known for its DUBBLE BUBBLE and
RAZZLES gum products. Marvel believes that DUBBLE BUBBLE, with origins dating
back to 1928, was the first branded bubble gum sold in the United States.
Marvel distributes its confectionery products utilizing substantially the same
distribution channels as those used for sports and entertainment trading
cards.
ADHESIVES
Panini distributes self-adhesive paper throughout the world.
Through its Adespan Paper Division, Panini manufactures sheet and reel
self-adhesive paper which is sold to third parties primarily for production of
stickers used in labeling and packaging.
Net revenues from other products, were $101.7 million, $90.0
million and $52.3 million in 1996, 1995 and 1994, respectively.
LICENSES AND TRADEMARKS
Marvel believes that its roster of Marvel Characters as well as
its MARVEL trade name represent its most valuable assets and that such roster
could not be easily reproduced. In addition, Marvel considers its FLEER, FLEER
ULTRA, FLAIR, NBA HOOPS and SKYBOX trademarks to be of material importance to
its sports picture card business, its PANINI trademark to be of material
importance to its children's activity sticker business and DUBBLE BUBBLE and
RAZZLES trademarks to be of material importance to its confectionery business.
Marvel currently conducts an active program of maintaining and protecting (i)
its principal trademarks, including the MARVEL trade name, and (ii) copyrights
on the
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Marvel characters and publications in the United States and in approximately
55 foreign countries where such protection is available. Marvel's principal
trademarks have been registered in the United States, certain of the countries
in Western Europe and South America, Japan, Israel and South Africa and, in
the case of Panini, in Western Europe and Brazil.
Marvel's ability to market its sports trading cards is based on
rights under primarily non-exclusive license agreements with the baseball,
basketball, football and hockey players' associations, and with the
organizations which represent the respective leagues and their member teams.
Generally, Marvel's sports picture card licenses provide for two-to-four-year
terms and minimum guaranteed royalty and advertising payments. Marvel's
agreements with the various players' associations enable Marvel to use a
player's name, picture, facsimile signature and biographical description.
Marvel's agreements with the organizations representing the various leagues
and their member teams enable Marvel to use the logos and trademarks of the
various sports, the leagues and logos, names and uniforms of the member teams.
As a result of these licenses, Marvel is permitted to produce and sell in the
United States and Canada, and most of the rest of the world, sports picture
cards and stickers. All of these licenses are primarily non-exclusive and,
accordingly, the various players' associations, leagues and team
representatives are free to grant similar licenses to other companies. For
additional information relating to this matter, see "Competition".
Marvel's sports picture card license agreements generally provide
the licensor with the right to assure the quality of the manufactured products
and the suitability of the manufacturers used by Marvel, allow the licensor to
inspect the records relating to licensed products, and set forth labeling
requirements for the licensed merchandise. Such license agreements generally
require annual guaranteed minimum royalty payments and monthly or other
periodic payments of royalty guarantees for royalties in excess of the
guaranteed minimum amounts. Marvel also has required minimum advertising
expenditures under its various sports licenses. The sports and entertainment
trading card licenses of Fleer/SkyBox generally provide that it is an event of
default if there is a change of control of Fleer/SkyBox or of Marvel. On
February 26, 1997, the Bankruptcy Court entered an order granting relief from
the automatic stay to allow the Holding Companies' Trustee to vote and to
foreclose upon the Pledged Stock. On February 27, 1997, Marvel and the Marvel
Holding Companies filed a notice of appeal with respect to such order. On
March 24, 1997, the Court in the Debtor Companies' bankruptcy cases issued a
restraining order preventing the Creditors Committee and the Holding
Companies' Trustee from voting the Pledged Stock or otherwise replacing the
Board of Directors of Marvel and determined that the Creditors Committee and
the Holding Companies' Trustee must comply with the procedural requirements of
Section 362 of the Bankruptcy Code to seek relief from the automatic stay to
take such action. The Court, however, also ruled that the Creditors Committee
and Holding Companies' Trustee could replace the Board of Directors of Marvel
Holdings and Parent Holdings. If the Holding Companies' Trustee were to
foreclose on the Pledged Stock or exercise voting control over such stock,
such action could cause a change of control of Marvel and may cause a default
under one or more of the Fleer/SkyBox's sports and entertainment trading card
licenses.
Panini's ability to market its sports sticker products is based on
rights, some of which are exclusive, and some of which are non-exclusive, with
the sports federations and, depending upon the country, the players. Panini's
sticker licenses have various terms and require minimum guaranteed royalties.
Panini's agreements with the various federations and, where applicable, the
players, allow Panini to use the logos and trademarks of the various leagues,
member teams and the player's name, picture, biographical and other
information.
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Marvel also has various entertainment licenses related to the
trading cards and sticker businesses that require minimum guaranteed royalties
and are otherwise similar to Marvel's sports trading card licenses.
Although Marvel considers its relationships with its trading card
and sticker licensors to be good, there can be no assurance that such
licensors will grant new licenses to Marvel upon expiration of the current
licenses. In the past, renewals of Marvel's sports card licenses have
required, among other things, increases in royalty rates and minimum
guaranteed royalty amounts and advertising commitments.
In 1996, Toy Biz produced a majority of its products under
licenses which it has obtained from third parties. Some of these licenses
confer rights to exploit original concepts developed by toy inventors and
designers. Character licenses, such as exclusive, perpetual and royalty-free
licenses, subject to certain limitations from Marvel (the "Marvel License"),
permit Toy Biz to manufacture and market toys based on characters owned by
others which have or develop their own popular identity, often through
exposure in various media such as television programs, movies, cartoons and
books. Other licenses, referred to as trademark or brand name licenses, permit
Marvel to produce toys bearing the recognized consumer trademark or brand name
owned by the licensor. In return for these rights (other than those under the
Marvel License), Toy Biz pays royalties to its licensors.
Royalties paid by Toy Biz to licensors and investors are typically
based on a percentage of net sales. Most licenses extend for one to three
years and are renewable at the option of Toy Biz upon payment of minimum
guaranteed payments or the attainment of certain sales levels during the
initial term of the license. In the future, royalty rates and minimum
guaranteed payments may increase or decrease depending upon various
competitive forces in the toy industry.
EMPLOYEES
As of March 15, 1997, Marvel employed approximately 1,400 persons.
Marvel also contracts for creative work on an as-needed basis with
approximately 550 freelance writers and artists.
Certain of Marvel's manufacturing employees are represented by a
union pursuant to a collective bargaining agreement which expires in June
1999.
Marvel believes that its relations with its employees are
satisfactory.
COMPETITION
The comic book and sports and entertainment trading card
industries are highly competitive. Marvel competes with over one hundred
publishers in the United States. There are numerous companies licensed to
produce sports and entertainment trading cards, other than entertainment
trading cards based on the Marvel's Characters, some of which sell their
products only in regional or niche markets. In addition, licenses may be
granted to other companies to produce sports and entertainment trading cards
in the future, thus generating greater competition.
Panini, as a leader in the development of the sticker industry,
generally enjoys a pre-eminent position in each of the countries in which it
operates. The major competitors of Panini are generally regional companies.
Marvel believes that Panini's competitive advantages are its reputation for
quality stickers, its long standing relationship with licensors and its strong
distribution capabilities. Panini
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does, however, compete for the discretionary spending of children with other
forms of youth entertainment.
The toy industry is highly competitive, and Toy Biz competes with
many larger toy companies in the design and development of new toys, the
procurement of licenses and for adequate retail shelf space of its products.
Such competitors include Hasbro, Inc., Mattel Inc., Tyco Toys, Inc.,
Playmates, Inc. and Bandai Co., Ltd., and Toy Biz considers Just Toys, Inc.,
Lewis Galoob Toys, Inc., Empire of Carolina, Inc. and Ohio Art Co. to be among
its competitors as well.
Some of Marvel's competitors such as D.C. Comics are part of
integrated entertainment companies and may have greater resources than Marvel.
Marvel also faces competition from other entertainment media, such as movies
and video games, but believes that it benefits from the low price of comic
books, sports and entertainment trading cards and children's activity sticker
collections in relation to such other products.
SEASONALITY
Marvel sells sports trading cards throughout the year in all major
sports. Sales of Marvel's sports trading cards peak at or near the beginning
and mid-point of the sports season to which a specific product relates. Sales
of entertainment related products tend to be less seasonal, although sales of
products related to a motion picture or animated series are generally planned
to begin at the time of first release or subsequent video release in the case
of a major motion picture. Sales of entertainment related products are
planned, where possible, to counterbalance the seasonality of sports related
product sales or event-driven entertainment product sales (e.g., a motion
picture or animated series release).
Sales of Marvel's sports and entertainment stickers in Europe are
generally concentrated in the first and fourth quarters, coinciding with the
related buying habits of children during the school year.
Toy Biz, like the toy industry in general, experiences a
significant seasonal pattern in sales and net income due to the heavy demand
for toys during the Christmas season. During 1994, 1995 and 1996, 70%, 69% and
64%, respectively, of Toy Biz's domestic net sales were realized during the
months of July through December. The seasonal pattern requires significant use
of working capital, mainly to build inventory during the year, prior to the
Christmas selling season. Toy Biz expects that its business will continue to
experience a significant seasonal pattern for the foreseeable future.
The timing of events as discussed above as well as the continued
introduction of new events and related products can and will cause
fluctuations in quarterly revenues and earnings.
STRATEGIC INITIATIVES
Marvel has begun several strategic initiatives intended to create
organizational synergies, coordinate creative character development and
increase mass retail penetration. The objective eventually is to integrate all
applicable products of Marvel in a coordinated marketing effort. The vision is
to transform Marvel into an integrated entertainment and sports content
company prominent in all forms of media, print, electronic publishing, toys
and games. Marvel will concentrate on old and new character development while
targeting growth niches within each market. There can be no assurance that
Marvel will have sufficient capital to fund these initiatives (see
"Management's
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Discussion and Analysis of Financial Condition and Results of Operations -
Liquidity and Capital Resources"), or that Marvel will be successful in
implementing such initiatives.
The strategic initiatives are focused in four main areas: (i) the
development of Marvel Studios, (ii) the development of Marvel Interactive,
(iii) the development of Marvel Mania Restaurants and (iv) certain in-store
merchandising investments for the purpose of increasing revenues in the sports
and entertainment trading card business.
MARVEL STUDIOS
To enhance further the media exposure of the Marvel Characters,
Marvel and Toy Biz intend to form Marvel Studios, although documentation
relating to such formation has not been finalized (and pending such formation,
Marvel Studios is being operated as a division of Marvel). The objective of
Marvel Studios is to facilitate the release of live action and animated
feature films and television programming, and other media based on the Marvel
Characters in order to create greater consumer interest in the Marvel
Characters and related merchandise. Marvel believes that any feature film
or television programming, theatrical productions or other media
and any advertising and promotion associated with such media will create
consumer interest in the Marvel Characters and revenue opportunities for
Marvel's businesses, including the licensing and toy businesses. For example,
Marvel believes that the popularity of the X-MEN and SPIDER-MAN animated
television shows resulted in significant increases in net sales by Toy Biz of
X-MEN and SPIDER-MAN toys. Marvel believes that Marvel Studios will facilitate
the release of feature films, television programming and other media by giving
Marvel greater control over the development of such projects compared to the
present practice of only licensing the use of the Marvel Characters in film or
television projects to an unrelated third party.
The rights to produce feature films based on certain of the Marvel
Characters are currently licensed to third parties and some of those rights
are currently in dispute. There can be no assurance that the Company will be
able to reacquire or restructure these rights for development or that Marvel
Studios will enhance the likelihood that any such films or television
programming will be produced.
Currently, there are three television series based on the Marvel
Characters being aired on free domestic television. Series based on the X-MEN
and SPIDER-MAN characters appear on Fox Children's Network ("FCN") and
consistently are rated among the most highly watched shows during children's
television time periods. In the Fall of 1996, The INCREDIBLE HULK began airing
on the United Paramount Network ("UPN"). In addition, from 1994 to 1996, the
Marvel Action Hour aired in syndication, which featured two half-hour segments
of THE FANTASTIC FOUR and IRON MAN. In February, 1996 a made for television
movie GENERATION X aired. Marvel has also entered into an agreement with Fox
Kid's Worldwide ("FKW") for the development and broadcast of four new
animation series on FCN over a seven-year period, anticipated to begin with
the SILVER SURFER in the 1997-1998 broadcast season. The agreement with FKW
provides for the development and broadcast of at least fifty-two (52) episodes
of new series, and has a term of seven (7) years, which may be extended to ten
(10) years at the option of FKW if at least 104 episodes of eight (8)
different series are broadcast. As part of its agreement with FKW, Marvel will
generally reimburse FKW for 25% of production costs, and will grant FKW a
participation in merchandise revenues derived from the Marvel Characters
featured in the television series aired by FKW. In addition commencing in the
Fall of 1997, Marvel expects that its X-MEN, IRON MAN, and FANTASTIC FOUR
series will be rerun in syndication in an hour long broadcast with one half of
the hour airing an X-MEN episode and the other half of the hour airing either
an IRON MAN or FANTASTIC FOUR episode. Marvel anticipates that this
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media exposure will increase the popularity of the Marvel Characters on which
the series are based and thereby benefit Marvel's various businesses.
MARVEL INTERACTIVE
Marvel intends to further develop entertainment software and
on-line applications which leverage the popularity of Marvel Characters.
America On line ("AOL"), one of the world's largest commercial on-line
services, has entered into a joint venture with the Company to create, among
other offerings, original, exclusive on-line interactive comics or
"Cybercomics". These comics change weekly, versus the standard monthly, and
allow fans to participate in the comic by driving the story line. Marvel
believes that its on-line offerings, including comics, will reach a new group
of readers beyond that of its traditional distribution. Marvel's site on AOL
was launched on July 8, 1996 and recently was awarded AOL's Members Choice
Awards. Marvel Interactive has also initiated the online launch of all
Marvel's brands (including Marvel Comics, Fleer/SkyBox and Toy Biz) on the
internet through a series of linked websites. The internet addresses provided
by Marvel are www.marvel.com and www.fleerskybox.com.
All initial software titles will be based on the Marvel Characters
and are expected to be multi-platform. Given the lead times for software
development, most of the benefits from development efforts in 1997 will not
begin to be realized until 1998. At this point, Marvel Interactive is in a
start-up mode and certain of the markets, principally on-line, are in a
developmental stage and there can be no assurance that the on-line market will
prove to be a commercial success for Marvel, Marvel Interactive will develop
any software and, if developed, that such software will be successful.
MARVEL MANIA
Marvel Mania is projected to be a group of theme restaurants
offering an array of merchandise, in the genre of Planet Hollywood and Hard
Rock Cafe, although the theming will be based on the Marvel Characters. The
Marvel Mania units are envisioned as a multimedia, interactive experience
which will give life to the fictitious Marvel Universe of characters. Marvel
Mania represents a further strategic investment in the development of Marvel's
intellectual properties. In addition to the general branding benefits Marvel
desires to obtain from Marvel Mania, Marvel expects that each restaurant with
its retail merchandise area, once fully operational, will be profitable.
The restaurants are intended to be an interactive, multimedia
environment designed to entertain the customer with videos, soundtracks and
electronics. Each operation is intended to offer premium quality fashion
merchandise such as jackets, T-shirts, sweatshirts and hats. Other items
intended for sale will include video games, comic books, action-figure toys,
collectible figurines and animation cels.
The Marvel Mania restaurants are a joint venture between Marvel
Restaurants and PHI. Three restaurants are contemplated, with the first
restaurant expected to open in Los Angeles as a joint venture between the
Joint Venture and MCA/Universal, in which MCA/Universal has a 70% interest and
the Joint Venture has a 30% interest. The Los Angeles restaurant is under
construction and is projected to open in the second half of 1997. The Joint
Venture agreement between Marvel Restaurants and PHI provides that Marvel will
lend $35 million on an interest bearing basis and make a $1 million equity
contribution to the Joint Venture for the development and construction of the
first units. If only three restaurants are developed, Marvel does not
anticipate that it will be required to loan the Joint Venture the entire $35
million. After reimbursement to Marvel of the loan, the Joint Venture will pay
Marvel an annual license fee equal to 10% of all gross sales at Marvel Mania
units and will pay PHI, which is responsible for the daily operation of the
business, a management fee equal to 10% of gross sales. Any remaining income
will then be divided
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equally between Marvel and PHI. As a result of the decline in Marvel's
financial condition, Marvel and PHI entered into a modification of the
agreement providing, among other things, that (i) if Marvel did not agree to
open a third restaurant by the earlier of one year after the opening of its
Orlando restaurant or December 31, 2001, 50% of the Joint Venture profits each
year would be distributed to the Joint Venture parties prior to full repayment
of Marvel's loan and (ii) Planet Hollywood's agreement not to compete with the
Joint Venture would be modified. Through March 21, 1997, Marvel has invested
approximately $3.8 million and has posted a standby letter of credit for
approximately $6.1 million to fund development costs associated with the
restaurant being constructed in Los Angeles.
TRADING AND ENTERTAINMENT CARDS
In an effort to increase revenues, Fleer/SkyBox has begun to
implement an in-store merchandising program involving the placement of
fixtures which, in an attractive and efficient manner, hold and dispense packs
of trading cards. These fixtures are being placed in retail stores with high
traffic of trading card collectors and are expected to simplify buying and
make purchases more attractive to customers by making selections easier.
Fleer/SkyBox plans to provide the fixture program to retailers who will
support the category through a dedicated in-store section. If the program is
successful, Fleer/SkyBox intends to roll out the program nationally.
INFLATION
In general, Marvel's business is affected by inflation and the
effects of inflation may be experienced by Marvel in future periods.
Management believes, however, that such effect has not been significant to
Marvel during the past three years.
21
<PAGE>
ITEM 2. PROPERTIES
The Company has the following principal properties:
<TABLE>
<CAPTION>
Facility Location Square Feet Owned/Leased
-------- -------- ----------- ------------
<S> <C> <C> <C>
Manufacturing/Warehouse/Office Waldorf, Germany 22,825 Owned
Warehouse/Office Terrsella, Spain 20,450 Owned
Warehouse/Office Saint Laurent Du Var, France 35,327 Owned
Manufacturing/Warehouse/Office Bomporto, Italy 217,345 Owned
Office Modena, Italy 131,132 Owned
Office Modena, Italy 11,388 Owned
Manufacturing Modena, Italy 45,144 Owned
Warehouse Modena, Italy 21,953 Owned
Manufacturing/Office Modena, Italy 48,086 Owned
Warehouse Modena, Italy 14,817 Owned
Warehouse Modena, Italy 23,605 Owned
Warehouse Modena, Italy 12,411 Leased
Manufacturing/Warehouse/Office Sao Paolo, Brazil 35,801 Leased
Office New York, NY 69,000 Leased
Office* New York, NY 17,000 Leased
Office New York, NY 15,000 Leased
Office Mt. Laurel, NJ 30,836 Leased
Office London, England 8,978 Leased
Warehouse/Office Leeds, England 13,390 Leased
Warehouse/Office Wakefield, England 18,385 Leased
Warehouse/Office* Yuma, Arizona 80,000 Leased
Manufacturing/Warehouse/Office Byhalia, MS 72,300 Leased
Warehouse* Puyallup, WA 216,500 Leased
</TABLE>
In addition, Marvel leases or subleases other office and warehouse
space located in several locations in the United States and in Europe.
Marvel's leases expire through 2005 and provide for aggregate monthly rentals
of approximately $0.4 million, subject to escalation clauses.
*Represents facilities leased by Toy Biz. Toy Biz's New York lease
expires in April 1997. Toy Biz has entered into a sublease pursuant to which
it will occupy approximately 30,000 square feet of new office space and
expects to relocate its executive and principal offices to such premises in
1997.
The properties of NWCG were sold on January 22, 1997 in connection with the
NWCG Disposition and are included in net liabilities held for disposition in
the Company's consolidated financial statements.
22
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
REORGANIZATION LEGAL PROCEEDINGS
On December 27, 1996, the Debtor Companies and the Marvel Holding
Companies filed petitions under Chapter 11 of the Bankruptcy Code and in
connection with such filings have been parties to various legal proceedings.
See "Business -- Reorganization of Marvel and Marvel Holding Companies".
The Holding Companies' Trustee has alleged that events of defaults
under each of the Marvel Holding Companies indentures have occurred by reason
of the commencement of the Debtor Companies' cases under the Bankruptcy Code.
The Holding Companies' Trustee has also alleged that the majority ownership
and the anti-injunction provisions of each of the indentures have been
violated. Marvel is not a party to any of the indentures governing the notes
issued by the Marvel Holding Companies. In addition, the Company believes the
allegations of the Holding Companies' Trustee are either without merit or will
be resolved in connection with the prosecution of the reorganization cases of
the Marvel Holding Companies. The Holding Companies' Trustee has also alleged
that it may assert a claim based on alleged "tortious interference" occasioned
by Marvel's filing of the Plan. The Company believes that any such allegations
are completely without merit.
There are twenty-seven purported class and derivative actions
brought by stockholders of Marvel and holders of bonds issued by the Marvel
Holding Companies and one action brought by a purported class of Toy Biz
shareholders presently pending in the Delaware Court of Chancery
(collectively, the "Delaware Actions") that challenge, among other things, the
Andrews Investment.
Twenty-one of the twenty-seven Delaware Actions assert either
claims on behalf of a purported class of all Marvel shareholders or
shareholder derivative claims on behalf of Marvel, or both. The complaints
allege, among other things, that the Andrews Investment represents a breach of
defendants' fiduciary duties because the proposed purchase price per share is
unfair and such purchase would dilute the minority shareholders' interest in
Marvel. Plaintiffs in these actions seek to enjoin the Andrews Investment, to
rescind the Andrews Investment if it is in fact consummated prior to the entry
of the Court's judgment, to recover damages for defendants' alleged conduct
and to recover costs and disbursements in pursuing these actions, including
reasonable attorneys' fees. These actions have been consolidated for all
purposes by order of the Delaware Court of Chancery.
A consolidated complaint has not yet been filed.
Six of the Delaware Actions assert claims on behalf of a purported
class consisting of the holders of bonds issued by the Marvel Holding
Companies. These complaints allege, among other things, that the Andrews
Investment, if consummated, would be a breach of defendants' duty of fair
dealing and good faith owed to the holders of the bonds because the Andrews
Investment would result in the substantial dilution of Marvel's outstanding
stock, which is security for the bonds, and will thus diminish the value of
the bonds. These actions have been separately consolidated by order of the
Delaware Court of Chancery. The consolidated complaint in these six actions do
not name any of the Chapter 11 debtor companies as defendant. The parties to
the consolidated complaint have agreed to defer the filing of an answer.
All of the foregoing Delaware Actions name varying defendants
consisting in the aggregate of Marvel, Andrews, MacAndrews Holdings, Parent
Holdings, Marvel III, Marvel Holdings, Ronald O. Perelman, William C. Bevins,
Donald G. Drapkin, Michael Fuchs, Frank Gifford, E. Gregory Hookstratten,
Morton L. Janklow, Quincy Jones, Stan Lee, Scott C. Marden, Terry C. Stewart
and Kenneth Ziffren.
23
<PAGE>
One of the pending Delaware Actions asserts claims on behalf of a
purported class of all Toy Biz shareholders. Holl v. Toy Biz, Inc., Marvel
Entertainment Group, Inc., Andrews Group, Inc., Ronald O. Perelman, Joseph M.
Ahearn, Avi Arad and Issac Perlmutter, C.A. No. 15359, was filed on November
15, 1996. The complaint alleges, among other things, that defendants Perelman,
Ahearn, Arad and Perlmutter are breaching their fiduciary duties in pursuing
the proposed offers of Marvel and Andrews to purchase Toy Biz stock. In
addition, the complaint alleges that defendant Marvel is aiding and abetting
the individual defendants in their unlawful conduct. Damages in an unspecified
amount are sought for the alleged breach of fiduciary duties by defendants.
Plaintiffs also seek to enjoin the consummation of the transaction, to rescind
the transaction in the event it is consummated and to recover costs and
disbursements and reasonable allowances for plaintiff's counsel. This case has
been stayed by stipulation of the parties.
No classes have been certified in any of the Delaware Actions. On
December 27, 1996, the Debtor Companies and the Marvel Holding Companies filed
a petition for protection under Chapter 11 of the Bankruptcy Code. As a result
of Marvel's filing, all of the Delaware Actions with respect to Marvel are
automatically stayed pursuant to 11 U.S.C. Section 362. On March 7, 1997,
Andrews Group terminated the Stock Purchase Agreement with Marvel and withdrew
the proposal for the Andrews Investment. On the same date, Andrews informed
Toy Biz and the two other principal stockholders of Toy Biz that the
transactions contemplated by the Merger Agreement and the Stock Purchase
Agreements with Toy Biz and each of such principal stockholders, respectively,
would not be consummated.
Piels v. Marvel Entertainment Group, Inc., Ronald O. Perelman,
Andrews Group, Inc. and MacAndrews & Forbes Holdings Inc., Index No.
96-605702, was commenced on November 14, 1996. This action, filed in New York
Supreme Court, County of New York, asserts claims on behalf of a purported
class of all Marvel shareholders. Named as defendants are Marvel, Ronald O.
Perelman, Andrews Group and MacAndrews Holdings. The complaint alleges, among
other things, that the defendants have breached their fiduciary duties in
connection with the Andrews Investment. Specifically, plaintiff alleges that
Marvel's minority shareholders are being directly damaged by defendants'
actions with respect to the Andrews Investment. Plaintiff seeks injunctive
relief, damages in an unspecified amount and costs and disbursements,
including reasonable attorneys' fees. By orders dated February 25, 1997, the
New York Supreme Court denied plaintiff's motion for a preliminary injunction
and granted defendants' motion to dismiss the action based on forum non
conveniens.
OTHER LEGAL PROCEEDINGS
On March 9, 1995, a complaint purporting to be a class action was
filed against SkyBox, certain of SkyBox's officers and directors and Marvel in
the Delaware Court of Chancery, New Castle County, entitled Strougo v. Lorber,
et al., C.A. No. 14107 ("Strougo"). The complaint generally alleged that
SkyBox and certain of its officers and directors breached their fiduciary
duties by agreeing to be acquired by Marvel at an allegedly unfair and
inadequate price, failing to consider other potential purchasers in a manner
designed to obtain the highest possible price for SkyBox's stockholders and
not acting in the best interest of stockholders. The complaint also alleged
that Marvel aided and abetted the breaches of fiduciary duty committed by the
other defendants named in the complaint. The complaint sought preliminary and
permanent injunctions against consummation of the merger, damages, costs and
experts' fees and expenses. This case was dismissed without prejudice.
On March 16, 1995, a complaint purporting to be a class action was
filed against SkyBox and certain of SkyBox's officers and directors in the
Delaware Court of Chancery, New Castle County, entitled Krim and Gerber v.
SkyBox International Inc., et al., C.A. No. 14127. The complaint generally
made
24
<PAGE>
allegations similar to those contained in the Strougo complaint and sought
similar injunctive and other relief. This case was dismissed without
prejudice.
Marvel is a defendant in a purported class action filed on July
26, 1996 in the United States District Court for the Eastern District of New
York entitled Fishman, et al v. Marvel Entertainment Group, Inc., CV-96-3757
(SJ), by four persons who allegedly purchased sports and entertainment cards
manufactured by Fleer/SkyBox. The action is directed against standard business
practices in the trading card industry, including the practice of randomly
placing insert cards in packages of sports and entertainment trading cards,
and alleges that these practices constitute illegal gambling activity in
violation of state and federal law. Fleer/SkyBox's principal competitors in
the trading card industry have been separately sued for employing the same or
similar practices. On March 11, 1997, a similar action as Fishman against a
competitor of Fleer/SkyBox entitled Schwartz, et. al. v. Upper Deck No.
96CV3408 - B (AJB) (S.D. Cal.), was dismissed with leave to replead. The
plaintiffs in that action filed an amended complaint on March 24, 1997. On
April 2, 1997, a similar action as Fishman against another competitor of
Fleer/SkyBox entitled Price, et. al. v. Pinnacle Brands, No. 3:96-CV-2150-T
(N.D. Tex.), was dismissed with prejudice. In addition, certain of the various
sports organizations and entertainment companies that issue licenses to
Fleer/SkyBox (as well as the other major trading card companies) in connection
with the manufacture of sports and entertainment trading cards have also been
separately sued and are alleged to be engaged in aspects of the purportedly
illegal gambling operations. Plaintiffs seek certification of a class of
persons who within four years prior to the filing of the complaint purchased
packages of trading cards that might contain randomly inserted cards, and
recovery of treble damages. On September 30, 1996, Marvel filed a motion to
dismiss the complaint. Plaintiffs filed their opposition to the motion on or
about December 2, 1996. No discovery has commenced. Plaintiffs have not
specified the amount of damages sought, but generally allege that members of
the purported class have been damaged as a result of their purchases of
trading cards during the four years preceding the commencement of the action.
As set forth above, on or about December 27, 1996, Marvel filed a voluntary
petition in the United States Bankruptcy Court for the District of Delaware.
As a result, the action was automatically stayed pending the outcome of the
bankruptcy proceeding. It is not possible at this early stage of the case to
predict the outcome with certainty. In the opinion of Marvel, the action lacks
merit and Marvel intends to defend it vigorously.
Marvel and two of its officers, William C. Bevins and Terry C.
Stewart, are named as defendants in a purported class action entitled Brian
Barry SEP IRA v. Marvel Entertainment Group, Inc., pending in the United
States District Court for the Southern District of New York. The complaint
seeks unspecified damages on behalf of a proposed class of purchasers of
Marvel's common stock from April 11, 1994 to December 31, 1994 for alleged
violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934,
as amended, as well as Rule 10b-5 promulgated thereunder. Plaintiff alleges
that the defendants, through their own statements and those of analysts,
artificially inflated the price of Marvel's common stock by creating earnings
expectations which Marvel did not meet. Plaintiff also contends that the
defendants failed to timely disclose softness in the publishing and sports
trading card markets which led to Marvel's not attaining its purported
earnings target. Plaintiff claims that the individual defendants, because of
their corporate positions, are liable under the securities laws as control
persons of Marvel. The defendants moved to dismiss the complaint in its
entirety on February 23, 1996. On April 8, 1997, the District Court granted
the defendants motion to dismiss without prejudice. As set forth above, on or
about December 27, 1996, Marvel filed a voluntary petition in the United
States Bankruptcy Court for the District of Delaware. As a result, any further
action against Marvel is automatically stayed pending the outcome of the
bankruptcy proceeding.
Marvel is named as a defendant in two actions which have been
consolidated for all purposes with certain related actions in proceedings now
pending in the Los Angeles County Superior Court. The
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<PAGE>
consolidated cases center around the ownership of certain rights in the
production and distribution of a live action motion picture based on the
"SPIDER-MAN" character owned by Marvel. Once the automatic stay governing all
litigation involving Marvel is lifted by the Delaware Bankruptcy Court, Marvel
intends to assert its own claims to those rights.
In the lead case, a dispute between 21st Century Film Corporation
("21st Film"), Carolco Pictures, Inc. ("Carolco") and related entities, 21st
Film claims that it still possesses rights under an agreement with Marvel to
produce and distribute a live action film based on the "SPIDER-MAN" character,
although it had assigned all of its rights to Carolco. Metro Goldwyn Mayer,
Inc. ("MGM") has succeeded to the litigation position of both 21st Film and
Carolco in the respective bankruptcy proceeding of those two companies. In
addition to its purchase of 21st Film and Carolco litigation positions, MGM is
a plaintiff in a separate case that has been deemed related to the lead and
consolidated cases. Marvel has answered the complaint denying MGM's
allegations.
An additional lawsuit, between Carolco and Columbia Tristar Home
Video ("Columbia"), concerns the videocassettes rights to any such film, and a
third lawsuit, between Carolco and Viacom International, Inc. ("Viacom"),
involves television rights. Both Columbia and Viacom claim that, before 21st
Film assigned its rights under its agreement with Marvel to Carolco, 21st Film
had licensed ancillary rights to each company. Each seeks to enforce its
respective rights. Viacom, however, brought a separate suit naming Marvel, and
Marvel has answered that complaint, denying Viacom's allegations.
In its answer and other pleadings, Marvel contends that it is the
sole and exclusive holder of the unencumbered right to produce and distribute a
live action based on the "SPIDER-MAN" character. Marvel contends that all
rights to produce or distribute a "SPIDER-MAN" film under its agreement with
Carolco and 21st Film have reverted to Marvel.
Marvel has notified the Court in the consolidated action that
Marvel has filed for bankruptcy protection, and that the bankruptcy court
filing stays all further proceedings in the consolidated lawsuit as to Marvel.
Subject to further proceedings in the bankruptcy court, Marvel has stated that
it intends to defend vigorously the Viacom lawsuit and the MGM lawsuit, and to
defend vigorously and assert its exclusive rights to produce and distribute a
live action film based on the "SPIDER-MAN" character.
In February 1989, Robert Eckstein, et al. brought an action for
violation of Federal securities laws against New World Entertainment Ltd. ("NW
Entertainment"), then a subsidiary of Andrews, and other parties (the
"Eckstein Action"). In October 1988, Ralph Majeski, et al. brought an action
for fraud, misrepresentation, breaches of contract and fiduciary duty and
pendent state law claims against NW Entertainment and other parties (the
"Majeski Action"). Classes were certified in both actions. In March 1992, the
court granted a motion for summary judgment and dismissed both the Eckstein
Action and the Majeski Action. Plaintiffs in the Majeski Action filed a motion
for reconsideration, which was denied by the District Court on June 2, 1992.
Notices of Appeal were filed in both actions.
The plaintiffs in the Majeski action filed a lawsuit in the Circuit
Court of Milwaukee County, Wisconsin on March 8, 1993 (the "Majeski State Court
Action"). The Majeski State Court Action alleges essentially the same pendent
state law claims that had been asserted in the federal Majeski Action.
On August 20, 1993, the Court of Appeals for the Seventh Circuit
vacated the district court judgments and remanded the cases to the district
court for further proceedings. On November 18, 1993 the defendants filed a
Petition for Writ of Certiorari with the United States Supreme Court,
<PAGE>
seeking review of the Court of Appeals Order. The defendant's petition was
denied on or about January 18, 1994.
In November 1993, both the Eckstein and Majeski plaintiffs filed
motions seeking leave to amend the complaints. The defendants did not oppose
the Eckstein plaintiffs' motion because those plaintiffs' did not add new
claims or assert new theories. The Majeski plaintiffs' motion seeks to amend
their Section 10(b) and breach of fiduciary duty claims, add a claim for
treble damages under the Racketeer Influenced and Corrupt Organizations Act,
18 U.S.C. ss.ss. 1961-68 and delete certain common law claims and pursue them
in a separate proceeding. The defendants filed papers opposing the Majeski
plaintiffs' proposed amendments. A hearing on the foregoing motions was held
on January 26, 1994. On January 27, 1994 the Court granted the Eckstein
plaintiffs' motion to amend and took the Majeski plaintiff's motion to amend
under consideration. The Majeski State Court Action was voluntarily dismissed
by the plaintiffs.
In February 1994, the defendants filed motions for summary
judgment in both actions. On August 31, 1994, the court denied the Majeski
plaintiffs' motion to amend their first amended complaint, granted the
defendants' motions for summary judgment in both the Eckstein and Majeski
Actions and dismissed both actions with prejudice. The Eckstein plaintiffs
filed a motion for reconsideration on September 15, 1994, which was denied by
the court on October 28, 1994. Both the Eckstein and Majeski Actions were
appealed by the plaintiffs to the United States Court of Appeals for the
Seventh Circuit. Oral argument for these appeals was held on April 17, 1995.
On June 26, 1995, the Court of Appeals affirmed the judgments of the District
Court in favor of the defendants. On July 10, 1995, the Eckstein plaintiffs
filed a petition for rehearing and suggestion of rehearing en banc. The
petition was denied by the Court of Appeals on July 21, 1995. Neither the
Eckstein or Majeski plaintiffs sought review of the Seventh Circuit's decision
in the Supreme Court.
On July 27, 1995, the district court entered a final order taxing
costs against the Majeski plaintiffs in favor of the defendants in the sum of
$86,693.34. The Court of Appeals for the Seventh Circuit affirmed that
decision, in an unpublished order, on January 24, 1996, and issued its mandate
on February 15, 1996. No petition for writ of certiorari has been filed.
On or about July 6, 1995, the Majeski plaintiffs filed a purported
class action lawsuit in the Circuit Court for Milwaukee County, Wisconsin,
entitled Ralph Majeski, et al. v. Balcor Entertainment Company Ltd., et al.,
Case No. 95CV006579 (the "Second Majeski State Court Action"). The Second
Majeski State Court Action is based on allegations similar to those in the
Federal Court Majeski Action, and seeks similar relief. The complaint alleges
claims based on state law asserting, among other things, breach of fiduciary
duties, negligent and intentional misrepresentation and deceit, breach of
contract, and a derivative claim on behalf of another defendant, Balcor Film
Investors, and its successor. On October 23, 1995, plaintiffs filed an amended
complaint, which made only minor, technical changes. On November 2, 1995, the
court entered its order, without objection from the defendants, certifying the
plaintiff-class and directing that notice be sent to all class members. NW
Entertainment filed a motion to dismiss the complaint for lack of personal
jurisdiction.
On November 16, 1995, plaintiffs filed a Second Amended Complaint
adding as a defendant the most recently appointed co-trustee of the BFI Trust.
The newly-named defendant, joined by all other defendants, thereafter removed
the case to United States District Court. On November 20, 1995, the District
Court granted plaintiff's motion to remand and returned the case to the Circuit
Court, Milwaukee County, State of Wisconsin.
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<PAGE>
Following discovery, the New World defendants withdrew their motion
to dismiss for lack of personal jurisdiction, and filed an answer denying
liability and asserting affirmative defenses. The case is set for trial on
October 6, 1997.
The Company and its subsidiaries are also parties to various other
litigation, some of which are in the process of being settled. The Company
believes that it is unlikely that the outcome of all non-bankruptcy related
pending litigation in the aggregate will have a material adverse effect on its
consolidated financial condition or results of operations. As a result of the
Debtor Companies filing of petitions pursuant to the Bankruptcy Code, Marvel's
legal proceedings, other than the Debtor Companies bankruptcy proceedings have
been automatically stayed. Marvel has obtained a lifting of the automatic stay
in the Fishman case in order to allow Marvel to pursue its motion to dismiss.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS
There was no submission of matters to a vote of securityholders in
the fourth fiscal quarter.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's common stock does not have a public market.
As of March 29, 1997, the number of shareholders of record of
common stock was one.
See Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations for a discussion of dividend limitations.
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth certain selected historical
financial data of the Company at and for each of the years in the five year
period ended December 31, 1996. As a result of the NWCG Disposition, the
Company's financial statements reflect for all periods presented, the net
liabilities and results of operations of the Company's broadcasting segment as
net liabilities held for disposition and discontinued operations,
respectively.
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<PAGE>
The information set forth below has been derived from audited
financial statements and should be read in conjunction with the consolidated
financial statements of the Company and the notes thereto and "Item 7 -
Management's Discussion And Analysis Of Financial Condition And Results Of
Operations" of this Report.
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------------------
(Dollars in millions) 1996 1995(c) 1994(d) 1993 1992(e)
--------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
Net sales $ 745.5 $ 828.9 $ 514.8 $ 421.8 $ 229.9
(Loss) income from continuing operations (666.2)(a) (175.5) (57.6) 0.7 (4.2)
At end of period:
Total assets 1,331.6 (b) 2,034.7 1,421.8 1,067.1 472.0
Debt and redeemable preferred stock 801.6 2,052.3 1,484.1 1,167.0 419.5
Liabilities subject to settlement under
reorganization 1,313.7
</TABLE>
(a) Includes non-cash charge to write off goodwill related to the youth
entertainment segment of $581.7, a charge of $32.2 by Marvel to
record a valuation allowance against certain deferred tax assets
and a $175.0 credit to reflect a reduction in the valuation
allowance on the Company's deferred tax assets, excluding Marvel,
as well as benefit for 1996 losses of the Company, excluding
Marvel.
(b) Reflects the non-cash charge to write off goodwill related to the
youth entertainment segment of $581.7, a reduction in loans to
affiliate of $193.4, a charge of $32.2 by Marvel to record a
valuation allowance against certain deferred tax assets and an
increase in deferred tax assets of $175.0 to reflect a reduction
in the valuation allowance on the Company's deferred tax assets,
excluding Marvel, as well as benefit for 1996 losses of the
Company, excluding Marvel.
(c) The Company's statement of operations and financial position
include the operations and financial position of Toy Biz since the
Toy Biz IPO on March 2, 1995 and the operations and financial
position of SkyBox since its acquisition on April 27, 1995.
(d) The Company's statement of operations and financial position
include the operations of Panini since its acquisition on September
1, 1994.
(e) The Company's statement of operations and financial position
include the operations of Fleer since its acquisition on September
1, 1992.
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<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
As a result of the NWCG Disposition, the Company's financial
statements reflect for all periods presented, the net liabilities and results
of operations of the Company's broadcasting business as net liabilities held
for disposition and discontinued operations, respectively. The results of
operations of the broadcasting business is included in loss from discontinued
operations through September 24, 1996, the measurement date. The results of
operations of NWCG's San Diego Station from September 24, 1996 through the
date of sale of such station in November 1996, and the gain on sale of NWCG's
San Diego and Birmingham stations are included in gain on disposal of
discontinued operations.
RESULTS OF MARVEL AND MARVEL HOLDING COMPANIES
Marvel is a leading creator, publisher and distributor of youth
entertainment products for domestic and international markets based on
fictional action adventure characters owned by Marvel, licenses from
professional athletes, sports teams and leagues and popular entertainment
characters and other properties owned by third parties. Marvel also licenses
the Marvel Characters and properties for consumer products, television and
film projects, on-line and interactive software, and advertising promotions.
Marvel's products include comic book and other children's publications, sports
and entertainment trading cards, activity stickers, toys, adhesives and
confectionery products.
In recent years there has been an overall decline in the comic
book market, and more specifically, a significant reduction in speculative
purchases of comic books and reduced readership, which has adversely affected
Marvel's publishing business. In response, Marvel has undertaken several
strategic actions to mitigate the effect of such contraction. However, to date
these actions have not been successful in overcoming the overall decline in
the comic book market.
Similarly, there has been a significant contraction in the sports
trading card market related in part to lower speculative purchases. In
addition, as a result of the baseball, hockey and basketball labor situations
in 1994 and 1995, fan interest declined which adversely affected sports
trading card sales and increased returns for those periods. The level of fan
interest, although showing some signs of improvement during 1996, has not
returned to the levels experienced prior to the labor situations in
professional sports. Marvel believes that these factors have negatively
affected the sports trading card business, causing Marvel to experience lower
sales, higher returns and higher inventory obsolescence. The level of demand
for entertainment trading cards is dependent on, among other factors, the
commercial success and media exposure of the Marvel Characters and third party
licensed products, as well as the market conditions in the comic book
specialty stores. In 1994 and 1995, the sale of entertainment cards based on
the Marvel Characters and third party licensed characters substantially offset
the decline in sports trading cards. However, in 1996, Marvel's sales of
entertainment trading cards has been adversely affected by lack of commercial
success of properties licensed from third parties as well as the lower demand
for trading cards based on comic book characters. The result of the minimum
royalty and advertising contractual commitments to licensors, coupled with
declines in Marvel's trading card net revenues have significantly and
adversely affected the profit margins of the trading card business and Marvel
anticipates a continued significant adverse effect on profit margins due to
the current contractual commitments. In response, Marvel has undertaken
several strategic actions to mitigate the effect of the contraction in the
sports trading card and
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<PAGE>
entertainment card businesses. However, to date these actions have not been
sufficient to overcome the overall market decline in the sales of sports
trading cards and entertainment cards.
As described above, continuing operating losses in the trading
card and publishing businesses through the third quarter of 1996, as well as
significant long-term changes in industry conditions, indicated to the
Company, at that time, that there may be asset impairment. During the fourth
quarter of 1996, the Company evaluated the recoverability of the carrying
value of long-lived assets related to Marvel, including goodwill and other
intangibles, in accordance with its previously stated accounting policies and
recorded a non-cash charge of approximately $581.7 million, substantially all
related to Marvel's trading card operations and goodwill of the Marvel Holding
Companies. See Note 15 of "Notes to Consolidated Financial Statements".
Marvel experienced significant operating losses during 1995 and
1996, and failed to satisfy certain financial covenants contained in the
Marvel Credit Agreements (as defined below, see Note 6 of "Notes to
Consolidated Financial Statements") beginning in the Fall of 1996. Marvel
commenced discussions in the Fall of 1996 with Andrews regarding an equity
infusion in order to provide for Marvel's cash requirements and with The Chase
Manhattan Bank, agent bank for the Marvel Credit Agreements, regarding a
restructuring of the Marvel Credit Agreements.
On December 27, 1996, Marvel along with certain of its operating
and inactive subsidiaries, Fleer; SkyBox; Marvel Characters, Inc.; Heroes
World Distribution Inc.; The Asher Candy Company; Malibu; Frank H. Fleer Corp.
and Marvel Direct Marketing Inc., filed petitions for relief and a plan of
reorganization under Chapter 11 of the Bankruptcy Code in the Bankruptcy
Court. Panini S.p.A., Marvel Restaurants (a general partner in the Joint
Venture developing the Marvel Mania restaurants (each as defined below), see
"Business of Marvel -- Strategic Initiatives -- Marvel Mania") and Toy Biz,
all of which are active, as well as certain inactive subsidiaries did not file
petitions under the Bankruptcy Code. See "Business - Reorganization of Marvel
and Marvel Holding Companies".
In the fourth quarter of 1996, Marvel instituted a series of
actions to reduce its operating costs. These actions include the termination
of certain employees and the closure of certain facilities and given the
underlying weaknesses in certain of Marvel's markets and the negative impact
associated with the uncertainty surrounding its Chapter 11 proceeding, Marvel
made additional provisions for returns and inventory obsolescence and provided
additional reserves for other assets which may not be realized. The aggregate
amount of the foregoing charges are approximately $69.3 million which includes
restructuring charges of $15.8 million. These charges were reflected in
various line items in the statement of operations.
During the fourth quarter of 1996, Marvel recorded a charge of
approximately $32.2 million to income tax expense to record a valuation
allowance against deferred tax assets of certain subsidiaries. This adjustment
is required given the current level of net operating losses ("NOLs") of Marvel
and the inability, based on the projected financial results of Marvel, to
utilize these tax attributes against future taxable income from operations.
The Debtor Companies received approval from the Bankruptcy Court
to pay on time and in full undisputed pre-petition obligations including
salaries, wages and benefits to all of its employees, trade creditors and
independent contractors and to continue funding its strategic initiatives. On
January 24, 1997 the Bankruptcy Court approved the $100 million DIP Loan,
provided by a syndicate of lenders, including The Chase Manhattan Bank, as
agent bank, and is available to Marvel until June 30, 1997. The DIP Loan is
subject to covenants and events of default including a change of control of
Marvel (as defined therein). See Note 6 of "Notes to Consolidated Financial
Statements".
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On December 27, 1996, the Marvel Holding Companies filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code with the
Bankruptcy Court. The Chapter 11 cases commenced by the Marvel Holding
Companies have not been procedurally consolidated and are not jointly
administered with the Debtor Companies' Chapter 11 cases.
Marvel believes that since, and in part as a result of, the
commencement of Marvel's Chapter 11 proceedings, Marvel has continued to
experience greater than expected weakness in certain businesses, including
trading cards, due to, among other things, certain mass merchandisers
maintaining lower than expected levels of inventory of Marvel's products.
Currently, there is no plan of reorganization. There can be no
assurance that any plan of reorganization under the Bankruptcy Code reflecting
the Committee Proposal or a proposal made by any other party will be proposed,
or if that plan is proposed, such plan of reorganization will be confirmed
under the Bankruptcy Code. If Marvel is unable to obtain confirmation of a
plan of reorganization, its creditors or equity securityholders may seek other
alternatives for Marvel, including bids for Marvel or parts thereof through an
auction process. There can be no assurance that upon consummation of a plan of
reorganization that there will be improvement in any of such businesses.
Marvel has, and will continue to incur professional fees and other cash
demands typically incurred in bankruptcy. From December 27, 1996 through March
28, 1997 these amounts approximated $6.3 million.
YEAR ENDED DECEMBER 31, 1996 COMPARED WITH THE YEAR ENDED DECEMBER 31, 1995
The Company's net revenues were $745.5 million and $828.9 million
in 1996 and 1995, respectively, a decrease of $83.4 million or 10.1%. This
reflects a decrease of $44.7 million in net publishing revenues, a decrease of
$56.7 million in net trading card and sticker revenues, and a decrease of
$34.7 million in licensing revenues, partially offset by a $41.0 million
increase in toy revenues and an $11.7 million increase in other revenues. The
decrease in net publishing revenues was due to the impact on the Company of
the continuing decline in the overall comic book market, the reduction of
marginally profitable titles resulting from the implementation of Marvel's
business strategy, and beginning in July 1995 the discontinuance of
distribution by Heroes World of comic book publications other than Marvel's
titles. The decrease in trading card net revenues was primarily due to the
continuing general decline in the demand for trading cards as well as the
change in Marvel's distribution of its trading cards to concentrate on trading
card specialty stores and select mass market accounts which generally resulted
in lower net revenues in 1996. In addition, entertainment card net revenues
decreased due to lower sales of cards based on Marvel's comic book characters
due in part to market conditions in the comic book specialty store market, as
well as lower sales of cards based on properties licensed from third parties
resulting from lower commercial success of such properties in 1996 as compared
to 1995. However, as compared to 1995, provisions for trading card sales
returns were significantly lower, reflecting the change in distribution and
the inclusion in 1995 of a significant increase in sales returns allowances
reserves. Such lower sales return allowances provisions, combined with the
inclusion of net revenues from SkyBox for a full year in 1996 versus only
eight months in 1995 (the acquisition of SkyBox was consummated on April 27,
1995), partially offset the lower sales discussed above. These decreases in
trading card net revenues were partially offset by an increase in net revenues
of stickers. This increase was due to the 1996 European Cup soccer tournament
and expansion into new markets such as Brazil and Russia, and was partially
offset by higher provisions for returns for stickers in 1996. In addition,
Marvel experienced lower net revenues in certain European markets principally
due to lower net revenues from entertainment stickers based on properties
licensed from third parties as a result of lower commercial success of such
properties in 1996 as compared to 1995. Licensing revenues decreased in 1996
as compared to 1995 primarily as a result of an insufficient amount of new
media exposure of Marvel's
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characters as well as an unfavorable comparison to 1995 licensing revenues
which included the recording of revenues from certain large long term licenses
for certain licensing categories. Pursuant to the agreement between FKW and
Marvel, Marvel expects to have a new animation series based on the SILVER
SURFER on FCN in the 1997-1998 broadcast season. Licensing revenues will vary
from period to period depending on the volume and extent of licensing
agreements entered into during any particular financial period, as well as the
level and commercial success of the media exposure of the Marvel Characters.
The increase in toy revenues was principally due to Toy Biz's expanded product
offerings, increased international distribution of products and the
consolidation of Toy Biz for a full year in 1996 as compared to ten months in
1995, offset in part by lower revenues due to lower sales of certain products
based on Marvel characters. The improvement in other revenues was due to
increased sales of adhesive paper by Panini.
Gross profit was $209.1 million and $295.6 million in 1996 and
1995, respectively, a decrease of $86.5 million. As a percentage of net
revenues, gross profit was 28.0% in 1996 as compared to 35.7% in 1995. The
decrease in gross profit as a percentage of net revenues was due primarily to
the effect of higher return provisions for stickers, the effect of lower
licensing revenues, an unfavorable product mix for trading cards and toys as
compared to 1995, and the effect of lower trading card net revenues without a
corresponding decrease in royalty expense given minimum payment obligations
for trading cards in 1996.
Selling, General & Administrative ("SG&A") expenses were $289.9
million and $262.1 million in 1996 and 1995, respectively. The increase of
$27.8 million was mainly attributable to the increase in advertising,
promotion and selling expenses of Panini and Toy Biz, the consolidation of Toy
Biz's results for a full year in 1996 as compared to ten months in 1995, the
inclusion of SkyBox for a full year in 1996 as compared to eight months in
1995, the effect of certain charges related to the termination of employees
and other items and higher expense primarily resulting from an increased
investment to support Toy Biz's expanded product line and the effect of
certain charges related to the write-down of fixed assets. This increase was
partially offset by a general reduction in overhead expenses associated with
the restructuring of the trading card, publishing and confectionery
operations. As a percentage of net revenues, SG&A was 38.9% in 1996 as
compared to 31.6% in 1995.
During the fourth quarter of 1996, Marvel recorded a $15.8 million
restructuring charge, which primarily represents the costs related to the
closure of facilities, including severance related to terminated employees and
other costs associated with the restructuring of its comic book distribution
subsidiary and confectionery businesses. During the fourth quarter of 1995,
Marvel recorded a $25.0 million restructuring charge, which primarily
represents the costs related to the consolidation and closure of facilities,
severance related to terminated employees and other costs associated with its
publishing, trading card and confectionery businesses.
Amortization and writedown of goodwill and intangibles was $617.6
million and $30.9 million in 1996 and 1995, respectively. The increase of
$586.7 million mainly reflects the write-down of goodwill and other
intangibles related to the asset impairment at Marvel which was primarily due
to the significant and long-term changes in industry conditions in trading
cards and publishing and the bankruptcy filing of Marvel. See Note 15 of Notes
to Consolidated Financial Statements.
Interest expense, net was $199.8 million and $184.6 million in
1996 and 1995, respectively. The increase in interest expense primarily
reflects an increase in average borrowings.
Interest and net investment income was $58.6 million and $37.6
million in 1996 and 1995, respectively. The increase was primarily due to an
increase in average loans to affiliates.
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The gain on sale of Toy Biz common stock was $22.0 million in 1996
and $14.3 million from the Toy Biz IPO in 1995 (see Note 5 of Notes to the
Consolidated Financial Statements).
Benefit (provision) for income taxes was $149.6 million and ($5.8)
million in 1996 and 1995, respectively. The net tax benefit in 1996 reflects a
reduction in the valuation allowance on deferred tax assets of the Company,
other than Marvel, the benefit for current year operating losses of the
Company, other than Marvel, due to the taxable gain on the NWCG Disposition in
the first quarter of 1997, the U.S. federal tax refund receivable associated
with Marvel's current year operating loss and tax benefits for Marvel's
foreign operations, partially offset by a provision for income taxes related
to the operations of Toy Biz and the establishment of a valuation allowance
against deferred tax assets of Marvel. In 1995, the tax provision primarily
was a result of taxes on income from foreign and Toy Biz operations offset by
a U.S. federal benefit from the balance of its other operations.
Minority interest in loss (income) of subsidiaries was $32.3
million and ($7.3) million in 1996 and 1995, respectively. The increase in
minority interest was primarily due to the increase in net loss of Marvel and
lower net income of Toy Biz partially offset by Marvel's reduced ownership
percentage.
In 1996 and 1995, the Company recorded an extraordinary loss of
$7.0 million (net of taxes of $3.8 million) and $3.3 million (net of taxes of
$2.1 million), respectively, which represented a write-off of deferred
financing costs associated with the early retirement of indebtedness.
Loss from discontinued operations was $39.9 million and $60.1
million in 1996 and 1995, respectively. The decrease in loss from discontinued
operations from 1995 to 1996 primarily reflects an increase in income from
operations of NWCG.
Gain on disposal of discontinued broadcasting operations reflects
the gain on sale of NWCG's San Diego and Birmingham stations during 1996, net
of income taxes and minority interest and income from operations of the San
Diego station from September 24, 1996 through the date of sale in November
1996.
YEAR ENDED DECEMBER 31, 1995 COMPARED WITH THE YEAR ENDED DECEMBER 31, 1994
The Company's net revenues were $828.9 million and $514.8 million
in 1995 and 1994, respectively, an increase of $314.1 million. This increase
reflects a $75.2 million increase in trading card and sticker net revenues,
mainly attributable to the full year impact of Panini, which was acquired in
August 1994, and the acquisition of SkyBox in April 1995. This increase was
partially offset by a general decline in demand for trading cards as well as
the higher provisions for returns in 1995. In March 1995, Marvel began to
consolidate Toy Biz. For 1995, Marvel consolidated toy revenues of $180.2
million. Previously, Marvel reported the results of Toy Biz under the equity
basis and did not include Toy Biz revenues in its consolidated net revenues.
Toy Biz revenues for the full year ended 1995 was $196.4 million as compared
to $156.5 million in 1994. The increase in net publishing revenues of $18.3
million was due to the full year impact of Heroes World, Malibu and Welsh
Publishing Group, Inc., partially offset by a reduction in sales due to lower
speculative purchases. Primarily as a result of a full year impact of
adhesives, other product revenues increased by $37.7 million in 1995.
Licensing revenues increased by $2.7 million in 1995 as a result of, in part,
licensing revenues from certain long term licenses for certain product
categories. Licensing revenues will vary from period to period depending on
the volume and extent of licensing agreements entered into during any
particular financial period, as well as the level and commercial success of
the media exposure of the Marvel Characters.
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Gross profit was $295.6 million or 35.7% of sales in 1995 as
compared to $241.4 million or 46.9% in 1994. The decrease in margin percentage
was primarily attributable to Marvel's increased provisions for returns and
product obsolescence for the trading card business. Excluding the results of
the trading card operation for 1995 and 1994, the operating results of
Marvel's other businesses generated gross margin as a percentage of net
revenues of 42%, approximating the prior year.
SG&A were $262.1 million and $127.8 million in 1995 and 1994,
respectively. The increase of $134.3 million was primarily attributable to the
full year impact of Panini, the acquisition of SkyBox sports and entertainment
trading cards in 1995, the consolidation of Toy Biz's results, increased
corporate overhead to support the expansion of Marvel, the effects of the
strategic actions taken by Marvel in its publishing business and higher
expense primarily resulting from an increased investment to support Toy Biz's
expanded product line. As a percentage of net revenues, SG&A increased to
31.6% in 1995 from 24.8% in 1994. This percentage increase was attributable to
Marvel's increased return provisions for the trading card business which
decreased net revenues, higher SG&A expense as a percentage of net revenues
for the publishing operation, in part due to the distribution of comic books
through Heroes World, and other factors.
During the fourth quarter of 1995, Marvel recorded a $25.0 million
restructuring charge, which primarily represents the costs related to the
consolidation and closure of facilities, severance related to terminated
employees and other costs associated with its publishing, trading card and
confectionery businesses.
Amortization of goodwill and intangibles was $30.9 million and
$23.3 million in 1995 and 1994, respectively. The increase of $7.6 million
mainly reflects the amortization related to the acquisitions of Panini and
SkyBox.
Interest expense, net was $184.6 million and $122.6 million in 1995
and 1994, respectively. The increase of $62.0 million primarily reflects
increased borrowings.
Interest and net investment income was $37.6 million and $10.1
million in 1996 and 1995, respectively. The increase was primarily due to an
increase in average loans to affiliates.
The gain on sale of Toy Biz common stock in 1995 was $14.3 million
from the Toy Biz IPO (see Note 5).
Equity in net income of unconsolidated subsidiaries was $1.7
million and $11.9 million in 1995 and 1994, respectively. This decrease mainly
represents the consolidation of Toy Biz since the Toy Biz IPO. The 1995 amount
primarily represents Panini's equity interest in operations which distribute
its product internationally. During the fourth quarter of 1995, Panini
acquired the remainder of these operations and as a result, the year end
results reflect the consolidation since the acquisition.
For 1995, the provision for income taxes was $5.8 million as
compared to $30.6 million in 1994. The lower income taxes in 1995 are due
primarily to Marvel's loss. In 1995, the tax provision primarily was a result
of taxes on income from foreign and Toy Biz operations offset by a U.S.
federal benefit from remaining operations. The 1994 provision for income taxes
includes tax expense related to federal, state and local and foreign income
taxes related to subsidiaries which file separate tax returns.
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Marvel recorded a $3.3 million extraordinary loss, net of taxes of
$2.1 million, which represents a write-off of the deferred financing costs
associated with the term loan portion of its Amended and Restated Credit
Agreement.
(Loss) income from discontinued operations was ($60.1) million and
$43.9 million in 1995 and 1994, respectively. The decrease was primarily
attributable to the increase in interest expense and income tax expense in
1995 and the gain on sale of interest in NWCG of $86.6 million in 1994 as
compared to a gain on sale of stations of $41.7 million in 1995 partially
offset by improved income from operations of the broadcast business.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
MARVEL AND MARVEL HOLDING COMPANIES
Marvel experienced significant operating losses during 1995 and
1996, and failed to satisfy certain financial covenants contained in the
Marvel Credit Agreements (as defined below, see Note 6 of "Notes to
Consolidated Financial Statements") beginning in the Fall of 1996. Marvel
commenced discussions in the Fall of 1996 with Andrews regarding an equity
infusion in order to provide for Marvel's cash requirements and with The Chase
Manhattan Bank, agent bank for the Marvel Credit Agreement, regarding a
restructuring of the Marvel Credit Agreements.
On December 27, 1996, Marvel along with certain of its operating
and inactive subsidiaries, Fleer Corp.; SkyBox International, Inc.; Marvel
Characters, Inc.; Heroes World Distribution Inc.; The Asher Candy Company;
Malibu Comics Entertainment; Frank H. Fleer Corp. and Marvel Direct Marketing
Inc., filed petitions for relief and a plan of reorganization under Chapter 11
of the Bankruptcy Code, in the Bankruptcy Court. Panini S.p.A., Marvel
Restaurant Venture Corp. (a general partner in the Joint Venture developing
the Marvel Mania restaurants (each as defined below) see " Business of Marvel
- - Strategic Initiatives - Marvel Mania" and Toy Biz, all of which are active,
as well as certain inactive subsidiaries did not file petitions under the
Bankruptcy Code (See "Description of Business - Reorganization of Marvel and
Marvel Holding Companies").
The Debtor Companies received approval from the Bankruptcy Court
to pay on time and in full undisputed pre-petition obligations including
salaries, wages and benefits to all of its employees, trade creditors and
independent contractors and to continue funding its strategic initiatives. On
January 24, 1997 the Bankruptcy Court approved a $100 million DIP Loan, which
is provided by a syndicate of lenders, including The Chase Manhattan Bank, as
agent bank, which is available to Marvel until June 30, 1997. The DIP Loan is
subject to covenants and events of default including a change of control of
Marvel (as defined therein). See Note 6 of "Notes to Consolidated Financial
Statements".
At March 28, 1997, Marvel's outstanding bank indebtedness was
approximately $711.3 million, of which $56.9 million relates to borrowings
under the DIP Loan (including approximately $6.9 million drawn under letters
of credit), $607.6 million relates to borrowings under the Marvel Credit
Agreements, approximately Italian Lire 25 billion (approximately $14.9 million
based on exchange rates at March 28, 1997) relates to borrowings for Panini's
Adespan adhesives facility and approximately Italian Lire 53.4 billion
(approximately $31.9 million based on exchange rates at March 28, 1997)
relates to borrowings under Panini's short term lines of credit. Panini had
approximately Italian Lire 4.9 billion (approximately $3.2 million based on
exchange rates at March 28, 1997) available under its foreign credit
facilities at March 28, 1997. In addition, there was approximately
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$24.5 million (net of letters of credit outstanding) available under the Toy
Biz credit agreement at March 28, 1997.
The Marvel Credit Agreements and DIP Loan provide that it is an
event of default if there is a change of control of Marvel. Toy Biz's credit
agreement provides it is an event of default if Marvel does not control Toy
Biz, although Toy Biz believes that upon any such default it will be able to
obtain an amendment or waiver of such event of default or refinance such
indebtedness. There can be no assurance as to the terms and conditions of such
amendment or refinancing.
On December 27, 1996, the Marvel Holding Companies filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code with the
Bankruptcy Court. The Chapter 11 cases commenced by the Marvel Holding
Companies have not been procedurally consolidated and are not jointly
administered with the Debtor Companies' Chapter 11 cases.
On February 26, 1997, the Bankruptcy Court entered an order
granting relief from the automatic stay to allow the Holding Companies'
Trustee to vote and foreclosure upon the Pledged Stock. On February 27, 1997,
Marvel and the Marvel Holding Companies filed a notice of appeal with respect
to such order. On March 19, 1997, the Creditors Committee notified Marvel that
on March 25, 1997 it would cause the Holding Companies' Trustee to vote the
Pledged Stock to replace the Board of Directors of Marvel and the Marvel
Holding Companies. On March 24, 1997, the Court in the Debtor Companies'
bankruptcy cases issued a restraining order preventing the Creditors Committee
and the Holding Companies' Trustee from voting the Pledged Stock or otherwise
replacing the Board of Directors of Marvel and determined that the Creditors
Committee and the Holding Companies' Trustee must comply with the procedural
requirements of section 362 of the Bankruptcy Code to seek relief from the
automatic stay to take such action. The Court, however, also ruled that the
Creditors Committee and Holding Companies' Trustee could replace the Board of
Directors of Marvel Holdings and Parent Holdings. On March 28, 1997, the
Creditors Committee and the Holding Companies' Trustee filed motion to lift
the automatic stay in the Debtor Companies' cases in order to permit the
Creditors Committee and the Holding Companies' Trustee to replace the Board of
Directors of Marvel. A hearing date on such motion has been set for May 14,
1997. On March 28, 1997, the Creditors Committee also filed an emergency
appeal of the order of the Bankruptcy Court issued on March 24, 1997
preventing the replacement of the Board of Directors of Marvel. A briefing
schedule has been set for the emergency appeal and a hearing date for such
appeal has been set for May 1, 1997.
Although there can be no assurance, Marvel believes that
borrowings under the DIP Loan and internally generated funds will be
sufficient to enable the Debtor Companies to meet their consolidated cash
requirements, including debt service through the date of maturity of the DIP
Loan. The DIP Loan expires April 30, 1997 and the maturity of the DIP Loan may
be extended at the option of Marvel to June 30, 1997. As part of the Plan, a
group of lenders had committed to lend $160 million to Toy Biz which could be
used by Marvel and its subsidiaries, including Toy Biz to fund working capital
and strategic investments and repay borrowings outstanding under the DIP Loan.
Such commitments have been terminated as a result of the withdrawal of the
Andrews Investment and the Plan. In addition, the DIP Loan is subject to a
number of events of default and conditions of borrowings. In the event
borrowings under the DIP Loan become due either upon maturity or an event of
default prior to a plan of reorganization being confirmed under the Bankruptcy
Code and consummated, then the Debtor Companies will have to seek one or more
alternatives to provide for its cash requirements (including the repayment of
borrowings under the DIP Loan), including seeking alternative
debtor-in-possession financing and/or sales of assets and/or sales of one or
more of Marvel's businesses. Although there can be no assurance, Marvel
believes that its Panini subsidiary should be able to meet its cash
requirements, including for debt service and repayment, from
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permissible advances by Marvel of borrowings under the DIP Loan, local
borrowings and internally generated funds. Marvel anticipates that internally
generated funds of Toy Biz and borrowings under Toy Biz's credit agreement will
be sufficient to enable Toy Biz to meet its cash requirements, including debt
service, for the foreseeable future. See Note 6 of "Notes to Consolidated
Financial Statements".
As Chapter 11 debtors, the Debtor Companies may sell (subject, in
certain circumstances, to Bankruptcy Court approval), or otherwise dispose of
assets, and liquidate or settle liabilities for amounts other than those
reflected in the consolidated financial statements. The amounts reported in the
consolidated financial statements do not give effect to any adjustments to the
carrying value of assets or amount of liabilities that might result as a
consequence of actions taken pursuant to the bankruptcy or a plan of
reorganization. If Marvel is unable to obtain confirmation of a plan of
reorganization, its creditors or equity securityholders may seek other
alternatives for Marvel, including bids for Marvel or parts thereof through an
auction process. In that event it is possible that certain assets would not be
realized and additional liabilities and claims would be asserted which are not
presently reflected in the consolidated financial statements and which are not
presently determinable. The effect of any such assertion or non-realization
could be material. Currently, there is no plan of reorganization that is
pending with the Bankruptcy Court. These conditions raise substantial doubt as
to Marvel's ability to continue as a going concern.
Because the Marvel Holding Companies have no assets other than
common stock of Marvel and/or stock in the Marvel Holding Companies, the
securityholders of the Marvel Holding Companies will likely receive only their
pro rata share of the Pledged Stock upon consummation of the Chapter 11 cases.
Capital expenditures for Marvel (excluding Toy Biz), including
software development costs, are expected to be approximately $25.0 million for
the year ending December 31, 1997. Capital expenditures for Toy Biz, including
product development and package design costs and software development costs,
are projected to approximate $25.0 million for the year ending December 31,
1997.
In August 1996, Toy Biz sold in a public offering 700,000 shares
of its Class A common stock at a price of $15 per share. As part of Toy Biz's
offering, Marvel sold 2.5 million shares of Toy Biz Class A common stock. The
net proceeds to Toy Biz and Marvel were approximately $9.3 million and $35.7
million, respectively, after deducting amounts accrued for fees and expenses.
As a result of the offering by Toy Biz and the sale of Class A common stock of
Toy Biz by Marvel, Marvel's ownership percentage of Toy Biz decreased to 26.6%
and its voting control decreased to 78.4%.
In addition to the Pledged Stock as of March 26, 1997,
approximately 2.9 million shares of Marvel's common stock are subject to a
negative pledge under the indenture to the notes issued by Marvel Holdings and
approximately 0.3 million shares of Marvel's common stock were pledged to
secure obligations of subsidiaries of Mafco. The indentures governing the
indebtedness of the Marvel Holding Companies contain various covenants
relating to Marvel, including certain limitations on Marvel's indebtedness.
Marvel expects to incur approximately $1 million in net production
costs for the INCREDIBLE HULK animated series being produced for the 1997-1998
broadcast year. In addition, with respect to Marvel's agreement with FKW,
Marvel will be required to reimburse FKW a portion of its production costs.
One-half of such amounts are expected to be reimbursed to Marvel by Toy Biz
pursuant to the understanding with respect to Marvel Studios.
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Marvel, along with its joint venture partner, is continuing
development of Marvel theme restaurants. Three restaurants are contemplated,
with the first restaurant expected to open in Los Angeles as a joint venture
between the Joint Venture and MCA/Universal, in which MCA/Universal has a 70%
interest and the Joint Venture has a 30% interest. The Los Angeles restaurant
is under construction and is projected to open in the second half of 1997.
Marvel has posted a standby letter of credit for approximately $6.1 million to
fund development costs associated with the restaurant being constructed in Los
Angeles. See "Business of Marvel -- Strategic Initiatives -- Marvel Mania."
Toy Biz has authorized the repurchase of up to three million
shares of Class A Common Stock. The repurchase program requires the consent of
Marvel Characters, Inc., a wholly-owned subsidiary of Marvel, which has
announced that it will seek approval of the bankruptcy court for such consent.
Such stock repurchase also requires approval under Toy Biz's credit agreement.
CORPORATE AND OTHER SUBSIDIARIES
Pursuant to the NWCG Stock Purchase Agreement, Fox purchased from
NWCG Parent 2,682,236 shares of common stock of NWCG owned by NWCG Parent and
all of the outstanding shares of capital stock of NWCG Holdings Inc. The
consideration for such purchase was 1.45 ADSs, each of which represents four
fully paid and non-assessable Preferred Limited Voting Ordinary Shares, of par
value A$.50 per share of News Corp., for each share of common stock of NWCG
directly or indirectly acquired by Fox pursuant to the NWCG Stock Purchase
Agreement, with the aggregate number of ADSs issued to NWCG Parent reduced by
an amount which approximated the accreted amount of the Discount Notes
outstanding at the effective time of the Fox Merger. In addition, in
connection with the NWCG Disposition, Fox agreed to assume an aggregate of
$46.2 million principal amount of debt of Four Star Holdings Inc.
In connection with the NWCG Merger, the Company received
37,954,211 ADSs (with an aggregate market value of $668.9 million on January
22, 1997) and 2,175,000 warrants to purchase ADSs (in exchange for 1,500,000
warrants to purchase shares of NWCG previously held by the Company). The
Company expects to record a pre-tax gain in 1997 on the NWCG Disposition of
approximately $720 million. Through March 26, 1997, the Company sold
15,562,300 ADSs for net proceeds of $271.4 million.
On December 16, 1996, Mafco Finance Corp. (formerly known as
Marvel IV Holdings Inc.) ("Mafco Finance") entered into an amended and
restated credit agreement which provided for a $350.0 million term loan
facility and a $300.0 million revolving credit facility. At December 31, 1996,
there was $249.6 million of outstanding borrowings under the revolving credit
facility and $0 under the term loan facility. Such borrowings were repaid in
full on March 13, 1997. On March 20, 1997, Mafco Finance entered into an
amended and restated credit agreement (the "Amended Mafco Finance Credit
Agreement") which provides for a $400.0 million term loan facility and $250.0
million revolving credit facility. The Amended Mafco Finance Credit Agreement
matures in March 1999. Pursuant to the Amended Mafco Finance Credit Agreement,
Mafco Finance will be required to have no outstanding borrowings under the
Revolving Credit Facility for 30 days in each twelve month period. At March
26, 1997, there was $400.0 million of outstanding borrowings under the term
loan facility and $0 outstanding under the revolving credit facility.
Borrowings outstanding under the Amended Mafco Finance Credit Agreement bear
interest, as appropriate for the type of advance, at either (i) the Base Rate
(as defined) plus a margin of 2.50% or (ii) LIBOR (as defined) plus a margin
of 4.50%. Mafco Finance's obligations are guaranteed by certain subsidiaries
and affiliates of the Company and the Amended Mafco Finance Credit Agreement
contains customary affirmative and negative covenants and events of default.
The ADSs are pledged as security under the Amended Mafco Consolidated Credit
Agreement, which limits the use of proceeds of any ADS sale. The Company
anticipates that
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collections of loans to affiliates and borrowings from affiliates and/or
proceeds from the NWCG Disposition will be used to repay a substantial portion
of the borrowings under the Amended Mafco Finance Credit Agreement.
At March 26, 1997, December 31, 1996 and December 31, 1995, Mafco
Holdings and affiliates had outstanding advances to the Company of $64.0
million, $297.8 million and $307.1 million, respectively. At March 26, 1997,
December 31, 1996 and December 31, 1995, Mafco Finance had advanced $391.6
million, $247.6 million and $441.0 million, respectively, to Mafco Holdings and
its subsidiaries and at March 26, 1997, the Company had advanced $221.0 million
to Mafco Holdings and its subsidiaries.
The bankruptcy of Marvel resulted in an event of default pursuant
to the indenture governing Andrews' 10% Senior Subordinated Notes due 1999 (the
"Senior Notes"). In accordance with the settlement of certain litigation, the
Company will exercise its optional rights to redeem the Senior Notes which have
a face value of $31.2 million on June 30, 1997.
As prescribed in Statement of Position ("SOP") No. 90-7, certain
pre-petition obligations, which may be impaired, have been classified as
obligations subject to Chapter 11 reorganization proceedings and include
Marvel debt and liabilities of $503.2 million and Marvel Holding Companies'
debt and liabilities of $810.5 million. In the event the bondholders seize the
Pledged Stock, the Company will recognize a substantial non-cash gain
estimated at December 31, 1996 to be the book value of the Company's negative
investment in the Marvel Holding Companies of approximately $1,060.0 million
and will have a related tax obligation to its parent in accordance with its
tax sharing agreement.
FORWARD-LOOKING STATEMENTS
Statements in this annual report on Form 10-K for the year ended
December 31, 1996 such as "intend", "estimated", "believe", "expect",
"anticipate" and similar expressions which are not historical are
forward-looking statements that involve risks and uncertainties. Such
statements include, without limitation, the Company's expectation as to future
financial performance. In addition to factors that may be described in the
Company's Securities and Exchange Commission filings, including this filing,
the following factors, among others, could cause the Company's financial
performance to differ materially from that expressed in any forward-looking
statements made by, or on behalf of, the Company: (i) the ability of the
Debtor Companies and the Marvel Holding Companies to successfully reorganize
in bankruptcy and the outcome of such bankruptcy proceedings, (ii) the ability
of the Debtor Companies to continue to draw on the DIP Loan and to obtain
additional DIP Loan financing subsequent to the maturity of the DIP Loan on
June 30, 1997 or in the event of an earlier termination of the DIP Loan, (iii)
continued weakness in the comic book market which cannot be overcome by
Marvel's new editorial, production and distribution initiatives in comic
publishing; (iv) continued general weakness in the trading card market; (v)
the failure of fan interest in baseball to return to traditional levels that
existed prior to the 1994 baseball strike thereby negatively affecting
Marvel's baseball card business; (vi) the effectiveness of Marvel's changes to
its trading card and publishing distribution; (vii) a decrease in the level of
media exposure or popularity of Marvel's characters resulting in declining
revenues based on such characters; (viii) the lack of continued commercial
success of properties owned by major licensors which have granted Marvel
licenses for its sports and entertainment trading card and sticker businesses;
(ix) unanticipated costs or delays in completing projects associated with
Marvel's new ventures including media, interactive software and on-line
services and theme restaurants; (x) consumer acceptance of new product
introductions, including those for toys; and (xi) imposition of tariffs or
40
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import quotas on toys manufactured in China as a result of a deterioration in
trade relations between the U.S. and China.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Index To Consolidated Financial Statements and Financial
Statement Schedules appearing on page F-1 of this Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS
The name, age, principal occupation for the last five years,
selected biographical information and the period of previous service as a
director of Andrews as to each such director are set forth below as of the
latest practicable date.
Name Age Principal Occupations
- ---- --- ---------------------
Ronald O. Perelman 54 Mr. Perelman has been Chairman of the Board
and Chief Executive Officer of MacAndrews &
Forbes Holdings Inc. ("M&F Holdings") for
more than the past five years. Mr. Perelman
also is Chairman of the Board of Consolidated
Cigar Holdings Inc. ("Consolidated Cigar"),
Mafco Consolidated Group Inc. ("Mafco
Consolidated"), Meridian Sports Incorporated
("Meridian"), Power Control Technologies Inc.
("PCT") and Toy Biz, Inc. ("Toy Biz"), and is
the Chairman of the Executive Committee of
the Board of Directors of The Coleman
Company, Inc. ("Coleman"), Revlon, Inc.
("Revlon"), Revlon Consumer Products
Corporation ("Revlon Products") and Marvel
Entertainment Group, Inc. ("Marvel"). Mr.
Perelman is a director of the following
corporations which file reports pursuant to
the Securities Exchange Act of 1934, as
amended (the "Exchange Act"): Coleman,
Coleman Holdings Inc. ("Coleman Holdings"),
Coleman Worldwide Corporation ("Coleman
Worldwide"), Consolidated Cigar, Consolidated
Cigar Corp., California Federal, First
Nationwide Holdings Inc. ("First Nationwide
Holdings"), First Nationwide (Parent)
Holdings Inc. ("First Nationwide Parent"),
Mafco Consolidated, Marvel, Marvel Holdings
Inc. ("Marvel
41
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Holdings"), Marvel (Parent) Holdings Inc.
("Marvel Parent"), Marvel III Holdings Inc.
("Marvel III"), Meridian, Pneumo Abex,
Revlon, Revlon Products, Revlon Worldwide
Corporation, and Toy Biz. (On December 27,
1996, Marvel Holdings, Marvel Parent, Marvel
III, Marvel and several of its subsidiaries
filed voluntary petitions for reorganization
under Chapter 11 of the United States
Bankruptcy Code.)
Donald G. Drapkin 49 Mr. Drapkin has been Vice Chairman and a
Director of M&F Holdings and various of its
affiliates since 1987. Mr. Drapkin was a
partner in the law firm of Skadden, Arps,
Slate, Meagher & Flom for more than five
years prior to March 1987. He is a Director
of each of Coleman, Coleman Holdings, Coleman
Worldwide, Consolidated Cigar, Consolidated
Cigar Corp., Revlon, Revlon Products, Revlon
Worldwide, Marvel, Marvel Holdings, Marvel
III, Marvel Parent, Toy Biz, Algos
Pharmaceutical Corporation and VIMRx
Pharmaceuticals, Inc. (On December 27, 1996,
Marvel Holdings, Marvel Parent, Marvel III,
Marvel and several of its subsidiaries filed
voluntary petitions for reorganization under
Chapter 11 of the United States Bankruptcy
Code.)
Howard Gittis 63 Mr. Gittis has been Vice Chairman and
Director of M&F Holdings and various of its
affiliates since 1985. He is a Director of
each of Consolidated Cigar, Consolidated
Cigar Corp., California Federal, First
Nationwide Holdings, First Nationwide Parent,
Jones Apparel Group, Inc., Loral Space and
Communication Ltd., Mafco Consolidated, PCT,
Pneumo Abex, Revlon Products, Revlon
Worldwide, Revlon and Rutherford-Moran Oil
Corporation.
Bruce Slovin 60 Mr. Slovin has been President and Director of
M&F Holdings and various of its affiliates
since 1980. He is a director of each of
Coleman, Coleman Holdings, Coleman Worldwide,
Continental Health Affiliates, Inc., Cantel
Industries, Inc., Oak Hill Sportswear
Corporation, Infu-Tech, Inc., Meridian and
PCT.
42
<PAGE>
EXECUTIVE OFFICERS
The following table sets forth the name, age, position with
Andrews and selected biographical information for each of the executive
officers of Andrews as of the latest practicable date.
Name Age Position
- ---- --- --------
Ronald O. Perelman 54 Chairman of the Board
Donald G. Drapkin 49 Vice Chairman
Howard Gittis 63 Vice Chairman
Bruce Slovin 60 Vice Chairman
Scott M. Sassa 38 President and Chief Operating Officer
Mr. Sassa has been President and Chief Operating Officer since
October 1996. Mr. Sassa is also the Chairman, Chief Executive Officer and a
Director of Marvel since October 1996. Prior thereto, Mr. Sassa served as
President of Turner Entertainment Group and as a member of the Board of
Directors of Turner Broadcasting System, Inc. and the TBS Executive Committee.
Mr. Sassa was named Executive Vice President of Turner Network Television in
1992 ("TNT"). From 1987 to 1988, Mr. Sassa served as Vice President/New
Business for Ohlmeyer Communications Co. Prior to that time, Mr. Sassa served
as Vice President/Network Management for Fox Broadcasting Co. (On December 27,
1996, Marvel and several of its subsidiaries filed voluntary petitions for
reorganization under Chapter 11 of the United States Bankruptcy Code.)
William C. Bevins, Jr. 50 Chief Executive Officer
Mr. Bevins was elected President and Chief Executive Officer in
November 1988 and has been Executive Vice President of Mafco Holdings since
November 1988; Chief Executive Officer of Marvel from 1991 through 1996;
Director and Chief Financial & Administrative Officer of Turner Broadcasting
System, Inc. for more than five years prior to 1988. (On December 27, 1996,
Marvel Holdings, Marvel Parent, Marvel III and Marvel, of which Mr. Bevins is
an officer, and several of its subsidiaries filed voluntary petitions for
reorganization under Chapter 11 of the United States Bankruptcy Code.)
Terry C. Bridges 53 Executive Vice President and Chief
Administrative Officer
Mr. Bridges has been Executive Vice President and Chief
Administrative Officer since 1993. Prior to joining Andrews in 1993, Mr.
Bridges was a partner in the law firm of Troutman Sanders in Atlanta, Georgia
for more than the previous five years. Mr. Bridges is also Executive Vice
President and General Counsel of Coleman since March 1997.
Barry F. Schwartz 47 Executive Vice President and General Counsel
Mr. Schwartz has been Executive Vice President and General Counsel
of the Company since June 1995. He has been Executive Vice President and
General Counsel of Mafco Holdings and various of its affiliates since 1993. Mr.
Schwartz was Senior Vice President of MacAndrews & Forbes from 1989 to 1993.
(On December 27, 1996, Marvel Holdings, Marvel Parent and Marvel III, of which
Mr. Schwartz is an officer, filed voluntary petitions for reorganization under
Chapter 11 of the United States Bankruptcy Code.)
43
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Joseph P. Page 43 Executive Vice President and Chief Financial
Officer
Mr. Page has been Executive Vice President and Chief Financial
Officer since 1994. Prior to joining Andrews in 1994, Mr. Page was a partner in
the accounting firm of Price Waterhouse for more than the previous five years.
Paul E. Shapiro 55 Executive Vice President
Mr. Shapiro has been Executive Vice President of the Company since
1994. Mr. Shapiro is also Executive Vice President and General Counsel of
Marvel. Prior thereto, he was a shareholder in the law firm of Greenberg,
Traurig, Hoffman, Lipoff, Rosen & Quental from 1991 to 1993 and is currently Of
Counsel to that firm. Mr. Shapiro is also a director of Toll Brothers, Inc. (On
December 27, 1996, Marvel and several of its subsidiaries filed voluntary
petitions for reorganization under Chapter 11 of the United States Bankruptcy
Code.)
Michael H. Diamond 51 Executive Vice President
Mr. Diamond has been Executive Vice President of Andrews Group
since 1994 and prior to 1994, Mr. Diamond was a partner in the law firm of
Skadden, Arps, Slate, Meagher and Flom for more than the previous five years.
Laurence Winoker 40 Vice President and Controller
Mr. Winoker was elected Vice President and Controller in September
1992. He has been Vice President and Controller of Mafco Holdings and various
of its affiliates since that date. He was Assistant Vice President and
Assistant Controller of Mafco Holdings and various affiliates for more than
five years prior to September 1992. (On December 27, 1996, Marvel Holdings,
Marvel Parent and Marvel III, of which Mr. Winoker is an officer, filed
voluntary petitions for reorganization under Chapter 11 of the United States
Bankruptcy Code.)
44
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by the
Company and the Company's subsidiaries to the Company's Chief Executive
Officer and the Company's executive officers.
<TABLE>
<CAPTION>
OTHER
ANNUAL
NAME YEAR SALARY($) BONUS($) COMPENSATION($)
- ---- ---- --------- -------- ---------------
<S> <C> <C> <C> <C>
William C. Bevins, Jr. 1996 2,000,000 2,000,000 129,851 (a)
1995 2,000,000 2,000,000 3,596,273 (b)
1994 2,000,000 2,000,000 815,474 (c)
Paul E. Shapiro 1996 750,000 750,000 112,500 (d)
1995 600,000 250,000 106,624 (d)
1994 600,000 250,000 104,896 (d)
Terry C. Bridges 1996 715,000 500,000 50,069
1995 677,083 200,000 48,732
1994 620,833 250,000 44,687
Joseph P. Page 1996 600,000 500,000 28,212
1995 550,000 250,000 27,424
1994 500,000 200,000 15,147
Michael H. Diamond 1996 583,336 500,000 45,673
1995 533,333 200,000 47,058
1994 333,333 200,000 33,415
</TABLE>
(a) Includes $73,076 of airplane allowance, $36,310 of automobile
allowance, with the remainder representing insurance premiums paid on
behalf of Mr. Bevins.
(b) Includes $3,378,870 related to a Company property transferred to Mr.
Bevins, $169,200 of airplane allowances, $32,746 of automobile
allowances, with the remainder representing insurance premiums paid on
behalf of Mr. Bevins.
(c) Includes $700,000 of housing and expense allowances, $39,037 of
automobile allowances, $62,550 of airplane allowances, with the
remainder representing insurance premiums paid on behalf of Mr.
Bevins.
(d) Includes $100,000 of housing allowances.
Mr. Bevins has an agreement with Andrews effective January 1, 1993
whereby Mr. Bevins is employed as President and Chief Executive Officer of
Andrews Group. The term of the employment agreement was originally for three
years and has been extended by the mutual agreement of the parties through
December 31, 1998. The employment agreement provides for the payment to Mr.
Bevins of a base salary of $2,000,000 per annum and additional bonus
compensation, if any, as may be awarded to him in the sole discretion of the
Board of Directors.
45
<PAGE>
Mr. Shapiro has an agreement with Andrews effective October 28, 1993
whereby Mr. Shapiro is employed as Executive Vice President of Andrews. Mr.
Shapiro also serves as Executive Vice President and General Counsel of Marvel.
The term of this agreement, as renewed and extended by agreement dated as of
January 1, 1997, extends until December 31, 1999. The employment agreement, as
amended, provides for the payment to Mr. Shapiro of a base salary of $900,000
through December 31, 1997, $950,000 through December 31, 1998 and $1,000,000
through the end of the term. Mr. Shapiro's participation in a performance bonus
plan to be adopted by the Company will permit Mr. Shapiro to receive, upon
achievement of certain operating goals, a bonus of up to 100% of each year's
base salary. Mr. Shapiro also receives a $150,000 per annum living expense.
Mr. Bridges has an agreement with Andrews effective August 1, 1993
whereby Mr. Bridges is employed as Executive Vice President and Chief
Administrative Officer of Andrews. The term of this agreement, as renewed and
extended by agreement dated as of January 1, 1996, extends until December 31,
1998. The employment agreement provides for the payment to Mr. Bridges of an
initial base salary of $600,000 which increases by $50,000 annually on each
August 1 (through August 1, 1997) of the term. The agreement also provides for
an annual bonus to be determined at the sole discretion of the Board of
Directors.
Mr. Page has an agreement with Andrews effective November 15, 1993
whereby Mr. Page is employed as Executive Vice President and Chief Financial
Officer of Andrews. The term of this agreement, as renewed and extended by
agreement dated as of January 1, 1996, extends until December 31, 1998. The
employment agreement provides for the payment to Mr. Page of an initial base
salary of $500,000 which increases commencing January 1, 1994 by $50,000
annually on each subsequent January 1 of the term. The agreement also provides
for an annual bonus to be determined at the sole discretion of the Board of
Directors.
Mr. Diamond has an agreement with Andrews effective April 20, 1994
whereby Mr. Diamond is employed as Executive Vice President of Andrews. The
term of his employment agreement extends until April 30, 1997. The employment
agreement provides for the payment to Mr. Diamond of an initial base salary of
$500,000 per year commencing April 20, 1994, which increases commencing May 1,
1995 by $50,000 annually on each subsequent May 1 of the term. The agreement
also provides for an annual bonus to be determined at the sole discretion of
the Board of Directors.
Mr. Sassa has an agreement with Andrews effective October 21, 1996
whereby Mr. Sassa is employed as President and Chief Operating Officer of
Andrews Group. The term of the employment agreement is three years. The
employment agreement provides for the payment to Mr. Sassa of a base salary of
$2,000,000 per annum, an annual bonus of $1,000,000 and additional bonus
compensation, if any, as may be awarded to him in the sole discretion of the
Board of Directors. Mr. Sassa's employment agreement provides that Mr. Sassa
may be entitled to receive certain other consideration pursuant to the terms of
the employment agreement.
46
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the ownership of shares of common stock
by each person known by the Company to own beneficially more than five percent
of the outstanding shares, by each director and by all officers and directors
as a group as of March 15, 1997.
Beneficial Owner Shares Beneficially Owned Percent of Class
---------------- ------------------------- ----------------
Ronald O. Perelman 1,000(1) 100%
- -----------
(1) All of such Shares are beneficially owned by MacAndrews Holdings and,
in turn, by Mafco Holdings, of which Mr. Perelman is the sole
stockholder.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS (DOLLARS IN MILLIONS)
"Other assets" at December 31, 1996 and 1995 includes $0.3 and $2.9
debt securities issued by a subsidiary of Mafco Holdings that were purchased in
the open market.
At March 26, 1997, December 31, 1996 and December 31, 1995, Mafco
Holdings and affiliates had outstanding advances to the Company of $64.0,
$297.8 and $307.1, respectively. At March 26, 1997, December 31, 1996 and
December 31, 1995, Mafco Finance had advanced $391.6, $247.6 and $441.0,
respectively, to Mafco Holdings and its subsidiaries and at March 26, 1997, the
Company had advanced $221.0 to Mafco Holdings and its subsidiaries.
In addition to the Pledged Stock, as of March 26, 1997, approximately
2.9 million shares of Marvel's common stock are subject to a negative pledge
under the indenture to the notes issued by Marvel Holdings and approximately
0.3 million shares of Marvel's common stock were pledged to secure obligations
of subsidiaries of Mafco.
See "Description of Business -- Reorganization of Marvel and Marvel
Holding Companies".
Information required by this Item 13 as it relates to Marvel, is
incorporated by reference from the definitive proxy statement for the 1997
annual meeting of Marvel shareholders, and if such proxy is not so filed, it
will be filed as an amendment to Marvel's Form 10-K.
47
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8K
a) 1 and 2 Financial statements and financial statement schedules
The Financial Statements and Financial Statements
Schedules and Report of Independent Auditors included in this Report are
indexed on page F-1.
3. Exhibits
EXHIBIT DESCRIPTION
2.1 Agreement and Plan of Merger, dated as of July 24, 1992
among Fleer Corp., Marvel and M Acquisition Corp. filed
as Exhibit (c)(1) to Registrant's Tender Offer
Statement on Schedule 14D-1 filed with the Securities
and Exchange Commission on July 28, 1992, as amended
(the " Fleer Schedule 14D-1") and incorporated herein
by reference.
3.1 Restated Certificate Of Incorporation of the Company as
filed with the Delaware Secretary of State on August
16, 1990 (incorporated herein by reference to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1991 (the "1991 10-K")).
3.2 Amended and Restated By-Laws of the Company
(incorporated by reference to Exhibit 3.2 to the
Company's Registration Statement on Form S-4
(Registration No. 33-34829) filed with the SEC on May
11, 1990 (the "1990 S-4")).
4.1 Form of Indenture between the Company and Security
Pacific National Trust Company (New York), as Trustee,
including the form of 10% Senior Subordinated
Debentures due 1999 (incorporated herein by reference
to the 1990 S-4).
4.3 Certificate Of Designations, Preferences And Relative
Rights, Qualifications, Limitations And Restrictions Of
The Series "A" Adjustable Rate Cumulative Preferred
Stock Of Four Star Holdings Corp. (incorporated herein
by reference to the Registrant's Current Report on Form
8-K dated June 5, 1989), as amended (incorporated
herein by reference to the Registrant's Current Report
on Form 8-K dated June 5, 1989).
4.4 Fourth Amendment, dated as of May 12, 1994 to the
Credit and Guarantee Agreement, dated as of September
17, 1992, as amended, among Marvel, Fleer, the
financial institutions parties thereto and Chemical
Bank, as administrative agent (incorporated by
reference to Marvel's 1993 Annual Report on Form 10-K
for the fiscal year ended December 31, 1993).
48
<PAGE>
4.5 Credit Agreement dated as of July 20, 1994 among Marvel
IV Holdings Inc., the banks named therein and Citibank,
N.A. and related schedules (incorporated by reference
to the Company's Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 1994 ("the 1994
10Q")).
4.6 First Amendment dated as of March 10, 1995 to Credit
Agreement dated as of July 20, 1994 among Marvel IV
Holdings Inc., the banks named therein and Citibank
N.A. as agent and related agreements (incorporated by
reference to the Company's Quarterly Report on Form
10-Q for the period ended June 30, 1995 (the "1995
10Q")).
4.7 Amended and Restated Agreement dated as of June 29,
1995 among Marvel IV Holdings Inc., the banks named
therein and Citibank N.A. as agent and related
agreements (incorporated by reference to the 1995 10Q)
4.8 Second Amended and Restated Credit Agreement dated as
December 15, 1995 among Marvel IV Holdings Inc., the
banks named therein and Citibank, N.A., as agents
(incorporated by reference to Andrews Annual Report on
Form 10-K for the year ended December 31, 1995 (the
"1995 10- K")).
4.9 First Amendment to the Second Amended and Restated
Credit Agreement dated as of January 9, 1996
(incorporated by reference to the 1995 10-K).
4.10 Second Amendment to the Second Amended and Restated
Credit Agreement dated as of January 24, 1996
(incorporated by reference to the 1995 10-K).
4.11 Third Amendment to the Second Amended and Restated
Credit Agreement dated as of April 9, 1996
(incorporated by reference to Exhibit 4.45 to the
Registrant's Form 10-Q for the quarterly period ended
March 31, 1996).
4.12 Third Amended and Restated Credit Agreement dated as of
June 3, 1996 among Marvel IV Holdings Inc., the
financial institutions and issuing bank named therein,
and Citibank, N.A., as agent (incorporated by reference
to Exhibit 10.1 to the Registrant's Form 10-Q for the
quarterly period ended June 30, 1996).
4.13 First Amendment, dated as of September 9, 1996, to the
Third Amended and Restated Credit Agreement, dated as
of June 3, 1996, by and among Marvel IV Holdings Inc.,
the financial institutions and issuing bank named
therein, and Citibank, N.A., as agent (incorporated by
reference to Exhibit 10.1 to the Registrant's Form 10-Q
for the quarterly period ended September 30, 1996 (the
"1996 10-Q")).
10.1 Formation and Contribution Agreement dated as of March
19, 1993, among Toy Biz, Inc., Isaac Perlmutter, Isaac
Perlmutter T.A., the registrant, Avi Arad and Toy Biz
Acquisition, Inc., as amended as of March 31, 1993, and
April 30, 1993, incorporated by reference to Exhibit
10.29 to the registrant's Form 10-Q for the quarterly
period ended March 31, 1993.
49
<PAGE>
10.2 Distribution Agreement dated as of September 1, 1993,
between Curtis Circulation Company and Marvel
(incorporated by reference to Marvel's 1993 10-K).
10.3 Marketing and Distribution Agreement dated November 1,
1989 between Publishers Group West Incorporated and
Marvel (incorporated by reference to Exhibit 10.5 to
Marvel's 1991 Registration Statement on Form S-1 (file
No. 33-40574)).
10.4 Agreement dated November 9, 1994, between Time
Distribution Services and Fleer Corp. (incorporated by
reference to Exhibit 10.7 to Marvel's 1994 Form 10-K).
Confidential treatment has been granted for portions of
this document.
10.5 Lease dated as of July 1, 1986, between 387 P.A.S.
Enterprises and Cadence Industries Corporation (9th
floor) (incorporated by reference to Exhibit 10.7 to
Marvel's 1991 Registration Statement).
10.6 Lease Modification and Extension Agreement dated as of
July 1, 1991, between 387 P.A.S. Enterprises and Marvel
(9th, 10th, 11th and 12th floors) (incorporated by
reference to Exhibit 10.9 to Marvel's 1991 Form 10-K).
10.7 Sublease dated September 13, 1991 between American
Banker Bond Buyer and Marvel (12th floor) (incorporated
by reference to Exhibit 10.10 to Marvel's 1991 Form
10-K).
10.8 Andrews Group Incorporated Savings and Investment Plan
(incorporated by reference to Exhibit 10.9 to Marvel's
1991 Registration Statement).
10.9 First Amendment to the Marvel Entertainment Group, Inc.
1991 Stock Option Plan (incorporated by reference to
Exhibit 4.2 to the Marvel's Registration Statement on
Form S-8 (File No. 33-63892)).
10.10 Services Agreement dated as of July 22, 1991, among
Marvel, MacAndrews and Andrews (incorporated by
reference to Exhibit 10.13 to the 1991 Marvel Form
10-K).
10.11 Tax Indemnification Agreement dated as of July 22,
1991, between Marvel and Mafco (incorporated by
reference to Exhibit 10.14 to the 1991 Marvel Form
10-K).
10.12 Tax Sharing Agreement dated as of May 18, 1993, among
Marvel, certain of its subsidiaries and Mafco
(incorporated by reference to Exhibit 10.32 to the
Marvel (Parent) Holdings Inc. Registration Statement on
Form S-1)
10.13 Amended and Restated Tax Sharing Agreement dated as of
January 1, 1994, between Mafco, Marvel III, Marvel and
certain subsidiaries of Marvel (incorporated by
reference to Exhibit 10.15 to the 1993 Marvel Form
10-K).
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<PAGE>
10.14 Stock Purchase Agreement dated as of July 1, 1993,
between Marvel Holdings Inc. and the Marvel
(incorporated by reference to Exhibit 10.16 to the 1993
Marvel Form 10-K).
10.15 Term Sheet for License Agreement dated January 25,
1995, between Major League Baseball Properties, Inc.
and Fleer Corp. (incorporated by reference to the 1994
Marvel 10-K).
10.16 License Agreement dated December 22, 1994, between
Major League Baseball Players Association and Fleer
Corp. (incorporated by reference to the 1994 Marvel
10-K).
10.17 Amendment dated February 7, 1996, to License Agreement
dated December 22, 1994, between Major League Baseball
Players Association and Fleer Corp. Confidential
treatment has been granted for portions of this
document (incorporated by reference to Exhibit 10.3 to
the September 30, 1996 Marvel Quarterly Report on Form
10-Q).
10.18 Retail Product License Agreement dated July 21, 1995,
between NBA Properties, Inc. and Marvel. Confidential
treatment has been granted for portions of this
document (incorporated by reference to Exhibit 10.4 to
the September 30, 1996 Marvel Quarterly Report on Form
10-Q).
10.19 License Agreement dated June 30, 1995, between SkyBox
International Inc. and National Football League Players
Incorporated, as amended June 30, 1995. Confidential
treatment has been granted for portions of this
document (incorporated by reference to Exhibit 10.5 to
the September 30, 1996 Marvel Quarterly Report on Form
10-Q).
10.20 Employment agreement, dated as of January 1, 1993, by
and between Andrews Group and William C. Bevins, Jr.
(incorporated by reference to the Company's Annual
Report on Form 10-K for the fiscal year ended December
31, 1993 (the "1993 10-K")).
10.21 Employment agreement, dated as of August 1, 1993, by
and between Andrews Group and Terry C. Bridges
(incorporated by reference to the 1993 10-K).
10.22 Employment agreement, dated as of November 15, 1993, by
and between Andrews and Joseph P. Page (incorporated by
reference to the 1993 10-K).
10.23 Employment agreement, dated as of June 1, 1993, by and
between Andrews and Bill Kerstetter (incorporated by
reference to the 1993 10-K).
10.24 Employment agreement, dated as of October 28, 1993, by
and between Andrews and Paul E. Shapiro (incorporated
by reference to the 1993 10-K).
10.25 Employment agreement dated as of April 20, 1994, by and
between Andrews and Michael H. Diamond (incorporated by
reference to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1994 ("the 1994
10-K").
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10.26 Employment agreement dated as of December 15, 1994, by
and between Andrews and Arthur H. Bilger (incorporated
by reference to Andrews 1994 10-K).
10.27 Employment Agreement dated as of August 1, 1995,
between Marvel and Jeffrey L. Kaplan (incorporated by
reference to the Marvel 1995 10-K).
10.28 Employment Agreement dated as of January 26, 1996,
between Marvel and Scott C. Marden (incorporated
by reference to Marvel's 1996 10-K).
10.29 Employment Agreement dated as of August 13, 1996,
between Marvel and David J. Schreff (incorporated by
reference to Exhibit 10.2 to the Marvel 1996 Third
Quarter 10-Q).
10.30 Employment Agreement dated as of October 21, 1996,
between AGI Management Corp. and Scott M. Sassa
(incorporated by reference to the 1996 10-Q).
10.31 Joint Venture Agreement dated December 9, 1994, between
Marvel Restaurants and EBCO Management, Inc.
(incorporated by reference to Exhibit 10.45 to the
Marvel 1994 10-K). Confidential treatment has been
granted for portions of this document.
10.32 Amended and Restated Credit and Guarantee Agreement
dated as of August 30, 1994, among Marvel, Fleer Corp.,
the banks from time-to-time parties thereto, the
Co-Agents and Chemical Bank, as Administrative Agent.
(incorporated by reference to Exhibit 10.49 to the
Marvel Form 8-K filed September 15, 1994 (the "1994
Marvel August 8-K") and Exhibit 10.50 to the 1994
Marvel August 8-K).
10.33 Term Loan and Guarantee Agreement dated as of August
30, 1994, among Marvel Comics Italia S.r.1., Marvel and
Instituto Bancario San Paolo Di Torino, S.p.A.
(incorporated by reference to Exhibit 10.50 to the 1994
Marvel August 8-K).
10.34 Participation Agreement dated as of August 30, 1994,
among Instituto Bancario San Paolo Di Torino, S.p.A.,
New York Limited Branch, as Italian Lender, Chemical
Bank, as Administrative Agent, and the financial
institutions signatory thereto, as Participants.
(incorporated by reference to Exhibit 10.51 to the 1994
Marvel August 8-K).
10.35 Credit and Guarantee Agreement dated as of April 24,
1995, by and among Marvel, Fleer Corp., Chemical Bank,
as Administrative Agent, and the financial institutions
parties thereto (incorporated by reference to Exhibit
(b)(3) to the Final Amendment to the Marvel 1995
Schedule 14D-1.
10.36 First Amendment dated as of November 22, 1994, to the
Amended and Restated Credit and Guarantee Agreement by
and among Marvel, Fleer Corp., Chemical Bank, as
Administrative Agent, and the financial institutions
parties thereto (incorporated by reference to Exhibit
10.4 to the Form 8-K of Marvel Entertainment Group,
Inc. filed May 11, 1995.
52
<PAGE>
10.37 Second Amendment dated as of April 24, 1995, to the
Amended and Restated Credit and Guarantee Agreement by
and among Marvel, Fleer Corp., Chemical Bank, as
Administrative Agent, and the financial institutions
parties thereto (incorporated by reference to Exhibit
10.5 to the Form 8-K of Marvel Entertainment Group,
Inc. filed May 11, 1995.
10.38 Consent Number 1 dated as of February 9, 1996, to the
Marvel's Credit Agreements with Chemical Bank, as
Administrative Agent, and the financial institutions
from time to time parties thereto (incorporated by
reference to the Marvel 1995 10-K).
10.39 Third Amendment dated as of March 1, 1996, to the
Amended and Restated Credit and Guarantee Agreement by
and among Marvel, Fleer Corp., Chemical Bank, as
Administrative Agent, and the financial institutions
from time to time parties thereto (incorporated by
reference to the Marvel 1995 10-K.).
10.40 Consent Number 2 and First Amendment dated as of March
1, 1996, to the Credit and Guarantee Agreement among
Marvel, Fleer Corp., the financial institutions from
time to time parties thereto, the Co-Agents and
Chemical Bank, as Administrative Agent (incorporated by
reference to the Marvel 1995 10-K.).
10.41 Consent Number Three dated as of June 30, 1996 to the
Credit and Guarantee Agreement among Marvel, Fleer
Corp., the financial institutions from time to time
parties thereto, and The Chase Manhattan Bank (formerly
Chemical Bank) as administrative agent (incorporated by
reference to Exhibit 10.1 to Marvel's 1996 Second
Quarter 10-Q).
10.42 Consent Number Two and Fourth Amendment, dated as of
June 30, 1996, to the Amended and Restated Credit and
Guarantee Agreement, by and among Marvel, Fleer Corp.,
the financial institutions from time to time parties
thereto, and The Chase Manhattan Bank (formerly named
Chemical Bank) (incorporated by reference to Exhibit
10.2 to the Marvel 1996 Second Quarter 10-Q).
10.43 Line of Credit, dated as of March 27, 1996 between
Fleer Corp. and The Chase Manhattan Bank (formerly
named Chemical Bank). (incorporated by reference to
Exhibit 10.3 to the Marvel 1996 Second Quarter 10-Q).
10.44 Consent, dated as of September 24, 1996 to the (a)
Participation Agreement, dated as of August 30,1994,
among Instituto Bancario San Paolo Di Torino, S. p. A.,
New York Limited Branch ("San Paolo"), the financial
institutions party thereto and The Chase Manhattan Bank
(formerly named Chemical Bank), as administrative agent
and (b) the Term Loan and Guarantee Agreement among
Panini S. p. A. (formerly named Marvel Comics Italia S.
r. L.), Marvel Entertainment Group, Inc. and San Paolo
(incorporated by reference to Exhibit 10.1 to the
Marvel 1996 Third Quarter 10-Q).
53
<PAGE>
10.45 Standstill Agreement and Amendment dated as of December
20, 1996 among the signatories thereto (incorporated by
reference to Exhibit 10.38 to the Marvel 1996 Form
10-K).
10.46 Consent Number Four and Second Amendment dated as of
November 25, 1996, to the Credit and Guarantee
Agreement among Marvel, Fleer Corp., the banks and
other financial institutions, from time to time as
parties thereto and The Chase Manhattan Bank (formerly
Chemical Bank) as administrative agent (incorporated by
reference to Exhibit 10.39 to the Marvel 1996 Form
10-K).
10.47 Waiver Number One or Fifth Amendment, dated as of
November 25, 1996, to the Amended and Restated Credit
and Guarantee Agreement among Marvel, Fleer Corp., the
banks and other financial institutions from time to
time as parties thereto and The Chase Manhattan Bank
(formerly Chemical Bank) as administrative agent
(incorporated by reference to Exhibit 10.40 to the
Marvel 1996 Form 10-K).
10.48 Revolving Credit and Guaranty Agreement, dated as of
December 27, 1996, among Marvel, certain subsidiaries
of Marvel Entertainment Group, Inc., the banks party
thereto and The Chase Manhattan Bank, as agent
(incorporated by reference to Exhibit 10.41 to the
Marvel 1996 Form 10-K).
10.49 First Amendment to Revolving Credit and Guaranty
Agreement, dated as of January 24, 1997 among Marvel,
certain subsidiaries of Marvel, the banks party thereto
and The Chase Manhattan Bank, as agent (incorporated by
reference to Exhibit 10.42 to the Marvel 1996 Form
10-K).
10.50 Second Amendment to Revolving Credit and Guaranty
Agreement, dated as of February 11, 1997, among Marvel,
certain subsidiaries of Marvel Entertainment Group,
Inc., the banks party thereto and The Chase Manhattan
Bank, as agent (incorporated by reference to Exhibit
10.43 to the Marvel 1996 Form 10-K).
10.51 License Agreement dated April 30, 1993, by and between
Toy Biz, Inc. and Marvel, as amended December 1, 1994
(incorporated by reference to Exhibit 10.9 to the Toy
Biz 1995 Registration Statement).
10.52 Amendment dated November 22, 1995, to the License
Agreement dated April 30, 1993, as amended, between Toy
Biz and Marvel (incorporated by reference to Exhibit
10.48 to the Marvel 1996 Form 10-K).
10.53 Amendment dated February, 1995, to the License
Agreement dated August 30, 1993, as amended, between
Toy Biz and Marvel (incorporated by reference to
Exhibit 10.9(b) to the Toy Biz 1995 Registration
Statement).
54
<PAGE>
10.54 License Agreement dated July 1, 1994, between Toy Biz
and Marvel (incorporated by reference to Exhibit 10.12
to the Toy Biz 1995 Registration Statement).
10.55* Fourth Amended and Restated Revolving Credit Agreement
and Term Credit Agreement, dated as of December 16,
1996 among Marvel IV Holdings Inc., the financial
institutions and the initial issuing bank named therein
and Citibank, N.A. as agent and related agreements
(incorporated by reference to the Andrews Annual Report
on Form 10-K for the year ended December 31, 1996 (the
"1996 10-K")).
10.56* Fifth Amended and Restated Revolving Credit Agreement
and Amended and Restated Term Credit Agreement, dated
as of March 20, 1997 among Mafco Finance Corp.
(formerly known as Marvel IV Holdings Inc.), the
financial institutions and the initial issuing bank
named therein and Citibank, N.A. as agent and related
agreements (incorporated by reference to the 1996
10-K).
10.57* First Amendment dated as of January 1, 1997 to
Employment Agreement dated October 28, 1993, between
Andrews and Paul E. Shapiro.
21* List of Subsidiaries
24* Powers of Attorney executed by Messrs. Perelman,
Gittis, Drapkin, Slovin and Bevins.
27* Financial Data Schedule
* Filed with this report
b) Reports on Form 8-K during the fourth quarter of 1996
None
55
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
ANDREWS GROUP INCORPORATED
(Registrant)
By:/s/ William C. Bevins
-------------------------------------
William C. Bevins, Jr.
President and Chief Executive Officer
By:/s/ Joseph P. Page
-------------------------------------
Joseph P. Page
Executive Vice President and
Chief Financial Officer
By:/s/ Laurence Winoker
-------------------------------------
Laurence Winoker
Vice President and Controller
(Chief Accounting Officer)
Dated: April 15, 1997
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on April 15, 1997 in the
capacities indicated.
By: Ronald O. Perelman *
--------------------------------
Ronald O. Perelman
Director
By: William C. Bevins, Jr. *
--------------------------------
William C. Bevins, Jr.
Director
By: Donald G. Drapkin *
--------------------------------
Donald G. Drapkin
Director
By: Howard Gittis *
--------------------------------
Howard Gittis
Director
By: Bruce Slovin *
Bruce Slovin
--------------------------------
Director
Date: April 15, 1997
*The undersigned by signing his name hereto does hereby execute this
Annual Report pursuant to powers of attorney filed as exhibits to the Annual
Report.
By:/s/ Laurence Winoker
--------------------------------
Laurence Winoker
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
--------------------------
ITEM 8, ITEM 14 (A)(1) AND (2) AND (D)
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
YEAR ENDED DECEMBER 31, 1996
The following consolidated financial statements of Andrews Group
Incorporated and Subsidiaries are included in Item 8:
Pages
Report of Independent Auditors ...........................................F-2
Consolidated Balance Sheets as of December 31, 1996 and 1995..............F-3
Consolidated Statements of Operations
for the years ended December 31, 1996, 1995 and 1994...................F-4
Consolidated Statements of Stockholder's Deficit
for the years ended December 31, 1996, 1995 and 1994...................F-5
Consolidated Statements of Cash Flows
for the years ended December 31, 1996, 1995 and 1994...................F-6
Notes to Consolidated Financial Statements................................F-8
The following financial statement schedules of Andrews Group
Incorporated is included in Item 14(d):
Schedule I - Condensed Financial Information of Registrant............F-46
Schedule II- Valuation and Qualifying Accounts........................F-49
All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable and, therefore, have been omitted.
F-1
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholder
Andrews Group Incorporated
We have audited the accompanying consolidated balance sheets of Andrews Group
Incorporated and subsidiaries as of December 31, 1996 and 1995, and the related
consolidated statements of operations, stockholder's deficit and cash flows for
each of the three years in the period ended December 31, 1996. Our audits also
included the financial statement schedules listed in the Index at Item 14(a).
These financial statements and schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Andrews Group Incorporated and subsidiaries at December 31, 1996 and 1995, and
the consolidated results of their operations and their cash flows for each of
the three years in the period ended December 31, 1996, in conformity with
generally accepted accounting principles. Also, in our opinion, the related
financial statement schedules, when considered in relation to the basic
financial statements taken as a whole, present fairly in all material respects,
the information set forth therein.
Ernst & Young LLP
New York, New York
March 28, 1997
F-2
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------
1996 1995
----------------- -----------------
<S> <C> <C>
ASSETS
Cash $ 25.6 $ 55.7
Accounts receivables, net 229.1 236.7
Inventories, net 78.1 82.4
Deferred taxes 181.6 50.8
Prepaid expenses and other 61.7 68.3
----------------- ----------------
Total current assets 576.1 493.9
Property, plant and equipment, net 99.6 77.6
Goodwill and other intangibles, net 317.6 912.8
Loans to affiliate 247.6 441.0
Other assets 90.7 109.4
----------------- ----------------
$ 1,331.6 $ 2,034.7
================= ================
LIABILITIES AND STOCKHOLDER'S DEFICIT
Current liabilities:
Current portion of long-term debt $ 43.6 $ 59.5
Short-term borrowings 47.3 13.3
Accounts payable 98.5 104.8
Accrued expenses 193.6 217.8
Net liabilities held for sale 43.1 52.7
Liabilities subject to settlement under reorganization 20.0 -
----------------- ----------------
Total current liabilities 446.1 448.1
Long-term debt 407.8 1,667.3
Indebtedness to affiliates 297.8 307.1
Liabilities subject to settlement under reorganization 1,293.7 -
Other liabilities 24.0 67.2
Minority interest 100.6 113.8
Redeemable preferred stock of subsidiaries 5.1 5.1
Commitments and contingencies
Stockholder's deficit:
Common stock, $1.00 par value; 1,000 shares
authorized, issued and outstanding - -
Additional paid-in-capital 40.7 40.2
Accumulated deficit (1,284.2) (614.5)
Cumulative translation adjustment - 0.4
----------------- ----------------
Total stockholder's deficit (1,243.5) (573.9)
----------------- ----------------
$ 1,331.6 $ 2,034.7
================= ================
</TABLE>
See notes to consolidated financial statements.
F-3
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------
1996 1995 1994
-------------- -------------- -------------
<S> <C> <C> <C>
Net revenues $ 745.5 $ 828.9 $ 514.8
Operating expenses:
Direct costs 536.4 533.3 273.4
Selling, general and administrative expenses 289.9 262.1 127.8
Amortization and write-down of goodwill and intangibles 617.6 30.9 23.3
Restructuring 15.8 25.0 -
-------------- -------------- ------------
Operating (loss) income (714.2) (22.4) 90.3
-------------- -------------- ------------
Other (expense) income:
Interest expense (199.8) (184.6) (122.6)
Interest and net investment income 58.6 37.6 10.1
Gain on sale of business interests, net 22.0 14.3 -
Amortization of debt issuance costs and other (13.5) (9.0) (4.5)
-------------- -------------- ------------
(132.7) (141.7) (117.0)
-------------- -------------- ------------
Loss from continuing operations before income taxes, minority interest and
equity in net income of investees (846.9) (164.1) (26.7)
Benefit (provision) for income taxes 149.6 (5.8) (30.6)
Minority interest in loss (income) of subsidiaries 32.3 (7.3) (12.2)
Equity in net (loss) income of investees (1.2) 1.7 11.9
-------------- -------------- -------------
Loss from continuing operations (666.2) (175.5) (57.6)
Discontinued operations:
(Loss) income from discontinued operations, net of taxes
and minority interest (39.9) (60.1) 43.9
Gain on disposal of discontinued operations, net of taxes
and minority interest 43.4 - -
-------------- -------------- -------------
Income (loss) from discontinued operations 3.5 (60.1) 43.9
Loss before extraordinary item (662.7) (235.6) (13.7)
Extraordinary item, net of taxes (7.0) (3.3) -
-------------- -------------- -------------
Net loss $ (669.7) $ (238.9) $ (13.7)
============== ============== =============
</TABLE>
See notes to consolidated financial statements.
F-4
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S DEFICIT
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
ADDITIONAL CUMULATIVE
COMMON PAID-IN ACCUMULATED TRANSLATION
STOCK CAPITAL DEFICIT ADJUSTMENT TOTAL
-------------- -------------- --------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1993 $ - $ 8.2 $ (361.9) $ (1.0) $ (354.7)
Currency translation adjustment (0.2) (0.2)
Net loss (13.7) (13.7)
Contributions, net 1.5 1.5
Effect of exercise of stock
options of Marvel 22.9 22.9
-------------- -------------- --------------- -------------- --------------
Balance, December 31, 1994 - 32.6 (375.6) (1.2) (344.2)
Currency translation adjustment 1.6 1.6
Net loss (238.9) (238.9)
Contributions, net 0.8 0.8
Effect of exercise of stock
options of Marvel 6.8 6.8
-------------- -------------- --------------- -------------- --------------
Balance, December 31, 1995 - 40.2 (614.5) 0.4 (573.9)
Currency translation adjustment (0.4) (0.4)
Net loss (669.7) (669.7)
Effect of exercise of stock
options of Marvel 0.5 0.5
-------------- -------------- --------------- -------------- --------------
Balance, December 31, 1996 $ - $ 40.7 $ (1,284.2) $ 0.0 $ (1,243.5)
============== ============== =============== ============== ==============
</TABLE>
See notes to consolidated financial statements.
F-5
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ($669.7) ($238.9) ($13.7)
---------- ---------- ----------
Adjustments to reconcile net loss to net cash flows
from operating activities:
Depreciation and amortization 655.6 60.0 32.8
Loss (income) from discontinued operations, net 39.9 60.1 (43.9)
Gain on disposal of discontinued operations, net (43.4) - -
Amortization of debt discount 72.3 64.5 57.4
Undistributed earnings of investees 1.2 (1.7) (11.9)
Minority interest in (loss) earnings of subsidiaries (32.3) 7.3 12.2
Distribution from unconsolidated subsidiary - 3.0 -
Gain on sale of business interests, net (22.0) (14.3) -
Extraordinary item 7.0 3.3 -
Net (benefit) provison for deferred taxes (161.7) (4.8) 6.0
Changes in assets and liabilities, net of effects of
acquisitions, dispositions and previously unconsolidated
subsidiaries
Decrease (increase) in assets 13.6 (31.2) (115.0)
Increase in net liabilities held for sale and other
liabilities 5.3 42.0 199.7
---------- ---------- ----------
535.5 188.2 137.3
---------- ---------- ----------
Net cash flows from operating activities (134.2) (50.7) 123.6
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of SkyBox, net of cash acquired - (162.5) -
Acquisition of Panini Group, net of cash acquired - (0.2) (133.2)
Net proceeds from sale of Marvel investment in Toy Biz 35.7 - -
Purchase of Marvel common stock - (8.2) (21.5)
Loans to affiliates, net 193.3 (216.4) (224.6)
Capital expenditures (57.2) (48.6) (11.5)
Other acquisitions and investments (3.3) (16.4) (20.7)
---------- ---------- ----------
Net cash flows from investing activities 168.5 (452.3) (411.5)
---------- ---------- ----------
</TABLE>
(Continued)
See notes to consolidated financial statements.
F-6
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN MILLIONS)
(Continued)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long term debt 277.6 422.2 502.5
Repayment and repurchases of debt (324.9) (74.5) (11.5)
Issuance of common stock, stock options and warrants 9.8 52.3 22.0
Loans from affiliates, net (9.3) 152.9 (220.0)
Debt issuance costs and other, net (18.0) (16.2) (5.3)
---------- ---------- ----------
Net cash flows from financing activities (64.8) 536.7 287.7
---------- ---------- ----------
Effect of exchange rate changes on cash 0.4 2.0 (0.6)
Net increase (decrease) in cash (30.1) 35.7 (0.8)
Cash at beginning of the period 55.7 20.0 20.8
---------- ---------- ----------
Cash at end of the period $25.6 $55.7 $20.0
========== ========== ==========
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION:
Interest paid during the period $32.3 $99.8 $35.6
Taxes (refunded) paid during the period (6.1) 15.6 0.2
</TABLE>
See notes to consolidated financial statements.
F-7
<PAGE>
REVLON GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
1. BACKGROUND AND BASIS OF FINANCIAL STATEMENTS
BASIS OF PRESENTATION
Andrews Group Incorporated ("Andrews", and together with its
subsidiaries, the "Company") is a wholly-owned subsidiary of MacAndrews &
Forbes Holdings Inc. ("M&F Holdings") which is a wholly-owned subsidiary of
Mafco Holdings Inc. ("Mafco Holdings"). Prior to June 4, 1990, the Company was
a 57% owned subsidiary of M&F Holdings. On June 4, 1990, a wholly-owned
subsidiary of M&F Holdings merged with and into the Company, and the Company
became a wholly-owned subsidiary of M&F Holdings (the "Andrews Merger").
At December 31, 1996, Andrews had a 79% ownership interest in Marvel
Entertainment Group, Inc. ("Marvel") and a 41% ownership interest (86% voting
interest) in New World Communications Group Incorporated ("NWCG"), assuming
conversion of the then-outstanding NWCG Series B Preferred Stock. Through
Marvel, the Company operates in the youth entertainment business. Until the
NWCG Disposition in January 1997, the Company owned NWCG which operated in the
television broadcasting and production and distribution businesses (the
"broadcasting business").
The Company's financial statements reflect for all periods presented,
Marvel and the Marvel Holding Companies on a consolidated basis. As more fully
described in Note 4, Marvel and the Marvel Holding Companies filed petitions
for relief under Chapter 11 of the United States Bankruptcy Code. As a result
of the Chapter 11 filing, it is uncertain as to whether Andrews will continue
to control a voting majority of Marvel and the Marvel Holding Companies. The
financial statements continue to consolidate these entities until resolution of
such matters.
As a result of the NWCG Disposition (see note 3), the Company's
financial statements reflect for all periods presented, the net liabilities and
results of operations of the Company's broadcasting business as net liabilities
held for disposition and discontinued operations, respectively. The results of
operations of the broadcasting business are included in loss from discontinued
operations through September 24, 1996, the measurement date. The results of
operations of NWCG's San Diego Station from September 24, 1996 through the date
of sale of such station in November 1996, and the gain on sale of NWCG's San
Diego and Birmingham stations, is included in gain on disposal of discontinued
operations.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REVENUE RECOGNITION
Sales are recorded upon shipment of products. Sales made on a
returnable basis are recorded net of provisions for estimated returns. These
estimates are revised, as necessary, to reflect actual experience and market
conditions. Subscription revenues generally are collected in advance for a one
year subscription and are deferred and recognized as income on a pro-rata basis
over the subscription period. Income from licensing of characters owned by
Marvel is recorded at the time characters are available to the licensee and
collection is reasonably assured. Receivables due more than one year beyond the
balance sheet date are discounted to their present value.
F-8
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
ADVERTISING EXPENSE
Advertising production costs are expensed when the advertisement is
first run. Media advertising costs are expensed on the projected sales method
during interim periods. Advertising expense was $69.0, $69.2, and $38.5 in
1996, 1995, and 1994, respectively. The amount of advertising costs included in
prepaid expenses and other as of December 31, 1996 and 1995 was $2.2 and $2.8,
respectively.
ROYALTIES
Minimum guaranteed royalties, as well as royalties in excess of
minimum guarantees, are generally expensed as incurred based on sales of
related products.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The
principal areas of judgment relate to provision for returns and other sales
allowances, doubtful accounts, the realizability of inventories, goodwill and
other intangible asset impairment, income taxes and pro forma information
related to stock options.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents are highly liquid investments with original
maturities of three months or less.
INVENTORIES
Inventories are valued at the lower of cost (first-in, first-out
(FIFO)) or market.
PROPERTY, PLANT AND EQUIPMENT
All expenditures for additions and improvements to property, plant and
equipment are capitalized and normal repairs and maintenance are charged to
expense as incurred. Construction-in-progress principally includes machinery
and equipment being constructed for the Company by outside vendors under
contract.
GOODWILL AND OTHER INTANGIBLES
Goodwill and other intangibles, except goodwill related to the trading
card business, are amortized on the straight-line basis principally over 40
years. The Company's accounting policy regarding the assessment of the
recoverability of the carrying value of goodwill and other intangibles is
F-9
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
to review the carrying value of goodwill and other intangibles if the facts and
circumstances suggest that they may be impaired. If this review indicates that
goodwill and other intangibles will not be recoverable, as determined based on
the undiscounted future cash flows of the Company, the carrying value of
goodwill and other intangibles will be reduced to its estimated fair value.
During the fourth quarter of 1996, the Company recorded a non-cash
write-down to goodwill and other intangibles of approximately $581.7. Remaining
goodwill associated with Marvel's trading cards operations is approximately
$110.0, which will be amortized on a straight line basis over 15 years. See
Note 15.
INCOME TAXES
The Company computes income taxes under the liability method. Under
the liability method, deferred income taxes are generally determined based on
the difference between the financial statement and tax bases of assets and
liabilities using enacted tax rates in effect in the years in which the
differences are expected to reverse. Net deferred tax assets are recorded when
it is more likely than not that such tax benefits will be realized.
DEFERRED CHARGES
Deferred charges and other includes deferred debt issue costs, which
are mainly costs associated with the Company's credit facilities that are
amortized over the remaining term of the related agreements.
TRANSLATION OF FOREIGN CURRENCIES
The financial position and results of operations of the Company's
foreign subsidiaries are measured using the local currency as the functional
currency. Assets and liabilities of subsidiaries are translated at the exchange
rate in effect at year-end. Income statement accounts and cash flows are
translated at the average rate of exchange prevailing during the period.
Translation adjustments arising from the use of differing exchange rates are
included in the cumulative translation adjustment account in stockholder's
deficit. Transaction adjustments arising from the use of differing exchange
rates, including intercompany account balances, are included in net income.
RECLASSIFICATION
Certain prior year amounts have been reclassified to conform with the
current year presentation.
3. NWCG DISPOSITION
On January 22, 1997 (the "NWCG Merger Date"), a special meeting (the
"Special Meeting") of stockholders of NWCG was held. At the Special Meeting,
the Agreement and Plan of Merger dated as of September 24, 1996 (the "NWCG
Merger Agreement"), by and among NWCG, The News Corporation Limited, a South
Australian corporation ("News Corp."), Fox Television Stations, Inc., a
Delaware
F-10
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
corporation in which News Corp. has an indirect interest ("Fox"), and Fox
Acquisition Co., Inc., a Delaware corporation and a wholly-owned subsidiary of
Fox ("Merger Sub"), was approved. Immediately following the Special Meeting,
the transactions contemplated by the NWCG Merger Agreement were consummated,
including the merger of Merger Sub with and into NWCG and a stock purchase
pursuant to the Stock Purchase Agreement dated as of September 24, 1996 (the
"NWCG Stock Purchase Agreement"), by and among News Corp., Fox and NWCG
(Parent) Holdings Corporation ("NWCG Parent") (the transactions contemplated by
the NWCG Merger Agreement and the NWCG Stock Purchase Agreement, collectively,
the "NWCG Merger").
Pursuant to the NWCG Stock Purchase Agreement, Fox purchased (the
"NWCG Disposition") from NWCG Parent 2,682,236 shares of common stock of NWCG
owned by NWCG Parent and all of the outstanding shares of capital stock of NWCG
Holdings Corporation ("NWCG Holdings"). The consideration for such purchase was
1.45 American Depositary Shares of News Corp. ("ADSs"), each of which
represents four fully paid and non-assessable Preferred Limited Voting Ordinary
Shares, par value A$.50 per share, of News Corp., for each share of common
stock of NWCG directly or indirectly acquired by Fox pursuant to the NWCG Stock
Purchase Agreement, with the aggregate number of ADSs issued to NWCG Parent
reduced to an amount which approximated the accreted amount of the NWCG
Holdings Senior Secured Discount Notes due 1999 (the "Discount Notes")
outstanding at the effective time of the NWCG Merger. In addition, in
connection with the NWCG Disposition, Fox agreed to assume an aggregate of
$46.2 principal amount of debt of Four Star Holdings Inc. ("Four Star
Holdings").
In connection with the NWCG Merger, the Company received 37,954,211
ADSs (with a market price of $17.625 per ADS on January 22, 1997) and 2,175,000
warrants to purchase ADSs (in exchange for 1,500,000 warrants to purchase
shares of NWCG previously held by the Company). The Company expects to record a
pre-tax gain in 1997 on the NWCG Disposition of approximately $720. Through
March 26, 1997, the Company sold 15,562,300 ADSs for net proceeds of $271.4.
As a gain on the NWCG Disposition, net of transaction costs and
estimated results of operations during the phase-out period, is expected, the
net gain will be recognized on the disposal date. Losses of $12.2 for the
period from September 24, 1996 through December 31, 1996 have been deferred
until the disposal date. Revenues included in discontinued operations in 1996,
1995 and 1994 were $671.5, $605.0 and $396.9, respectively.
4. CHAPTER 11 REORGANIZATION OF MARVEL AND MARVEL HOLDING COMPANIES
Although Marvel's consolidated net revenues have increased through
1995 as a result of diversification into lines of business other than comic
book publishing, certain significant and long-term changes in market conditions
associated with Marvel's publishing and trading cards businesses have
significantly and adversely affected Marvel's net revenues and operating
results in recent periods.
Marvel experienced significant operating losses during 1995 and 1996,
and failed to satisfy certain financial covenants contained in the Marvel
Credit Agreements (as defined below, see Note 6) beginning in the Fall of 1996.
Marvel commenced discussions in the Fall of 1996 with Andrews regarding an
equity infusion in order to provide for Marvel's cash requirements and with The
Chase
F-11
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
Manhattan Bank, agent bank for the Marvel Credit Agreements, regarding a
restructuring of the Marvel Credit Agreements.
On December 27, 1996, Marvel along with certain of its operating and
inactive subsidiaries, Fleer Corp. ("Fleer"); SkyBox International, Inc.
("SkyBox"); Marvel Characters, Inc.; Heroes World Distribution, Inc. ("Heroes
World"); The Asher Candy Company; Malibu Comics Entertainment, Inc.
("Malibu"); Frank H. Fleer Corp. and Marvel Direct Marketing Inc. (along with
Marvel, the "Debtor Companies"), filed petitions for relief and a plan of
reorganization under Chapter 11 of the United States Bankruptcy Code (the
"Bankruptcy Code") in the United States Bankruptcy Court for the District of
Delaware (the "Bankruptcy Court"). Panini S.p.A. ("Panini"), Marvel Restaurant
Venture Corp. ("Marvel Restaurants") (a general partner in the Joint Venture
developing the Marvel Mania restaurants (each as defined below) and Toy Biz,
Inc. ("Toy Biz") all of which are active, as well as certain inactive
subsidiaries did not file petitions under the Bankruptcy Code.
A Plan of Reorganization, filed on December 27, 1996 (as amended, the
"Plan"), contemplated pursuant to the Stock Purchase Agreement dated December
26, 1996, between Andrews and Marvel, Andrews, or an affiliate thereof, would
acquire from Marvel a number of shares of Common Stock (or its equivalent) that
would represent 80.1% of the shares of reorganized Marvel after giving effect
to such acquisition, in consideration for $365 in cash or, at the option of
Andrews, shares of class A common stock, par value $.01 per share of Toy Biz
(the "Class A Common Stock") or a combination of the foregoing (the "Andrews
Investment"). The Plan contemplated that in connection with the Andrews
Investment, Marvel would acquire the Class A Common Stock not owned by Marvel,
Andrews or their affiliates pursuant to a Merger Agreement between Andrews and
Toy Biz and Stock Purchase Agreements with the two other principal stockholders
of Toy Biz. The Plan also contemplated a new $160 credit facility at Toy Biz to
be used for working capital purposes of Marvel, including Toy Biz, and to fund
Marvel's strategic initiatives. As of March 27, 1997, Marvel owned 7,394,000
shares of class B common stock of Toy Biz (the "Class B Common Stock"),
representing 26.6% of the equity of Toy Biz, and 78.4% of the voting power
relating to Toy Biz. The Plan has since been withdrawn as described below.
The Debtor Companies received approval from the Bankruptcy Court to
pay on time and in full undisputed pre-petition obligations including salaries,
wages and benefits to all of its employees, trade creditors and independent
contractors and to continue funding its strategic initiatives. On January 24,
1997 the Bankruptcy Court approved a $100 debtor-in-possession financing
facility (the "DIP Loan"), which is provided by a syndicate of lenders,
including The Chase Manhattan Bank, as agent bank, and is available to Marvel
until June 30, 1997. The DIP Loan is subject to covenants and events of default
including a change of control of Marvel (as defined therein). See Note 6.
On February 12, 1997, the Office of the United States Trustee
appointed a committee of equity securityholders of the Debtor Companies under
section 1102(a)(1) of the Bankruptcy Code (the "Equity Committee"). The Equity
Committee presently consists of: Barclay's Global Investors, Marty Solomon,
Robert A. Della Camera, Peter E. Kelly, Jr., Gladys V. Veidemanis and Ronald
Cantor.
In 1993, Marvel Holdings Inc. ("Marvel Holdings"), an indirect
subsidiary of Andrews, issued $517.4 principal amount at maturity of Senior
Secured Discount Notes due 1998. In 1993, Marvel (Parent)
F-12
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
Holdings Inc. ("Parent Holdings"), an indirect subsidiary of Andrews, issued
$251.7 principal amount at maturity of Senior Secured Discount Notes due 1998
(the "Parent Holdings Notes"). In 1994, Marvel III Holdings Inc. ("Marvel III"
and collectively with Marvel Holdings and Parent Holdings, the "Marvel Holding
Companies"), an indirect subsidiary of Andrews, issued $125 principal amount of
9-1/8% Senior Secured Notes due 1998 (the "Marvel III Notes"). Marvel Holdings
and Parent Holdings have, in the aggregate, pledged 77,302,326 shares of
Marvel's common stock to secure such notes (the "Pledged Common Stock"), and an
additional approximately 2.9 million shares of Marvel common stock are subject
to a negative pledge under the indenture to the notes issued by Marvel
Holdings. In addition, Parent Holdings has pledged the common stock of Marvel
Holdings, which it owns, to secure the Parent Holding Notes, and Marvel III has
pledged the common stock of Parent Holdings, which it owns, to secure the
Marvel III Notes (collectively with the Pledged Common Stock, the "Pledged
Stock").
On December 27, 1996, the Marvel Holding Companies filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code with the
Bankruptcy Court. The Chapter 11 cases commenced by the Marvel Holding
Companies have not been procedurally consolidated and are not jointly
administered with the Debtor Companies' Chapter 11 cases.
On January 9, 1997, the United States Trustee appointed a committee of
creditors holding unsecured claims against the Marvel Holding Companies (the
"Creditors Committee") under section 1102(a) of the Bankruptcy Code. The
members of the Creditors Committee, as originally appointed, include: The Bank
of New York, High River Limited Partnership, Westgate International, L.P.,
Schultz Investments, WHERCO, Inc., M3, LLC and United Equities Commodities
Company.
On January 13, 1997, the Creditors Committee filed a motion (the "Stay
Relief Motion") in the Marvel Holdings Companies' Chapter 11 cases seeking (i)
relief from the automatic stay to permit LaSalle National Bank, as successor
indenture trustee (the "Holding Companies' Trustee"), on behalf of the holders
of the notes issued by the Marvel Holding Companies, to foreclose upon, and
vote, the Pledged Stock and (ii) dismissal of the Marvel Holding Companies'
Chapter 11 cases. On February 26, 1997, the Bankruptcy Court entered an order
granting relief from the automatic stay to allow the Holding Companies' Trustee
to vote and to foreclose upon the Pledged Stock. On February 27, 1997, Marvel
and the Marvel Holding Companies filed a notice of appeal with respect to such
order.
On March 7, 1997, Andrews exercised its right to terminate the Stock
Purchase Agreement with Marvel. On the same date, Andrews informed Toy Biz and
the two principal stockholders of Toy Biz that, as a result of the termination
of the Andrews Investment, a condition to closing under the Merger Agreement
with Toy Biz and the Stock Purchase Agreement would not be satisfied, that
Andrews did not intend to waive the satisfaction of such condition and
therefore the transaction contemplated by such agreements would not be
consummated. As a consequence of the termination of the Stock Purchase
Agreement, the Plan has been withdrawn.
On March 7, 1997, the Creditors Committee indicated that it would make
a proposal whereby the holders of Marvel common stock (other than Mafco
Holdings and its affiliates) and holders of the notes of the Marvel Holding
Companies would make a $365 infusion into Marvel as part of a new Plan of
Reorganization through a rights offering that would be backstopped by certain
members of the Creditors Committee, including an entity controlled by Carl
Icahn (the "Icahn Group") (as subsequently amended, the
F-13
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
"Committee Proposal"). The Committee Proposal did not specify whether all of
the $365 would be added to the equity of Marvel or whether a portion of the
proceeds would be used to repay borrowings under the Marvel Credit Agreements,
and does not contemplate Toy Biz becoming a wholly-owned subsidiary of Marvel.
The Committee Proposal contemplated that prior to confirmation of any plan of
reorganization reflecting the Committee Proposal, the current Board of
Directors of Marvel would be replaced by designees of the Creditors Committee.
Such proposal was subject to further negotiations with Marvel and Marvel's bank
lenders, but an agreement with these entities was never reached.
On March 19, 1997, the Creditors Committee notified Marvel that on
March 25, 1997 it would cause the Holding Companies' Trustee to vote the
Pledged Stock to replace the Board of Directors of Marvel and the Marvel
Holding Companies. On March 24, 1997, the Court in the Debtor Companies'
bankruptcy cases issued a restraining order preventing the Creditors Committee
and the Holding Companies' Trustee from voting the Pledged Stock or otherwise
replacing the Board of Directors of Marvel and determined that the Creditors
Committee and the Holding Companies' Trustee must comply with the procedural
requirements of Section 362 of the Bankruptcy Code to seek relief from the
automatic stay to take such action. The Court, however, also ruled that the
Creditors Committee and Holding Companies' Trustee could replace the Board of
Directors of Marvel Holdings and Parent Holdings. On March 28, 1997, the
Creditors Committee and the Holding Companies' Trustee filed a motion to lift
the automatic stay in the Debtor Companies' cases in order to permit the
Creditors Committee and the Holding Companies' Trustee to replace the Board of
Directors of Marvel. A hearing date on such motion has been set for May 14,
1997. On March 28, 1997, the Creditors Committee also filed an emergency appeal
of the restraining order of the Bankruptcy Court issued on March 24, 1997
preventing the replacement of the Board of Directors of Marvel. A briefing
schedule has been set for the emergency appeal and a hearing date for such
appeal has been set for May 1, 1997.
There can be no assurance that any plan of reorganization under the
Bankruptcy Code reflecting the Committee Proposal or a proposal made by any
other party will be proposed, or that if a plan is proposed, such plan of
reorganization will be confirmed under the Bankruptcy Code.
If Marvel is unable to obtain confirmation of a plan of
reorganization, its creditors or equity security holders may seek other
alternatives for Marvel, including bids for Marvel or parts thereof through an
auction process.
The accompanying consolidated financial statements have been prepared
on a going concern basis with respect to Marvel and the Marvel Holding
Companies, which assumes continuity of their operations, realization of their
assets and liquidation of their liabilities in the ordinary course of business.
However, as a result of the Chapter 11 filings and circumstances relating to
these events, such realization of assets and liquidation of liabilities is
subject to significant uncertainty. These conditions raise substantial doubt as
to Marvel's ability to continue as a going concern.
Although there can be no assurance, Marvel believes that borrowings
under the DIP Loan and internally generated funds will be sufficient to enable
the Debtor Companies to meet their consolidated cash requirements, including
debt service through the date of maturity of the DIP Loan. The DIP Loan expires
April 30, 1997 and the maturity of the DIP Loan may be extended at the option
of Marvel to June 30, 1997. As part of the Plan, a group of lenders had
committed to lend $160 to Toy
F-14
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
Biz which could be used by Marvel and its subsidiaries, including Toy Biz to
fund working capital and strategic investments and repay borrowings outstanding
under the DIP Loan. Such commitments have been terminated as a result of the
withdrawal of the Andrews Investment and the Plan. In addition, the DIP Loan is
subject to a number of events of default and conditions of borrowings. In the
event borrowings under the DIP Loan become due either upon maturity or an event
of default prior to a plan of reorganization being confirmed under the
Bankruptcy Code and consummated, then the Debtor Companies will have to seek
one or more alternatives to provide for their cash requirements (including the
repayment of borrowings under the DIP Loan), including seeking alternative
debtor-in-possession financing and/or sales of assets and/or sales of one or
more of Marvel's businesses. Although there can be no assurance, Marvel
believes that its Panini subsidiary should be able to meet its cash
requirements, including for debt service and repayment, from permissible
advances by Marvel of borrowings under the DIP Loan, local borrowings and
internally generated funds. Marvel anticipates that internally generated funds
of Toy Biz and borrowings under Toy Biz's credit agreement will be sufficient
to enable Toy Biz to meet its cash requirements, including debt service, for
the foreseeable future.
As part of the Chapter 11 process, the Debtor Companies have received
a significant amount of proofs of claims. Marvel is currently in the process of
reviewing these claims and have found that a majority of these claims are
without merit. Although Marvel believes that reserves as of December 31, 1996
are adequate to cover the ultimate liability of these claims, there can be no
assurances that these claims will not be settled for amounts in excess of these
reserves.
Because the Marvel Holding Companies have no assets other than common
stock of Marvel and/or stock in Marvel Holdings and Parent Holdings, the
securityholders of the Marvel Holding Companies will likely receive only their
pro rata share of the Pledged Common Stock upon consummation of the Chapter 11
cases.
In the event the bondholders seize the Pledged Stock, the Company will
recognize a substantial non-cash gain estimated at December 31, 1996 to be the
book value of the Company's negative investment in the Marvel Holding Companies
of approximately $1,060.0 and will have a related tax obligation to its parent
in accordance with its tax sharing agreement. To the extent the Marvel
liabilities are settled for less than their book value, Marvel may also
recognize a non-cash gain.
F-15
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
Financial accounting and reporting during a Chapter 11 proceeding is
prescribed in Statement of Position No. 90-7, "Financial Reporting by Entities
in Reorganization Under Bankruptcy Code" ("SOP 90-7"). Accordingly, certain
pre-petition obligations, which may be subject to settlement, have been
classified as obligations subject to Chapter 11 reorganization proceedings and
include the following estimated amounts at December 31, 1996:
Total accrued expenses $ 20.0
-------
Debt:
U.S. Term Loan Agreement 350.0
Amended and Restated Credit Agreement 120.0
Additional Revolving Credit Facility 15.0
Marvel Holdings Notes 449.4
Parent Holdings Notes 217.0
Marvel III Notes 125.0
--------
Total debt 1,276.4
Other long-term liabilities 17.3
Total liabilities subject to settlement
under reorganization $1,313.7
========
Total bankruptcy reorganization items of $5.5 for the year ended
December 31, 1996 include professional charges and other costs typical to those
incurred by entities in bankruptcy.
5. TOY BIZ COMMON STOCK OFFERINGS
On March 2, 1995, Toy Biz, completed the Toy Biz IPO in which it
issued and sold 2,750,000 shares of Class A Common Stock at $18 per share. As
part of the Toy Biz IPO, a stockholder sold 700,000 shares of Class A Common
Stock at $18 per share. The net proceeds to Toy Biz, after deducting
commissions and offering expenses, of $44.1 were used to pay outstanding
amounts due under subordinated notes held by Marvel and the sole stockholder of
the predecessor to Toy Biz and for working capital and general corporate
purposes. In 1995, Marvel recorded a gain of $14.3 on the Toy Biz IPO in
recognition of the net increase in value of Marvel's investment in Toy Biz. In
August 1996, Toy Biz sold in an offering 700,000 shares of its Class A Common
Stock at a price to the public of $15 per share. As part of the Toy Biz
offering, Marvel sold 2.5 million shares of its Toy Biz Class A Common Stock.
In the third quarter of 1996, Marvel recorded a gain on the sale of this common
stock of approximately $22.0. The net proceeds to Toy Biz and Marvel were
approximately $9.3 and $35.7, respectively, after deducting amounts accrued for
fees and expenses.
In conjunction with the Toy Biz IPO, Marvel's equity ownership
percentage of Toy Biz decreased to 36.6% and its voting control increased to
85.3% and, as a result of the increase in voting control, the consolidated
financial statements of the Company include the result of operations, financial
position and cash flows of Toy Biz. For periods prior to the Toy Biz IPO, Toy
Biz was accounted for under the equity method. As a result of Marvel's sale of
Class A Common Stock of Toy Biz in August 1996, Marvel's ownership percentage
of Toy Biz decreased to 26.7% and its voting control decreased to 78.4%.
F-16
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
In connection with the Toy Biz IPO, Marvel, Mr. Perlmutter, certain
affiliates of Mr. Perlmutter, Mr. Arad and Toy Biz entered into a stockholders'
agreement (the "Stockholders' Agreement"). The Stockholders' Agreement provides
that , upon a change of control of Marvel, Marvel is obligated to convert its
shares of Class B Common Stock into Class A Common Stock, unless Mr. Perlmutter
and Mr. Arad consent to such shares remaining Class B Common Stock. In such an
event the Company would cease to account for Toy Biz as a consolidated
subsidiary.
6. SHORT-TERM BORROWINGS AND DEBT
SHORT-TERM BORROWINGS
Under credit arrangements for short-term borrowings arranged with a
group of banks, Panini may borrow up to Italian Lire 69.5 billion
(approximately $45.4 based on exchange rates at December 31, 1996) on such
terms as Panini and the banks may mutually agree upon. These arrangements
generally do not have termination dates but are reviewed annually for renewal.
At December 31, 1996, the unused portion of the credit lines was Italian Lire
12.4 billion (approximately $8.1 based on exchange rates at December 31, 1996).
The weighted average interest rate on short-term borrowings as of December 31,
1996 was 6.3%.
Marvel experienced significant operating losses during 1995 and 1996
and failed to satisfy certain financial covenants contained in the Marvel
Credit Agreements (as defined below). In addition, the filing of petitions for
relief and a plan of reorganization under Chapter 11 of the Bankruptcy Code in
Bankruptcy Court by the Debtor Companies is an event of default under the
Marvel Credit Agreements (as defined below).
At the time that the Debtor Companies commenced their reorganization
cases, they anticipated that their financing needs would be satisfied through a
working capital facility extended by a group of financial institutions. Prior
to the Petition Date (December 27, 1996), the Debtor Companies undertook to
arrange such financing through different financial institutions and selected
Chase Securities Inc. to arrange such financing. No principal payments on the
pre-petition debt of the Debtor Companies will be made without the approval
from the Bankruptcy Court or until a plan of reorganization defining the
repayment terms has been confirmed. The Debtor Companies received approval from
the Bankruptcy Court to pay, on time and in full, interest on the pre-petition
debt of the Debtor Companies calculated at the applicable non-default rate or
rates provided for pursuant to the Marvel Credit Agreements (as defined below).
On the Petition Date, the Bankruptcy Court approved the DIP Loan dated
as of December 27, 1996, among Marvel, as borrower, the other Debtor Companies,
as guarantors, and The Chase Manhattan Bank, as lender, on an interim basis and
authorized Marvel to borrow up to $20 thereunder based upon the anticipated
cash needs of Marvel for a specified period pending a final hearing thereon.
On January 24, 1997, the Bankruptcy Court entered an order (the "DIP
Order") approving the DIP Loan, as amended by the parties thereto to
incorporate resolutions to issues articulated by the Bankruptcy Court at the
final hearing to consider approval of the DIP Loan. The DIP Order authorized
Marvel to incur obligations under the DIP Loan not exceeding the commitment
amount of $100. The DIP Loan is scheduled
F-17
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
to expire 120 days from the Petition Date (extendible at Marvel's option in the
absence of default) and the date of the occurrence of certain specified events.
The liens securing the DIP Loan prime the liens securing the Marvel
Credit Agreements (as defined below). The DIP Loan is necessary to the
successful prosecution of the reorganization cases and confirmation of a plan
of reorganization. Loans under the DIP Loan bear interest at a rate per annum
equal to the one month Eurodollar Rate rounded upwards to the next 1/16 of 1%
(as defined in the DIP Loan) , or Alternate Base Rate (as defined in the DIP
Loan) plus the Applicable Margin of 2 1/2% with respect to Eurodollar Loans and
1 1/2% with respect to Alternate Base Rate loans. The interest rate on
Alternate Base Rate Loans at December 31, 1996, was 9.75%. Interest on
Eurodollar Rate Loans is payable at the end of the applicable interest period,
and interest on Alternate Base Rate Loans is payable monthly in arrears. As of
December 31, 1996, $10.0 was borrowed under this facility. At March 28, 1997,
amounts available to borrow under this facility, net of amounts reserved under
letters of credit, were $43.1.
In connection with the Marvel Credit Agreements, each of the Debtor
Companies executed security agreements and other collateral documents under
which such Debtor Companies granted the lenders under the Marvel Credit
Agreements security interests, liens, and mortgages in all or substantially all
of their respective properties and interests in property as collateral security
for the payment and performance of the obligations owing to such lenders. As at
the Petition Date, such lenders asserted liens against, and claimed an
entitlement to adequate protection of their liens on such properties and
interest in property.
The DIP Loan includes various restrictive covenants prohibiting Marvel
from, among other things, incurring additional indebtedness, with certain
limited exceptions, making investments, except for certain limited exceptions,
including for Marvel's strategic initiatives, and making dividend, redemption
and certain other payments on its capital stock. The DIP Loan also contains
certain customary financial covenants and events of default for financing of
this type, including a change of control covenant and an event of default if
the royalty free license from Marvel to Toy Biz is rejected in Marvel's
bankruptcy proceedings.
In connection with approval of the DIP Loan and entry of the DIP
Order, the Debtor Companies consented to a grant of adequate protection to the
holders of Senior Secured Claims (as defined in the DIP Orders) in
consideration for the right to use cash collateral and obtain post-petition
financing under sections 363 and 364 of the Bankruptcy Code. Under the DIP
Order, the holders of Senior Secured Claims were granted the following
consideration as adequate protection to the extent of any diminution in the
value of their collateral: (i) a priority claim as contemplated by section
507(b) of the Bankruptcy Code, (ii) periodic cash payments in an amount equal
to current interest at the applicable non-default rate or rates provided for
pursuant to the Credit Agreements and accrued letter of credit fees calculated
at the rate or rates provided for in the Credit Agreements, and (iii) a lien on
the properties and interests in property of Marvel and the guarantors of the
Credit Agreements (including the capital stock of Toy Biz owned by Marvel),
which lien shall have a priority junior to the priming and other liens to be
granted in favor of The Chase Manhattan Bank under the DIP Loan.
F-18
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
Debt consist of the following:
<TABLE>
<CAPTION>
December 31, December 31,
1996 1995
----------------- -----------------
<S> <C> <C>
Marvel:
U.S. Term Loan Agreement (a) $ 350.0 $ 350.0
Amended and Restated Credit Agreement (a) 120.0 87.5
Additional Revolving Credit Facility (a) 15.0 -
Term Loan Agreement (a) 139.3 139.5
Other long term debt 16.3 9.5
Marvel Holdings Inc. 11.25% Discount Notes (b) 449.4 402.8
Parent Holdings 11 7/8% Discount Notes (c) 217.0 193.4
Marvel III 9 1/8% Senior Secured Notes (d) 125.0 125.0
Mafco Finance Credit Agreement (e) 249.6 373.0
Andrews Group Incorporated:
10% Debentures (f) 29.7 26.8
12 3/4% Debentures (g) - 14.1
Other notes and mortgages 16.5 5.2
----------- -------------
Subtotal $ 1,727.8 $ 1,726.8
Less amount reclassified* (1,276.4) -
Less current maturities (43.6) (59.5)
------------ -------------
Long-term debt $ 407.8 $ 1,667.3
================= =================
</TABLE>
* - Amounts as of December 31, 1996 have been reclassed to "Liabilities subject
to settlement under reorganization" in accordance with bankruptcy reporting
prescribed by Statement 90-7. See Note 4.
(a) On December 20, 1996, the banks and financial institutions that were
parties to the Marvel Credit Agreements entered into a Standstill
Agreement and Amendment (the "Standstill Agreement") which grants
Marvel the right, for any outstanding loans under the Marvel Credit
Agreements to remain as either Eurodollar or Eurocurrency Loans during
the Standstill Period (as defined below). The Standstill Agreement
also provides that the commitments under the Marvel Credit Agreements
will not automatically terminate or be accelerated upon the
commencement of the reorganization cases but rather will be suspended
and reinstated upon confirmation of the Plan. Unless a payment default
is continuing or certain other termination events are triggered, each
lender under the Marvel Credit Agreements will agree not to exercise
any remedies against any subsidiary of Marvel which is not one of the
Debtor Companies during the Standstill Period. Each lender under the
Marvel Credit Agreements agreed not to transfer such Claim to any
entity that does not agree to be bound by the Standstill Agreement or
support the Plan. Pursuant to the Standstill Agreement, the lenders
under the Marvel Credit Agreements will permit the loans outstanding
thereunder to be outstanding as Eurodollar Loans (or the equivalent)
during the Standstill Period provided that, in the event that the
interest period for any such Eurodollar Loans is longer than one
month, such interest period shall have a scheduled expiration on or
prior to June 30, 1997. The Standstill Period is the period commencing
on December 27, 1996 and ending on June 30, 1997 (or, sooner, if a
Final Order is entered confirming the Plan prior to such date or a
payment default occurs).
F-19
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
Marvel's indebtedness is principally represented by the outstanding
balance under the U.S. Term Loan Agreement, as defined below, the
Amended and Restated Credit Agreement effective August 30, 1994
between Marvel, a syndicate of banks, the Co-Agents and The Chase
Manhattan Bank, as administrative agent (the "Amended and Restated
Credit Agreement"), and the outstanding balance of the Term Loan
Agreement, as defined below. The Applicable Margin under the Amended
and Restated Credit Agreement for Alternate Base Rate loans is 2% and
for Eurodollar Rate loans is 3%. The interest rate on Eurodollar Rate
Loans at December 31, 1996 was approximately 8 17/32% to 8 7/8% per
annum, depending upon the length of the relevant interest period.
In April 1995, Marvel entered into a $350.0 term loan agreement with a
syndicate of banks, the Co-Agents and The Chase Manhattan Bank, as
administrative agent (the "U.S. Term Loan Agreement"). Loans under the
U.S. Term Loan Agreement bear interest at a rate per annum equal to
the Eurodollar Rate (as defined in the U.S. Term Loan Agreement), or
the Alternate Base Rate (as defined in the U.S. Term Loan Agreement)
plus, in each case, the Applicable Margin (as defined in this
paragraph). Eurodollar Rate Loans will, at the option of the Company,
have interest periods of one, two, three or six months. Applicable
Margin means (a) with respect to Eurodollar Rate loans, 3% and (b)
with respect to Alternate Base Rate loans, 2%. The interest rate on
Eurodollar Rate Loans at December 31, 1996, was approximately 8 19/32%
to 8 11/16% depending upon the length of the relevant interest period.
Interest on Alternate Base Rate Loans is payable quarterly in arrears,
and interest on Eurodollar Rate Loans is payable at the end of the
applicable interest period, except that if the interest period is six
months, interest is payable ninety days after the commencement of the
interest period and at the end of the interest period.
On August 30, 1994, Marvel, Marvel Italia Srl (now Panini S.p.A.) and
Instituto Bancario San Paolo Di Torino S.p.A. (the "Lender"), entered
into a term loan and guarantee agreement (the "Term Loan Agreement")
providing for a term loan credit facility of Italian Lire 244.5
billion (approximately $154.0 based on exchange rates in effect on the
date of acquisition) (the "Term Loan Facility").
The Term Loan Facility bears interest at a rate per annum equal to the
Eurocurrency Rate (as defined in the Term Loan Agreement) or, in
certain limited circumstances, the Negotiated Rate (as defined in the
Term Loan Agreement), in each case plus the Applicable Margin (as
defined in this paragraph). Eurocurrency Rate Loans have, at the
option of Panini, interest periods of one, two, three or six months.
Applicable Margin means (a) with respect to Eurocurrency Loans 3% and
(b) with respect to Negotiated Rate Loans, 2%. The interest rate on
Eurocurrency Rate Loans at December 31, 1996, was approximately 10
5/32%. Interest on Negotiated Rate Loans is payable quarterly in
arrears and interest on Eurocurrency Rate Loans is payable at the end
of the applicable interest period, except that if the interest period
is six months, interest is payable ninety days after the commencement
of the interest period and at the end of the interest period.
The U.S. Term Loan Agreement (through incorporation by reference to
the Amended and Restated Credit Agreement), the Amended and Restated
Credit Agreement and the Term Loan Agreement
F-20
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
include various restrictive covenants prohibiting Marvel from, among
other things, incurring additional indebtedness, with certain limited
exceptions, and making dividend, redemption and certain other payments
on its capital stock. The U.S. Term Loan Agreement, the Amended and
Restated Credit Agreement and the Term Loan Agreement also contain
certain customary financial covenants and events of default for
financing of this type, including a change of control covenant.
Mandatory prepayments are required to be made out of net proceeds from
sales of assets by Marvel, with certain exceptions, and from certain
excess cash flow (as defined in the Amended and Restated Credit
Agreement).
During March 1996 and August 1996, Marvel amended the U.S. Term Loan
Agreement, the Amended and Restated Credit Agreement and the Term Loan
Agreement to, among other things: (1) provide for an additional $25.0
revolving credit facility which was subsequently reduced to $15.0; (2)
secure the borrowings with substantially all of Marvel's domestic
assets, other than Marvel's investment in common stock of Toy Biz, and
all of the capital stock of Marvel's domestic subsidiaries and 65% of
the capital stock of Marvel's first tier foreign subsidiaries; and (3)
amend certain financial covenants. The additional revolving credit
facility is pari passu with the loans extended by the banks pursuant
to Marvel's existing loan agreements (collectively with the U.S. Term
Loan Agreement, the Amended and Restated Credit Agreement, the
additional revolving credit facility, the additional revolving credit
facility and the Term Loan Agreement, the "Credit Agreements"). The
additional revolving credit facility bears interest at a rate per
annum equal to the Eurodollar Rate (as defined in the Term Loan
Agreement), plus 2 3/4%, or the Alternate Base Rate (as defined in the
Term Loan Agreement) plus 1 3/4%. The interest rate on the additional
revolving credit facility at December 31, 1996 was 8.5%.
In conjunction with the Toy Biz IPO, Toy Biz entered into a three year
$30.0 revolving line of credit with a syndicate of banks for which The
Chase Manhattan Bank serves as administrative agent. Substantially all
of the assets of Toy Biz have been pledged to secure borrowings under
the Toy Biz credit facility. Borrowings under the credit facility bear
interest at either The Chase Manhattan Bank's alternate base rate or
at the Eurodollar rate plus, in each case, the applicable margin. The
applicable margin is 1% unless Toy Biz meets specific financial
operating levels, in which case the applicable margin decreases to 3/4
of 1%. The credit facility requires Toy Biz to pay a commitment fee of
3/8 of 1% per annum on the average daily unused portion of the credit
facility.
The Toy Biz credit facility contains various financial covenants, as
well as restrictions, on the incurrence of new indebtedness, prepaying
or amending subordinated debt, acquisitions and similar investments,
the sale or transfer of assets, capital expenditures, limitations on
restricted payments, dividends, issuing guarantees and creating liens.
The credit facility also requires that (a) the Company control Toy Biz
and (b) that the exclusive, royalty free perpetual worldwide license
agreement between Toy Biz and the Company remain in effect. The Toy
Biz credit facility is not guaranteed by Marvel.
The average cost of borrowings for the U.S. Term Loan Agreement, the
Amended and Restated Credit Agreement and the Term Loan Agreement was
approximately 8.83% for the year ended December 31, 1996. The average
cost of borrowings for the U.S. Term Loan Agreement, the
F-21
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
Amended and Restated Credit Agreement and the Term Loan Agreement was
approximately 8 7/8% for the year ended December 31, 1995. The average
cost of borrowings for the Amended and Restated Credit Facility for
the year ended December 31, 1994 was 5.6% , and the average cost of
borrowings for the Term Loan Agreement was 9 1/2% for the four months
ended December 31, 1994.
The average cost of borrowings for the Toy Biz credit facility was
approximately 8 1/4% and 8 1/2% for the years ended December 31, 1996
and 1995, respectively.
The revolving credit portion of the Amended and Restated Credit
Agreement at December 31, 1996 was fully drawn. The Amended and
Restated Marvel Credit Agreement requires the Company to pay a
commitment fee of 1/4 to 3/8 of 1% per annum on the unused portion.
Due to the extenuating circumstances involving the Marvel Credit
Facilities and other debt as a result of the Chapter 11 filings, it is
not practicable to estimate the fair value of these obligations as of
December 31, 1996.
(b) The Marvel Holdings Notes, which have a face value of $517.4, mature
on April 15, 1998 and are secured by 48 million shares of Marvel
common stock. There is no periodic payments of interest on the Marvel
Holdings Notes which were offered at a substantial discount from their
principal amount which represents a yield to maturity of 11 1/4%. The
indenture pursuant to which the Marvel Holdings Notes were issued
contain various restrictions on new indebtedness, sale or transfer of
assets, payment of dividends and change in control. Additionally, the
indenture requires Marvel Holdings to hold a majority of the
outstanding shares of Marvel common stock at all times.
(c) The Parent Holdings Notes, which have a face value of $251.7, mature
on April 15, 1998 and are secured by 20 million shares of Marvel
common stock owned directly by Parent Holdings and all of the
outstanding shares of Marvel Holdings common stock. There is no
periodic payments of interest on the Marvel Holdings Notes which were
offered at a substantial discount from their principal amount which
represents a yield to maturity of 11 7/8%. The indenture pursuant to
which Parent Holdings Notes were issued contains various restrictions
on new indebtedness, sale or transfer of assets, payment of dividends
and change in control. Additionally, the indenture requires Parent
Holdings to hold or cause Marvel Holdings together with Parent
Holdings to hold a majority of the outstanding shares of Marvel common
stock at all times.
(d) The Marvel III Notes, which have a face value of $125.0, mature on
February 15, 1998, and pay interest at an annual rate of 9 1/8% in
semi-annual installments on February 15 and August 15 of each year,
commencing August 15, 1994. The Marvel III Notes are guaranteed on a
non-recourse basis by Parent Holdings, which guaranty is secured by a
first priority lien on approximately 9.3 million shares of Marvel
common stock.
The bankruptcy filings of Marvel and the Marvel Holding Companies
resulted in an event of default pursuant to the indentures of the Marvel
Holding Companies. The estimated fair value of the Marvel
F-22
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
Holdings Notes, the Parent Holdings Notes and the Marvel III Notes at December
31, 1996 were $67.4, $28.2 and $23.1, respectively. The fair value of the
Company's long-term debt is estimated using indicative market rates. Because
considerable judgment is required in interpreting market data to develop
estimates of fair value, the estimates are not necessarily indicative of
amounts that could be realized or would be paid in a current market exchange.
The effect of using different market assumptions or estimation methodologies
may be material to the estimated fair value amounts.
On February 27, 1997, the Bankruptcy Court entered an order lifting
the automatic stay in the Chapter 11 cases of the Marvel Holding Companies. On
March 19, 1997, the Creditors Committee notified Marvel that on March 25, 1997
it would cause the Holding Companies' Trustee to vote the Pledged Common Stock
to replace the Board of Directors of Marvel and the Marvel Holding Companies.
On March 24, 1997, the Court in the Debtor Companies' Bankruptcy cases issued a
restraining order preventing the Creditors Committee and the Holding Companies'
Trustee from voting the Pledged Stock or otherwise replacing the Board of
Directors of Marvel. On March 28, 1997, the Creditors Committee and the Holding
Companies' Trustee filed a motion with the Bankruptcy Court seeking a lifting
of the automatic stay in the Debtors Companies' cases in order to permit the
Creditors Committee and the Holding Companies' Trustee to replace the Board of
Directors of Marvel. A hearing date on such motion has been set for May 14,
1997. On March 28, 1997, the Creditors Committee also filed an emergency appeal
of the restraining order of the Bankruptcy Court issued on March 24, 1997,
preventing the replacement of the Board of Directors of Marvel. A briefing
schedule has been set for the emergency appeal and a hearing date for such
appeal has been set for May 1, 1997. If the Holding Companies' Trustee were to
among other things, vote the Pledged Common Stock to replace the Board of
Directors of Marvel, such action would likely be a change of control of Marvel
and therefore a default under, among other agreements, the DIP Loan.
(e) In July 1994, Mafco Finance Corp. (formerly Marvel IV Holdings Inc.),
a wholly-owned subsidiary of the Company ("Mafco Finance"), entered
into a bank credit agreement (the "Mafco Finance Credit Agreement")
with Citibank, N.A. as agent for a group of banks. The Mafco Finance
Credit Agreement provided for borrowings up to $240.0. The agreement
was amended on June 29, 1995 and on December 15, 1995. On December 16,
1996, Mafco Finance Corp. ("Mafco Finance") entered into an amended
and restated credit agreement which provided for a $350.0 million term
loan facility and a $300.0 revolving credit facility. At December 31,
1996, there was $249.6 of outstanding borrowings under the revolving
credit facility and $0 under the term loan facility. Such borrowings
were repaid in full on March 13, 1997. On March 20, 1997, Mafco
Finance entered into an amended and restated credit agreement (the
"Amended Mafco Finance Credit Agreement") which provides for a $400.0
term loan facility and $250.0 revolving credit facility. The Amended
Mafco Finance Credit Agreement matures in March 1999. Pursuant to the
Amended Mafco Finance Credit Agreement, Mafco Finance will be required
to have no outstanding borrowings under the Revolving Credit Facility
(other than outstanding letters of credit) for at least 30 consecutive
days in each twelve consecutive month period. At March 26, 1997, there
was $400.0 of outstanding borrowings under the term loan facility and
$0 outstanding under the revolving credit facility. Borrowings
outstanding under the Amended Mafco Finance Credit Agreement bear
interest, as appropriate for the type of advance, at either (i) the
Base Rate (as defined) plus a margin of 2.50% or (ii) LIBOR (as
defined) plus a margin of 4.50%. Mafco Finance's obligations are
guaranteed by certain subsidiaries and affiliates of the Company and
the Amended Mafco Finance Credit Agreement contains customary
affirmative and negative covenants and events of default. The ADSs are
pledged as
F-23
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
security under the Amended Mafco Consolidated Credit Agreement, which
limits the use of proceeds of any ADS sale.
(f) In connection with the Andrews Merger, the Company issued 10% Senior
Subordinated Debentures due 1999 (the "10% Debentures"). During 1992,
in connection with the settlement of certain litigation, $4.1 face
value of 10% Debentures were issued. The 10% Debentures have a face
value of $31.2 and were recorded with an original issue discount. The
10% Debentures pay interest semi-annually and mature on December 31,
1999. The bankruptcy of Marvel resulted in an event of default
pursuant to the indenture governing the 10% Debentures. However, in
accordance with the settlement of certain litigation, the Company has
agreed to exercise its optional right to redeem the 10% Debentures on
June 30, 1997 and to use its best efforts to cause a registered broker
to make a market in the 10% Debentures. The discount is amortized over
the life of the debentures to June 1997. The unamortized discount at
December 31, 1996 and 1995 was $1.7 and $4.5, respectively.
(g) In July 1986, the Company issued $80.0 of 12 3/4% Subordinated
Debentures due 1996 (the "12 3/4% Debentures"), of which $65.7
principal amount was repurchased in 1988. The 12 3/4% Debentures paid
interest semi-annually on January 1 and July 1 and matured on July 1,
1996 when the remaining debentures were redeemed.
The scheduled aggregate maturities of the Company's long term debt,
not subject to settlement under reorganization, per the underlying credit
agreements that support each debt facility are as follows:
For the Years Ending December 31,
---------------------------------
1997...................................................$ 43.6
1998................................................... 17.6
1999................................................... 277.8
2000................................................... 56.7
2001................................................... 43.6
2002 and thereafter.................................... 12.1
------
$451.4
======
The scheduled aggregate maturities of the Company's long term debt
which is not subject to settlement under reorganization per the underlying
credit agreements and indentures that support each debt facility are as
follows:
For the Years Ending December 31,
---------------------------------
1997...................................................$ 15.0
1998................................................... 894.1
1999................................................... 57.5
2000................................................... 125.0
2001................................................... 187.5
2002 and thereafter.................................... 100.0
--------
$1,379.1
========
F-24
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
7. EMPLOYEE BENEFIT PLANS
SAVINGS PLANS
The Marvel Entertainment Group, Inc. Savings and Investment Plan is a
defined contribution plan qualified under Section 401(k) of the Internal
Revenue Code of 1986, as amended, covering all full-time non-union salaried and
hourly employees who have at least one year of service and matches
contributions by employees in an amount equal to 100% of the first 3% of
eligible compensation contributed and 25% of the next 3% of eligible
compensation contributed, up to a maximum of 3.75% of the employees'
compensation. In addition, Toy Biz has a 401(k) Profit Sharing Plan and Trust
that covers all employees of Toy Biz over the age of twenty who have been
employed by Toy Biz for at least six months. Toy Biz matches contributions by
employees in an amount equal to 20% of that employee's contribution that does
not exceed 6% of the employee's compensation for that period. The provisions
for contributions under these plans were $.5 in 1996, 1995 and 1994.
PENSION PLANS AND POSTRETIREMENT BENEFITS
Fleer and SkyBox have noncontributory defined benefit pension plans
for salaried employees. Effective as of September 1, 1996, such pension plans
were merged with Fleer becoming the plan sponsor. The benefits are based on the
employee's years of service and highest five years of compensation.
Contributions are intended to provide for benefits attributed to service to
date and for those expected to be earned in the future. Employees are eligible
to participate in the pension plan after two years of service at which time
they are fully vested. The projected benefit obligation was $17.7 and $17.9 and
plan assets were approximately $14.5 and $15.0 at December 31, 1996 and 1995,
respectively. Pension expense for all periods was insignificant.
Fleer has a postretirement medical and life insurance plan for
salaried employees who retire after the age of 62. The Company accounts for
these benefits in accordance with Statement of Financial Accounting Standards
No. 106 "Employers' Accounting for Postretirement Benefits Other Than
Pensions". Benefits include postretirement coverage of medical insurance for
the life of the retiree and spouse. The plan has only a limited number of
participants. Fleer's policy is to fund postretirement benefit costs as
payments are made to participants. At December 31, 1996, 1995 and 1994, and for
the years then ended, the postretirement benefit obligation and expense were
insignificant.
STOCK OPTION PLAN
Under the terms of the Marvel Entertainment Group, Inc. Amended and
Restated Stock Option Plan (the "Stock Option Plan"), incentive stock options
("ISOs"), non-qualified stock options ("NQSOs") and stock appreciation rights
("SARs") may be granted to key employees of, or consultants to, the Company and
any of its affiliates from time to time. In May 1995, Marvel was authorized to
increase the aggregate number of shares of Marvel common stock as to which
options and rights may be granted under the Stock Option Plan from 11,000,000
to 16,000,000 shares, including options described below.
F-25
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
Information with respect to options under the Stock Option Plan
follows:
<TABLE>
<CAPTION>
Weighted
Average
Exercise
Shares Option price per share Price
---------------------- ------------------------------- -------------------
<S> <C> <C> <C>
Outstanding at January 1, 1994....... 9,120,333 $2.0625 - $26.75
Canceled------------------------------------- (10,001) 2.0625 - $14.50
Exercised.................................. (3,012,732) 2.0625 - $14.50
Granted.................................... 1,975,000 13.6875 - $18.50
----------------------
Outstanding at December 31, 1994........... 8,072,600 2.0625 - $26.75
Exercised.................................. (1,046,940) 2.0625 - $14.50
Canceled................................... (1,267,002) 2.0625 - $17.625
Granted.................................... 2,200,000 14.25 - $15.50
----------------------
Outstanding at December 31, 1995........... 7,958,658 2.0625 - $26.75
Exercised.................................. (106,993) 2.0625 - $7.75 $11.945
Canceled................................... (1,128,668) 2.0625 - $26.75 15.658
Granted.................................... 1,745,000 5.00 - $12.625 $ 9.850
----------------------
Outstanding at December 31, 1996........... 8,467,997 $2.0625 - $16.75
======================
</TABLE>
At December 31, 1996, 6,078,867 shares (6,656,000 shares at December
31, 1995) were exercisable and 1,722,343 shares (1,732,000 shares at December
31, 1995) were available for future grants of options and rights. The weighted
average fair value of options granted under the Stock Option Plan during 1996
was $.67 per share.
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
------------------------------------- -----------------------------------
Number Weighted Number
Outstanding at Average Weighted Exercisable at Weighted
Ranges of December 31, Remaining Average December 31, Average
Exercise Prices 1996 Contractual Life Exercise Price 1996 Exercise Price
--------------- ---- ---------------- -------------- ---- --------------
<S> <C> <C> <C> <C> <C>
$2.00 - $5.00 1,546,000 5.4 $2.54 1,296,000 $2.06
$5.01 - $10.00 3,468,300 6.7 $8.87 3,067,500 $8.90
$10.01-$15.00 2,973,700 8.3 $13.71 1,502,033 $13.99
$15.01-$20.00 479,997 8.2 $16.26 213,334 $16.04
--------- --------
8,467,997 7.1 $9.83 6,078,867 $9.83
========= =========
</TABLE>
Toy Biz's 1995 Stock Option Plan provides for the issuance of stock
options ("Toy Biz Options") and SARs for up to 1,350,000 shares of Class A
Common Stock at a fair market value at the time of grant. One-third of the Toy
Biz Options become exercisable at the date of grant (the "Grant Date"), and the
balance of the Toy Biz Options become exercisable in equal increments on the
first and second anniversaries of the Grant Date. At December 31, 1996 and
1995, Toy Biz Options for 691,211 and 329,187, respectively were exercisable.
As of December 31, 1996, no SARs have been granted and Toy Biz Options with
respect to 186,321 shares of Class A Common Stock are available for future
grant. The weighted average fair value of Toy Biz Options granted during 1995
and 1996 were $6.85 per share and $6.15 per share, respectively.
F-26
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
Information with respect to options under Toy Biz's 1995 Stock Option
Plan follows:
<TABLE>
<CAPTION>
Shares Weighted Average
Exercise Price
---------------------- -------------------------------
<S> <C> <C>
Outstanding at January 1, 1995............. - -
Forfeited.................................. (33,268) $18.000
Exercised.................................. (20,130) $18.000
Granted.................................... 1,049,000 $18.173
----------------------
Outstanding at December 31, 1995........... 995,602 $18.183
Exercised.................................. (22,664) $18.000
Forfeited.................................. (47,303) $18.119
Granted.................................... 195,250 $17.111
----------------------
Outstanding at December 31, 1996........... 1,120,885 $18.002
======================
</TABLE>
The Company has elected to follow Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" ("APB 25") and related
Interpretations in accounting for its employee stock options. Under APB 25,
because the exercise price of the Company's employee stock options equals the
market price of the underlying stock on date of grant, no compensation expense
is recognized. The Company has adopted the disclosure-only provisions under
FASB Statement No. 123, "Accounting for Stock-Based Compensation," ("SFAS
123"). For the purposes of SFAS 123 pro forma disclosures, the estimated fair
value of the options is amortized to expense over the options' vesting period.
The Company's pro forma information follows:
1996 1995
------------------ ------------------
Net loss, as reported ($669.7) ($238.9)
Pro Forma net loss ($675.7) ($241.8)
The fair value for each option grant under the Stock Option Plan was
estimated at the date of grant using a Black-Scholes option pricing model with
the following weighted-average assumptions for the various grants made during
1995 and 1996: risk free interest rates ranging from 5.40% to 6.53%; no
dividend yield; expected volatility ranging from .466 to .487 and expected life
of three years. The fair value for each option grant under Toy Biz's 1995 Stock
Option Plan was estimated at the date of grant using a Black-Scholes option
pricing model with the following weighted-average assumptions for the various
grants made during 1995 and 1996: risk free interest rates ranging from 5.26%
to 7.19%; no dividend yield; expected volatility of .354 and expected lives of
three to five years. The option valuation models were developed for use in
estimating the fair value of traded options which have no vesting restrictions
and are fully transferable. In addition, the option valuation models require
the input of highly subjective assumptions including the expected stock price
volatility. Because Marvel and Toy Biz's employee stock options have
characteristics significantly different from those traded options, and because
changes in the subjective input assumptions can materially affect the fair
value estimate in management's opinion, the existing models do not necessarily
provide a reliable single measure of the fair value of its employee stock
options.
F-27
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
The value of the options granted under the Stock Option Plan is
directly related to the value of Marvel's Common Stock. The closing sale
prices for Marvel's common stock and Toy Biz Common Stock as of
March 27, 1997 were $2.50 per share and $9.25 per share, respectively.
Presently, there is no plan of reorganization. There can be no assurances
that the holders of equity interests of Marvel will receive any consideration
for such equity interests under any plan of reorganization.
8. PREFERRED STOCK OF SUBSIDIARY
In June 1989, Four Star Holdings issued 5,127 shares of Adjustable
Rate Cumulative Preferred Stock at $1,000 per share to former New World
Entertainment Ltd. ("NW Entertainment") management stockholders in connection
with the acquisition of NW Entertainment, a former subsidiary included in the
NWCG Disposition. The dividend rate is 60% of the sum of LIBOR plus 1 1/2% to be
paid quarterly on February 1, May 1, August 1 and November 1. At its option,
Four Star Holdings may redeem the preferred stock at par. The preferred stock
is non-voting and has a mandatory redemption requirement at par on June 8,
1999.
9. DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS
ACCOUNTS RECEIVABLE, NET:
1996 1995
------------------ ------------------
Accounts receivable ......... $ 275.3 $ 314.6
Less: Allowances............. (46.2) (77.9)
------------------ ------------------
$ 229.1 $ 236.7
================== ==================
The decrease in the allowance is primarily due to the provisions
recorded by Marvel in the fourth quarter of 1995 in connection with the
discontinuance of certain mass market points of distribution for the trading
card business for which there were no similar provisions of such magnitude in
1996.
Marvel performs periodic credit evaluations of its customers'
financial condition and generally does not require collateral. Receivables
generally are due within 30-90 days. At December 31, 1996, Marvel did not have
any significant concentrations of credit risk.
INVENTORIES:
1996 1995
------------------ ------------------
Finished goods.................... $ 69.4 $ 58.8
Work in process................... 16.3 22.3
Raw materials..................... 22.0 23.7
Less: Reseerve for obsolescence .. (29.6) (22.4)
------------------ ------------------
$ 78.1 $ 82.4
================== ==================
The increase in the reserve for obsolescence is primarily due to the
increased provisions recorded by Marvel for the trading card business.
F-28
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
PROPERTY, PLANT AND EQUIPMENT (AT COST), NET:
Depreciation and amortization of property, plant and equipment are
provided on the straight-line basis over the estimated asset lives indicated
below.
1996 1995
------------- ------------
Land and buildings (20 to 33 years for buildings) $ 55.3 $ 37.3
Machinery and equipment (3 to 10 years) 65.1 54.1
Furniture and fixtures (5 to 10 years) 7.3 6.0
Leasehold improvements and other (3 to 10 years) 2.7 2.8
Construction-in-progress 1.8 1.3
------------- ------------
132.2 101.5
Less: Accumulated depreciation and amortization (32.6) (23.9)
-------------
------------
$ 99.6 $ 77.6
============= ============
Depreciation and amortization was $19.3, $13.9 and $3.3 in 1996, 1995
and 1994, respectively. This increase primarily resulted from an increased
investment in product tooling to support Toy Biz's expanded product line.
GOODWILL AND OTHER INTANGIBLES, NET (SEE NOTE 15):
1996 1995
------------------ ------------------
Goodwill and other intangibles...... $ 656.4 $ 974.9
Less: Accumulated amortization..... (338.8) (62.1)
------------------ ------------------
$ 317.6 $ 912.8
================== ==================
ACCRUED EXPENSES AND OTHER:
<TABLE>
<CAPTION>
1996 1995
------------------ -----------------
<S> <C> <C>
Royalties and incentives...................................... $ 23.0 $ 21.4
Reserve for returns........................................... 51.2 59.0
Other......................................................... 139.3 137.4
Less amounts reclassed to liabilities subject to settlement
under reorganization (See Note 4)........................... (20.0) -
------------------ -----------------
$ 193.5 $ 217.8
================== =================
</TABLE>
10. RELATED PARTY TRANSACTIONS
During the years ended December 31, 1996, 1995 and 1994, Toy Biz
accrued royalties of $1.8, $5.7 and $6.5 to Mr. Arad for toys he invented or
designed.
During 1994, Marvel entered into an apparel license with Classic
Heroes, Inc., an affiliate of Toy Biz controlled by a non-Mafco director of Toy
Biz. Under the contract, Marvel recognized $5.0 of income in 1994. In 1995,
Marvel, at its initiation, terminated the contract and incurred $4.0 of costs,
which has been charged to operations.
F-29
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
"Other assets" at December 31, 1996 and 1995 includes $0.3 and $2.9 of
debt securities issued by M&F Holdings and an affiliate that were purchased in
the open market.
At March 26, 1997, December 31, 1996 and December 31, 1995, Mafco
Holdings and affiliates had outstanding advances to the Company of $64.0,
$297.8 and $307.1, respectively. At March 26, 1997, December 31, 1996 and
December 31, 1995, Mafco Finance had advanced $391.6, $247.6 and $441.0,
respectively, to Mafco Holdings and its subsidiaries and at March 26, 1997, the
Company had advanced $221.0 to Mafco Holdings and its subsidiaries.
In addition to the Pledged Stock, approximately 2.9 million shares of
Marvel's common stock are subject to a negative pledge under the indenture to
the notes issued by Marvel Holdings and approximately 0.3 million shares of
Marvel's common stock were pledged to secure obligations of subsidiaries of
Mafco Holdings.
At December 31, 1996 and 1995, the Company has unsecured loans
totaling $1.8 and $1.7 to certain executive officers of the Company and Marvel.
At December 31, 1996, Marvel had unsecured loans totaling $0.5 to one of
Marvel's executive officers.
F-30
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
11. INCOME TAXES
Components of the provision for income taxes consisted of the
following:
<TABLE>
<CAPTION>
Year ended December 31,
-------------------------------------------
1996 1995 1994
-------- -------- ---------
<S> <C> <C> <C>
Income (loss) from continuing
operations before income taxes,
minority interest, equity in net
income of investees and
extraordinary items:
Domestic $ (837.1) $ (198.7) $ (38.3)
Foreign (9.8) 34.6 11.6
----------- ---------- ----------
$ (846.9) $ (164.1) $ (26.7)
=========== ========== ==========
(Benefit) provision for income taxes:
current:
Federal $ (5.0) $ (0.1) $ 12.9
State and local 2.9 2.9 6.7
Foreign (0.4) 8.1 4.4
----------- ---------- ----------
(2.5) 10.9 24.0
Deferred:
Federal (148.5) (12.8) 3.2
State and local 4.2 1.0 1.7
Foreign (2.8) 6.7 1.7
----------- ---------- ----------
(147.1) (5.1) 6.6
----------- ---------- ----------
Total $ (149.6) $ 5.8 30.6
=========== ========== ==========
</TABLE>
The Company provides for taxes as if it had filed a separate
consolidated tax return. The Company is included in the consolidated federal
and certain state and local income tax returns of Mafco Holdings. Toy Biz files
separate federal, state and local income tax returns.
During 1996, the Company, other than Marvel, recorded a federal
benefit on its loss for the year ended December 31, 1996 and for previously
unrecognized net operating losses carried forward from previous years due to
the taxable gain recorded in 1997 in connection with the NWCG Disposition. The
1996 provision also includes income taxes related to earnings of subsidiaries
which file separate tax returns.
The provisions for federal income taxes in 1995 and 1994 related
primarily to the earnings of subsidiaries which file separate tax returns.
Marvel was not included in the federal consolidated
F-31
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
returns of the Company for periods prior to May 18, 1993 and subsequent to June
30, 1994. At June 30, 1994, the Company's ownership percentage in Marvel was
reduced below 80%, thus causing the company to treat Marvel as having
deconsolidated for tax purposes. However, Marvel is still included in the
consolidated federal tax return of Mafco Holdings, as Mafco Holdings, through
the Company and other affiliates maintains greater than 80% ownership in
Marvel. For 1995 and 1994, the Company has not recorded a benefit for its
separate company loss, including those of its subsidiaries, for the periods in
which Marvel was not a member of the Company's consolidated group as the
Company is not assured that it will be able to realize benefit for such losses
in the future. The state and local and foreign tax provisions relate primarily
to the operations of Marvel and Toy Biz.
A portion of the deferred foreign tax provision for the year ended
December 31, 1994 relates to the utilization of foreign net operating loss
carryforwards and has been recorded as a credit to goodwill.
The approximate effect of temporary differences that gave rise to
deferred tax balances at December 31, 1996 and 1995, were as follows:
<TABLE>
<CAPTION>
1996 1995
------------- ----------
<S> <C> <C>
Gross deferred tax assets:
Trade receivables, net $ 3.5 $ 5.1
Inventory 13.6 -
Sales returns reserves 21.7 -
Restructuring reserve 22.4 -
Accounts payable and accrued expenses - 41.4
Other assets - 16.0
Reserve related to foreign investment 7.5 7.3
Foreign net operating loss carryforward 28.9 8.0
Domestic net operating loss carryforward 189.8 128.2
Tax credit carryforwards 4.7 -
Other liabilities 11.2 -
------------- ----------
Total deferred tax asset 303.3 206.0
Valuation allowance (94.9) (116.2)
------------- ----------
Net deferred tax asset 208.4 89.8
Gross deferred liabilities:
Equity investments 3.4 -
Net liabilities held for sale 75.1 73.1
Depreciation/amortization 20.9 14.4
Licensing income 6.6 14.4
Other liabilities, net 2.4 32.7
------------- ----------
Total deferred tax liability 108.4 134.6
------------- ----------
Net deferred tax asset (liability) % 100.0 % (44.8)
============= ==========
</TABLE>
At December 31, 1996, the Company had federal net operating loss
carryforwards of approximately $552.3 which expire between 1998 and 2011.
F-32
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
At December 31, 1996, the Company has provided a partial valuation
allowance relating to its net operating losses due to uncertainty as to the
realization of taxable income in the future.
The effective tax rate on loss from continuing operations before
income taxes, minority interest, equity in net income of investees and
extraordinary item varies from the current statutory federal income tax rate as
follows (shown in percent):
<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------------------
1996 1995 1994
-------- ------- ------
<S> <C> <C> <C>
Statutory Rate (35.0%) (35.0%) (35.0%)
State and local taxes, net (1.1) 2.1 20.5
Non-deductible amortization 23.5 3.9 20.7
Foreign taxes (0.4) 2.5 2.5
Increase (decrease) in valuation allowance (4.6) 29.4 110.5
Non-taxable gain (loss) -- 1.2 (0.2)
Other (0.1) (0.6) (4.4)
--------- -------- -------
Effective rate (17.7%) 3.5% 114.6%
======= ====== ======
</TABLE>
The Company has not provided for taxes on undistributed foreign
earnings of approximately $3.9 and $26.0 at December 31, 1996 and 1995,
respectively, as the Company intends to permanently reinvest these earnings in
the future growth of the business. Determination of the amount of unrecognized
deferred U.S. income tax liability is not practicable because of the
complexities associated with its hypothetical calculations.
In the event that the stock ownership in Marvel by members of the
Mafco Holdings-affiliated group were to decline below 80% (measured by vote or
value), Marvel and its subsidiaries would cease to be members of the Mafco
Holdings-affiliated group, at such time for tax purposes (a "
deconsolidation"). A deconsolidation would occur if, among other things, the
Holding Companies' Trustee were to foreclose on the Pledged Stock or the
Holding Companies' Trustee were to seek or exercise certain remedies under the
indentures pursuant to which the Marvel Holding Companies issued their
respective notes, such as the right to exercise all voting rights with respect
to the Pledged Stock.
In the event of a deconsolidation, the Company would recognize a
substantial non-cash gain and would have a related tax obligation to its parent
in accordance with its tax sharing agreement.
F-33
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
12. COMMITMENTS AND CONTINGENCIES
OPERATING LEASES
Consolidated rent expense under operating leases covering production
facilities, office facilities, warehouse facilities and equipment was $9.9,
$7.5 and $4.8 for the years ended December 31, 1996, 1995 and 1994,
respectively. These leases expire through 2005 and are subject to price
escalations for certain costs. Aggregate future minimum rental commitments,
excluding amounts included within restructuring charges, for these leases as of
December 31, 1996 were as follows:
For the Years Ending December 31 31,
-----------------------------------------------
1997 $4.9
1998 3.9
1999 3.2
2000 2.5
2001 1.3
2002 and thereafter 0.7
SPORTS AND ENTERTAINMENT LICENSING CONTRACTS
Minimum payments under Marvel's sports and entertainment license
agreements are $66.0, $55.3, $33.8, $6.1 and $6.7 in 1997, 1998, 1999, 2000 and
2001 respectively and $6.0 for 2002 and thereafter.
LEGAL MATTERS
REORGANIZATION LEGAL PROCEEDINGS OF MARVEL AND MARVEL HOLDING COMPANIES
On December 27, 1996, the Debtor Companies and the Marvel Holding
Companies filed petitions under Chapter 11 of the Bankruptcy Code (see Note 4)
and in connection with such filings have been parties to various legal
proceedings.
The Holding Companies' Trustee has alleged that events of defaults
under each of the Marvel Holding Companies indentures have occurred by reason
of the commencement of the Debtor Companies' cases under the Bankruptcy Code.
The Holding Companies' Trustee has also alleged that the majority ownership and
the anti-injunction provisions of each of the indentures have been violated.
Marvel is not a party to any of the indentures governing the notes issued by
the Marvel Holding Companies. In addition, the Company believes the allegations
of the Holding Companies' Trustee are either without merit or will be resolved
in connection with the prosecution of the reorganization cases of the Marvel
Holding Companies. The Holding Companies' Trustee has also alleged that it may
assert a claim based on alleged "tortious interference" occasioned by Marvel's
filing of the Plan. The Company believes that any such allegations are
completely without merit.
There are twenty-seven purported class and derivative actions brought
by stockholders of Marvel and holders of bonds issued by the Marvel Holding
Companies and one action brought by a purported class of Toy Biz shareholders
presently pending in the Delaware Court of Chancery (collectively, the
"Delaware Actions") that challenge, among other things, the Andrews Investment.
F-34
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
Twenty-one of the twenty-seven Delaware Actions assert either claims
on behalf of a purported class of all Marvel shareholders or shareholder
derivative claims on behalf of Marvel, or both. The complaints allege, among
other things, that the Andrews Investment represents a breach of defendants'
fiduciary duties because the proposed purchase price per share is unfair and
such purchase would dilute the minority shareholders' interest in Marvel.
Plaintiffs in these actions seek to enjoin the Andrews Investment, to rescind
the Andrews Investment if it is in fact consummated prior to the entry of the
Court's judgment, to recover damages for defendants' alleged conduct and to
recover costs and disbursements in pursuing these actions, including reasonable
attorneys' fees. These actions have been consolidated for all purposes by order
of the Delaware Court of Chancery. A consolidated complaint has not yet been
filed.
Six of the Delaware Actions assert claims on behalf of a purported
class consisting of the holders of bonds issued by the Marvel Holding
Companies. These complaints allege, among other things, that the Andrews
Investment, if consummated, would be a breach of defendants' duty of fair
dealing and good faith owed to the holders of the bonds because the Andrews
Investment would result in the substantial dilution of Marvel's outstanding
stock, which is security for the bonds, and will thus diminish the value of the
bonds. These actions have been separately consolidated by order of the Delaware
Court of Chancery. The consolidated complaint in these six actions do not name
any of the Chapter 11 Debtor Companies as defendant. The parties to the
consolidated complaint have agreed to defer the filing of an answer.
All of the foregoing Delaware Actions name varying defendants
consisting in the aggregate of Marvel, Andrews Group, MacAndrews Holdings,
Parent Holdings, Marvel III, Marvel Holdings, Ronald O. Perelman, William C.
Bevins, Donald G. Drapkin, Michael Fuchs, Frank Gifford, E. Gregory
Hookstratten, Morton L. Janklow, Quincy Jones, Stan Lee, Scott C. Marden, Terry
C. Stewart and Kenneth Ziffren.
One of the pending Delaware Actions asserts claims on behalf of a
purported class of all Toy Biz shareholders. Holl v. Toy Biz, Inc., Marvel
Entertainment Group, Inc., Andrews Group, Inc., Ronald O. Perelman, Joseph M.
Ahearn, Avi Arad and Issac Perlmutter, C.A. No. 15359, was filed on November
15, 1996. The complaint alleges, among other things, that defendants Perelman,
Ahearn, Arad and Perlmutter are breaching their fiduciary duties in pursuing
the proposed offers of Marvel and Andrews Group to purchase Toy Biz stock. In
addition, the complaint alleges that defendant Marvel is aiding and abetting
the individual defendants in their unlawful conduct. Damages in an unspecified
amount are sought for the alleged breach of fiduciary duties by defendants.
Plaintiffs also seek to enjoin the consummation of the transaction, to rescind
the transaction in the event it is consummated and to recover costs and
disbursements and reasonable allowances for plaintiff's counsel. This case has
been stayed by stipulation of the parties.
No classes have been certified in any of the Delaware Actions. On
December 27, 1996, the Debtor Companies and the Marvel Holding Companies filed
a petition for protection under Chapter 11 of the United States Bankruptcy
Code. As a result of Marvel's filing, all of the Delaware Actions with respect
to Marvel are automatically stayed pursuant to 11 U.S.C. Section 362. On March
7, 1997, Andrews Group terminated the Stock Purchase Agreement with Marvel and
withdrew the proposal for the Andrews Investment. On the same date, Andrews
Group informed Toy Biz and the two other principal stockholders of Toy Biz that
the transactions contemplated by the Merger Agreement and the Stock Purchase
Agreements with Toy Biz and each of such principal stockholders, respectively,
would not be consummated.
F-35
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
Piels v. Marvel Entertainment Group, Inc., Ronald O. Perelman, Andrews
Group, Inc. and MacAndrews & Forbes Holdings Inc., Index No. 96-605702, was
commenced on November 14, 1996. This action, filed in New York Supreme Court,
County of New York, asserts claims on behalf of a purported class of all Marvel
shareholders. Named as defendants are Marvel, Ronald O. Perelman, Andrews Group
and MacAndrews Holdings. The complaint alleges, among other things, that the
defendants have breached their fiduciary duties in connection with the Andrews
Investment. Specifically, plaintiff alleges that Marvel's minority shareholders
are being directly damaged by defendants' actions with respect to the Andrews
Investment. Plaintiff seeks injunctive relief, damages in an unspecified amount
and costs and disbursements, including reasonable attorneys' fees. By orders
dated February 25, 1997, the New York Supreme Court denied plaintiff's motion
for a preliminary injunction and granted defendants' motion to dismiss the
action based on forum non conveniens.
OTHER LEGAL PROCEEDINGS
On March 9, 1995, a complaint purporting to be a class action was
filed against SkyBox, certain of SkyBox's officers and directors and Marvel in
the Delaware Court of Chancery, New Castle County, entitled Strougo v. Lorber,
et al., C.A. No. 14107 ("Strougo"). The complaint generally alleged that SkyBox
and certain of its officers and directors breached their fiduciary duties by
agreeing to be acquired by Marvel at an allegedly unfair and inadequate price,
failing to consider other potential purchasers in a manner designed to obtain
the highest possible price for SkyBox's stockholders and not acting in the best
interest of stockholders. The complaint also alleged that Marvel aided and
abetted the breaches of fiduciary duty committed by the other defendants named
in the complaint. The complaint sought preliminary and permanent injunctions
against consummation of the merger, damages, costs and experts' fees and
expenses. This case was dismissed without prejudice.
On March 16, 1995, a complaint purporting to be a class action was
filed against SkyBox and certain of SkyBox's officers and directors in the
Delaware Court of Chancery, New Castle County, entitled Krim and Gerber v.
SkyBox International Inc., et al., C.A. No. 14127. The complaint generally made
allegations similar to those contained in the Strougo complaint and sought
similar injunctive and other relief. This case was dismissed without prejudice.
Marvel is a defendant in a purported class action filed on July 26,
1996 in the United States District Court for the Eastern District of New York
entitled Fishman, et al v. Marvel Entertainment Group, Inc., CV-96-3757 (SJ),
by four persons who allegedly purchased sports and entertainment cards
manufactured by Fleer/SkyBox. The action is directed against standard business
practices in the trading card industry, including the practice of randomly
placing insert cards in packages of sports and entertainment trading cards, and
alleges that these practices constitute illegal gambling activity in violation
of state and federal law. Fleer/SkyBox's principal competitors in the trading
card industry have been separately sued for employing the same or similar
practices. On March 11, 1997, a similar action as Fishman against a competitor
of Fleer/SkyBox entitled Schwartz, et. al. v. Upper Deck No. 96CV3408 - B (AJB)
(S.D. Cal.), was dismissed with leave to replead. The plaintiffs in that action
filed an amended complaint on March 24, 1997. On April 2, 1997, a similar
action as Fishman against another competitor of Fleer/SkyBox entitled Price,
et. al. v. Pinnacle Brands, No. 3:96-CV-2150-T (N.D. Tex.), was dismissed with
prejudice. In addition, certain of the various sports organizations and
entertainment companies that issue licenses to Fleer/SkyBox (as well as the
other major trading card companies) in connection with the manufacture of
sports and entertainment
F-36
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
trading cards have also been separately sued and are alleged to be engaged in
aspects of the purportedly illegal gambling operations. Plaintiffs seek
certification of a class of persons who within four years prior to the filing
of the complaint purchased packages of trading cards that might contain
randomly inserted cards, and recovery of treble damages. On September 30, 1996,
the Company filed a motion to dismiss the complaint. Plaintiffs filed their
opposition to the motion on or about December 2, 1996. No discovery has
commenced. Plaintiffs have not specified the amount of damages sought, but
generally allege that members of the purported class have been damaged as a
result of their purchases of trading cards during the four years preceding the
commencement of the action. As set forth above, on or about December 27, 1996,
the Company filed a voluntary petition in the United States Bankruptcy Court
for the District of Delaware. As a result, the action was automatically stayed
pending the outcome of the bankruptcy proceeding. It is not possible at this
early stage of the case to predict the outcome with certainty. In the opinion
of the Company, the action lacks merit and the Company intends to defend it
vigorously.
Marvel and two of its officers, William C. Bevins and Terry C.
Stewart, are named as defendants in a purported class action entitled Brian
Barry SEP IRA v. Marvel Entertainment Group, Inc., pending in the United States
District Court for the Southern District of New York. The complaint seeks
unspecified damages on behalf of a proposed class of purchasers of the
Company's Common Stock from April 11, 1994 to December 31, 1994 for alleged
violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934,
as amended, as well as Rule 10b-5 promulgated thereunder. Plaintiff alleges
that the defendants, through their own statements and those of analysts,
artificially inflated the price of Marvel common stock by creating earnings
expectations which Marvel did not meet. Plaintiff also contends that the
defendants failed to timely disclose softness in the publishing and sports
trading card markets which led to Marvel's not attaining its purported earnings
target. Plaintiff claims that the individual defendants, because of their
corporate positions, are liable under the securities laws as control persons of
Marvel. The defendants moved to dismiss the complaint in its entirety on
February 23, 1996. On April 8, 1997, the District Court granted the defendants
motion to dismiss without prejudice. As set forth above, on or about December
27, 1996, Marvel filed a voluntary petition in the United States Bankruptcy
Court for the District of Delaware. As a result, any further action against
Marvel is automatically stayed pending the outcome of the bankruptcy
proceeding.
Marvel is named as a defendant in two actions which have been
consolidated for all purposes with certain related actions in proceedings now
pending in the Los Angeles County Superior Court. The consolidated cases center
around the ownership of certain rights in the production and distribution of a
live action motion picture based on the "SPIDER-MAN" character owned by Marvel.
Once the automatic stay governing all litigation involving Marvel is lifted by
the Delaware Bankruptcy Court, Marvel intends to assert its own claims to those
rights.
In the lead case, a dispute between 21st Century Film Corporation
("21st Film"), Carolco Pictures, Inc. ("Carolco") and related entities, 21st
Film claims that it still possesses rights under an agreement with Marvel to
produce and distribute a live action film based on the "SPIDER-MAN" character,
although it had assigned all of its rights to Carolco. Metro Goldwyn Mayer,
Inc. ("MGM") has succeeded to the litigation position of both 21st Film and
Carolco in the respective bankruptcy proceeding of those two companies. In
addition to its purchase of 21st Film and Carolco litigation positions, MGM is
a plaintiff in a separate case that has been deemed related to the lead and
consolidated cases. Marvel has answered the complaint denying MGM's
allegations.
F-37
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
An additional lawsuit, between Carolco and Columbia Tristar Home Video
("Columbia"), concerns the videocassettes rights to any such film, and a third
lawsuit, between Carolco and Viacom International, Inc. ("Viacom"), involves
television rights. Both Columbia and Viacom claim that, before 21st Film
assigned its rights under its agreement with Marvel to Carolco, 21st Film had
licensed ancillary rights to each company. Each seeks to enforce its respective
rights. Viacom, however, brought a separate suit naming Marvel, and Marvel has
answered that complaint, denying Viacom's allegations.
In its answer and other pleadings, Marvel contends that it is the sole
and exclusive holder of the unencumbered right to produce and distribute a live
action based on the "SPIDER-MAN" character. Marvel contends that all rights to
produce or distribute a "SPIDER-MAN" film under its agreement with Carolco and
21st Film have reverted to Marvel.
Marvel has notified the Court in the consolidated action that Marvel
has filed for bankruptcy protection, and that the bankruptcy court filing stays
all further proceedings in the consolidated lawsuit as to Marvel. Subject to
further proceedings in the bankruptcy court, Marvel has stated that it intends
to defend vigorously the Viacom lawsuit and the MGM lawsuit, and to defend
vigorously and assert its exclusive rights to produce and distribute a live
action film based on the "SPIDER-MAN" character.
In February 1989, Robert Eckstein, et al. brought an action for
violation of Federal securities laws against NW Entertainment, then a
subsidiary of Andrews, and other parties (the "Eckstein Action"). In October
1988, Ralph Majeski, et al. brought an action for fraud, misrepresentation,
breaches of contract and fiduciary duty and pendent state law claims against NW
Entertainment and other parties (the "Majeski Action"). Classes were certified
in both actions. In March 1992, the court granted a motion for summary judgment
and dismissed both the Eckstein Action and the Majeski Action. Plaintiffs in
the Majeski Action filed a motion for reconsideration, which was denied by the
District Court on June 2, 1992. Notices of Appeal were filed in both actions.
The plaintiffs in the Majeski action filed a lawsuit in the Circuit
Court of Milwaukee County, Wisconsin on March 8, 1993 (the "Majeski State Court
Action"). The Majeski State Court Action alleges essentially the same pendent
state law claims that had been asserted in the federal Majeski Action.
On August 20, 1993, the Court of Appeals for the Seventh Circuit
vacated the district court judgments and remanded the cases to the district
court for further proceedings. On November 18, 1993 the defendants filed a
Petition for Writ of Certiorari with the United States Supreme Court, seeking
review of the Court of Appeals Order. The defendant's petition was denied on or
about January 18, 1994.
In November 1993, both the Eckstein and Majeski plaintiffs filed
motions seeking leave to amend the complaints. The defendants did not oppose
the Eckstein plaintiffs' motion because those plaintiffs' did not add new
claims or assert new theories. The Majeski plaintiffs' motion seeks to amend
their Section 10(b) and breach of fiduciary duty claims, add a claim for treble
damages under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C.
ss.ss. 1961-68 and delete certain common law claims and pursue them in a
separate proceeding. The defendants filed papers opposing
F-38
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
the Majeski plaintiffs' proposed amendments. A hearing on the foregoing motions
was held on January 26, 1994. On January 27, 1994 the Court granted the
Eckstein plaintiffs' motion to amend and took the Majeski plaintiff's motion to
amend under consideration. The Majeski State Court Action was voluntarily
dismissed by the plaintiffs.
In February 1994, the defendants filed motions for summary judgment in
both actions. On August 31, 1994, the court denied the Majeski plaintiffs'
motion to amend their first amended complaint, granted the defendants' motions
for summary judgment in both the Eckstein and Majeski Actions and dismissed
both actions with prejudice. The Eckstein plaintiffs filed a motion for
reconsideration on September 15, 1994, which was denied by the court on October
28, 1994. Both the Eckstein and Majeski Actions were appealed by the plaintiffs
to the United States Court of Appeals for the Seventh Circuit. Oral argument
for these appeals was held on April 17, 1995. On June 26, 1995, the Court of
Appeals affirmed the judgments of the District Court in favor of the
defendants. On July 10, 1995, the Eckstein plaintiffs filed a petition for
rehearing and suggestion of rehearing en banc. The petition was denied by the
Court of Appeals on July 21, 1995. Neither the Eckstein or Majeski plaintiffs
sought review of the Seventh Circuit's decision in the Supreme Court.
On July 27, 1995, the district court entered a final order taxing
costs against the Majeski plaintiffs in favor of the defendants in the sum of
$0.1. The Court of Appeals for the Seventh Circuit affirmed that decision, in
an unpublished order, on January 24, 1996, and issued its mandate on February
15, 1996. No petition for writ of certiorari in the Supreme Court has not yet
expired.
On or about July 6, 1995, the Majeski plaintiffs filed a purported
class action lawsuit in the Circuit Court for Milwaukee County, Wisconsin,
entitled Ralph Majeski, et al. v. Balcor Entertainment Company Ltd., et al.,
Case No. 95CV006579 (the "Second Majeski State Court Action"). The Second
Majeski State Court Action is based on allegations similar to those in the
Federal Court Majeski Action, and seeks similar relief. The complaint alleges
claims based on state law asserting, among other things, breach of fiduciary
duties, negligent and intentional misrepresentation and deceit, breach of
contract, and a derivative claim on behalf of another defendant, Balcor Film
Investors, and its successor. On October 23, 1995, plaintiffs filed an amended
complaint, which made only minor, technical changes. On November 2, 1995, the
court entered its order, without objection from the defendants, certifying the
plaintiff-class and directing that notice be sent to all class members. NW
Entertainment filed a motion to dismiss the complaint for lack of personal
jurisdiction.
On November 16, 1995, plaintiffs filed a Second Amended Complaint
adding as a defendant the most recently appointed co-trustee of the BFI Trust.
The newly-named defendant, joined by all other defendants, thereafter removed
the case to United States District Court. On November 20, 1995, the District
Court granted plaintiff's motion to remand and returned the case to the Circuit
Court, Milwaukee County, State of Wisconsin.
Following discovery, the defendants withdrew their motion to dismiss
for lack of personal jurisdiction, and filed an answer denying liability and
asserting affirmative defenses. The case is set for trial on October 6, 1997.
F-39
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
The Company is involved in various other legal proceedings and claims
incident to the normal conduct of its business. Although it is impossible to
predict the outcome of any outstanding legal proceeding, the Company believes
that all of its non-bankruptcy legal proceedings and claims, individually and
in the aggregate, are not likely to have a material adverse effect on its
financial condition or results of operations. As a result of the Debtors
Companies filing of petitions pursuant to the Bankruptcy Code, Marvel's legal
proceedings, other than the Debtor Companies bankruptcy proceedings, have been
automatically stayed. Marvel has obtained a lifting of the automatic stay in
the Fishman case in order to allow Marvel to pursue its motion to dismiss.
13. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>
Year ended December 31, 1996
------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter* Total
------------ ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
Net revenue $ 189.6 $ 182.2 209.4 164.3 745.5
Operating income (loss) 9.1 (2.3) (10.6) (710.4) (714.2)
Loss before extraordinary item
and cumulative effect (52.6) (41.5) (35.5) (533.1) (662.7)
Net loss (52.6) (41.5) (35.5) (540.1) (669.7)
</TABLE>
<TABLE>
<CAPTION>
Year ended December 31, 1995
------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------------ ------------ ------------ ------------- --------------
<S> <C> <C> <C> <C> <C>
Net revenue $ 157.9 $ 169.2 $ 269.0 $ 232.8 828.9
Operating income (loss) 9.8 (11.5) 52.0 (72.7) (22.4)
Loss before extraordinary item
and cumulative effect (36.7) (54.4) (37.5) (107.0) (235.6)
Net loss (36.7) (57.7) (37.5) (107.0) (238.9)
</TABLE>
*Reflects fourth quarter charges including a writedown of goodwill and other
intangibles of approximately $581.7, a valuation allowance of approximately
$32.2 provided to offset deferred tax assets of Marvel previously recorded and
$175.0 reduction in the valuation allowance on deferred tax assets of the
Company other than Marvel, and benefit for current year operating losses of the
Company, other than Marvel.
14. GEOGRAPHIC SEGMENTS
The Company operates in a single business segment. Information related
to the Company's geographic segments for the years ended December 31, 1996,
1995 and 1994 is presented below. Substantially all of the Company's foreign
net revenues were derived from Europe.
Operating profit, as presented below, is total sales less operating
expenses, amortization of goodwill and other intangibles, restructuring
charges, and identifiable miscellaneous income and expense. Unallocated income
and expenses represent interest expense, net interest and investment income,
foreign exchange loss (gain), gain on sale of Toy Biz common stock, equity in
net income of unconsolidated
F-40
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
subsidiaries, reorganization item and general
corporate expenses incurred to manage all of the Company's activities.
Identifiable assets, as presented below, are those assets used in each
geographic area. Corporate assets are principally cash, certain property and
equipment and nonoperating assets. Export sales, including those to affiliates,
are not significant.
The majority of the Company's foreign sales and thus the majority of
the risk of foreign currency fluctuations relate to Panini. As a hedge against
foreign currency fluctuation, the financing for the acquisition of Panini in
1994 has been denominated in Panini's functional currency. Additionally, from
time to time, Panini may enter into foreign currency forward exchange
contracts, swaps and options as hedges of various intercompany transactions. At
December 31, 1996 and 1995, outstanding forward exchange contracts were
insignificant. Additionally, the fluctuation in Panini's functional currency
for the years ended December 31, 1996 and 1995 was not significant.
GEOGRAPHIC AREAS:
Year Ended December 31,
1996 1995 1994
-----------------------------------------
Net revenues:
Domestic .......... $ 462.8 $ 579.9 $ 427.5
Foreign ........... 309.9 278.6 97.5
Eliminations ...... (27.2) (29.6) (10.2)
---------- ---------- ----------
$ 745.5 $ 828.9 $ 514.8
========== ========== ==========
Operating (loss) profit:
Domestic .......... ($ 718.9) ($ 44.5) $ 81.3
Foreign ........... 13.1 44.6 19.4
---------- ---------- ----------
(705.8) 0.1 100.7
Unallocated expenses, net (141.1) (164.2) (127.4)
---------- ---------- ----------
Loss from continuing
operations before income
taxes, minority interest,
equity in net income of
investees and extraordinary
items...................... ($ 846.9) ($164.1) $ (26.7)
========== ========== ==========
December 31,
1996 1995
---------------------------------
Identifiable assets:
Domestic......................... $ 455.6 $ 1,095.5
Foreign.......................... 342.3 324.0
Corporate........................ 533.7 615.2
------------- ----------
$ 1,331.6 $ 2,034.7
============= ==========
F-41
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
15. UNUSUAL CHARGES
RESTRUCTURING:
In the fourth quarter of 1995, Marvel recorded restructuring charges
of $25.0 related primarily to the publishing and confections operations. As
part of the restructuring, Marvel has terminated approximately 275 employees,
covering editorial, production, distribution and administrative employee groups
and accordingly, provided $10.7 of termination benefits, of which $8.8 has been
paid as of December 31, 1996. Additionally, approximately $6.7 relates to
facility closures and consolidation costs, of which $5.4 has been paid as of
December 31, 1996, and $7.6 relates to other costs, of which $4.7 has been paid
as of December 31, 1996. A substantial portion of the remaining amount of $6.1
as of December 31, 1996, which is included in accrued expenses and other, is
scheduled to be paid in accordance with the terms of various agreements.
In the fourth quarter of 1996, Marvel recorded restructuring charges
of $15.8 related primarily to the publishing and trading card operations, the
closing of the comic book distribution subsidiary and the closing of a certain
confections facility. As part of the restructuring, Marvel has terminated
approximately 200 employees, covering editorial, production, distribution and
administrative employee groups and, accordingly, provided for $6.6 of
termination benefits. Additionally, approximately $9.2 of the restructuring
charges relates to write-down of fixed assets and facility closure.
GOODWILL AND OTHER INTANGIBLES WRITE-DOWN:
Goodwill related to the trading card operations of Fleer and SkyBox
was initially recorded at the time of their respective acquisitions. This
goodwill represented the excess of the purchase price over the valuation of the
net assets acquired in each acquisition. Among other things, the goodwill
amortization period was based on Marvel's expectations of future performance at
the time of acquisition, considering historical performance and industry
trends. These expectations assumed various growth rates in revenue and
sufficient cash flow from operations to repay acquisition indebtedness.
There has been a significant and continued contraction in the trading
card market since the Fleer and SkyBox acquisitions, related in part to lower
speculative purchases. In addition as a result of the baseball, hockey and
basketball labor situations in 1994 and 1995, fan interest declined which
adversely affected sports trading card sales and increased returns for those
periods. The level of fan interest, although showing some signs of improvement
during 1996, has not returned to the levels experienced prior to the 1994
strike. Marvel believes that all of these factors have negatively affected the
sports trading card business, causing Marvel to experience lower sales, higher
returns and higher inventory obsolescence.
The level of demand for entertainment trading cards is dependent on,
among other factors, the commercial success and media exposure of the Marvel
Characters and third party licensed products, as well as the market conditions
in the comic book specialty stores. In 1994 and 1995, the sale of entertainment
cards based on the Marvel Characters and third party licensed characters
substantially offset the decline in sports trading cards. However, in 1996,
Marvel's sales of entertainment trading cards has been adversely affected by
lack of commercial success of properties licensed from third parties as well as
the lower demand
F-42
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
for trading cards based on comic book characters. In response, Marvel has
undertaken several strategic actions to mitigate the effect of such contraction
However, to date these actions have not been sufficient to overcome the overall
decline in the sales of entertainment cards.
As described above, continuing operating losses in the trading card
and publishing businesses, as well as significant long-term changes in industry
conditions, indicated to Marvel that there may be asset impairment. During the
fourth quarter of 1996, Marvel evaluated the recoverability of the carrying
value of long-lived assets related to Marvel, including goodwill and other
intangibles, in accordance with its previously stated accounting policies and
recorded a non-cash writedown of goodwill of approximately $252.9 related to
Fleer and SkyBox. Marvel recognized an impairment on a going concern basis
related to certain assets of the trading card business because the future
undiscounted cash flows of the assets were estimated to be insufficient to
recover their related carrying value. The write down was recorded based on the
difference between the carrying value of the asset and the fair value estimated
by independent appraisals on a going concern basis. As part of the bankruptcy
proceedings and reorganization efforts involving Marvel, certain appraisals of
Marvel's business units were prepared by investment banking firms. No such
adjustment was required for the assets of Marvel's ongoing publishing activity.
Considerable judgment was used to estimate future cash flows and fair value.
Accordingly, actual results could vary significantly from such estimates.
Subsequent to this write-down Marvel's goodwill related to trading cards was
approximately $110 which will be amortized over 15 years.
The foregoing charge was based on a going concern assumption. In the
event of a sale of assets, there can be no assurance that actual results or
valuations will not vary significantly from the foregoing.
In addition, Marvel has recorded, in the fourth quarter of 1996, an
approximate $19.8 non-cash write-down of goodwill and other intangibles related
to the write off of long-lived assets, including goodwill and other
intangibles, related to the closing of Heroes World and the discontinuance of
certain magazines for children.
Goodwill of the Marvel Holding Companies relates to the tender offer
for Marvel shares in 1993 and subsequent open market purchases of Marvel common
stock. As a result of the condition in Marvel's operating businesses described
above and the bankruptcy filing of Marvel, the Company recorded a non-cash
charge of $303.2 to write off such goodwill.
F-43
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
16. FINANCIAL STATEMENTS OF ENTITIES OPERATING UNDER CHAPTER 11
The combined condensed balance sheet as of December 31, 1996 of the Debtor
Companies and to Marvel Holding Companies is as follows (See Note 4):
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Current assets:
Cash.................................................. $ 15.2
Accounts receivable, net.............................. 57.5
Inventories, net...................................... 22.1
Income tax receivable................................. 11.8
Prepaid expenses and other............................ 7.3
---------
Total current assets................................. 113.9
Property, plant and equipment, net..................... 9.3
Goodwill and other intangibles, net.................... 193.0
Deferred charges and other............................. 31.4
Investments in and advances to subsidiaries, at cost .. 50.2
---------
Total Assets ........................................ $ 397.8
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable...................................... $ 29.2
Accrued expenses and other ........................... 93.2
Short term borrowings................................. 10.0
Liabilities subject to settlement under
reorganization....................................... 20.0
---------
Total current liabilities............................ 152.4
Other long-term liabilities............................ 11.6
Liabilities subject to settlement under
reorganization........................................ 1,293.7
---------
Total Liabilities.................................... 1,457.7
---------
Stockholders' deficit:
Additional paid-in capital............................ (109.1)
Accumulated deficit................................... (950.3)
Cumulative translation adjustment..................... (0.5)
---------
Total Stockholders' Deficit.......................... (1,059.9)
---------
Total Liabilities and Stockholders' Deficit ......... $ 397.8
=========
</TABLE>
F-44
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
The combined condensed statement of operations for the year ended December
31, 1996 of the Debtor Companies and the Marvel Holding Companies is as follows:
<TABLE>
<CAPTION>
<S> <C>
Net revenues.......................................................... $ 290.1
Cost of sales......................................................... 236.7
Selling, general & administrative expenses............................ 127.8
Restructuring charges................................................. 15.8
Depreciation and amortization ........................................ 10.7
Amortization and write-off of goodwill, intangibles and deferred
charges ............................................................. 608.7
Interest expense, net................................................. 119.9
Gain on sale of Toy Biz common stock.................................. 22.0
Equity in net loss of unconsolidated subsidiaries and other, net ..... (23.4)
---------
Loss before reorganization items, provision for income taxes,
minority interest and extraordinary item............................. (830.9)
Reorganization items.................................................. 5.5
---------
Loss before provision for income taxes................................ (836.4)
Provision for income taxes............................................ 18.6
Minority interest in loss of subsidiaries............................. (44.0)
---------
Net loss.............................................................. ($ 811.0)
=========
</TABLE>
F-45
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONSOLIDATED BALANCE SHEETS (PARENT ONLY)
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
December 31,
--------------------------
1996 1995
------------ ------------
<S> <C> <C>
ASSETS
Prepaid expenses and other $0.3 $0.5
Deferred income taxes 175.0 -
------------ ------------
Total current assets 175.3 0.5
Investments in and advances to subsidiaries net of
cumulative losses and distributions (706.9) 42.2
Net assets held 18.1 18.6
Other assets 5.3 7.7
------------ ------------
Total assets ($508.2) $69.0
============ ============
LIABILITIES AND STOCKHOLDER'S DEFICIT
Current portion of long-term debt $29.7 $14.3
Accrued expenses 14.2 15.5
------------ ------------
Total current liabilities 43.9 29.8
Long-term debt 0.9 27.6
Indebtedness to subsidiaries and affiliates 686.9 581.9
Other liabilities 3.6 3.6
Stockholder's deficit:
Common stock $1.00 par value; 1,000 shares
authorized, issued and outstanding - -
Additional paid-in-capital 40.7 40.2
Accumulated deficit (1,284.2) (614.5)
Cumulative translation adjustment - 0.4
------------ ------------
Total stockholder's deficit (1,243.5) (573.9)
------------ ------------
($508.2) $69.0
============ ============
</TABLE>
F-46
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF OPERATIONS (PARENT ONLY)
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------
1996 1995 1994
-------------- ------------ ------------
<S> <C> <C> <C>
General and administrative expenses $5.6 $10.4 $4.1
-------------- ------------ ------------
Operating loss (5.6) (10.4) (4.1)
-------------- ------------ ------------
Other (expenses) income:
Interest expense (40.5) (56.0) (52.2)
Interest and investment income 0.3 0.5 0.7
Amortization of goodwill and debt issuance costs (0.7) (0.7) (0.7)
Miscellaneous, net (0.3) (0.3) (0.2)
-------------- ------------ ------------
(41.2) (56.5) (52.4)
-------------- ------------ ------------
Loss from continuing operations before income taxes, equity
in net income (loss) of subsidiaries and investees (46.8) (66.9) (56.5)
Benefit for deferred income taxes 175.0 - -
Equity in net (loss) income of subsidiaries (797.4) (171.5) 35.8
Equity in net income of investees - - 9.4
-------------- ------------ ------------
Loss from continuing operations before extraordinary items (669.2) (238.4) (11.3)
Loss from discontinued operations (0.5) (0.5) (2.4)
-------------- ------------ ------------
Net loss ($669.7) ($238.9) ($13.7)
============== ============ ============
</TABLE>
F-47
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF CASH FLOWS (PARENT ONLY)
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------------
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net loss ($669.7) ($238.9) ($13.7)
------------ ------------ ------------
Adjustments to reconcile net loss to net cash flows from operating
activities:
Depreciation and amortization 0.8 0.8 1.8
Loss from discontinued operations 0.5 0.5 2.8
Benefit for deferred income taxes (175.0) - -
Equity in net loss of subsidiaries and investees 797.4 171.5 (45.2)
Amortization of debt discount 3.1 2.8 2.2
Change in assets and liabilites:
Decrease in accounts receivable - 0.3 1.5
(Decrease) increase in accrued expenses (1.3) 0.4 -
Decrease (increase) in other assets 2.1 3.9 (2.0)
------------ ------------ ------------
627.6 180.2 (38.9)
------------ ------------ ------------
Net cash flows from operating activities (42.1) (58.7) (52.6)
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Loans to affiliates, net - 14.0 -
Investments in and (distributions from) subsidiaries, net (40.5) (100.4) 144.7
Other, net - (4.3) -
------------ ------------ ------------
Net cash flows from investing activities (40.5) (90.7) 144.7
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from net loans from affiliates and issuance of debt 105.0 154.0 (96.8)
Repayment of debt (14.5) - (2.1)
Contributions, net - 0.8 1.5
Other, net (7.9) (5.4) 5.3
------------ ------------ ------------
Net cash flows from financing activities
82.6 149.4 (92.1)
------------ ------------ ------------
Net decrease in cash and cash equivalents - - -
Cash and cash equivalents at beginning of the period - - -
------------ ------------ ------------
Cash and cash equivalents at end of the period $0.0 $0.0 $0.0
============ ============ ============
Supplemental schedule of cash flow information:
Interest paid during the period $9.8 $5.0 $3.3
</TABLE>
F-48
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
SCHEDULE II- VALUATION AND QUALIFYING ACCOUNTS
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
Balance
Balance at Charged to Charged at
Beginning Costs and Other End of
of Period Expenses Accounts(c) Deductions Period
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
DESCRIPTION
Year ended December 31, 1996
Deducted from asset accounts:
Allowance for returns .................... $ 61.6 $ 41.0 $ - ($ 83.9) (a) $ 18.7
Allowance for doubtful accounts and other
allowances.............................. 16.3 52.7 - (41.5) (b) 27.5
Reserve for inventory obsolescence........ 22.4 23.5 - (16.3) 29.6
Included in Accrued Expenses & Other:
Reserve for Returns .................... 59.0 129.1 - (136.9) (a) 51.2
------------ ------------ ------------ ------------ ------------
Totals $ 159.3 $ 246.3 $ - $ (278.6) $ 127.0
============ ============ ============ ============ ============
Year ended December 31, 1995
Deducted from asset accounts:
Allowance for returns.................... $ 21.0 $ 101.5 $ 3.8 ($ 64.7) (a) $ 61.6
Allowance for doubtful accounts and other
allowances......................... 2.5 24.1 4.0 (14.3) (b) 16.3
Reserve for inventory obsolescence........ 1.7 33.6 9.8 (22.7) 22.4
Included in Accrued Expenses & Other:
Reserve for Returns ...................... 47.6 163.7 7.5 (159.8) (a) 59.0
------------ ------------ ------------ ------------ ------------
Totals $ 72.8 $ 322.9 $ 25.1 $ (261.5) $ 159.3
============ ============ ============ ============ ============
Year ended December 31, 1994
Deducted from asset accounts:
Allowance for returns..................... $ 15.8 $ 86.4 $ - $ (81.2)(a) $ 21.0
Allowance for doubtful accounts .......... .9 .2 1.9 (.5)(b) 2.5
Reserve for inventory obsolescence........ .7 7.3 .3 (6.6) 1.7
Included in Accrued Expenses & Other:
Reserve for Returns .................... 12.1 97.9 15.6 (78.0)(a) 47.6
------------ ------------ ------------ ------------ ------------
Totals $ 29.5 $ 191.8 $ 17.8 $ (166.3) $ 72.8
============ ============ ============ ============ ============
</TABLE>
- ------------------
(a) Actual returns
(b) Doubtful accounts written off, less recoveries
(c) Primarily represents amounts acquired
F-49
<PAGE>
$300,000,000
FOURTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
Dated as of December 16, 1996
Among
MARVEL IV HOLDINGS INC.,
(to be renamed MAFCO FINANCE CORP.)
as Borrower,
THE FINANCIAL INSTITUTIONS AND
THE INITIAL ISSUING BANK NAMED HEREIN,
as Financial Institutions and
Initial Issuing Bank,
CITIBANK, N.A.,
as Administrative Agent and Collateral Agent ,
THE FIRST NATIONAL BANK OF BOSTON,
as Documentation Agent,
CHASE SECURITIES, INC.,
as Syndication Agent,
and
BANK OF AMERICA ILLINOIS,
ING (U.S.) CAPITAL CORPORATION,
SALOMON BROTHERS HOLDING COMPANY INC,
THE BANK OF NEW YORK,
THE FUJI BANK, LIMITED
as Managing Agents
<PAGE>
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms........................... 3
SECTION 1.02. Computation of Time Periods..................... 40
SECTION 1.03. Accounting Terms................................ 40
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances.................................... 40
SECTION 2.02. Making the Advances............................. 42
SECTION 2.03. Issuance of and Drawings and Reimbursement
Under Letters of Credit....................... 44
SECTION 2.04. Repayment....................................... 46
SECTION 2.05. Termination or Reduction of the Commitments..... 47
SECTION 2.06. Prepayments..................................... 52
SECTION 2.07. Interest........................................ 55
SECTION 2.08. Interest Rate Determination..................... 55
SECTION 2.09. Fees ........................................... 56
SECTION 2.10. Increased Costs; Illegality..................... 57
SECTION 2.11. Conversion of Advances.......................... 59
SECTION 2.12. Payments and Computations....................... 60
SECTION 2.13. Taxes ........................................ 61
SECTION 2.14. Sharing of Payments, Etc........................ 64
SECTION 2.15. Removal of Lender............................... 64
SECTION 2.16. Defaulting Lender............................... 65
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Effective Date.......... 68
SECTION 3.02. Conditions Precedent to Each Borrowing
and Issuance.................................. 76
SECTION 3.03. Determinations Under Section 3.01............... 77
ARTICLE IV
<PAGE>
ii
Page
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower... 77
SECTION 4.02. Representations and Warranties Applicable
to Marvel...................................... 82
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants............................ 82
(a) Compliance with Laws, Etc......... 82
(b) Compliance with Environmental
Laws............................ 82
(c) Maintenance of Insurance.......... 83
(d) Preservation of Corporate
Existence, Etc.................. 83
(e) Visitation Rights................. 83
(f) Keeping of Books.................. 83
(g) Maintenance of Properties, Etc.... 83
(h) Termination of Financing
Statements...................... 84
(i) Collateral Account................ 84
(j) Reporting Requirements............ 84
(k) Look-Forward Certificate.......... 87
(l) Transactions with Affiliates...... 88
(m) Use of Proceeds................... 88
(n) Mafco Tax Group................... 89
(o) Net Cash Proceeds................. 89
(p) LYONS Utilization................. 89
SECTION 5.02. Negative Covenants.............................. 89
(a) Liens, Etc........................ 89
(b) Lease Obligations................. 90
(c) Mergers, Etc...................... 90
(d) Sales, Etc. of Assets............. 90
(e) Dividends, Repurchases, Etc....... 90
(f) Investments....................... 91
(g) Change in Nature of Business...... 91
(h) Accounting Changes................ 91
(i) Debt.............................. 91
(j) Charter Amendments................ 92
(k) Prepayments, Etc. of Debt......... 92
(l) Negative Pledge................... 92
(m) Partnerships...................... 92
(n) Capital Expenditures.............. 92
(o) Issuance of Capital Stock......... 92
<PAGE>
iii
Page
(p) Payment Restrictions................ 92
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default.................................. 93
SECTION 6.02. Actions in Respect of the Letters of Credit
upon Event of Default............................ 98
ARTICLE VII
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
SECTION 7.01. Authorization and Action........................... 99
SECTION 7.02. Administrative Agent's and Collateral Agent's
Reliance, Etc.................................... 99
SECTION 7.03. Citibank and Affiliates............................100
SECTION 7.04. Lender Party Credit Decision.......................100
SECTION 7.05. Indemnification....................................100
SECTION 7.06. Successor Administrative Agent and
Collateral Agent.................................102
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc....................................103
SECTION 8.02. Notices, Etc.......................................104
SECTION 8.03. No Waiver; Remedies................................104
SECTION 8.04. Costs; Expenses....................................105
SECTION 8.05. Right of Set-off...................................106
SECTION 8.06. Binding Effect.....................................107
SECTION 8.07. Assignments and Participations.....................107
SECTION 8.08. Governing Law; Submission to Jurisdiction..........110
SECTION 8.09. Execution in Counterparts..........................111
SECTION 8.10. No Liability of the Issuing Bank...................111
SECTION 8.11. WAIVER OF JURY TRIAL...............................112
<PAGE>
iv
Schedule I - List of Existing Advances, Advances, Commitments and
Lending Offices
Schedule II - Borrower Information
Schedule III - List of Existing Debt
Schedule IV - List of Investments
Schedule V - List of Existing Liens
Schedule VI - Calculation of Defeased Debt Amount
Schedule VII - List of Debt for the Definition of Net Cash Proceeds
Exhibit A-1 - Form of Tranche A Revolving Credit Note
Exhibit A-2 - Form of Tranche B Revolving Credit Note
Exhibit B - Form of Assignment and Acceptance
Exhibit C - Form of Notice of Borrowing
Exhibit D-1 - Form of Mafco Security Agreement
Exhibit D-2 - Form of Borrower Security Agreement
Exhibit D-3 - Form of Borrower Parent Security Agreement
Exhibit E-1 - Form of Mafco Guaranty
Exhibit E-2 - Form of Borrower Parent Guaranty
Exhibit E-3 - Form of C&F Guaranty
Exhibit E-4 - Form of Cigar Guaranty
Exhibit E-5 - Form of Coleman Guaranty
Exhibit E-6 - Form of Flavors Guaranty
Exhibit E-7 - Form of New World Guaranty
Exhibit E-8 - Form of Revlon Guaranty
<PAGE>
v
Exhibit F-1 - Form of C&F Pledge Agreement
Exhibit F-2 - Form of Cigar Pledge Agreement
Exhibit F-3 - Form of Coleman Pledge Agreement
Exhibit F-4 - Form of Coleman Worldwide Pledge Agreement
Exhibit F-5 - Form of Flavors Pledge Agreement
Exhibit F-6 - Form of Four Star Pledge Agreement
Exhibit F-7 - Form of Mafco Pledge Agreement
Exhibit F-8 - Form of M&F Pledge Agreement
Exhibit F-9 - Form of New Coleman Pledge Agreement
Exhibit F-10 - Form of New World Pledge Agreement
Exhibit F-11 - Form of Second Andrews Pledge Agreement
Exhibit F-12 - Form of Revlon Pledge Agreement
Exhibit G - Form of Equity Contribution Agreement
Exhibit H - Form of First Gibraltor Loan
Exhibit I - Form of Confidentiality Letter
<PAGE>
FOURTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
FOURTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT dated
as of December 16, 1996 among MARVEL IV HOLDINGS INC., a Delaware corporation
(to be renamed MAFCO FINANCE CORP.) (the "Borrower"), the banks, financial
institutions and other institutional lenders (the "Financial Institutions")
listed on the signature pages hereof, the Initial Issuing Bank (as hereinafter
defined), CITIBANK, N.A. ("Citibank"), as administrative agent (together
with any successor appointed pursuant to Article VII, the "Administrative
Agent") for the Lender Parties (as hereinafter defined) hereunder, THE
FIRST NATIONAL BANK OF BOSTON, as documentation agent (the "Documentation
Agent") for the Lender Parties hereunder, CHASE SECURITIES, INC, as
syndication agent (the "Syndication Agent"), BANK OF AMERICA ILLINOIS, INC
(U.S.) CAPITAL CORPORATION, SALOMON BROTHERS HOLDING COMPANY INC, and THE
FUJI BANK, LIMITED, as managing agents (the "Managing Agents"; together with
the Administrative Agent, the Documentation Agent and the Syndication Agent,
the "Agents") for the Lender Parties hereunder and Citibank, as collateral
agent (together with any successor appointed pursuant to Article VII, the
"Collateral Agent") for the Lender Parties hereunder and the Term Credit
Agreement Lenders (as hereinafter defined).
PRELIMINARY STATEMENTS
(1) In connection with the purchase of certain assets and
the assumption of certain liabilities (the "Original Transaction") of First
Nationwide Bank, A Federal Savings Bank, by First Madison Bank, F.S.B. (now
known as First Nationwide Bank), an indirect Subsidiary (as hereinafter
defined) of Mafco Holdings Inc., a Delaware corporation ("Mafco"), the
Borrower entered into a Credit Agreement dated as of July 20, 1994, as amended
by the First Amendment dated as of March 10, 1995 (said agreement, as so
amended, being the "Original Credit Agreement"), with the financial
institutions and other institutional lenders party thereto (the "Original
Lenders") and Citibank, as agent for the Original Lenders.
(2) Pursuant to the Original Credit Agreement, the Borrower
requested that the Original Lenders make advances to it, in an aggregate
principal amount of up to $240,000,000, on the terms and conditions set forth
therein.
(3) Subsequently, the Borrower entered into an Amended and
Restated Credit Agreement dated as of June 29, 1995, as amended by the First
Amendment dated as of October 27, 1995 (said agreement, as so amended, being
the "Second Credit Agreement"), with the financial institutions and other
institutional lenders thereto and Citibank, as agent for such financial
institutions and other institutional lenders.
(4) Pursuant to the Second Credit Agreement, the Borrower
requested that the financial institutions and other institutional lenders
party thereto make advances to it in an
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2
aggregate principal amount of up to $350,000,000, on the terms and conditions
set forth therein.
(5) Subsequently, the Borrower entered into a Second Amended
and Restated Credit Agreement dated as of December 15, 1995, as amended by the
First Amendment dated as of January 9, 1996, the Second Amendment dated as of
January 24, 1996 and the Third Amendment dated as of April 9, 1996 (said
agreement, as so amended, being the "Third Credit Agreement"), with the
financial institutions and other institutional lenders party thereto (the
"Third Lenders") and Citibank, as agent for the Third Lenders.
(6) Pursuant to the Third Credit Agreement, the Borrower
requested that the Third Lenders make advances to it in an aggregate principal
amount of up to $430,000,000, on the terms and conditions set forth therein.
(7) Subsequently, the Borrower entered into a Third Amended
and Restated Credit Agreement dated as of June 3, 1996, as amended by the
First Amendment dated as of September 9, 1996 and the Second Amendment dated
as of October 9, 1996 (said agreement, as so amended, being the "Existing
Credit Agreement"), with the financial institutions and other institutional
lenders party thereto (the "Existing Lenders") and Citibank, as agent for the
Existing Lenders.
(8) Pursuant to the Existing Credit Agreement, the Borrower
requested that the Existing Lenders make advances to it in an aggregate
principal amount of up to $250,000,000, on the terms and conditions set forth
therein.
(9) The Borrower has requested that the Financial
Institutions hereunder enter into this Agreement to amend and restate the
Existing Credit Agreement and to lend to the Borrower and issue Letters of
Credit for the benefit of the Borrower from time to time in an aggregate
principal amount of up to $300,000,000. The Financial Institutions hereunder
have indicated their willingness to amend and restate the Existing Credit
Agreement and to provide such additional financing on the terms and conditions
of this Agreement.
(10) Concurrently with entering into this Agreement, the
Borrower is entering into a Term Credit Agreement dated as of the date hereof
(as it may hereafter be amended or otherwise modified from time to time, the
"Term Credit Agreement") with the banks, financial institutions and other
institutional lenders party thereto (the "Term Credit Agreement Lenders"),
Citibank, as administrative agent (in such capacity, the "Term Administrative
Agent"), NationsBanc Capital Markets, Inc., as documentation agent (in such
capacity, the "Term Documentation Agent"), Credit Suisse, as syndication agent
(in such capacity, the "Term Syndication Agent"), the managing agents party
thereto (the "Term Managing Agents"; together with the Term Administrative
Agent, the Term Documentation Agent and the Term Syndication Agent, the "Term
Agents") and the Collateral Agent.
<PAGE>
3
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements contained herein, the parties hereto hereby
agree that, subject to the satisfaction of the conditions set forth in Section
3.01, the Existing Credit Agreement is amended and restated in its entirety to
read as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):
"A Company" means (i) each Loan Party, FN Parent, FN
Holdings, Coleman Holdings Inc., Coleman Worldwide and NWCG Holdings and (ii)
on and after the Revlon Inclusion Date, National Health Care Group Inc.,
Revlon Holdings Inc. and Revlon Worldwide Corporation; provided, however, that
on and after (i) the consummation of the New World Acquisition, NWCG Holdings
shall no longer be a "A Company" and (ii) the date of sale, monetization or
other disposal by Mafco or any of its Subsidiaries of all of the News Corp.
Preferred ADRs, New World Guarantor shall no longer be an "A Company".
"Administrative Agent" has the meaning specified in the
recital of parties to this Agreement.
"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent with Citibank at
399 Park Avenue, New York, New York 10043, Account No. 3685-2248.
"Advance" means a Tranche A Revolving Credit Advance, a
Tranche B Revolving Credit Advance or a Letter of Credit Advance.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 5% or more of the Voting
Stock of such Person or to direct or cause direction of the management and
policies of such Person, whether through the ownership of Voting Stock, by
contract or otherwise.
"Agents" has the meaning specified in the recital of parties
to this Agreement.
<PAGE>
4
"Andrews" means Andrews Group Incorporated, a Delaware
corporation.
"Applicable Lending Office" means, with respect to each
Lender Party, such Lender Party's Domestic Lending Office in the case of a
Base Rate Advance and such Lender Party's Eurodollar Lending Office in the
case of a Eurodollar Rate Advance.
"Applicable Margin" means, at any time, 2.50% per annum for
Base Rate Advances and 4.50% per annum for Eurodollar Rate Advances.
"Appropriate Lender" means, at any time, with respect to (a)
any of the Tranche A Revolving Credit Facilities or Tranche B Revolving Credit
Facilities, a Lender that has a Commitment with respect to such Facility at
such time and (b) the Letter of Credit Facility, (i) the Issuing Bank and (ii)
if the other Tranche A Revolving Credit Lenders have made Letter of Credit
Advances pursuant to Section 2.03(c) that are outstanding at such time, each
such other Tranche A Revolving Credit Lender.
"Asset Sale" means the sale, lease, transfer or other
disposition (collectively, a "disposition") of assets of Mafco or any of its
Subsidiaries other than a disposition of any of the following:
(i) all or any portion of the capital stock of
Laboratory Corporation of America Holdings, or Meridian
Sports Incorporated,
(ii) all or any portion of the capital stock or
assets of the Bank or any of its Subsidiaries,
(iii) all or any portion of the real property
located at 1440 South Sepulveda, Los Angeles, California in
connection with the New World Acquisition,
(iv) from and after the later to occur of (A) the
Tranche B Termination Date and (B) the Term Credit Agreement
Termination Date, all or any portion of the capital stock or
assets of Marvel III Holdings Inc., Marvel (Parent) Holdings
Inc., Marvel Holdings Inc. and Marvel (or any of its
Subsidiaries), and
(v) any asset of Ropa Two Corporation so long as
the Net Cash Proceeds from any disposition of an asset of
Ropa Two Corporation shall be reinvested, within twelve
months following the date of such disposition, in the
business of Ropa Two Corporation or any of its Subsidiaries;
provided, however, that
<PAGE>
5
(a) a disposition of assets of (x) a Designated
Operating Company or any of its Subsidiaries, (y) Meridian
Sports Incorporated or any of its Subsidiaries or (z) Marvel
or any of its Subsidiaries prior to and following the Marvel
Inclusion Period shall, in each case, only be considered an
Asset Sale for purposes of this Agreement to the extent, and
only to the extent, that all or a portion of the proceeds of
such disposition are received by any of Mafco or any of its
Subsidiaries (other than (i) a Designated Operating Company
or any of its Subsidiaries, (ii) Meridian Sports
Incorporated or any of its Subsidiaries or (iii) Marvel or
any of its Subsidiaries prior to and following the Marvel
Inclusion Period, as the case may be) through a dividend,
distribution, loan, advance or other similar payment,
(b) subject to the other clauses of this proviso,
so long as the Revlon Holdings Statement is true and correct
both before and after giving effect to such disposition, a
disposition of assets of Revlon Holdings Inc. or any of its
Subsidiaries shall only be considered an Asset Sale for
purposes of this Agreement to the extent, and only to the
extent, that all or a portion of the proceeds of such
disposition are received by any of Mafco or any of its
Subsidiaries (other than Revlon Holdings Inc. or any of its
Subsidiaries) through a dividend, distribution, loan,
advance or other similar payment,
(c) notwithstanding clause (b) of this proviso, a
disposition of all or any portion of the capital stock of
Revlon Worldwide Corporation, National Health Care Group,
Inc. or Charles of the Ritz Group Ltd. (but in the case of
Charles of the Ritz Group Ltd., only if it owns any of the
capital stock of Revlon Worldwide Corporation at the time of
such disposition) shall be considered an Asset Sale for
purposes of this Agreement,
(d) notwithstanding clause (b) of this proviso, a
disposition of any asset (other than assets specifically
excluded from this definition of "Asset Sale") of National
Health Care Group, Inc. or any of its Subsidiaries (other
than (i) prior to the Revlon Inclusion Date, Revlon
Worldwide and its Subsidiaries and (ii) from and after the
Revlon Inclusion Date, Revlon and its Subsidiaries) shall be
considered an Asset Sale for purposes of this Agreement; and
(e) notwithstanding clause (b) of this proviso,
prior to the Revlon Inclusion Date, a disposition of assets
by Revlon Worldwide or any of its Subsidiaries shall not be
considered an Asset Sale for purposes of this Agreement.
<PAGE>
6
"Asset Sale Threshold" means the receipt on and after the
Effective Date by Mafco and its Subsidiaries of aggregate Net Cash Proceeds
from Asset Sales in an amount equal to $1 billion; provided, however, that the
Net Cash Proceeds from any Asset Sale which are applied pursuant to Section
2.05(b)(iv) or Section 2.06(b)(iii) shall not be included in the calculation
of the "Asset Sale Threshold".
"Assignment and Acceptance" means an assignment and
acceptance entered into by a Lender Party and an assignee of such Lender
Party, and accepted by the Administrative Agent, in substantially the form of
Exhibit B hereto.
"Available Amount" of any Letter of Credit means, at any
time, the maximum amount available to be drawn under such Letter of Credit at
such time (assuming compliance at such time with all conditions to drawing).
"Bank" means First Nationwide Bank, A Federal Savings Bank,
and any successor thereto, including the surviving bank of the merger of the
Bank with and into California Federal.
"Bank Preferred Stock Document" means the Federal Stock
Charter of First Madison Bank, FSB, as supplemented by the First Supplementary
Section to Section 5 of the Charter of First Gibraltar Bank, FSB and the
Second Supplemental Section to Section 5 of the Charter of First Madison Bank,
FSB.
"Base Rate" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be equal to
the highest of:
(a) the rate of interest announced publicly by Citibank
in New York, New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearest 1/4 of 1% or, if there
is no nearest 1/4 of 1%, to the next higher 1/4 of 1%) of (i) 1/2 of
1% per annum, plus (ii) the rate obtained by dividing (A) the latest
three-week moving average of secondary market morning offering rates
in the United States for three-month certificates of deposit of major
United States money market banks, such three-week moving average
(adjusted to the basis of a year of 360 days) being determined weekly
on each Monday (or, if such day is not a Business Day, on the next
succeeding Business Day) for the three-week period ending on the
previous Friday by Citibank on the basis of such rates reported by
certificate of deposit dealers to and published by the Federal
Reserve Bank of New York or, if such publication shall be suspended
or terminated, on the basis of quotations for such rates received by
Citibank from three New York certificate of deposit dealers of
recognized standing selected by Citibank, by (B) a percentage equal
to 100% minus the average of the daily percentages specified during
<PAGE>
7
such three-week period by the Board of Governors of the Federal
Reserve System (or any successor thereto) for determining the maximum
reserve requirement (including, but not limited to, any emergency,
supplemental or other marginal reserve requirement) for Citibank with
respect to liabilities consisting of or including (among other
liabilities) three-month U.S. dollar non-personal time deposits in
the United States, plus (iii) the average during such three-week
period of the annual assessment rates estimated by Citibank for
determining the then current annual assessment payable by Citibank to
the Federal Deposit Insurance Corporation (or any successor thereto)
for insuring U.S. dollar deposits of Citibank in the United States;
and
(c) 1/2 of 1% per annum above the Federal Funds Rate.
"Base Rate Advance" means an Advance that bears interest as
provided in Section 2.07(a)(i).
"Borrower" has the meaning specified in the recital of
parties to this Agreement.
"Borrower Collateral Account" has the meaning specified in
the Borrower Security Agreement.
"Borrower Parent" means Marvel V Holdings Inc., a Delaware
corporation.
"Borrower Parent Guaranty" means the Third Amended and
Restated Guaranty dated as of December 16, 1996 made by the Borrower Parent in
favor of the Lender Parties, the Term Credit Agreement Lenders, the Agents,
the Term Agents and the Collateral Agent, as such guaranty may be amended or
otherwise modified from time to time in accordance with its terms.
"Borrower Parent Security Agreement" means the Amended and
Restated Security Agreement dated as of December 16, 1996 made by the Borrower
Parent and The Bank of New York, in its capacity as voting trustee, to the
Collateral Agent, as such agreement may be amended or otherwise modified from
time to time in accordance with its terms.
"Borrower Security Agreement" means the Fourth Amended and
Restated Borrower Security Agreement dated as of December 16, 1996 made by the
Borrower to the Collateral Agent, as such agreement may be amended or
otherwise modified from time to time in accordance with its terms.
<PAGE>
8
"Borrower's Account" means the account of the Borrower
maintained by the Borrower with Citibank, N.A., at its office at 399 Park
Avenue, New York, New York 10043, Account No. 40650489.
"Borrowing" means a Tranche A Revolving Credit Borrowing or
a Tranche B Revolving Credit Borrowing.
"Business Day" means a day of the year on which banks are
not required or authorized by law to close in New York City and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on which
dealings are carried on in the London interbank market and banks are open for
business in London.
"C&F Guarantor" means Mafco Consolidated Holdings Inc., a
Delaware corporation (formerly known as C&F (Parent) Holdings Inc.).
"C&F Guaranty" means the Second Amended and Restated
Guaranty dated as of December 16, 1996 made by C&F Guarantor in favor of the
Lender Parties, the Term Credit Agreement Lenders, the Agents, the Term Agents
and the Collateral Agent, as such guaranty may be amended or otherwise
modified from time to time in accordance with its terms.
"C&F Pledge Agreement" means the Amended and Restated Pledge
Agreement dated as of December 16, 1996 made by C&F Guarantor to the
Collateral Agent, as such agreement may be amended or otherwise modified from
time to time in accordance with its terms.
"Calculation Period" means, for any date in respect of any
common stock, the immediately preceding five Business Days during which such
common stock traded on the relevant national stock exchange or the Nasdaq
national market system.
"California Federal" means California Federal Bank, A Federal
Savings Bank.
"Capital Expenditures" means, for any period, the sum of (a)
all expenditures during such period for equipment, fixed assets, real property
or improvements, or for replacements or substitutions therefor or additions
thereto, that have a useful life of more than one year plus (b) the aggregate
principal amount of all Debt (including obligations under Capitalized Leases)
assumed or incurred in connection with any such expenditures.
"Capitalized Leases" has the meaning specified in clause (e)
of the definition of "Debt".
<PAGE>
9
"Cash Equivalents" means any of the following, to the extent
owned by the Borrower or its Subsidiaries free and clear of all Liens and
having a maturity not greater than 180 days from the date of issuance thereof:
(a) direct obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
faith and credit of the Government of the United States, (b) insured
certificates of deposit of or time deposits with any commercial bank that is a
Lender Party or a member of the Federal Reserve System, issues (or the parent
of which issues) commercial paper rated as described in clause (c), is
organized under the laws of the United States or any State thereof and has
combined capital and surplus of at least $1,000,000,000, (c) commercial paper
in an aggregate amount of not more than $10,000,000 per issuer outstanding at
any time, issued by any corporation organized under the laws of any State of
the United States and rated at least "Prime-1" (or the then equivalent grade)
by Moody's Investors Services, Inc. or "A-1" (or the then equivalent grade) by
Standard & Poor's Ratings Group or (d) shares of money market mutual or
similar funds having assets in excess of $100,000,000 and which invest
exclusively in assets satisfying the requirements of clauses (a) through (c)
of this definition.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980.
"Cigar Guarantor" means Consolidated Cigar II Holdings Inc.,
a Delaware corporation.
"Cigar Guaranty" means the Third Amended and Restated Cigar
Guaranty dated as of December 16, 1996 made by Cigar Guarantor in favor of the
Lender Parties, the Term Credit Agreement Lenders, the Agents, the Term Agents
and the Collateral Agent, as such guaranty may be amended or otherwise
modified from time to time in accordance with its terms.
"Cigar Non-Operating Subsidiary" means C&F Guarantor.
"Cigar Pledge Agreement" means the Second Amended and
Restated Cigar Pledge Agreement dated as of December 16, 1996 made by Cigar
Guarantor and The Bank of New York, in its capacity as voting trustee, to the
Collateral Agent, as such agreement may be amended or otherwise modified from
time to time in accordance with its terms.
"Citibank" has the meaning specified in the recital of
parties to this Agreement.
"Clean-Down Period" means any period of 30 consecutive days
during which the aggregate principal amount of Tranche A Revolving Credit
Advances (other than an aggregate principal amount of Tranche A Revolving
Credit Advances equal to the lesser of
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10
(x) $50,000,000 and (y) an amount equal to the LYONS Utilization on any day
during such Clean-Down Period) and Letter of Credit Advances outstanding does
not exceed $0.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and the regulations promulgated and the rulings issued
thereunder.
"Coleman" means The Coleman Company, Inc., a Delaware
corporation.
"Coleman Guarantor" means Coleman (Parent) Holdings Inc.,
a Delaware corporation.
"Coleman Guaranty" means the Third Amended and Restated
Coleman Guaranty dated as of December 16, 1996 made by Coleman Guarantor in
favor of the Lender Parties, the Term Credit Agreement Lenders, the Agents,
the Term Agents and the Collateral Agent, as such guaranty may be amended or
otherwise modified from time to time in accordance with its terms.
"Coleman Holdings" means Coleman Holdings Inc., a Delaware
corporation.
"Coleman Non-Operating Subsidiaries" means Coleman Holdings
and Coleman Worldwide.
"Coleman Pledge Agreement" means the Second Amended and
Restated Pledge Agreement dated as of December 16, 1996 made by Coleman
Guarantor to the Collateral Agent, as such agreement may be amended or
otherwise modified from time to time in accordance with its terms.
"Coleman Tax Agreements" means (i) the Tax Allocation
Agreement dated as of August 24, 1990, as amended through the date hereof,
between Mafco and New Coleman, (ii) the Tax Sharing Agreement dated as of
February 26, 1992, as amended through the date hereof, among Mafco, Coleman
Finance Holdings Inc., Coleman and the Subsidiaries of Coleman party thereto,
(iii) the Tax Sharing Agreement dated as of February 26, 1992, as amended
through the date hereof, among Mafco, New Coleman, Coleman Finance Holdings
Inc. and the Subsidiaries of Coleman Finance Holdings Inc. party thereto, (iv)
the Tax Equivalent Payment Agreement dated as of March 4, 1992, as amended
through the date hereof, between Mafco and Coleman Finance Holdings Inc., (v)
the Supplemental Tax Sharing Agreement dated as of February 26, 1992, as
amended through the date hereof, between Coleman and M&F, (vi) the Tax Sharing
Agreement dated as of May 27, 1993 among Mafco, Coleman Worldwide, Coleman and
its Subsidiaries party thereto, (vii) the Tax Sharing Agreement dated as of
May 27, 1993 among Mafco, Coleman Worldwide and the other Persons party
thereto, (viii) the Tax Sharing Agreement dated as of July 22, 1993 between
Mafco and Coleman Holdings, and (ix) the Tax Sharing Termination Agreement
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11
dated as of May 27, 1993 among Mafco, New Coleman, Coleman and the other
Persons party thereto.
"Coleman Worldwide" means Coleman Worldwide Corporation,
a Delaware corporation.
"Coleman Worldwide Indenture" has the meaning specified in
Schedule VI.
"Coleman Worldwide LYONS" means the Liquid Yield Option
Notes Due 2013 issued by Coleman Worldwide.
"Coleman Worldwide Pledge Agreement" means the Amended and
Restated Non-Recourse Guaranty and Pledge Agreement dated as of December 16,
1996 made by Coleman Worldwide to the Collateral Agent, as such agreement may
be amended or otherwise modified from time to time in accordance with its
terms.
"Collateral" means all "Collateral" referred to in the
Collateral Documents and all other property that is or is intended to be
subject to any Lien in favor of the Collateral Agent, the Lender Parties, the
Term Credit Agreement Lenders, the Agents and the Term Agents.
"Collateral Accounts" means the Borrower Collateral Account,
the Mafco Collateral Account, the Second Mafco Collateral Account and the L/C
Cash Collateral Account.
"Collateral Agent" has the meaning specified in the recital
of the parties hereto.
"Collateral Documents" means each Security Agreement and
each Pledge Agreement.
"Commitment" means a Tranche A Revolving Credit Commitment,
a Tranche B Revolving Credit Commitment or a Letter of Credit Commitment.
"Consolidated" for any Person refers to the consolidation of
the financial statements of such Person and its Subsidiaries in accordance
with GAAP.
"Conversion", "Convert" and "Converted" each refer to a
conversion of Advances of one Type into Advances of the other Type pursuant to
Section 2.11.
"Debt" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money; (b) all Obligations of such
Person for the deferred purchase price of property or services (other than
trade payables not overdue by more than 60 days
<PAGE>
12
incurred in the ordinary course of such Person's business); (c) all
Obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments; (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to
repossession or sale of such property); (e) all Obligations of such Person as
lessee under leases that have been or should be, in accordance with GAAP,
recorded as capital leases ("Capitalized Leases"); (f) all Obligations,
contingent or otherwise, of such Person under acceptance, letter of credit or
similar facilities; (g) all Obligations of such Person to purchase, redeem,
retire, defease or otherwise acquire for value any capital stock of such
Person or any warrants, rights or options to acquire such capital stock; (h)
all Obligations of such Person in respect of Hedge Agreements; (i) all Debt of
others referred to in clauses (a) through (h) above guaranteed directly or
indirectly in any manner by such Person, or in effect guaranteed directly or
indirectly by such Person through an agreement (i) to pay or purchase such
Debt or to advance or supply funds for the payment or purchase of such Debt,
(ii) to purchase, sell or lease (as lessee or lessor) property, or to purchase
or sell services, primarily for the purpose of enabling the debtor to make
payment of such Debt or to assure the holder of such Debt against loss, (iii)
to supply funds to or in any other manner invest in the debtor (including any
agreement to pay for property or services irrespective of whether such
property is received or such services are rendered) or (iv) otherwise to
assure a creditor against loss; and (j) all Debt referred to in clauses (a)
through (i) above secured by (or for which the holder of such Debt has an
existing right, contingent or otherwise, to be secured by) any Lien on
property (including, without limitation, accounts and contract rights) owned
by such Person, even though such Person has not assumed or become liable for
the payment of such Debt. For all purposes of this Agreement and the other
Loan Documents, "Debt" shall not include Obligations of any Designated
Operating Company, Revlon, Marvel or any of their respective Subsidiaries in
respect of Hedge Agreements.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given or
time elapse or both.
"Defaulted Advance" means, with respect to any Lender Party
at any time, the amount of any Advance required to be made by such Lender
Party to the Borrower pursuant to Section 2.01 at or prior to such time which
has not been so made as of such time; provided, however, that any Advance made
by the Administrative Agent for the account of such Lender Party pursuant to
Section 2.02(c) shall not be considered a Defaulted Advance even if, at such
time, such Lender shall not have reimbursed the Administrative Agent therefor
as provided in Section 2.02(c). In the event that a portion of a Defaulted
Advance shall be deemed made pursuant to Section 2.16(a), the remaining
portion of such Defaulted Advance shall be considered a Defaulted Advance
originally required to be made pursuant to Section 2.01 on the same date as
the Defaulted Advance so deemed made in part.
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13
"Defaulted Amount" means, with respect to any Lender Party
at any time, any amount required to be paid by such Lender Party to the
Administrative Agent, the Collateral Agent or any other Lender Party hereunder
or under any other Loan Document at or prior to such time which has not been
so paid as of such time, including, without limitation, any amount required to
be paid by such Lender to (a) the Issuing Bank pursuant to Section 2.03(c) to
purchase a portion of a Letter of Credit Advance made by the Issuing Bank, (b)
the Administrative Agent pursuant to Section 2.02(c) to reimburse the
Administrative Agent for the amount of any Advance made by the Administrative
Agent for the account of such Lender Party, (c) any other Lender Party
pursuant to Section 2.14 to purchase any interest or participating interest in
Advances owing to such other Lender Party and (d) the Administrative Agent,
the Collateral Agent or the Issuing Bank pursuant to Section 7.05 to reimburse
the Administrative Agent, the Collateral Agent or the Issuing Bank, as the
case may be, for such Lender Party's ratable share of any amount required to
be paid by the Lender Parties to the Administrative Agent, the Collateral
Agent or the Issuing Bank as provided therein. In the event that a portion of
a Defaulted Amount shall be deemed paid pursuant to Section 2.16(b), the
remaining portion of such Defaulted Amount shall be considered a Defaulted
Amount originally required to be made hereunder or under any other Loan
Document on the same date as the Defaulted Amount so deemed paid in part.
"Defaulting Lender" means, at any time, any Lender Party
that, at such time, (a) owes a Defaulted Advance or a Defaulted Amount or (b)
shall take or be the subject of any action or proceeding of a type described
in Section 6.01(e).
"Defeased Debt Amount" means for any date of determination
for any Designated Person listed on Schedule VI an amount calculated in the
manner set forth on Schedule VI for such Designated Person or such other
amount as may be agreed by the Administrative Agent and the Borrower.
"Deposit Certificate" has the meaning specified in
Section 5.01(k).
"Designated Coleman Subsidiaries" means Coleman Holdings,
Coleman Worldwide and Coleman.
"Designated New World Subsidiaries" means New World
Guarantor, NWCG Holdings and New World; provided, however, that (i) on and
after the date of the sale, monetization or other disposal by Mafco or any of
its Subsidiaries of all of the News Corp. Preferred ADRs, New World Guarantor
shall no longer be a "Designated New World Subsidiary" and (ii) on and after
the consummation of the New World Acquisition, each of NWCG Holdings and New
World shall no longer be a "Designated New World Subsidiary".
"Designated Operating Companies" means (i) Coleman, New
World and MCG, (ii) on and after the Revlon Inclusion Date, Revlon and (iii)
solely during the Marvel
<PAGE>
14
Inclusion Period, Marvel; provided, however, that on and after the
consummation of the New World Acquisition, New World shall no longer be a
"Designated Operating Company".
"Designated Persons" means Coleman Guarantor, New World
Guarantor, C&F Guarantor and, on and after the Revlon Inclusion Date, Revlon
Guarantor; provided, however, that on and after the date of the sale,
monetization or other disposal by Mafco or any of its Subsidiaries of all of
the News Corp. Preferred ADRs, New World Guarantor shall no longer be a
"Designated Person".
"Documentation Agent" has the meaning specified in the
recital of parties to this Agreement.
"Dollars" and the sign "$" each mean lawful money of the
United States.
"Domestic Lending Office" means, with respect to any Lender
Party, the office of such Lender Party specified as its "Domestic Lending
Office" opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender Party, as the case may be, or
such other office of such Lender Party as such Lender Party may from time to
time specify to the Borrower and the Administrative Agent.
"Effective Date" has the meaning specified in Section 3.01.
"Eligible Assignee" means (a) any commercial bank organized
under the laws of the United States, or any State thereof, and having total
assets in excess of $1,000,000,000; (b) any savings and loan association or
savings bank organized under the laws of the United States, or any State
thereof, and having a net worth determined in accordance with GAAP in excess
of $500,000,000; (c) any commercial bank organized under the laws of any other
country that is a member of the Organization for Economic Cooperation and
Development ("OECD") or has concluded special lending arrangements with the
International Monetary Fund Associated with its General Arrangements to
Borrow, or a political subdivision of any such country, and having total
assets in excess of $1,000,000,000, so long as such bank is acting through a
branch or agency located in the United States, in the Cayman Islands or in the
country in which it is organized or another country that is described in this
clause (c); (d) the central bank of any country that is a member of the OECD;
(e) any finance company, insurance company or other financial institution or
fund (whether a corporation, partnership, trust or other entity) that (i) is
not affiliated with the Borrower, (ii) is engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of its business
and (iii) has total assets in excess of $500,000,000; and (f) any other Person
(other than an Affiliate of the Borrower) approved by the Administrative Agent
and the Borrower, such approval not to be unreasonably withheld.
<PAGE>
15
"Environmental Action" means any administrative, regulatory
or judicial action, suit, demand, demand letter, claim, notice of
non-compliance or violation, investigation, proceeding, consent order or
consent agreement based upon or arising out of any Environmental Law or any
Environmental Permit, including without limitation (a) any claim by any
governmental or regulatory authority for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any Environmental
Law and (b) any claim by any third party seeking damages, contribution, or
injunctive relief arising from alleged injury or threat of injury to health,
safety or the environment.
"Environmental Law" means any federal, state or local law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award relating to the environment, health or safety including, without
limitation, CERCLA, the Resource Conservation and Recovery Act, the Hazardous
Materials Transportation Act, the Clean Water Act, the Toxic Substances
Control Act, the Clean Air Act, the Safe Drinking Water Act, the Atomic Energy
Act, the Federal Insecticide, Fungicide and Rodenticide Act and the
Occupational Safety and Health Act.
"Environmental Permit" means any permit, approval,
identification number, license or other authorization required under any
Environmental Law.
"Equity Contribution Agreement" means the Amended and
Restated Equity Contribution Agreement dated as of December 16, 1996, between
the Borrower and the Borrower Parent, as such agreement may be amended or
otherwise modified from time to time in accordance with its terms.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA Affiliate" of any Person means any other Person that
for purposes of Title IV of ERISA is a member of such Person's controlled
group, or under common control with such Person, within the meaning of Section
414 of the Code.
"ERISA Event" with respect to any Person means (a) the
occurrence of a reportable event, within the meaning of Section 4043 of ERISA,
with respect to any Plan of such Person or any of its ERISA Affiliates unless
the 30-day notice requirement with respect to such event has been waived by
the PBGC; (b) the provision by the administrator of any Plan of such Person or
any of its ERISA Affiliates of a notice of intent to terminate such Plan,
pursuant to Section 4041(a)(2) of ERISA (including any such notice with
respect to a plan amendment referred to in Section 4041(e) of ERISA); (c) the
cessation of operations at a facility of such Person or any of its ERISA
Affiliates in the circumstances described in Section 4062(e) of ERISA; (d) the
withdrawal by such Person or any of its ERISA Affiliates from a Multiple
Employer Plan during a plan year for which it was a substantial employer,
<PAGE>
16
as defined in Section 4001(a)(2) of ERISA; (e) the failure by such Person or
any of its ERISA Affiliates to make a payment to a Plan described in Section
302(f)(1) of ERISA; (f) the adoption of an amendment to a Plan of such Person
or any of its ERISA Affiliates requiring the provision of security to such
Plan, pursuant to Section 307 of ERISA; or (g) the institution by the PBGC of
proceedings to terminate a Plan of such Person or any of its ERISA Affiliates,
pursuant to Section 4042 of ERISA, or the occurrence of any event or condition
described in Section 4042 of ERISA that would constitute grounds for the
termination of, or the appointment of a trustee to administer, such Plan;
provided, however, that an event described in clause (a), (c) or (d) of this
definition, or in clause (b) of this definition solely with respect to a
standard termination under Section 4041(b) of ERISA, shall be an ERISA Event
only if such event is reasonably likely to result in a material liability of
such Person or any of its ERISA Affiliates.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve System,
as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any
Lender Party, the office of such Lender Party specified as its "Eurodollar
Lending Office" opposite its name on Schedule I hereto or in the Assignment
and Acceptance pursuant to which it became a Lender Party (or, if no such
office is specified, its Domestic Lending Office), or such other office of
such Lender Party as such Lender Party may from time to time specify to the
Borrower and the Administrative Agent.
"Eurodollar Rate" means, for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Borrowing, an interest
rate per annum equal to the rate per annum obtained by dividing (a) the
average (rounded upward to the nearest whole multiple of 1/100 of 1% per
annum, if such average is not such a multiple) of the rate per annum at which
deposits in U.S. dollars are offered by the principal office of Citibank in
London, England to prime banks in the London interbank market at 11:00 A.M.
(London time) two Business Days before the first day of such Interest Period
for a period equal to such Interest Period by (b) a percentage equal to 100%
minus the Eurodollar Rate Reserve Percentage for such Interest Period. The
Eurodollar Rate for each Interest Period shall be determined by the
Administrative Agent on the basis of applicable rates furnished to and
received by the Administrative Agent from Citibank two Business Days before
the first day of such Interest Period, subject, however, to the provisions of
Section 2.07.
"Eurodollar Rate Advance" means an Advance that bears
interest as provided in Section 2.07(a)(ii).
"Eurodollar Rate Reserve Percentage" of any Lender Party for
any Interest Period for any Advance means the reserve percentage applicable
during such Interest Period
<PAGE>
17
(or if more than one such percentage shall be so applicable, the daily average
of such percentages for those days in such Interest Period during which any
such percentage shall be so applicable) under regulations issued from time to
time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve requirement)
for such Lender Party with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities having a term equal to such Interest
Period.
"Events of Default" has the meaning specified in
Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"Exchange Agreement" means the Exchange Agreement dated as
of October 3, 1994 among FN Parent, FN Holdings and Gerald J. Ford.
"Existing Credit Agreement" has the meaning specified in
the Preliminary Statements.
"Existing Lenders" has the meaning specified in the
Preliminary Statements.
"Facility" means the Tranche A Revolving Credit Facility,
the Tranche B Revolving Credit Facility or the Letter of Credit Facility.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by it.
"FG Guarantor" means First Gibraltar Guarantor Corp.,
a Delaware corporation.
"Financial Institutions" has the meaning specified in the
recital of parties to this Agreement.
"First Gibraltar" means First Gibraltar Holdings Inc.,
a Delaware corporation.
"First Gibraltar Charter Document" means the restated
certificate of incorporation of First Gibraltar.
<PAGE>
18
"First Gibraltar Credit Agreement" means the $150,000,000
Credit Agreement dated as of September 27, 1996 among First Gibraltar, FG
Guarantor, the banks and other financial institutions party thereto,
NationsBank, N.A., as administrative agent, NationsBanc Capital Markets, Inc.,
as syndication agent and Citibank, as documentation agent, as the same may be
amended, modified or otherwise supplemented from time to time.
"First Gibraltar Loan Agreement" means the Amended and
Restated Loan Agreement dated as of December 16, 1996 between the Borrower
Parent and First Gibraltar, as amended or otherwise modified from time to time
in accordance with its terms.
"Flavors Guarantor" means Flavors (Parent) Holdings Inc.,
a Delaware corporation.
"Flavors Guaranty" means the Third Amended and Restated
Flavors Guaranty dated as of December 16, 1996 made by Flavors Guarantor in
favor of the Lender Parties, the Term Credit Agreement Lenders, the Agents,
the Term Agents and the Collateral Agent, as such guaranty may be amended or
otherwise modified from time to time in accordance with its terms.
"Flavors Non-Operating Subsidiary" means C&F Guarantor.
"Flavors Pledge Agreement" means the Second Amended and
Restated Flavors Pledge Agreement dated as of December 16, 1996 made by
Flavors Guarantor and The Bank of New York, in its capacity as voting trustee,
to the Collateral Agent, as such agreement may be amended or otherwise
modified from time to time in accordance with its terms.
"FN Documents" means the FN Holdings Debt Document, the FN
Holdings New Debt Document, the Second New FN Holdings Debt Document, the FN
Parent Debt Document, the Exchange Agreement and the Stockholders Agreement.
"FN Escrow" means First Nationwide Escrow Corp., a
Delaware corporation.
"FN Holdings" means First Nationwide Holdings Inc.,
a Delaware corporation.
"FN Holdings Debt" means the 12-1/4% Senior Notes due 2001
issued by FN Holdings in an aggregate principal amount equal to $200,000,000.
"FN Holdings Debt Document" means the Indenture dated as of
July 15, 1994 made by FN Holdings in favor of The First National Bank of
Boston, as trustee, in
<PAGE>
19
connection with the FN Holdings Debt and any other agreement or instrument
which governs the terms of the FN Holdings Debt.
"FN Holdings New Debt" means the 9-1/8% Senior Subordinated
Notes Due 2003 issued by FN Holdings in an aggregate principal amount equal to
$140,000,000.
"FN Holdings New Debt Document" means the Indenture dated as
of January 31, 1996 made by FN Holdings in favor of The Bank of New York, as
trustee, in connection with the FN Holdings New Debt and any other agreement
or instrument which governs the terms of the FN Holdings New Debt.
"FN Holdings Preferred Stock" means the $150,000,000
liquidation value of Cumulative Perpetual Preferred Stock issued by FN
Holdings and any shares of Cumulative Perpetual Preferred Stock to be issued
in lieu of cash dividends payable on the FN Holdings Preferred Stock.
"FN Management Incentive Plan" means the Management
Incentive Plan for Certain Employees of the Bank established by FN Holdings to
provide long-term incentives to certain key executives of the Bank.
"FN Parent" means First Nationwide (Parent) Holdings Inc.,
a Delaware corporation.
"FN Parent Debt" means the 12-1/2% Senior Notes due 2003
issued by FN Parent in an aggregate principal amount equal to $455,000,000.
"FN Parent Debt Document" means the Indenture dated as of
April 15, 1996 made by FN Parent in favor of The Bank of New York, as trustee,
in connection with the FN Parent Debt and any other agreement or instrument
which governs the terms of the FN Parent Debt.
"FN Parties" means the Bank, FN Holdings and FN Parent.
"FN Tax Agreement" means the Tax Sharing Agreement dated as
of January 1, 1994 among Mafco, FN Holdings, the Bank and certain Subsidiaries
of FN Holdings and the Bank.
"Four Star" means Four Star Holdings Corp., a Delaware
corporation.
"Four Star Pledge Agreement" means the Amended and Restated
Non-Recourse Guaranty and Pledge Agreement dated as of December 16, 1996 made
by Four Star and The Bank of New York, in its capacity as voting trustee, to
the Collateral
<PAGE>
20
Agent, as such agreement may be amended or otherwise modified from time to
time in accordance with its terms.
"Fully Satisfied" shall mean, with respect to the Payment
Obligations as of any date, that, on or before such date, (a) the principal of
and interest accrued to such date on all outstanding Advances shall have been
paid in full in cash, (b) the Commitments shall have been terminated in full,
(c) all outstanding Letters of Credit shall have been (i) terminated or (ii)
cash collateralized by an amount sufficient in the reasonable judgment of the
Administrative Agent and the Required Lenders to secure any claims under such
outstanding Letters of Credit or (iii) secured by one or more letters of
credit on terms and conditions, and with one or more financial institutions,
reasonably satisfactory to the Administrative Agent and the Required Lenders
and (d) all fees, expenses and other amounts then due and payable which
constitute Payment Obligations shall have been paid in cash; provided,
however, that on such date none of the Administrative Agent and the Lender
Parties shall have made any claims in respect of Payment Obligations against
the Borrower or any other Loan Party under any provision of any of the Loan
Documents that has not been cash collateralized by an amount sufficient in the
reasonable judgment of the Administrative Agent, the Required Lenders and any
such Lender Party (if such Lender Party is not one of the Lenders constituting
the Required Lenders) to secure such claim.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect as of the date of, and used in, the
preparation of the audited consolidated financial statements referred to in
Section 4.01(f), except that with respect to (x) the preparation of any
financial statement required to be furnished pursuant to clause (i), (ii) or
(iii) of Section 5.01(j) and (y) changes to financial statement presentation
and accounting policies contemplated by Section 5.02(h), "GAAP" shall mean
such principles as in effect from time to time in the United States of
America.
"Guarantor" means each of Mafco, Borrower Parent, Coleman
Guarantor, New World Guarantor, Flavors Guarantor, Cigar Guarantor, C&F
Guarantor and, on and and after the Revlon Inclusion Date, Revlon Guarantor;
provided, however, that on and after the date of the sale, monetization or
other disposal by Mafco or any of its Subsidiaries of all of the News Corp.
Preferred ADRs, New World Guarantor shall no longer be a "Guarantor".
"Guaranty" means each of the Borrower Parent Guaranty, the
C&F Guaranty, the Cigar Guaranty, the Coleman Guaranty, the Flavors Guaranty,
the Mafco Guaranty, the New World Guaranty and, on and after the Revlon
Inclusion Date, the Revlon Guaranty; provided, however, that on and after the
date of the sale, monetization or other disposal by Mafco or any of its
Subsidiaries of all of the News Corp. Preferred ADRs, the New World Guaranty
shall no longer be a "Guaranty".
<PAGE>
21
"Hazardous Materials" means (a) petroleum or petroleum
products, natural or synthetic gas, asbestos in any form that is or could
become friable, urea formaldehyde foam insulation and radon gas, (b) any
substances defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous wastes",
"restricted hazardous wastes", "toxic substances", "toxic pollutants",
"contaminants" or "pollutants", or words of similar import, under any
Environmental Law and (c) any other substance exposure to which is regulated
under any Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar agreements.
"Indemnified Party" has the meaning specified in Section
8.04(c).
"Initial Date" means, for purposes of Section 2.13, in the
case of the Administrative Agent and each Financial Institution, the date of
its execution and delivery of this Agreement and, in the case of each Lender
other than a Financial Institution, the date of the Assignment and Acceptance
pursuant to which it becomes a Lender.
"Initial Issuing Bank" means Citibank, N.A.
"Interest Period" means, for each Eurodollar Rate Advance
comprising part of the same Borrowing, the period commencing on the date of
such Eurodollar Rate Advance or the date of the Conversion of any Base Rate
Advance into such Eurodollar Rate Advance, and ending on the last day of the
period selected by the Borrower pursuant to the provisions below and,
thereafter, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the period
selected by the Borrower pursuant to the provisions below. The duration of
each such Interest Period shall be one, two, three or six months, as the
Borrower may, upon notice received by the Administrative Agent not later than
11:00 A.M. (New York City time) on the third Business Day prior to the first
day of such Interest Period, select; provided, however, that
(i) the Borrower may not select (x) any Interest Period with
respect to any Eurodollar Rate Advance under the Tranche A Revolving
Credit Facility which ends after June 3, 1999 and (y) any Interest
Period with respect to any Eurodollar Rate Advance under the Tranche
B Revolving Credit Facility which ends after June 30, 1997;
(ii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next
succeeding Business Day, provided that, if such extension would cause
the last day of such Interest Period to occur in the next following
calendar
<PAGE>
22
month, the last day of such Interest Period shall occur on the next
preceding Business Day; and
(iii) whenever the first day of any Interest Period occurs
on a day in a calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months
in such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
"Investment" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any capital stock, warrants,
rights, options, debt obligations or other securities of such Person, any
capital contribution to such Person or any other investment in such Person,
including, without limitation, any arrangement pursuant to which the investor
incurs Debt of the types referred to in clauses (i) and (j) of the definition
of "Debt" in respect of such Person.
"Issuing Bank" means the Initial Issuing Bank and each
Eligible Assignee to which the Letter of Credit Commitment hereunder has been
assigned pursuant to Section 8.07.
"L/C Cash Collateral Account" has the meaning specified in
the Borrower Security Agreement.
"L/C Certificate" means a certificate of the Borrower
delivered to the Administrative Agent in respect of a Letter of Credit Advance
(A) to the effect that on the date of delivery (i) the representations and
warranties contained in the Loan Documents are correct in all material
respects on and as of such date, as though made on and as of such date (except
to the extent such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties were true,
correct and complete in all material respects on and as of such earlier date
and (ii) no event has occurred and is continuing which constitutes a Default
and (B) specifying the Type of Advance such Letter of Credit Advance shall be
and, if such Letter of Credit Advance is to be a Eurodollar Rate Advance, the
Interest Period for such Letter of Credit Advance.
"L/C Related Documents" has the meaning specified in Section
2.04(b)(ii).
"Lender Party" means any Lender or the Issuing Bank.
"Lenders" means the Financial Institutions listed on the
signature pages hereof and each Eligible Assignee that shall become a party
hereto pursuant to Section 8.07.
"Letter of Credit" has the meaning specified in Section
2.01(c).
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23
"Letter of Credit Advance" means an advance made by the
Issuing Bank or any Tranche A Revolving Credit Lender pursuant to Section
2.03(c).
"Letter of Credit Agreement" has the meaning specified in
Section 2.03(a).
"Letter of Credit Commitment" means, with respect to the
Issuing Bank at any time, the amount set forth opposite the Issuing Bank's
name on Schedule I hereto under the caption "Letter of Credit Commitment" or,
if the Issuing Bank has entered into one or more Assignments and Acceptances,
the amount set forth for the Issuing Bank in the Register maintained by the
Administrative Agent pursuant to Section 8.07(c) as the Issuing Bank's "Letter
of Credit Commitment", as such amount may be reduced at or prior to such time
pursuant to Section 2.05.
"Letter of Credit Facility" means, at any time, an amount
equal to the amount of the Issuing Bank's Letter of Credit Commitment at such
time.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on
title to real property.
"Loan Documents" means this Agreement, the Notes, each Letter
of Credit Agreement, each Guaranty, each Collateral Document, the Equity
Contribution Agreement and the First Gibraltar Loan Agreement.
"Loan Party" means each of the Borrower, each Guarantor,
M&F, Andrews, Four Star, New Coleman and First Gibraltar.
"Look-Forward Certificate" has the meaning specified in
Section 5.01(k).
"LYONS Utilization" means, on any date, the aggregate amount
of cash applied by the Borrower from and after the Effective Date, as shown in
the most recent report furnished to the Administrative Agent and the Lender
Parties pursuant to the provisions of Section 5.01(p), to the purchase of the
Coleman Worldwide LYONS or the payment, in cash, of the exchange price to a
holder of Coleman Worldwide LYONS in respect of such holder's Coleman
Worldwide LYONS.
"M&F" means MacAndrews & Forbes Holdings Inc., a Delaware
corporation.
"M&F Pledge Agreement" means the Amended and Restated
Non-Recourse Guaranty and Pledge Agreement dated as of December 16, 1996 made
by M&F to the
<PAGE>
24
Collateral Agent, as such agreement may be amended or otherwise modified from
time to time in accordance with its terms.
"Mafco" has the meaning specified in the Preliminary
Statements.
"Mafco Collateral Account" has the meaning specified in the
Mafco Security Agreement.
"Mafco Guaranty" means the Fourth Amended and Restated Mafco
Guaranty dated as of December 16, 1996 made by Mafco in favor of the Lender
Parties, the Term Credit Agreement Lenders, the Agents, the Term Agents and
the Collateral Agent, as such guaranty may be amended or otherwise modified
from time to time in accordance with its terms.
"Mafco Pledge Agreement" means the Second Amended and
Restated Pledge Agreement dated as of December 16, 1996 made by Mafco and The
Bank of New York, in its capacity as voting trustee, to the Collateral Agent,
as such agreement may be amended or otherwise modified from time to time in
accordance with its terms.
"Mafco Security Agreement" means the Fourth Amended and
Restated Mafco Security Agreement dated as of December 16, 1996 made by Mafco
to the Collateral Agent, as such agreement may be amended or otherwise
modified from time to time in accordance with its terms.
"Managing Agents" has the meaning specified in the recital
of parties to this Agreement.
"Mandatory Clean-Down Period" means, (i) the 30-day period
commencing on July 1, 1997 and terminating on July 30, 1997, if a Clean-Down
Period has not commenced (after the date of this Agreement) prior to July 1,
1997 and (ii) thereafter, for each 12-month period commencing on August 1 and
terminating on July 31, the 30 day period commencing on July 2 and terminating
on July 31, if a Clean-Down Period has not commenced prior to July 2 during
such 12-month period; provided, however, that if a Clean-Down Period has not
commenced by the date that is 30 days prior to the end of any period of 15
consecutive months, a Mandatory Clean-Down Period shall commence on such date.
"Margin Stock" has the meaning specified in Regulation U of
the Board of Governors of the Federal Reserve System and any successor
regulations thereto, as in effect from time to time.
"Marvel" means Marvel Entertainment Group, Inc., a Delaware
corporation.
<PAGE>
25
"Marvel IV Required Lenders" means at any time Lenders and
Term Credit Agreement Lenders owed or holding at least a majority in interest
of the sum of (a) the aggregate principal amount of the Advances outstanding
at such time, (b) the aggregate principal amount of the Debt outstanding at
such time under the Term Credit Agreement, (c) the aggregate Available Amount
of all Letters of Credit outstanding at such time, (d) the aggregate Unused
Tranche A Revolving Credit Commitment, (e) the aggregate Unused Tranche B
Revolving Credit Commitment and (f) the aggregate unused "Commitments" under
the Term Credit Agreement (provided that, for purposes hereof, neither the
Borrower, nor any of its Affiliates, if a Lender or a Term Credit Agreement
Lender, shall be included in (x) the Lenders and the Term Credit Agreement
Lenders holding such amount of the Advances, the Debt or the Available Amount
of all Letters of Credit or having such amount of the Unused Tranche A
Revolving Credit Commitment, Unused Tranche B Revolving Credit Commitment or
the "Commitments" under the Term Credit Agreement or (y) determining the
aggregate unpaid principal amount of the Advances or such Debt, the total
Unused Tranche A Revolving Credit Commitment, the total Unused Tranche B
Revolving Credit Commitment or the total "Commitments" under the Term Credit
Agreement); provided, however, that if any Lender shall be a Defaulting Lender
at such time or any Term Credit Agreement Lender shall be a "Defaulting
Lender" under the Term Credit Agreement at such time, there shall be excluded
from the determination of Marvel IV Required Lenders at such time (i) the
aggregate principal amount of the Advances owing to such Lender (in its
capacity as Lender) and outstanding at such time, (ii) the aggregate principal
amount of Debt under the Term Credit Agreement owing to such Term Credit
Agreement Lender and outstanding at such time, (iii) such Lender's Pro Rata
Share of the aggregate Available Amount of all Letters of Credit issued by
such Lender as of such time, (iv) the aggregate Unused Tranche A Revolving
Credit Commitment and Unused Tranche B Revolving Credit Commitment of such
Lender at such time and (v) the aggregate unused portion of the "Commitments"
of such Term Credit Agreement Lender under the Term Credit Agreement at such
time; provided, further, that on and after the Term Credit Agreement
Termination Date, the Marvel IV Required Lenders shall be the Required Lenders
hereunder. For purposes of this definition, the aggregate principal amount of
Letter of Credit Advances owing to the Issuing Bank and the Available Amount
of each Letter of Credit shall be considered to be owed to the Lenders ratably
in accordance with their respective Tranche A Revolving Credit Commitment.
"Marvel Inclusion Period" means the period commencing on the
date that Mafco or any of its Affiliates acquires the New Marvel Shares and
terminating on the later to occur of (x) the Tranche B Termination Date and
(y) the Term Credit Agreement Termination Date.
"Material Adverse Change" means, with respect to any Person,
a material adverse change in the condition (financial or otherwise),
operations, assets, business or prospects of such Person and its Subsidiaries,
taken as a whole.
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26
"Material Adverse Effect" means, with respect to any Person,
a material adverse effect upon (a) the condition (financial or otherwise),
operations, assets, business or prospects of such Person and its Subsidiaries,
taken as a whole, or (b) the ability of a Loan Party to perform its
obligations under any Loan Document, or (c) the rights and remedies of the
Administrative Agent, the Collateral Agent or any Lender Party under any Loan
Document.
"MCG" means Mafco Consolidated Group Inc., a Delaware
corporation.
"MCG Tax Agreement" means the Tax Sharing Agreement dated as
of June 15, 1995 among Mafco, MCG and Subsidiaries of MCG party thereto.
"Multiemployer Plan" of any Person means a multiemployer
plan, as defined in Section 4001(a)(3) of ERISA, which is subject to Title IV
of ERISA, and to which such Person or any of its ERISA Affiliates is making or
accruing an obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make contributions.
"Multiple Employer Plan" of any Person means a single
employer plan, as defined in Section 4001(a)(15) of ERISA, which is subject to
Title IV of ERISA, and (a) that is maintained for employees of such Person or
any of its ERISA Affiliates and at least one Person other than such Person and
its ERISA Affiliates or (b) that was so maintained and in respect of which
such Person or any of its ERISA Affiliates could have liability under Section
4064 or 4069 of ERISA in the event such plan has been or were to be
terminated.
"Net Cash Proceeds" means, with respect to any sale, lease,
transfer or other disposition of any asset or the sale or issuance by any
Person of any Debt or capital stock, any securities convertible into or
exchangeable for capital stock or any warrants, rights or options to acquire
capital stock, the sum of (i) the aggregate amount of cash received from time
to time by or on behalf of such Person in connection with such transaction
plus (ii) the aggregate principal amount of any Debt listed on Schedule VII
hereto that is assumed, directly or indirectly, by any Person (other than
Mafco or an Affiliate of Mafco) in connection with, or as a result of, such
transaction, after deducting therefrom only (a) reasonable and customary
brokerage commissions, underwriting fees and discounts, legal fees and
expenses, finder's fees, accountants' fees and expenses and other similar
fees, expenses and commissions, (b) the amount of taxes payable or estimated
in good faith to be payable within 12 months following the date of the
consummation of such transaction in connection with or as a result of such
transaction and (c) the amount of any Debt that, by the terms of such Debt, is
required to be repaid upon such disposition, in each case to the extent, but
only to the extent, that the amounts so deducted are payable to a Person that
is not an Affiliate (other than such amounts that are payable by the Borrower
and its Subsidiaries to an Affiliate
<PAGE>
27
pursuant to a Related Document) and are properly attributable to such
transaction or to the asset that is the subject thereof.
"Net Equity Value" means for any day of determination for
any Designated Person:
(i) with respect to Coleman Guarantor, an amount (not less
than $0) equal to the excess of (A) the product of the number of
shares of common stock of Coleman owned directly or indirectly by
Coleman Guarantor times the average closing price during the
Calculation Period relating to such day of determination of such
common stock on the New York Stock Exchange over (B) the Defeased
Debt Amount of Coleman Guarantor;
(ii) with respect to New World Guarantor, (x) prior to the
date of the consummation of the New World Acquisition, an amount (not
less than $0) equal to the excess of (A) the product of the number of
shares of Class B common stock of New World owned directly or
indirectly by New World Guarantor times the average closing price of
the Class A common stock during the Calculation Period relating to
such day of determination for such Class A Common Stock on either the
New York Stock Exchange or the Nasdaq National Market System over (B)
the Defeased Debt Amount of New World Guarantor and (y) on and after
the date of the consummation of the New World Acquisition, an amount
(not less than $0) equal to the excess of (1) the product of the
number of News Corp. Preferred ADRs pledged in favor of the
Collateral Agent under the Collateral Documents times, the average
closing price of the News Corp. Preferred ADRs during the Calculation
Period relating to such day of determination for such News Corp.
Preferred ADRs on either the New York Stock Exchange or the Nasdaq
National Market System over (2) the product of (A) the aggregate
principal amount of Debt outstanding on such day of determination
under the Term Credit Agreement times (B) 1.25;
(iii) with respect to C&F Guarantor, an amount (not less
than $0) equal to the product of the number of shares of common stock
of MCG owned directly or indirectly by C&F Guarantor times the
average closing price during the Calculation Period relating to such
day of determination of such common stock on the New York Stock
Exchange; and
(iv) with respect to Revlon Guarantor (on and after the
Revlon Inclusion Date), an amount (not less than $0) equal to the
excess of (A) the product of the number of shares of common stock of
Revlon owned directly or indirectly by Revlon Guarantor times the
average closing price during the Calculation Period relating to such
day of determination of such common stock on the New York Stock
Exchange over (B) the Defeased Debt Amount of Revlon Guarantor.
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28
"Net Residual Value" means for any day of determination an
amount equal to the aggregate Net Equity Value of the Designated Persons on
such day.
"New Coleman" means New Coleman Holdings Inc., a Kansas
corporation.
"New Coleman Pledge Agreement" means the Amended and
Restated Non-Recourse Guaranty and Pledge Agreement dated as of December 16,
1996 made by New Coleman and The Bank of New York, in its capacity as voting
trustee, to the Collateral Agent, as such agreement may be amended or
otherwise modified from time to time in accordance with its terms.
"New Marvel Shares" means all shares of capital stock of
Marvel issued after the date hereof and received by Andrews or any of its
Affiliates.
"New World" means New World Communications Group
Incorporated, a Delaware corporation.
"New World Acquisition" means the acquisition by News Corp.
of NWCG Holdings and the shares of Class B common stock of New World held by
New World Guarantor pursuant to the News Corp. Contract and related documents.
"New World Guarantor" means NWCG (Parent) Holdings
Corporation, a Delaware corporation.
"New World Guaranty" means the Fourth Amended and Restated
New World Guaranty dated as of December 16, 1996 made by New World Guarantor
in favor of the Lender Parties, the Term Credit Agreement Lenders, the Agents,
the Term Agents and the Collateral Agent, as such guaranty may be amended or
otherwise modified from time to time in accordance with its terms.
"New World Pledge Agreement" means the Second Amended and
Restated Pledge and Assignment Agreement dated as of December 16, 1996 made by
New World Guarantor to the Collateral Agent, as such agreement may be amended
or otherwise modified from time to time in accordance with its terms.
"Newco" means DROF Holdings Inc., a Delaware corporation.
"Newco Loan" means the loan by First Gibraltar to Newco in
an aggregate principal amount of $150,000,000 for the sole purpose of
purchasing the FN Holdings Preferred Stock.
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29
"News Corp." means The News Corporation Limited, a South
Australia corporation.
"News Corp. Contract" means the Stock Purchase Agreement
dated as of September 24, 1996 among New World Guarantor, News Corp. and Fox
Television Stations, Inc., as such agreement may be amended, modified or
supplemented in accordance with the terms of the Loan Documents.
"News Corp. Preferred ADRs" means the American Depositary
Shares of News Corp., each of which represents four fully paid and
nonassessable Preferred Limited Voting Ordinary Shares, of A $.50 each of
News Corp., received by New World Guarantor pursuant to the terms of the News
Corp. Contract.
"Nonratable Assignment" means an assignment by a Lender
Party pursuant to Section 8.07(a) of a portion of its rights and obligations
under this Agreement, other than an assignment of a uniform, and not a
varying, percentage of all of the rights and obligations of such Lender Party
under and in respect of all of the Facilities (other than the Letter of Credit
Facility).
"Notes" means the Tranche A Revolving Credit Notes and the
Tranche B Revolving Credit Notes.
"Notice of Borrowing" has the meaning specified in Section
2.02(a).
"Notice of Issuance" has the meaning specified in Section
2.03(a).
"Notice of Termination" has the meaning specified in Section
2.01(c).
"NWCG Holdings" means NWCG Holdings Corporation, a Delaware
corporation.
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim, whether or not the
right of any creditor to payment in respect of such claim is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, disputed,
undisputed, legal, equitable, secured or unsecured, and whether or not such
claim is discharged, stayed or otherwise affected by any proceeding referred
to in Section 6.01(e). Without limiting the generality of the foregoing, the
Obligations of the Loan Parties under the Loan Documents include (a) the
obligation to pay principal, interest, Letter of Credit commissions, charges,
expenses, fees, attorneys' fees and disbursements, indemnities and other
amounts payable by any Loan Party under any Loan Document and (b) the
obligation
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30
to reimburse any amount in respect of any of the foregoing that any Lender
Party, in its sole discretion, may elect to pay or advance on behalf of such
Loan Party.
"Original Credit Agreement" has the meaning specified in the
Preliminary Statements.
"Original Lenders" has the meaning specified in the
Preliminary Statements.
"Other Taxes" has the meaning specified in Section 2.13(b).
"Original Transaction" has the meaning specified in the
Preliminary Statements.
"Payment Obligations" shall mean all principal, interest,
fees, Letter of Credit commissions, charges, expenses, attorneys' fees and
expenses, indemnities and any other amounts payable by the Loan Parties under
the Loan Documents.
"PBGC" means the Pension Benefit Guaranty Corporation, or
any successor agency or entity performing substantially the same functions.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any political
subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer
Plan.
"Pledge Agreements" means the C&F Pledge Agreement, the
Cigar Pledge Agreement, the Coleman Pledge Agreement, the Coleman Worldwide
Pledge Agreement, the Flavors Pledge Agreement, the Four Star Pledge
Agreement, the Mafco Pledge Agreement, the M&F Pledge Agreement, the New
Coleman Pledge Agreement, the New World Pledge Agreement, the Second Andrews
Pledge Agreement and, on and after the Revlon Inclusion Date, the Revlon
Pledge Agreement; provided, however, that, on and after the date of the sale,
monetization or other disposal by Mafco or any of its Subsidiaries of all of
the News Corp. Preferred ADRs, the New World Pledge Agreement shall no longer
be a "Pledge Agreement".
"Pro Rata Share" of any amount means, with respect to any
Lender at any time, the product of such amount times a fraction the numerator
of which is the amount of such Lender's Tranche A Revolving Credit Commitment
at such time and the denominator of which is the Tranche A Revolving Credit
Facility at such time.
"Register" has the meaning specified in Section 8.07(c).
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31
"Related Documents" means the Coleman Tax Agreements, the FN
Tax Agreement and the MCG Tax Agreement.
"Required Lenders" means at any time Lenders owed or holding
at least a majority in interest of the sum of (a) the aggregate principal
amount of the Advances outstanding at such time, (b) the aggregate Available
Amount of all Letters of Credit outstanding at such time, (c) the aggregate
Unused Tranche A Revolving Credit Commitment and (d) the aggregate Unused
Tranche B Revolving Credit Commitment (provided that, for purposes hereof,
neither the Borrower, nor any of its Affiliates, if a Lender, shall be
included in (x) the Lenders holding such amount of the Advances or the
Available Amount of all Letters of Credit or having such amount of the Unused
Tranche A Revolving Credit Commitment or the Unused Tranche B Revolving Credit
Commitment or (y) determining the aggregate unpaid principal amount of the
Advances or the total Unused Tranche A Revolving Credit Commitment or the
total Unused Tranche B Revolving Credit Commitment); provided, however, that
if any Lender shall be a Defaulting Lender at such time, there shall be
excluded from the determination of Required Lenders at such time (i) the
aggregate principal amount of the Advances owing to such Lender (in its
capacity as a Lender) and outstanding at such time, (ii) such Lender's Pro
Rata Share of the aggregate Available Amount of all Letters of Credit issued
by such Lender as of such time, (iii) the aggregate Unused Tranche A Revolving
Credit Commitment of such Lender at such time and (iv) the aggregate Unused
Tranche B Revolving Credit Commitment of such Lender at such time. For
purposes of this definition, the aggregate principal amount of Letter of
Credit Advances owing to the Issuing Bank and the Available Amount of each
Letter of Credit shall be considered to be owed to the Tranche A Revolving
Credit Lenders ratably in accordance with their respective Tranche A Revolving
Credit Commitments.
"Revlon" means Revlon, Inc., a Delaware corporation.
"Revlon Guarantor" means Revlon Guarantor Corp., a Delaware
corporation.
"Revlon Guaranty" means the Revlon Guaranty to be made, at
the Borrower's option, by Revlon Guarantor in favor of the Lender Parties, the
Term Credit Agreement Lenders, the Agents, the Term Agents and the Collateral
Agent in substantially the form of Exhibit E-8, as such guaranty may be
amended or otherwise modified from time to time in accordance with its terms.
"Revlon Holdings Statement" shall mean a statement that the
sum of the fair market value of Revlon Worldwide Corporation plus the fair
market value of National Health Care Group, Inc. constitutes at least 95% of
the fair market value of Revlon Holdings Inc.
"Revlon Inclusion Date" means the date on which the
Administrative Agent and the Term Administrative Agent deliver a notice to the
Borrower that the Administrative
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32
Agent or the Collateral Agent, as the case may be, shall have received, in
form and substance satisfactory to the Administrative Agent and in sufficient
copies for each Lender (or the requirement that such document be delivered
shall have been duly waived):
(i) certified copies of the resolutions of the
board of directors of Revlon Guarantor approving the Revlon
Guaranty and the Revlon Pledge Agreement, and of all
documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to the Revlon
Guaranty and the Revlon Pledge Agreement;
(ii) a certificate of the Secretary or an Assistant
Secretary of Revlon Guarantor certifying the names and true
signatures of the officers of Revlon Guarantor authorized to
sign the Revlon Guaranty and the Revlon Pledge Agreement;
(iii) a copy of a certificate of the Secretary of
State of the state of incorporation of each of National
Health Care Group Inc., Revlon Guarantor, Revlon Holdings
Inc., Revlon Worldwide Corporation and Revlon, dated
reasonably near the Revlon Inclusion Date, listing the
charter of such Person and each amendment thereto on file in
his office and certifying that (A) such amendments are the
only amendments to such Person's charter on file in his
office, (B) such Person has paid all franchise taxes to the
date of such certificate and (C) such Person is duly
incorporated or organized and in good standing under the
laws of such state;
(iv) (A) a certificate of each of National Health
Care Group Inc., Revlon Guarantor, Revlon Holdings Inc. and
Revlon Worldwide Corporation signed on behalf of such Person
by its President or a Vice President and its Secretary or
any Assistant Secretary, dated as of the Revlon Inclusion
Date (the statements made in such certificate shall be true
on and as of the Revlon Inclusion Date), certifying as to
(1) the absence of any amendments to the charter of such
Person since the date of the Secretary of State's
certificate referred to in clause (iii) above, (2) the
trueness and correctness of the bylaws of such Person
attached to such certificate, (3) the due incorporation and
good standing of such Person as a corporation under the laws
of the relevant state of incorporation, and the absence of
any proceeding for the dissolution or liquidation of such
Person, (4) the truth in all material respects of the
representations and warranties made by such Person contained
in the Revlon Guaranty and the Revlon Pledge Agreement as
though made on and as of the Revlon Inclusion Date and (5)
the absence of any event occurring and continuing, or
resulting from the Revlon Inclusion Date, that constitutes a
Default and (B) a certificate of Revlon Guarantor signed on
behalf of Revlon
<PAGE>
33
Guarantor by its President or a Vice President and its
Secretary or any Assistant Secretary, dated as of the Revlon
Inclusion Date (the statements made in such certificate
shall be true on and as of the Revlon Inclusion Date),
certifying as to (1) the absence of any amendments to the
charter of Revlon since the date of the Secretary of State's
Certificate referred to in clause (iii) above, (2) the
trueness and correctness of the bylaws of Revlon attached to
such certificate and (3) the due incorporation and good
standing of Revlon as a corporation organized under the laws
of the State of Delaware, and the absence of any proceeding
for the dissolution or liquidation of Revlon;
(v) the Revlon Guaranty in substantially the
form of Exhibit E-8, duly executed by Revlon Guarantor;
(vi) the Revlon Pledge Agreement in substantially
the form of Exhibit F-12, duly executed by Revlon Guarantor,
together with (1) certificates representing the Pledged
Shares referred to in the Revlon Pledge Agreement
accompanied by undated stock powers executed in blank, (2)
acknowledgment copies or stamped receipt copies of financing
statements, duly filed on or before such date under the
Uniform Commercial Code of all jurisdictions that the
Administrative Agent may deem necessary or desirable in
order to perfect the Liens created by the Revlon Pledge
Agreement, covering the Collateral described in the Revlon
Pledge Agreement, and (3) completed requests for
information, dated on or before such date listing the
financing statements referred to in clause (2) above and all
other effective financing statements filed in the
jurisdictions referred to in clause (2) above that name
Revlon Guarantor, as debtor, together with copies of such
other financing statements;
(vii) certified copies of (A) a voting trust
agreement among Revlon Finance Corporation, Revlon
Guarantor, the Collateral Agent and The Bank of New York, as
voting trustee, in substantially the form of the voting
trust agreements delivered pursuant to Section
3.01(h)(xiii)(A) and (B) the charter of Revlon Guarantor,
the terms and conditions of which shall be substantially
similar to those contained in the charter of Coleman
Guarantor;
(viii) a letter, in form and substance satisfactory
to the Administrative Agent, from Revlon Guarantor to KPMG
Peat Marwick, independent certified public accountants,
advising such accountants that the Administrative Agent and
the Lenders have relied upon the financial statements of
Revlon in determining whether to enter into the Loan
Documents and have been authorized to exercise all rights of
Revlon to require such accountants to disclose any and all
financial statements and any other information of any kind
that they may have with respect to Revlon and its
Subsidiaries and directing
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34
such accountants to comply with any reasonable request of
the Administrative Agent or any Lender for such information;
and
(ix) favorable opinions of counsel to Mafco
reasonably satisfactory to the Lenders, in form and
substance reasonably satisfactory to the Lenders.
"Revlon Pledge Agreement" means the Pledge Agreement to be
made, at the Borrower's option, by Revlon Guarantor to the Collateral Agent in
substantially the form of Exhibit F-12, as such agreement may be amended or
otherwise modified from time to time in accordance with its terms.
"Revlon Tax Agreements" shall have the meaning specified
in the Revlon Guaranty.
"Revolving Credit Facilities" means the Tranche A Revolving
Credit Facility and the Tranche B Revolving Credit Facility.
"Second Andrews Pledge Agreement" means the Second Amended
and Restated Non-Recourse Guaranty and Pledge Agreement dated as of December
16, 1996 made by Andrews and The Bank of New York, in its capacity as voting
trustee, to the Collateral Agent, as such agreement may be amended or
otherwise modified from time to time in accordance with its terms.
"Second Credit Agreement" has the meaning specified in the
Preliminary Statements.
"Second Lenders" has the meaning specified in the
Preliminary Statements.
"Second Mafco Collateral Account" has the meaning specified
in the Mafco Security Agreement.
"Second New FN Holdings Debt" means the 10-5/8% Senior
Subordinated Notes due 2003 issued by FN Escrow in an aggregate principal
amount equal to $575,000,000, which will be assumed by FN Holdings upon the
merger of FN Escrow with and into FN Holdings.
"Second New FN Holdings Debt Document" means the Indenture
dated as of September 19, 1996 between FN Escrow and The Bank of New York, as
trustee, in connection with the Second New FN Holdings Debt and any other
agreement or instrument which governs the terms of the Second New FN Holdings
Debt.
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35
"Security Agreements" means the Borrower Security Agreement,
the Borrower Parent Security Agreement and the Mafco Security Agreement.
"Single Employer Plan" of any Person means a single employer
plan, as defined in Section 4001(a)(15) of ERISA, which is subject to Title IV
of ERISA, and (a) that is maintained for employees of such Person or any of
its ERISA Affiliates and no Person other than such Person and its ERISA
Affiliates or (b) in respect of which such Person or any of its ERISA
Affiliates could have liability under Section 4069 of ERISA in the event such
plan has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on
a particular date, that on such date (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the present
fair salable value of the assets of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured, (c) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature and (d) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's property would
constitute an unreasonably small capital. The amount of contingent liabilities
at any time shall be computed as the amount that, in the light of all the
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Specified Holding Company Debt" means the 13% Subordinated
Debentures due March 1, 1999 issued by M&F pursuant to the Indenture dated as
of March 1, 1984 between M&F and the United States Trust Company of New York
and the 10% Senior Subordinated Debentures due 1999 issued by Andrews pursuant
to the Indenture dated as of June 4, 1990 between Andrews and First Trust of
California, National Association (as successor trustee to Security Pacific
National Trust Company (New York)).
"Standby Letter of Credit" means any Letter of Credit issued
under the Letter of Credit Facility, other than a Trade Letter of Credit.
"Stockholders Agreement" means the Stockholders Agreement
dated as of October 3, 1994, among FN Parent, FN Holdings and Gerald J. Ford,
as such agreement may be amended, modified or otherwise supplemented from time
to time with the consent of the Required Lenders.
"Subsidiary" of any Person means any corporation,
partnership, joint venture, trust or estate of which (or in which) more than
50% of (a) the Voting Stock of such corporation, (b) the interest in the
capital or profits of such partnership or joint venture or
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36
(c) the beneficial interest in such trust or estate is at the time directly or
indirectly owned or controlled by such Person, by such Person and one or more
of its other Subsidiaries or by one or more of such Person's other
Subsidiaries; provided, however, that for all purposes of the Loan Documents,
Toy Biz, Inc. shall not be a Subsidiary of any of the Loan Parties.
"Supermajority Lenders" means at any time Lenders owed or
holding at least 67% of the sum of (a) the aggregate principal amount of the
Advances outstanding at such time, (b) the aggregate Available Amount of all
Letters of Credit outstanding at such time, (c) the aggregate Unused Revolving
Tranche A Credit Commitment and (d) the aggregate Unused Tranche B Revolving
Credit Commitment (provided that, for purposes hereof, neither the Borrower
nor any of its Affiliates, if a Lender, shall be included in (x) the Lenders
holding such amount of the Advances or the Available Amount of all Letters of
Credit or having such amount of the Unused Tranche A Revolving Credit
Commitment or the Unused Tranche B Revolving Credit Commitment or (y)
determining the aggregate unpaid principal amount of the Advances or the total
Unused Tranche A Revolving Credit Commitment or the total Tranche B Revolving
Credit Commitment); provided, however, that if any Lender shall be a
Defaulting Lender at such time, there shall be excluded from the determination
of Supermajority Lenders at such time (i) the aggregate principal amount of
the Advances owing to such Lender (in its capacity as a Lender) and
outstanding at such time, (ii) such Lender's Pro Rata Share of the aggregate
Available Amount of all Letters of Credit issued by such Lender at such time,
(iii) the aggregate Unused Tranche A Revolving Credit Commitment of such
Lender at such time and (iv) the aggregate Unused Tranche B Revolving Credit
Commitment of such Lender at such time. For purposes of this definition, the
aggregate principal amount of Letter of Credit Advances owing to the Issuing
Bank and the Available Amount of each Letter of Credit shall be considered to
be owed to the Tranche A Revolving Credit Lenders ratably in accordance with
their respective Tranche A Revolving Credit Commitments.
"Syndication Agent" has the meaning specified in the
recital of parties to this Agreement.
"Tax Certificate" has the meaning specified in Section
5.01(j)(xiii).
"Taxes" has the meaning specified in Section 2.13(a).
"Term Administrative Agent" has the meaning specified in
the Preliminary Statements.
"Term Agents" has the meaning specified in the Preliminary
Statements.
"Term Credit Agreement" has the meaning specified in the
Preliminary Statements.
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37
"Term Credit Agreement Lenders" has the meaning specified
in the Preliminary Statement.
"Term Credit Agreement Termination Date" means the date on
which all "Payment Obligations" (as defined in the Term Credit Agreement)
shall have been "Fully Satisfied" (as defined in the Term Credit Agreement).
"Term Documentation Agent" has the meaning specified in
the Preliminary Statements.
"Term Facilities" means the "Term Facilities" as defined
in the Term Credit Agreement.
"Term Syndication Agent" has the meaning specified in the
Preliminary Statements.
"Third Credit Agreement" has the meaning specified in the
Preliminary Statements.
"Third Lenders" has the meaning specified in the Preliminary
Statements.
"Trade Letter of Credit" means any Letter of Credit that is
issued under the Letter of Credit Facility for the benefit of a supplier of
inventory to the Borrower or any of its Subsidiaries to effect payment for
such Inventory.
"Tranche A Revolving Credit Advance" has the meaning
specified in Section 2.01(a).
"Tranche A Revolving Credit Borrowing" means a borrowing
consisting of simultaneous Tranche A Revolving Credit Advances of the same
Type made by the Tranche A Revolving Credit Lenders.
"Tranche A Revolving Credit Commitment" means, with respect
to any Tranche A Revolving Credit Lender at any time, the amount set forth
opposite such Lender's name on Schedule I hereto under the caption "Tranche A
Revolving Credit Commitment" or, if such Lender has entered into one or more
Assignments and Acceptances, set forth for such Lender in the Register
maintained by the Administrative Agent pursuant to Section 8.07(c) as such
Lender's "Tranche A Revolving Credit Commitment", as such amount may be
reduced at or prior to such time pursuant to Section 2.05.
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38
"Tranche A Revolving Credit Facility" means, at any time,
the aggregate amount of the Tranche A Revolving Credit Lenders' Tranche A
Revolving Credit Commitments at such time.
"Tranche A Revolving Credit Lender" means any Lender that
has a Tranche A Revolving Credit Commitment.
"Tranche A Revolving Credit Note" means a promissory note of
the Borrower payable to the order of any Tranche A Revolving Credit Lender, in
substantially the form of Exhibit A-1 hereto, evidencing the aggregate
indebtedness of the Borrower to such Tranche A Revolving Credit Lender
resulting from the Tranche A Revolving Credit Advances made by such Tranche A
Revolving Credit Lender.
"Tranche A Termination Date" means the earlier of (a) June
3, 1999 or (b) the date of termination in whole of the Letter of Credit
Commitments and the Tranche A Revolving Credit Commitments pursuant to Section
2.05 or 6.01.
"Tranche B Revolving Credit Advance" has the meaning
specified in Section 2.01(b).
"Tranche B Revolving Credit Borrowing" means a borrowing
consisting of simultaneous Tranche B Revolving Credit Advances of the same
Type made by the Tranche B Revolving Credit Lenders.
"Tranche B Revolving Credit Commitment" means, with respect
to any Tranche B Revolving Credit Lender at any time, the amount set forth
opposite such Lender's name on Schedule I hereto under the caption "Tranche B
Revolving Credit Commitment" or, if such Lender has entered into one or more
Assignments and Acceptances, set forth for such Lender in the Register
maintained by the Administrative Agent pursuant to Section 8.07(c) as such
Lender's "Tranche B Revolving Credit Commitment", as such amount may be
reduced at or prior to such time pursuant to Section 2.05.
"Tranche B Revolving Credit Facility" means, at any time,
the aggregate amount of the Tranche B Revolving Credit Lenders' Tranche B
Revolving Credit Commitments at such time.
"Tranche B Revolving Credit Lender" means any Lender that
has a Tranche B Revolving Credit Commitment.
"Tranche B Revolving Credit Note" means a promissory note of
the Borrower payable to the order of any Tranche B Revolving Credit Lender, in
substantially the form of Exhibit A-2 hereto, evidencing the aggregate
indebtedness of the Borrower to such Tranche
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39
B Revolving Credit Lender resulting from the Tranche B Revolving Credit
Advances made by such Tranche B Revolving Credit Lender.
"Tranche B Termination Date" means the earliest of (a) June
30, 1997, (b) the date of the termination (and abandonment) of the News Corp.
Contract, (c) the date of the sale, monetization or other disposal by Mafco or
any of its Subsidiaries of all of the News Corp. Preferred ADRs or (d) the
date of termination in whole of the Tranche B Revolving Credit Commitments
pursuant to Section 2.05 or 6.01.
"Treasury Regulations" means the temporary and final
regulations promulgated under the Internal Revenue Code of 1986, as amended
from time to time.
"Type" refers to the distinction between Advances bearing
interest at the Base Rate and Advances bearing interest at the Eurodollar
Rate.
"Unfunded Pension Liabilities" with respect to any Plan
means the excess, if any, of its accumulated benefit obligation ("ABO"), as
determined in accordance with Statement of Financial Accounting Standards No.
87 or any successor thereto ("FAS 87") over the fair market value of its
assets (as of such date) (provided that in determining the ABO for this
purpose, the interest, mortality and other relevant actuarial assumptions used
to fund such Plan as of its most recent actuarial valuation) shall be used
instead of the interest, mortality and other relevant actuarial assumptions
that would otherwise be prescribed by FAS 87.
"Unused Tranche A Revolving Credit Commitment" means, with
respect to any Tranche A Revolving Credit Lender at any time, (a) such
Lender's Tranche A Revolving Credit Commitment at such time minus (b) the sum
of (i) the aggregate principal amount of all Tranche A Revolving Credit
Advances and Letter of Credit Advances made by such Lender (in its capacity as
a Lender) pursuant to Sections 2.02(a) and 2.03(c), respectively, and
outstanding at such time, plus (ii) such Lender's Pro Rata Share of (A) the
aggregate Available Amount of all Letters of Credit outstanding at such time
and (B) the aggregate principal amount of all Letter of Credit Advances made
by the Issuing Bank pursuant to Section 2.03(c) and outstanding at such time.
"Unused Tranche B Revolving Credit Commitment" means, with
respect to any Tranche B Revolving Credit Lender at any time, (a) such
Lender's Tranche B Revolving Credit Commitment at such time minus (b) the
aggregate principal amount of all Tranche B Revolving Credit Advances made by
such Lender (in its capacity as a Lender) pursuant to Section 2.02(b) and
outstanding at such time.
"Voting Stock" means capital stock issued by a corporation,
or equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of
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40
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section
3(1) of ERISA.
"Withdrawal Liability" has the meaning specified in Part I
of Subtitle E of Part IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement
in the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including" and the words "to"
and "until" each means "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances. (a) The Tranche A Revolving
Credit Advances. Each Tranche A Revolving Credit Lender severally agrees, on
the terms and conditions hereinafter set forth, to make advances (each a
"Tranche A Revolving Credit Advance") to the Borrower from time to time on any
Business Day during the period from the date hereof until the Tranche A
Termination Date in an aggregate amount not to exceed at any time outstanding
such Lender's Tranche A Revolving Credit Commitment on such Business Day;
provided, however, that (x) on each day, after giving effect to any Tranche A
Revolving Credit Borrowing on such day, the sum of (i) the aggregate amount of
the Tranche A Revolving Credit Advances (other than, on and after the Tranche
B Termination Date, an aggregate principal amount of Tranche A Revolving
Credit Advances outstanding on such day equal to the lesser of (x) $50,000,000
and (y) an amount equal to the LYONS Utilization on such day) outstanding on
such day plus (ii) the aggregate amount of the Letter of Credit Advances
outstanding on such day plus (iii) the aggregate Available Amount of all
Letters of Credit outstanding on such day, shall not exceed an amount equal to
the aggregate Tranche A Revolving Credit Commitments of the Lenders on such
day less (iv) on and after the Tranche B Termination Date, $50,000,000 and (y)
on each day (on and after the Tranche B Termination Date) on or before the
date that the LYONS Utilization equals or exceeds $50,000,000, after giving
effect to any Tranche A Revolving Credit Borrowing on such day, the aggregate
Unused Tranche A Revolving Credit Commitments of all the Lenders shall not
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41
be less than the excess, if any, of (1) $50,000,000 over (2) an amount equal
to the LYONS Utilization on such day. Each Tranche A Revolving Credit
Borrowing shall be in an aggregate amount not less than $5,000,000 or an
integral multiple of $1,000,000 in excess thereof (other than a Tranche A
Revolving Credit Borrowing the proceeds of which shall be used solely to repay
or prepay in full outstanding Letter of Credit Advances) and shall consist of
Tranche A Revolving Credit Advances made on the same day by the Tranche A
Revolving Credit Lenders ratably according to their Tranche A Revolving Credit
Commitments. Within the limits of each Tranche A Revolving Credit Lender's
Unused Tranche A Revolving Credit Commitment in effect from time to time, the
Borrower may borrow under this Section 2.01(a), prepay pursuant to Section
2.06(a) and reborrow under this Section 2.01(a); provided, however, that to
the extent the Borrower makes an optional prepayment of the Tranche A
Revolving Credit Advances pursuant to Section 2.06(a) from funds on deposit in
the Mafco Collateral Account that constitute Net Cash Proceeds of an Asset
Sale that are required, pursuant to the provisions of Section 7(q) of the
Mafco Guaranty, to be applied to prepay or repay outstanding Debt of any A
Company, a portion of the Tranche A Revolving Credit Facility equal to the
amount of such prepayment shall only be available (x) to repay or prepay
outstanding Debt of any A Company or (y) to be redeposited in the Mafco
Collateral Account.
(b) The Tranche B Revolving Credit Advances. Each Tranche B
Revolving Credit Lender severally agrees, on the terms and conditions
hereinafter set forth, to make advances (each a "Tranche B Revolving Credit
Advance") to the Borrower from time to time on any Business Day during the
period from the date hereof until the Tranche B Termination Date in an
aggregate amount not to exceed at any time outstanding such Lender's Tranche B
Revolving Credit Commitment on such Business Day. Each Tranche B Revolving
Credit Borrowing shall be in an aggregate amount not less than $5,000,000 or
an integral multiple of $1,000,000 in excess thereof and shall consist of
Tranche B Revolving Credit Advances made on the same day by the Tranche B
Revolving Credit Lenders ratably according to their Tranche B Revolving Credit
Commitments. Within the limits of each Tranche B Revolving Credit Lender's
Unused Tranche B Revolving Credit Commitment in effect from time to time, the
Borrower may borrow under this Section 2.01(b), prepay pursuant to Section
2.06(a) and reborrow under this Section 2.01(b).
(c) Letters of Credit. The Issuing Bank agrees, on the terms
and conditions hereinafter set forth, to issue letters of credit (the "Letters
of Credit") for the account of the Borrower from time to time on any Business
Day during the period from the date hereof until 60 days before the Tranche A
Termination Date (i) in an aggregate Available Amount for all Letters of
Credit not to exceed at any time the Issuing Bank's Letter of Credit
Commitment at such time and (ii) in an Available Amount for each such Letter
of Credit not to exceed the least of (x) the Letter of Credit Facility at such
time, (y) the Unused Tranche A Revolving Credit Commitments of the Lenders at
such time and (z) an amount equal to the aggregate Tranche A Revolving Credit
Commitments of the
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42
Lenders at such time, less the Tranche A Revolving Credit Advances (other
than, on and after the Tranche B Termination Date, an aggregate principal
amount of Tranche A Revolving Credit Advances outstanding at such time equal
to the lesser of (1) $50,000,000 and (2) an amount equal to the LYONS
Utilization on such day) outstanding at such time, less the aggregate
Available Amount of all Letters of Credit outstanding at such time, less, on
and after the Tranche B Termination Date, $50,000,000. No Letter of Credit
shall have an expiration date (including all rights of the Borrower or the
beneficiary to require renewal) later than the earlier of 60 days before the
Tranche A Termination Date and (A) in the case of a Standby Letter of Credit,
one year after the date of issuance thereof, but may by its terms be
automatically renewable annually unless the Issuing Bank has notified the
Borrower (with a copy to the Administrative Agent) on or after the 60th
Business Day prior to the first anniversary (or any subsequent anniversary) of
the date of issuance thereof but in any event at least 30 Business Days prior
to the date of automatic renewal of its election not to renew such Standby
Letter of Credit (a "Notice of Termination") and (B) in the case of a Trade
Letter of Credit, 60 days after the date of issuance thereof; provided,
however, that the terms of each Standby Letter of Credit that is automatically
renewable annually shall (x) require the Issuing Bank to give the beneficiary
named in such Standby Letter of Credit notice of any Notice of Termination,
(y) permit such beneficiary, upon receipt of such notice, to draw under such
Standby Letter of Credit prior to the date such Standby Letter of Credit
otherwise would have been automatically renewed and (z) not permit the
expiration date (after giving effect to any renewal) of such Standby Letter of
Credit in any event to be extended to a date later than 60 days before the
Termination Date. If a Notice of Termination is given by the Issuing Bank
pursuant to the immediately preceding sentence, such Standby Letter of Credit
shall expire on the date on which it otherwise would have been automatically
renewed. Within the limits of the Letter of Credit Facility, and subject to
the limits referred to above, the Borrower may request the issuance of Letters
of Credit under this Section 2.01(c), repay any Letter of Credit Advances
resulting from drawings thereunder pursuant to Section 2.03(c) and request the
issuance of additional Letters of Credit under this Section 2.01(c).
(d) Clean-Down. Notwithstanding the provisions of Sections
2.01(a) and 2.01(c), no Tranche A Revolving Credit Borrowings may be made
under Section 2.01(a) during any Clean-Down Period, other than, on or before
the date on which the LYONS Utilization equals or exceeds $50,000,000, Tranche
A Revolving Credit Borrowings in respect of which the Borrower certifies that
the proceeds of such Tranche A Revolving Credit Borrowing shall be used solely
to purchase Coleman Worldwide LYONS or to make the payment in cash of the
exchange price to a holder of Coleman Worldwide LYONS in respect of such
holder's Coleman Worldwide LYONS.
SECTION 2.02. Making the Advances. (a) Except as
otherwise provided in Section 2.16, each Borrowing shall be made on notice
given not later than 11:00 A.M. (New York City time) on the first Business Day
prior to the date of a proposed Borrowing
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43
consisting of Base Rate Advances or the third Business Day prior to the date
of a proposed Borrowing consisting of Eurodollar Rate Advances, by the
Borrower to the Administrative Agent, which shall give to each Lender prompt
notice thereof by telecopier, telex or cable. Each such notice of a Borrowing
(a "Notice of Borrowing") shall be by telecopier, telex or cable, and, with
respect to a Notice of Borrowing by telex or cable, confirmed immediately
thereafter in writing, in substantially the form of Exhibit C hereto,
specifying therein the requested (i) date of such Borrowing, (ii) Facility
under which such Borrowing is to be made, (iii) Type of Advances comprising
such Borrowing, (iv) aggregate amount of such Borrowing and (v) Interest
Period for each Eurodollar Rate Advance included in such Borrowing. In the
case of a proposed Borrowing comprised of Eurodollar Rate Advances, the
Administrative Agent shall promptly notify the Borrower and each Lender of the
applicable interest rate under Section 2.07(a)(ii). Each Appropriate Lender
shall, before 12:00 noon (New York City time) on the date of such Borrowing,
make available for the account of its Applicable Lending Office to the
Administrative Agent at the Administrative Agent's Account, in same day funds,
such Lender's ratable portion of such Borrowing in accordance with the
respective Commitments under the applicable Facility of such Lender and the
other Appropriate Lenders. After the Administrative Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in Article
III, the Administrative Agent will make such funds available by crediting the
Borrower's Account.
(b) Each Notice of Borrowing shall be irrevocable and
binding on the Borrower. In the case of any Borrowing that the related Notice
of Borrowing specifies is to be comprised of Eurodollar Rate Advances, the
Borrower shall indemnify each Appropriate Lender against any loss, cost or
expense incurred by such Lender as a result of any failure to fulfill on or
before the date specified in such Notice of Borrowing for such Borrowing the
applicable conditions set forth in Article III, including, without limitation,
any loss, cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the
Advance to be made by such Lender as part of such Borrowing when such Advance,
as a result of such failure, is not made on such date.
(c) Unless the Administrative Agent shall have received
notice from an Appropriate Lender prior to the date of any Borrowing under a
Facility under which such Lender has a Commitment that such Lender will not
make available to the Administrative Agent such Lender's ratable portion of
such Borrowing, the Administrative Agent may assume, or at its option request
confirmation from such Lender, that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (a) of this Section 2.02 and the Administrative
Agent may, in reliance upon such assumption or confirmation (as the case may
be), make available to the Borrower on such date a corresponding amount. If
and to the extent that such Lender shall not have so made such ratable portion
available to the Administrative Agent, such Lender and the Borrower severally
agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the
date such
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44
amount is made available to the Borrower until the date such amount is repaid
to the Administrative Agent, at (i) in the case of the Borrower, the interest
rate applicable at such time under Section 2.07 to Advances comprising such
Borrowing and (ii) in the case of such Lender, the cost (expressed as a rate
per annum) to the Administrative Agent of funding such Lender's ratable
portion; provided, however, that, upon the request of such Lender, the
Administrative Agent shall provide such Lender with a certificate as to the
calculation of such amount. If such Lender shall repay to the Administrative
Agent such corresponding amount, such amount so repaid shall constitute such
Lender's Advance as part of such Borrowing for purposes of this Agreement.
(d) The failure of any Lender to make the Advance to be made
by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Advance on the date of such
Borrowing, but no Lender shall be responsible for the failure of any other
Lender to make the Advance to be made by such other Lender on the date of any
Borrowing.
(e) The Borrower may not request a Borrowing comprised of
Eurodollar Rate Advances or, pursuant to Section 2.11, Convert Base Rate
Advances into Eurodollar Rate Advances or select a new Interest Period for
existing Eurodollar Rate Advances if, after the making or Conversion of such
Advances or the selection of such Interest Period, the number of outstanding
Borrowings comprised of Eurodollar Rate Advances having different Interest
Periods (whether of different duration or commencing on different dates) would
exceed 6.
SECTION 2.03. Issuance of and Drawings and Reimbursement
Under Letters of Credit. (a) Request for Issuance. Each Letter of Credit shall
be issued upon notice, given not later than 11:00 A.M. (New York City time) on
the seventh Business Day prior to the date of the proposed issuance of such
Letter of Credit, by the Borrower to the Issuing Bank, which shall give to the
Administrative Agent and each Tranche A Revolving Credit Lender prompt notice
thereof by telex or telecopier. Each such notice of issuance of a Letter of
Credit (a "Notice of Issuance") shall be by telephone, confirmed immediately
in writing, or telex or telecopier, specifying therein the requested (A) date
of such issuance (which shall be a Business Day), (B) Available Amount of such
Letter of Credit, (C) expiration date of such Letter of Credit, (D) name and
address of the beneficiary of such Letter of Credit and (E) form of such
Letter of Credit, and shall be accompanied by such application and agreement
for letter of credit as such Issuing Bank may specify to the Borrower for use
in connection with such requested Letter of Credit (a "Letter of Credit
Agreement"). If the requested form of such Letter of Credit is acceptable to
the Issuing Bank in its sole discretion, the Issuing Bank will, upon
fulfillment of the applicable conditions set forth in Article III, make such
Letter of Credit available to the Borrower at its office referred to in
Section 8.02 or as otherwise agreed with the Borrower in connection with such
issuance. In
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45
the event and to the extent that the provisions of any Letter of Credit
Agreement shall conflict with this Agreement, the provisions of this Agreement
shall govern.
(b) Letter of Credit Reports. The Issuing Bank shall furnish
(A) to the Administrative Agent and the Borrower on the first Business Day of
each week during which one or more Letters of Credit have been issued or drawn
upon, a written report summarizing issuance and expiration dates of Letters of
Credit issued during the previous week and drawings during such week under all
Letters of Credit issued, (B) to each Tranche A Revolving Credit Lender and
the Borrower on the first Business Day of each month a written report
summarizing issuance and expiration dates of Letters of Credit issued during
the preceding month and drawings during such month under all Letters of Credit
and (C) to the Administrative Agent, each Tranche A Revolving Credit Lender
and the Borrower on the first Business Day of each calendar quarter a written
report setting forth the average daily aggregate Available Amount during the
preceding calendar quarter of all Letters of Credit.
(c) Drawing and Reimbursement. The payment by the Issuing
Bank of a draft drawn under any Letter of Credit shall constitute for all
purposes of this Agreement the making by the Issuing Bank of a Letter of
Credit Advance, in the amount of such draft, which shall be a Base Rate
Advance until the third Business Day after the date which the Borrower shall
have delivered a L/C Certificate in respect of such Letter of Credit Advance
which specified that such Advance shall be a Eurodollar Advance. Upon written
demand by the Issuing Bank, with a copy of such demand to the Administrative
Agent, each Tranche A Revolving Credit Lender shall purchase from the Issuing
Bank, and the Issuing Bank shall sell and assign to each such Tranche A
Revolving Credit Lender, such Lender's Pro Rata Share of such outstanding
Letter of Credit Advance as of the date of such purchase, by making available
for the account of its Applicable Lending Office to the Administrative Agent
for the account of the Issuing Bank, by deposit to the Administrative Agent's
Account, in same day funds, an amount equal to the portion of the outstanding
principal amount of such Letter of Credit Advance to be purchased by such
Lender. Promptly after receipt thereof, the Administrative Agent shall
transfer such funds to the Issuing Bank. The Borrower hereby agrees to each
such sale and assignment. Each Tranche A Revolving Credit Lender irrevocably
and unconditionally agrees to purchase its Pro Rata Share of an outstanding
Letter of Credit Advance on (i) the Business Day on which demand therefor is
made by the Issuing Bank, provided notice of such demand is given not later
than 11:00 A.M. (New York City time) on such Business Day or (ii) the first
Business Day next succeeding such demand if notice of such demand is given
after such time. Upon any such assignment by the Issuing Bank to any other
Lender of a portion of a Letter of Credit Advance, the Issuing Bank represents
and warrants to such other Lender that the Issuing Bank is the legal and
beneficial owner of such interest being assigned by it, free and clear of any
liens, but makes no other representation or warranty and assumes no
responsibility with respect to such Letter of Credit Advance, the Loan
Documents or any Loan Party. If and to the extent that any Tranche A Revolving
Credit Lender shall not have so made the amount of
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46
such Letter of Credit Advance available to the Administrative Agent, such
Tranche A Revolving Credit Lender agrees to pay to the Administrative Agent
forthwith on demand such amount together with interest thereon, for each day
from the date of demand by the Issuing Bank until the date such amount is paid
to the Administrative Agent, at the Federal Funds Rate for its account or the
account of the Issuing Bank, as applicable. If such Lender shall pay to the
Administrative Agent such amount for the account of the Issuing Bank on any
Business Day, such amount so paid in respect of principal shall constitute a
Letter of Credit Advance made by such Lender on such Business Day for purposes
of this Agreement, and the outstanding principal amount of the Letter of
Credit Advance made by the Issuing Bank shall be reduced by such amount on
such Business Day.
(d) Failure to Make Letter of Credit Advances. The failure
of any Tranche A Revolving Credit Lender to make the Letter of Credit Advance
to be made by it on the date specified in Section 2.03(c) shall not relieve
any other Tranche A Revolving Credit Lender of its obligation hereunder to
make its Letter of Credit Advance on such date, but no Tranche A Revolving
Credit Lender shall be responsible for the failure of any other Tranche A
Revolving Credit Lender to make the Letter of Credit Advance to be made by
such other Tranche A Revolving Credit Lender on such date.
SECTION 2.04. Repayment. (a) Tranche A Revolving Credit
Advances. The Borrower shall repay to the Administrative Agent for the ratable
account of the Tranche A Revolving Credit Lenders on the Tranche A Termination
Date the aggregate principal amount of the Tranche A Revolving Credit Advances
then outstanding.
(b) Tranche B Revolving Credit Advances. The Borrower shall
repay to the Administrative Agent for the ratable account of the Tranche B
Revolving Credit Lenders on the Tranche B Termination Date the aggregate
principal amount of the Tranche B Revolving Credit Advances then outstanding.
(c) Letter of Credit Advances. (i) The Borrower shall repay
to the Administrative Agent for the account of the Issuing Bank and each other
Tranche A Revolving Credit Lender that has made a Letter of Credit Advance on
the Tranche A Termination Date the outstanding principal amount of each Letter
of Credit Advance made by each of them; provided, however, that if the
Borrower fails to deliver a L/C Certificate in respect of such Letter of
Credit Advance on the Business Day following the date on which the Issuing
Bank paid a draft drawn under a Letter of Credit which resulted in such Letter
of Credit Advance, the Borrower shall repay such Letter of Credit Advance on
demand.
(ii) The Obligations of the Borrower under this Agreement,
any Letter of Credit Agreement and any other agreement or instrument relating
to any Letter of Credit shall be unconditional and irrevocable, and shall be
paid strictly in accordance with the terms
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47
of this Agreement, such Letter of Credit Agreement and such other agreement or
instrument under all circumstances, including, without limitation, the
following circumstances:
(A) any lack of validity or enforceability of any Loan
Document, any Letter of Credit Agreement, any Letter of Credit or any
other agreement or instrument relating thereto (all of the foregoing
being, collectively, the "L/C Related Documents");
(B) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Obligations of the
Borrower in respect of any L/C Related Document or any other
amendment or waiver of or any consent to departure from all or any of
the L/C Related Documents;
(C) the existence of any claim, set-off, defense or other
right that the Borrower may have at any time against any beneficiary
or any transferee of a Letter of Credit (or any Persons for whom any
such beneficiary or any such transferee may be acting), the Issuing
Bank or any other Person, whether in connection with the transactions
contemplated by the L/C Related Documents or any unrelated
transaction;
(D) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(E) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or certificate that does not strictly
comply with the terms of such Letter of Credit;
(F) any exchange, release or non-perfection of any
Collateral or other collateral, or any release or amendment or waiver
of or consent to departure from any Guaranty or any other guarantee,
for all or any of the Obligations of the Borrower in respect of the
L/C Related Documents; or
(G) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing, including, without
limitation, any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Borrower or a guarantor.
SECTION 2.05. Termination or Reduction of the Commitments.
(a) Optional. The Borrower shall have the right, upon at least three Business
Days' prior notice to the Administrative Agent, to terminate in whole or
reduce ratably in part the unused portions of the Letter of Credit Facility,
the Unused Tranche A Revolving Credit Commitments and the Unused Tranche B
Revolving Credit Commitments; provided that each
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partial reduction of a Facility (i) shall be in an aggregate amount of
$10,000,000 or an integral multiple of $1,000,000 in excess thereof and (ii)
shall be made ratably among the Appropriate Lenders in accordance with their
Commitments with respect to such Facility.
(b) Mandatory. (i) On any date (A) on which a cash equity
contribution is deposited in the Borrower Collateral Account as a result of a
loan made by First Gibraltar to the Borrower Parent pursuant to the terms of
the First Gibraltar Loan Agreement or on which a deposit of amounts paid under
or in connection with any Related Documents is made to the Mafco Collateral
Account or on which a deposit of amounts constituting Net Cash Proceeds from
an Asset Sale is made to the Mafco Collateral Account and (B) either (I) a
Default has occurred and is continuing, (II) the Borrower fails to deliver a
Look-Forward Certificate or a Deposit Certificate with respect to such deposit
in accordance with the terms of section 5.01(k) or (III) the Marvel IV
Required Lenders determine, in their reasonable discretion, within 15 Business
Days following the date of the receipt of the Look-Forward Certificate or
within 2 Business Days following the date of the receipt of Deposit
Certificate, as the case may be, referred to in clause (B)(II), that the pro
forma amounts available to be loaned by First Gibraltar to Borrower Parent,
together with amounts received by Mafco pursuant to or in connection with any
Related Document, will be less than $8 million in any calendar quarter or will
not be sufficient to pay interest on the Advances then outstanding, the
Revolving Credit Facilities shall be automatically and permanently reduced by
an amount equal to the excess of (x) the amount of such cash equity
contribution or the amount on deposit in the Mafco Collateral Account, as the
case may be, plus any interest on Collateral Investments made with such
contribution or deposit over (y) the sum of the amount of interest and fees
then due and payable in respect of the Facilities plus the amount of expenses
of the Administrative Agent (including the reasonable fees and expenses of
counsel to the Administrative Agent) then due and payable. Each such reduction
of the Facilities shall be applied ratably first to the Tranche A Revolving
Credit Facility and second to the Tranche B Revolving Credit Facility. Each
such reduction of a Facility shall be made ratably among the Appropriate
Lenders in accordance with their Commitments with respect to such Facility.
Any such amounts remaining after the foregoing application shall be applied as
set forth in Section 2.05(b)(i) of the Term Credit Agreement.
(ii) The Revolving Credit Facilities shall be
automatically and permanently reduced:
(A) on the date of receipt by any A Company of the Net Cash
Proceeds of issuances, sales or liquidations of any capital stock
(including any securities convertible into or exchangeable for
capital stock or any warrants, rights or options to acquire capital
stock) of any A Company (other than (x) any Net Cash Proceeds in
respect of any Asset Sale and (y) the preferred stock to be issued by
FN Holdings in exchange for the preferred stock of FN Escrow upon
consummation of the merger of
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49
FN Escrow with and into FN Holdings which preferred stock will be
redeemed in full concurrently with or immediately after the
consummation of such merger),
(B) on the date of receipt by any A Company of any
dividends, other distributions or any loans or advances made in
respect of the capital stock of any other A Company (other than FN
Holdings and FN Parent) (provided that this clause (B) shall not
apply to the receipt by any A Company of any dividends, other
distributions or any loans or advances made in respect of all or any
portion of the proceeds received by Mafco or any of its Subsidiaries
from any Asset Sale or any sale, lease, transfer or other disposition
specified in clauses (i) through (v) of the definition of "Asset
Sale",
(C) on the date of receipt by any A Company of the proceeds
of distributions, dividends or any loans or advances made on account
of or as a result of the issuance, sale or liquidation of any capital
stock (including any securities convertible into or exchangeable for
capital stock or any warrants, rights or options to acquire capital
stock but excluding any Asset Sale) of, or the sale, issuance or
incurrence of any Debt by, any Designated Operating Company, and
(D) on the date of receipt by any A Company of the Net Cash
Proceeds from the sale, issuance or incurrence by any A Company of
any Debt (other than any sale, issuance or incurrence by Revlon
Holdings Inc. of any Debt to any of its Subsidiaries),
by an amount equal to the excess of (x) the amount so received (except, in
each case, to the extent (1) required pursuant to the terms of any agreement
or instruments relating to Debt existing on the date hereof or otherwise
approved by the Marvel IV Required Lenders of any A Company or Designated
Operating Company to prepay or redeem or purchase such Debt or (2) prohibited
to be so applied by the terms of any agreement or instrument relating to Debt
existing on the date hereof or otherwise approved by the Marvel IV Required
Lenders of any A Company or Designated Operating Company) over (y) the sum of
the amount of interest and fees then due and payable in respect of the
Facilities plus the amount of expenses of the Administrative Agent (including
the reasonable fees and expenses of counsel to the Administrative Agent) then
due and payable. Each such reduction of the Revolving Credit Facilities shall
be applied ratably first to the Tranche A Revolving Credit Facility and second
to the Tranche B Revolving Credit Facility. Each such reduction of a Revolving
Credit Facility shall be made ratably among the Appropriate Lenders in
accordance with their Commitments with respect to such Revolving Credit
Facility. Any such amounts remaining after the foregoing application shall be
applied as set forth in Section 2.05(b)(ii) of the Term Credit Agreement.
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50
(iii) On the date of receipt by Mafco or any of its
Subsidiaries (other than the Bank and its Subsidiaries) of the Net Cash
Proceeds from the sale, transfer or other disposition of (x) all or any
portion of the capital stock of the Bank (other than any issuance by the Bank
or any Subsidiary of the Bank of capital stock) or (y) any asset of the Bank,
the Revolving Credit Facilities shall be automatically and permanently reduced
by an amount equal to the excess of (A) such Net Cash Proceeds (other than the
portion of such Net Cash Proceeds required to be paid to the holders of the
Class B common stock of FN Holdings and the holders of the FN Holdings
Preferred Stock) over (B) the sum of the amount of interest and fees then due
and payable in respect of the Facilities plus the amount of expenses of the
Administrative Agent (including the reasonable fees and expenses of counsel to
the Administrative Agent) then due and payable. Each such reduction of the
Revolving Credit Facilities shall be applied ratably first to the Tranche A
Revolving Credit Facility and second to the Tranche B Revolving Credit
Facility. Each such reduction of the Revolving Credit Facilities shall be made
ratably among the Appropriate Lenders in accordance with their Commitments
with respect to such Revolving Credit Facility. Any Net Cash Proceeds
remaining after the foregoing application shall be applied as set forth in
Section 2.05(b)(iii) of the Term Credit Agreement.
(iv) On the date of receipt by Mafco or any of its
Subsidiaries, on or prior to the later of the Tranche B Termination Date and
the Term Credit Agreement Termination Date, of the Net Cash Proceeds from any
Asset Sale (other than the sale, disposal or other monetization of the News
Corp. Preferred ADRs or the New Marvel Shares), the excess of (A) such Net
Cash Proceeds over (B) the sum of the amount of interest and fees then due and
payable in respect of the Facilities plus the amount of expenses of the
Administrative Agent (including the reasonable fees and expenses of counsel to
the Administrative Agent) then due and payable shall be applied ratably first
to the automatic and permanent reduction in full of the Tranche B Revolving
Credit Facility and second to the prepayment of the Tranche A Revolving Credit
Facility as set forth in Section 2.06(b)(iii). Each such reduction or
prepayment of a Revolving Credit Facility shall be made ratably among the
Appropriate Lenders in accordance with their Commitments with respect to such
Revolving Credit Facility. Any Net Cash Proceeds remaining after the foregoing
application shall be applied as set forth in Section 2.05(b)(iv) of the Term
Credit Agreement.
(v) On the date of receipt by Mafco or any of its
Subsidiaries, on or prior to the later of the Tranche B Termination Date and
the Term Credit Agreement Termination Date, of the Net Cash Proceeds from the
sale, disposal or other monetization of the News Corp. Preferred ADRs or the
New Marvel Shares, the excess of (A) such Net Cash Proceeds over (B) the sum
of (1) the amount of interest and fees then due and payable in respect of the
Facilities plus (2) the amount of expenses of the Administrative Agent
(including the reasonable fees and expenses of counsel to the Administrative
Agent) then due and payable plus (3) the aggregate amount paid (including the
aggregate amount of interest, fees and expenses then due and payable in
respect of the Term Facilities) from such Net Cash
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51
Proceeds pursuant to the terms of Section 2.05(b)(v) of the Term Credit
Agreement shall be applied first to the permanent reduction in full of the
Tranche B Revolving Credit Facility and second to the prepayment of the
Tranche A Revolving Credit Facility as set forth in Section 2.06(b)(iv). Each
such reduction or prepayment of a Revolving Credit Facility shall be made
ratably among the Appropriate Lenders in accordance with their Commitments
with respect to such Revolving Credit Facility.
(vi) On and after the date (occurring after the later of the
Tranche B Termination Date and the Term Credit Agreement Termination Date), on
which Mafco and its Subsidiaries have received Net Cash Proceeds in an amount
equal to the Asset Sale Threshold from Asset Sales, upon any Asset Sale in
respect of which Mafco and its Subsidiaries have received Net Cash Proceeds
(which, together with the aggregate amount of Net Cash Proceeds from and after
the Effective Date from Asset Sales, exceeds the Asset Sale Threshold), the
Tranche A Revolving Credit Facility shall be automatically and permanently
reduced by an amount equal to the excess of (x) 50% of that portion of the Net
Cash Proceeds in excess of the Asset Sale Threshold (after taking into account
the aggregate amount of Net Cash Proceeds from and after the Effective Date
from Asset Sales) from such Asset Sale over (y) the sum of the amount of
interest and fees then due and payable in respect of the Facilities plus the
amount of expenses of the Administrative Agent (including the reasonable fees
and expenses of counsel to the Administrative Agent) then due and payable.
Each such reduction of the Tranche A Revolving Credit Facility shall be made
ratably among the Appropriate Lenders in accordance with their Commitments
with respect to the Tranche A Revolving Credit Facility.
(vii) On each date that an Event of Default set forth in
Section 6.01(a) shall have occurred and be continuing, the Revolving Credit
Facilities shall be automatically and permanently reduced by an amount equal
to the excess of (x) the amount on deposit in the Second Mafco Collateral
Account over (y) the sum of the amount of interest and fees then due and
payable in respect of the Facilities plus the amount of expenses of the
Administrative Agent (including the reasonable fees and expenses of counsel to
the Administrative Agent) then due and payable. Each such reduction of the
Revolving Credit Facilities shall be applied ratably first to the Tranche A
Revolving Credit Facility and second to the Tranche B Revolving Credit
Facility. Each such reduction of the Revolving Credit Facilities shall be made
ratably among the Appropriate Lenders in accordance with their Commitments
with respect to such Revolving Credit Facility. Any amounts remaining on
deposit in the Second Mafco Collateral Account after the foregoing application
shall be applied as set forth in Section 2.05(b)(vi) of the Term Credit
Agreement. If an Event of Default set forth in Section 6.01(a) shall occur and
be continuing at the same time as an "Event of Default" set forth in Section
6.01(a) of the Term Credit Agreement shall occur and be continuing, such
amount (less the sum of (1) the amount of interest and fees then due and
payable in respect of the Term Facilities plus (2) the amount of expenses of
the "Administrative Agent" under the Term Credit Agreement (including the
reasonable fees and expenses of counsel to such
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52
"Administrative Agent") then due and payable) shall be applied pro rata to the
Revolving Credit Facilities and to the Debt under the Term Credit Agreement
and such pro rata amount shall be applied to the Revolving Credit Facilities
as set forth in this Section 2.05(b)(vii).
(viii) On each date that an "Event of Default" set forth in
Section 6.01(a) of the Term Credit Agreement shall occur and be continuing,
the Revolving Credit Facilities shall be automatically and permanently reduced
by an amount equal to the excess of (x) the amount on deposit in the Second
Mafco Collateral Account over (y) the sum of (1) the amount of interest and
fees then due and payable in respect of the Facilities plus (2) the amount of
expenses of the Administrative Agent (including the reasonable fees and
expenses of counsel to the Administrative Agent) then due and payable plus (3)
the aggregate amount paid (including the aggregate amount of interest, fees
and expenses then due and payable in respect of the Term Facilities) from such
amount on deposit pursuant to the terms of Section 2.05(b)(vii) of the Term
Credit Agreement. Each such reduction of the Revolving Credit Facilities shall
be applied ratably first to the Tranche A Revolving Credit Facility and second
to the Tranche B Revolving Credit Facility. Each such reduction of the
Revolving Credit Facilities shall be made ratably among the Appropriate
Lenders in accordance with their Commitments with respect to such Revolving
Credit Facility. If an "Event of Default" set forth in Section 6.01(a) of the
Term Credit Agreement shall occur and be continuing at the same time as an
Event of Default set forth in Section 6.01(a) shall occur and be continuing,
such amount shall be applied pro rata to the Revolving Credit Facilities and
to the Debt under the Term Credit Agreement and such pro rata amount shall be
applied to the Revolving Credit Facilities as set forth in this Section
2.05(b)(viii).
(ix) The Letter of Credit Facility shall be permanently
reduced from time to time on the date of each reduction in the Tranche A
Revolving Credit Facility by the amount, if any, by which the Letter of Credit
Facility exceeds the Tranche A Revolving Credit Facility after giving effect
to such reduction of the Tranche A Revolving Credit Facility.
SECTION 2.06. Prepayments. (a) Optional. The Borrower may,
upon at least one Business Day's notice to the Administrative Agent, in the
case of Base Rate Advances, and three Business Days' notice to the
Administrative Agent, in the case of Eurodollar Rate Advances, stating the
proposed date, and the aggregate principal amount of the prepayment, and if
such notice is given, the Borrower shall, prepay the outstanding principal
amounts of the Advances comprising part of the same Borrowing in whole or
ratably in part, together with accrued interest to the date of such prepayment
on the principal amount so prepaid; provided, however, that, with respect to
any prepayment made in connection with the provisions of Section 7(o) of the
Mafco Guaranty, no such notice shall be required; provided further that (x)
each partial prepayment (other than a prepayment made in connection with the
provisions of Section 7(o) of the Mafco Guaranty) shall be in an aggregate
principal amount not less than $10,000,000 or an integral multiple of
$1,000,000 in excess thereof (or, if the aggregate principal amount of all
Advances that constitute part of
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53
such Borrowing is less, such aggregate principal amount) and (y) in the event
any such prepayment of Eurodollar Rate Advances is not made on the last day of
an Interest Period, the Borrower shall be obligated to reimburse the Lenders
in respect thereof pursuant to Section 8.04(b).
(b) Mandatory. (i) The Borrower shall, on each Business Day,
prepay an aggregate principal amount of the Tranche A Revolving Credit
Advances comprising part of the same Tranche A Revolving Credit Borrowing and
the Letter of Credit Advances equal to the amount by which (A) the sum of
aggregate principal amount of (x) the Tranche A Revolving Credit Advances and
(y) the Letter of Credit Advances then outstanding plus the aggregate
Available Amount of all Letters of Credit then outstanding exceeds (B) the
Tranche A Revolving Credit Facility on such Business Day.
(ii) The Borrower shall, on each Business Day, prepay an
aggregate principal amount of the Tranche B Revolving Credit Advances
comprising part of the same Tranche B Revolving Credit Borrowing equal to the
amount by which the aggregate principal amount of the Tranche B Revolving
Credit Advances then outstanding exceeds the Tranche B Revolving Credit
Facility on such Business Day.
(iii) The Borrower shall, on the date of receipt by Mafco or
any of its Subsidiaries, on or prior to the later of the Tranche B Termination
Date and the Term Credit Agreement Termination Date, of the Net Cash Proceeds
from any Asset Sale (other than the sale, disposal or other monetization of
the News Corp. Preferred ADRs or the New Marvel Shares), prepay an aggregate
principal amount of the Tranche A Revolving Credit Advances comprising part of
the same Borrowings in an amount equal to the excess of (A) such Net Cash
Proceeds over (B) the sum of (1) the amount of interest and fees then due and
payable in respect of the Facilities plus (2) the amount of expenses of the
Administrative Agent (including the reasonable fees and expenses of counsel to
the Administrative Agent) then due and payable plus (3) the aggregate
principal amount of Tranche B Revolving Credit Advances prepaid pursuant to
Section 2.06(b)(ii) in connection with the permanent reduction of the Tranche
B Revolving Credit Facility pursuant to Section 2.05(b)(iv) as a result of
such Asset Sale. Immediately after giving effect to the foregoing prepayment,
the lesser of (x) the Unused Tranche A Revolving Credit Commitments and (y)
$50,000,000 shall be available solely to purchase Coleman Worldwide LYONS or
to make the payment in cash of the exchange price to a holder of Coleman
Worldwide LYONS in respect of such holder's Coleman Worldwide LYONS. Any Net
Cash Proceeds remaining after the foregoing application shall be applied as
set forth in Section 2.05(b)(iv) of the Term Credit Agreement.
(iv) The Borrower shall, on the date of receipt by Mafco or
any of its Subsidiaries, on or prior to the later of the Tranche B Termination
Date and the Term Credit Agreement Termination Date, of the Net Cash Proceeds
from the sale, disposal or other monetization of the News Corp. Preferred ADRs
or the New Marvel Shares, prepay an
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54
aggregate principal amount of the Tranche A Revolving Credit Advances
comprising part of the same Borrowings in an amount equal to the lesser of (A)
the excess of (x) such Net Cash Proceeds over (y) the sum of (1) the amount of
interest and fees then due and payable in respect of the Facilities plus (2)
the amount of expenses of the Administrative Agent (including the reasonable
fees and expenses of counsel to the Administrative Agent) then due and payable
plus (3) the aggregate principal amount of Tranche B Revolving Credit Advances
prepaid pursuant to Section 2.06(b)(ii) in connection with the permanent
reduction of the Tranche B Revolving Credit Facility pursuant to Section
2.05(b)(v) as a result of such sale, disposal or other monetization plus (4)
the aggregate amount paid (including the aggregate amount of interest, fees
and expenses then due and payable in respect of the Term Facilities) from such
Net Cash Proceeds pursuant to the terms of Section 2.05(b)(iv) of the Term
Credit Agreement and (B) an amount up to $50,000,000 such that, after giving
effect to such prepayment, the Unused Tranche A Revolving Credit Commitments
shall equal $50,000,000. Immediately after giving effect to the foregoing
prepayment, $50,000,000 of the Tranche A Revolving Credit Commitments shall be
available solely to purchase Coleman Worldwide LYONS or to make the payment in
cash of the exchange price to a holder of Coleman Worldwide LYONS in respect
of such holder's Coleman Worldwide LYONS.
(v) The Borrower shall, on each Business Day, pay to the
Administrative Agent for deposit in the L/C Cash Collateral Account an amount
sufficient to cause the aggregate amount on deposit in such Collateral Account
to equal the amount by which the aggregate Available Amount of all Letters of
Credit then outstanding exceeds the Letter of Credit Facility on such Business
Day.
(vi) The Borrower shall, on the first day of each Mandatory
Clean-Down Period, prepay in full the Tranche A Revolving Credit Advances
(other than an aggregate principal amount of Tranche A Revolving Credit
Advances equal to the lesser of (x) $50,000,000 and (y) an amount equal to the
LYONS Utilization on any day during such Mandatory Clean-Down Period) and the
Letter of Credit Advances.
(vii) Prepayments of the Tranche A Revolving Credit Facility
made pursuant to clause (i) or (vi) above shall be first, applied to prepay
Letter of Credit Advances then outstanding until such Advances are paid in
full and second, applied to prepay Tranche A Revolving Credit Advances then
outstanding comprising part of the same Borrowings.
(viii) If, as a result of the making of any prepayment
required to be made pursuant to this Section 2.06, the Borrower would incur
costs pursuant to Section 8.04(b), the Borrower may deposit the amount of such
prepayment with the Administrative Agent, for the benefit of the Lenders, in a
cash collateral account, until the end of the applicable Interest Period at
which time such payment shall be made. The Borrower hereby grants to the
Administrative Agent, for the benefit of the Lenders, a security interest in
all amounts in which the Borrower has any right, title or interest which are
from time to time on deposit in
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55
such cash collateral account and expressly waives all rights (which rights the
Borrower hereby acknowledges and agrees are vested exclusively in the
Administrative Agent) to exercise dominion or control over any such amounts.
SECTION 2.07. Interest. (a) Ordinary Interest. The
Borrower shall pay interest on the unpaid principal amount of each Advance
owing to each Lender from the date of such Advance until such principal amount
shall be paid in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance
is a Base Rate Advance, a rate per annum equal at all times to the
sum of the Base Rate in effect from time to time plus the Applicable
Margin in effect from time to time, payable in arrears quarterly on
the first Business Day of each March, June, September and December
during such periods, commencing March 3, 1997, and on the date such
Base Rate Advance shall be Converted or paid in full.
(ii) Eurodollar Rate Advances. During such periods as such
Advance is a Eurodollar Advance, a rate per annum equal at all times
during each Interest Period for such Advance to the sum of the
Eurodollar Rate for such Interest Period plus the Applicable Margin
in effect from time to time, payable in arrears on the last day of
such Interest Period and, if such Interest Period has a duration of
more than three months, on each day that occurs during such Interest
Period every three months from the first day of such Interest Period.
(b) Default Interest. The Borrower shall pay on demand
interest on the unpaid principal amount of each Advance that is not paid when
due and on the unpaid amount of all interest, fees and other amounts then due
and payable hereunder that is not paid when due from the due date thereof to
the date paid, at a rate per annum equal at such time to (i) in the case of
any amount of principal, 2% per annum above the rate of interest per annum
required to be paid on such Advance immediately prior to the date on which
such amount became due and payable and (ii) in the case of all other amounts,
2% per annum above the rate per annum required to be paid on Base Rate
Advances pursuant to Section 2.07(a)(i) above.
SECTION 2.08. Interest Rate Determination. (a) The
Administrative Agent shall give prompt notice to the Borrower and each Lender
of the applicable interest rate determined by the Administrative Agent for
purposes of Section 2.07(a)(i) or (ii), and the applicable rate, if any,
furnished by Citibank for the purpose of determining the applicable interest
rate under Section 2.07(a)(i) or (ii).
(b) If Citibank cannot furnish timely information to
the Administrative Agent for determining the Eurodollar Rate, the
Administrative Agent shall forthwith notify
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56
the Borrower and each Lender that the interest rate cannot be determined for
such Eurodollar Rate Advances, whereupon (i) each such Eurodollar Rate Advance
will automatically, on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Advance and (ii) the obligation of the
Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall
be suspended until the Administrative Agent shall notify the Borrower that
Citibank has determined that the circumstances causing such suspension no
longer exist.
(c) If the Required Lenders notify the Administrative Agent
that the Eurodollar Rate for any Interest Period for such Eurodollar Rate
Advances will not adequately reflect the cost to such Required Lenders of
making, funding or maintaining their pro rata shares of such Eurodollar Rate
Advances for such Interest Period, the Administrative Agent shall forthwith so
notify the Borrower and the Lenders, whereupon (i) each such Eurodollar Rate
Advance will automatically, on the last day of the then existing Interest
Period therefor, Convert into a Base Rate Advance and (ii) the obligation of
the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances
shall be suspended until the Administrative Agent shall notify the Borrower
that such Required Lenders have determined that the circumstances causing such
suspension no longer exist.
(d) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01,
the Administrative Agent will forthwith notify the Borrower and the
Appropriate Lenders and the Interest Period for such Eurodollar Rate Advances
will be one month.
SECTION 2.09. Fees. (a) Commitment Fee. The Borrower agrees
to pay to the Administrative Agent for the account of the Tranche A Revolving
Credit Lenders a commitment fee on the average daily Unused Tranche A
Revolving Credit Commitment of such Lender, from the date hereof, in the case
of each Financial Institution, and from the effective date specified in the
Assignment and Acceptance pursuant to which it became a Lender, in the case of
each other Lender, until the Tranche A Termination Date at a rate equal to
1-1/4% per annum, payable in arrears on the date of the initial Tranche A
Revolving Credit Borrowing, thereafter quarterly on the first Business Day of
each March, June, September and December commencing March 3, 1997 and on the
Tranche A Termination Date. The Borrower further agrees to pay to the
Administrative Agent for the account of the Tranche B Revolving Credit Lenders
a commitment fee on the average daily Unused Tranche B Revolving Credit
Commitment of such Lender, from the date hereof, in the case of each Financial
Institution, and from the effective date specified in the Assignment and
Acceptance pursuant to which it became a Lender, in the case of each other
Lender, until the Tranche B Termination Date at a rate equal to 1-1/4% per
annum, payable in arrears on the date of the initial Tranche B Revolving
Credit Borrowing, thereafter quarterly on the first Business Day of each
March, June, September and December commencing March 3, 1997 and on the
Tranche B Termination Date.
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57
(b) Letter of Credit Fees, Etc. (i) The Borrower shall pay
to the Administrative Agent for the account of each Tranche A Revolving Credit
Lender a commission, payable in arrears quarterly on the first Business Day of
each March, June, September and December, commencing March 3, 1997, and on the
earliest to occur of the full drawing, expiration, termination or cancellation
of any such Letter of Credit and on the Tranche A Termination Date, on such
Lender's Pro Rata Share of the average daily aggregate Available Amount during
such quarter of (A) all Standby Letters of Credit outstanding from time to
time at the rate of 4-1/2% per annum and (B) all Trade Letters of Credit then
outstanding at the rate of 4-1/2% per annum.
(ii) The Borrower shall pay to each Issuing Bank, for its
own account, such commissions, issuance fees, fronting fees, transfer fees and
other fees and charges in connection with the issuance or administration of
each Letter of Credit as the Borrower and such Issuing Bank shall agree.
(c) Other Fees. The Borrower shall pay to the Administrative
Agent for its own account such fees as are set forth in the fee letter dated
November __, 1996 between Mafco and Citibank, as the same may be amended or
otherwise modified from time to time.
SECTION 2.10. Increased Costs; Illegality. (a) Except as to
taxes, levies, imposts, deductions, charges, withholdings or liabilities with
respect thereto (it being understood that the Borrower shall not have any
liability for any taxes, levies, imposts, deductions, charges, withholdings or
liabilities with respect thereto, except as provided in Section 2.13), if, due
to either (i) the introduction of or any change (other than any change by way
of imposition or increase of reserve requirements included in the Eurodollar
Rate Reserve Percentage) in or in the interpretation of any law or regulation
or (ii) the compliance by any Lender Party with any guideline or request from
any central bank or other governmental authority in any case introduced,
changed, interpreted or requested after the date hereof (whether or not having
the force of law), there shall be (x) imposed, modified or deemed applicable
any reserve, special deposit or similar requirement against assets held by, or
letters of credit or guarantees issued by, or deposits in or for the account
of, any Lender Party or (y) imposed on any Lender Party any other condition
relating to this Agreement or the Advances made by it or the issuance by it of
Letters of Credit, and the result of any event referred to in clause (x) or
(y) shall be to increase the cost to such Lender Party of agreeing to make or
making, funding or maintaining Eurodollar Rate Advances or of agreeing to
issue or of issuing or maintaining Letters of Credit or of agreeing to make or
of making or maintaining Letter of Credit Advances, then the Borrower shall
from time to time, upon demand by such Lender Party (with a copy of such
demand to the Administrative Agent) made within 60 days after the first date
on which such Lender Party has actual knowledge that it is entitled to make
demand for payment under this Section 2.10(a), pay to the Administrative Agent
for the account of such Lender Party additional amounts sufficient to
compensate such Lender Party for such increased cost; provided, however, that
if such
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58
Lender Party fails to so notify the Borrower within such 60-day period, such
increased cost shall commence accruing on such later date on which the Lender
Party notifies the Borrower; provided further that, before making any such
demand, such Lender Party agrees to use its best efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a
different Applicable Lending Office if the making of such a designation would
avoid the need for, or reduce the amount of, such increased cost and would
not, in the reasonable judgment of such Lender Party, be otherwise
disadvantageous to such Lender Party. A certificate as to the amount of such
increased cost, submitted to the Borrower and the Administrative Agent by such
Lender Party, shall be conclusive and binding for all purposes, absent
manifest error.
(b) If any Lender Party determines that compliance with any
law or regulation or any guideline or request from any central bank or other
governmental or monetary authority in regard to capital adequacy (whether or
not having the force of law) including, without limitation, any guideline
contemplated by the report dated July 1988 entitled "International Convergence
of Capital Management and Capital Standards" issued by the Bank Committee on
Banking Regulations and Supervisory Practices, in any case in which such law,
regulation, guideline or request became effective or was made after the date
hereof, has or would have the effect of reducing the rate of return on the
capital of, or maintained by, such Lender Party or any corporation controlling
such Lender Party as a consequence of such Lender Party's Advances or
Commitments hereunder or the issuance by it of any Letter of Credit and other
commitments of this type, by increasing the amount of capital required or
expected to be maintained by such Lender Party or any corporation controlling
such Lender Party, to a level below that which such Lender Party or any
corporation controlling such Lender Party could have achieved but for such
adoption, effectiveness, change or compliance (taking into account such Lender
Party's or such corporation's policies with respect to capital adequacy), then
the Borrower shall, from time to time, pay such Lender Party, upon demand by
such Lender Party (with a copy of such demand to the Administrative Agent)
made within 60 days after the first date on which such Lender Party has actual
knowledge that it is entitled to make demand for payment under this Section
2.10(b) of such reduction in return, such additional amount as may be
specified by such Lender Party as being sufficient to compensate such Lender
Party for such reduction in return, to the extent that such Lender Party
reasonably determines such reduction to be attributable to the existence of
such Lender Party's commitment to lend or to issue Letters of Credit hereunder
or to the issuance or maintenance of any Letters of Credit; provided, however,
that if such Lender Party fails to so notify the Borrower within such 60-day
period, such amounts shall commence accruing on such later date on which the
Lender Party notifies the Borrower. A certificate as to such amounts submitted
to the Borrower and the Administrative Agent by such Lender Party shall be
conclusive and binding for all purposes, absent manifest error.
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(c) Notwithstanding any other provision of this Agreement,
if the introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to fund or maintain Eurodollar Rate Advances hereunder, then, upon
written notice by such Lender to the Borrower (with a copy to the
Administrative Agent), (i) each Eurodollar Rate Advance under each Facility
under which such Lender has a Commitment will automatically Convert into a
Base Rate Advance and (ii) the obligation under each Facility under which such
Lender has a Commitment to make, or to Convert Base Rate Advances into,
Eurodollar Rate Advances shall be suspended until the Administrative Agent
shall notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist; provided, however, that, before making any such
demand, such Lender shall designate a different Eurodollar Lending Office if
the making of such a designation would avoid the need for giving such notice
and demand, and would not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender. For purposes of this Section 2.10(c), a notice
to the Borrower by a Lender shall be effective with respect to any Eurodollar
Rate Advance on the last day of the then current Interest Period for such
Advance; provided, however, that, if it is not lawful for such Lender to
maintain such Advance until the end of the Interest Period applicable thereto,
then the notice to the Borrower shall be effective upon receipt by the
Borrower.
SECTION 2.11. Conversion of Advances. (a) Optional. The
Borrower may on any Business Day, upon notice given to the Administrative
Agent not later than noon (New York City time) on the third Business Day prior
to the date of the proposed Conversion and subject to the provisions of
Section 2.08 and 2.10, Convert all or any portion of the Advances of one Type
comprising the same Borrowing into Advances of the other Type; provided,
however, that any Conversion of Eurodollar Rate Advances into Base Rate
Advances shall be made on, and only on, the last day of an Interest Period for
such Eurodollar Rate Advances, any Conversion of Base Rate Advances into
Eurodollar Rate Advances shall be subject to the limitation set forth in
Section 2.02(e) and in an amount not less than $5,000,000 and each Conversion
of Advances comprising part of the same Borrowing under any Facility shall be
made ratably among the Appropriate Lenders in accordance with their
Commitments under such Facility. Each such notice of Conversion shall, within
the restrictions specified above, specify (i) the date of such Conversion,
(ii) the Advances to be Converted and (iii) if such Conversion is into
Eurodollar Rate Advances, the duration of the initial Interest Period for such
Advances.
(b) Mandatory. (i) On the date on which the aggregate unpaid
principal amount of Eurodollar Rate Advances comprising any Borrowing shall be
reduced, by payment or prepayment or otherwise, to less than $5,000,000, such
Advances shall automatically Convert into Base Rate Advances.
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(ii) Upon the occurrence and during the continuance of any
Event of Default (or, in the case of any involuntary proceeding described in
Section 6.01(e), a Default), (A) each Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance and (B) the obligation of the Lenders to
make, or to Convert Advances into, Eurodollar Rate Advances shall be
suspended.
SECTION 2.12. Payments and Computations. (a) The Borrower
shall make each payment hereunder and under the Notes not later than 11:00
A.M. (New York City time) on the day when due in U.S. Dollars to the
Administrative Agent at the Administrative Agent's Account in same day funds.
The Administrative Agent will promptly thereafter cause to be distributed like
funds relating to the payment of principal or interest or commitment fees
ratably (other than amounts payable pursuant to Section 2.10 or 2.13) to the
Lender Parties for the account of their respective Applicable Lending Offices,
and like funds relating to the payment of any other amount payable to any
Lender Party to such Lender Party for the account of its Applicable Lending
Office, in each case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and Acceptance and recording
of the information contained therein in the Register pursuant to Section
8.07(c), from and after the effective date specified in such Assignment and
Acceptance, the Administrative Agent shall make all payments hereunder and
under the Notes in respect of the interest assigned thereby to the Lender
Party assignee thereunder, and the parties to such Assignment and Acceptance
shall make all appropriate adjustments in such payments for periods prior to
such effective date directly between themselves.
(b) The Borrower hereby authorizes each Lender Party, if and
to the extent payment of principal, interest or fees owed to such Lender Party
is not made when due hereunder or, in the case of a Lender under the Note or
Notes held by such Lender, to charge from time to time against any or all of
the Borrower's accounts with such Lender Party any amount so due.
(c) All computations of interest based on the Eurodollar
Rate, the Base Rate or the Federal Funds Rate and of commitment fees and
Letter of Credit commissions shall be made by the Administrative Agent, on the
basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period
for which such interest or commitment fees are payable. Each determination by
the Administrative Agent of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under any Note shall
be stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest or commitment
fee, as the case may be; provided,
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61
however, that, if such extension would cause payment of interest on or
principal of Eurodollar Rate Advances to be made in the next following
calendar month, such payment shall be made on the next preceding Business Day.
(e) Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due to any
Lender Party hereunder or under any Note that the Borrower will not make such
payment in full, the Administrative Agent may assume, or at its option request
confirmation from the Borrower, that the Borrower has made such payment in
full to the Administrative Agent on such date and the Administrative Agent
may, in reliance upon such assumption, cause to be distributed to each such
Lender Party on such due date an amount equal to the amount then due such
Lender Party. If and to the extent the Borrower shall not have so made such
payment in full to the Administrative Agent, each Lender Party shall repay to
the Administrative Agent forthwith on demand such amount distributed to such
Lender Party together with interest thereon, for each day from the date such
amount is distributed to such Lender Party until the date such Lender Party
repays such amount to the Administrative Agent, at the Federal Funds Rate.
(f) If the Administrative Agent receives funds for
application to the Obligations under the Loan Documents under circumstances
for which the Loan Documents do not specify the Advances or the Facility to
which, or the manner in which, such funds are to be applied, the
Administrative Agent may, but shall not be obligated to, elect to distribute
such funds in respect of a Facility to each appropriate Lender Party ratably
in accordance with such Lender Party's proportionate share of the principal
amount of all outstanding Advances under such Facility, in repayment or
prepayment of such of the outstanding Advances under such Facility or other
Obligations owed to such Lender Party, and for application to such principal
installments, as the Administrative Agent shall direct.
SECTION 2.13. Taxes. (a) Any and all payments by the
Borrower hereunder or under the Notes shall be made, in accordance with
Section 2.12, free and clear of and without deduction for any and all present
or future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender Party
and the Administrative Agent, (i) taxes imposed on its income, and franchise
taxes and backup withholding taxes imposed on it, by the United States or the
jurisdiction under the laws of which such Lender Party or the Administrative
Agent (as the case may be) is organized or any political subdivision or taxing
authority thereof or therein, (ii) taxes imposed on its income, and franchise
taxes imposed on it, by the jurisdiction of such Lender Party's or, in either
such case, the Administrative Agent's principal office or Applicable Lending
Office or any political subdivision or taxing authority thereof or therein and
(iii) United States withholding tax payable with respect to payments hereunder
under laws (including, without limitation any statute, treaty, ruling,
determination or regulation) in effect on the Initial Date with respect to
such Lender Party or the Administrative Agent, but not excluding any United
States withholding tax payable as a result of any change in such laws
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62
occurring after the Initial Date (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as "Taxes"). If the Borrower shall be required by law to deduct
any Taxes from or in respect of any sum payable hereunder or under any Note to
any Lender Party or the Administrative Agent, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions of
Taxes (including deductions of Taxes applicable to additional sums payable
under this Section 2.13) such Lender Party or the Administrative Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions of Taxes been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law; provided, however, that any such Lender Party shall designate a different
Applicable Lending Office if, in the judgment of such Lender Party, such
designation would avoid the need for, or reduce the amount of, any Taxes
required to be deducted from or in respect of any sum payable hereunder to
such Lender Party or the Administrative Agent and would not, in the judgment
of such Lender Party, be otherwise disadvantageous to such Lender Party.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies that arise from any payment made hereunder or under
the Notes or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement or the Notes (hereinafter referred to as
"Other Taxes").
(c) The Borrower will indemnify each Lender Party and the
Administrative Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.13) paid by such Lender Party or the
Administrative Agent (as the case may be) and any liability (including
penalties, additions to tax, interest and expenses) arising therefrom or with
respect thereto; provided that, in the event such Lender Party or the
Administrative Agent, as the case may be, successfully contests the assessment
of such Taxes or Other Taxes or any liability arising therefrom or with
respect thereto, such Lender Party or the Administrative Agent shall refund,
to the extent of any refund thereof made to such Lender Party or the
Administrative Agent, any amounts paid by the Borrower under this Section
2.13(c) in respect of such Taxes, Other Taxes or liabilities arising therefrom
or with respect thereto. Each Lender Party and the Administrative Agent agree
that it will contest such Taxes, Other Taxes or liabilities if (i) the
Borrower furnishes to it an opinion of reputable tax counsel acceptable to
such Lender Party or the Administrative Agent to the effect that such Taxes or
Other Taxes were wrongfully or illegally imposed and (ii) such Lender Party or
the Administrative Agent determines, in its sole discretion, that it would not
be disadvantaged or prejudiced in any manner whatsoever as a result of such
contest. This indemnification shall be made within 30 days from the date such
Lender Party or the Administrative Agent (as the case may be) makes written
demand therefor.
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63
(d) Within 30 days after the date of any payment of Taxes,
the Borrower will furnish to the Administrative Agent, at its address referred
to in Section 8.02, appropriate evidence of payment thereof. If no Taxes are
payable in respect of any payment hereunder or under the Notes by the Borrower
from an account or branch outside the United States or on behalf of the
Borrower by a payor that is not a United States person, the Borrower will
furnish to the Administrative Agent, at such address, a certificate from each
appropriate taxing authority, or an opinion of counsel acceptable to the
Administrative Agent, in either case stating that such payment is exempt from
or not subject to Taxes. For purposes of this Section 2.13, the terms "United
States" and "United States person" shall have the meanings specified in
Section 7701 of the Code.
(e) Each Lender Party organized under the laws of a
jurisdiction outside the United States and the Administrative Agent, if
organized under the laws of a jurisdiction outside the United States, shall,
on or prior to the Initial Date and from time to time thereafter if requested
in writing by the Borrower or the Administrative Agent (but only so long
thereafter as such Lender Party or the Administrative Agent remains lawfully
able to do so), provide the Borrower and (in the case of any such Lender Party
other than the Administrative Agent) the Administrative Agent with two duly
completed copies of Internal Revenue Service form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
certifying that such Lender Party or the Administrative Agent is entitled to
benefits under an income tax treaty to which the United States is a party that
reduces the rate of withholding tax on payments under this Agreement or the
Notes or certifying that the income receivable pursuant to this Agreement or
the Notes is effectively connected with the conduct of a trade or business in
the United States.
(f) For any period with respect to which the Administrative
Agent or a Lender Party has failed to provide the Borrower with the
appropriate forms described in subsection (e) above (other than if such
failure is due to a change in law occurring after the date on which such
person was originally required to provide such forms, or if such forms are
otherwise not required under subsection (e) above), the Administrative Agent
or such Lender Party shall not be entitled to increased payments or
indemnification under subsection (a) or (c) above with respect to Taxes
imposed by the United States; provided, however, that should the
Administrative Agent or a Lender Party become subject to Taxes because of its
failure to deliver a form required hereunder, the Borrower shall take such
steps as the Administrative Agent or such Lender Party shall reasonably
request to assist the Lender Party to recover such Taxes if, in the judgment
of the Borrower such steps would avoid the need for, or reduce the amount of,
any Taxes required to be deducted from or in respect of any sum payable
hereunder to the Administrative Agent or such Lender Party and would not, in
the judgment of the Borrower, be disadvantageous to the Borrower.
(g) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this
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Section 2.13 shall survive the payment in full of principal and interest
hereunder and under the Notes.
(h) If a Lender Party shall change its Applicable Lending
Office other than (i) at the request of the Borrower or (ii) at a time when
such change would not result in this Section 2.13 requiring the Borrower to
make a greater payment than if such change had not been made, such Lender
Party shall not be entitled to receive any greater payment under this Section
2.13 than such Lender Party would have been entitled to receive had it not
changed its Applicable Lending Office.
SECTION 2.14. Sharing of Payments, Etc. If any Lender Party
shall obtain any payment (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise) on account of the Advances owing to it
(other than pursuant to Section 2.10 or 2.13) in excess of its ratable share
of payments on account of the Advances obtained by all the Lender Parties,
such Lender Party shall forthwith purchase from the other Lender Parties such
interests or participating interests in the Advances owing to them as shall be
necessary to cause such purchasing Lender Party to share the excess payment
ratably with each of them; provided, however, that, if all or any portion of
such excess payment is thereafter recovered from such purchasing Lender Party,
such purchase from each Lender Party shall be rescinded and such Lender Party
shall repay to the purchasing Lender Party the purchase price to the extent of
such recovery together with an amount equal to such Lender Party's ratable
share (according to the proportion of (i) the amount of such Lender Party's
required repayment to (ii) the total amount so recovered from the purchasing
Lender Party) of any interest or other amount paid or payable by the
purchasing Lender Party in respect of the total amount so recovered. The
Borrower agrees that any Lender Party so purchasing an interest or
participating interest from another Lender Party pursuant to this Section 2.14
may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off) with respect to such interest or
participating interest, as the case may be, as fully as if such Lender Party
were the direct creditor of the Borrower in the amount of such interest or
participating interest, as the case may be.
SECTION 2.15. Removal of Lender. In the event that any
Lender Party demands payment of costs or additional amounts pursuant to
Section 2.10 or Section 2.13 or asserts pursuant to Section 2.10(c) that it is
unlawful for such Lender Party to make Eurodollar Rate Advances, then (subject
to such Lender Party's right to rescind such demand or assertion within 10
days after the notice from the Borrower referred to below) the Borrower may,
upon 20 days' prior written notice to such Lender Party and the Administrative
Agent, elect to cause such Lender Party to assign its Advances and Commitments
in full to an assignee institution selected by the Borrower that meets the
criteria of an Eligible Assignee and is reasonably satisfactory to the
Administrative Agent, so long as such Lender Party receives payment in full in
cash of the outstanding principal amount of all Advances made by it and all
accrued and unpaid interest thereon and all other
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65
amounts due and payable to such Lender Party as of the date of such assignment
(including without limitation amounts owing pursuant to Section 2.10 or 2.13),
and in such case such Lender Party agrees to make such assignment, and such
assignee shall agree to accept such assignment and assume all obligations of
such Lender Party hereunder, in accordance with Section 8.07.
SECTION 2.16. Defaulting Lender. (a) In the event that, at
any one time, (i) any Lender Party shall be a Defaulting Lender, (ii) such
Defaulting Lender shall owe a Defaulted Advance to the Borrower and (iii) the
Borrower shall be required to make any payment hereunder or under any other
Loan Document to or for the account of such Defaulting Lender, then the
Borrower may, so long as no Default shall occur or be continuing at such time
and to the fullest extent permitted by applicable law, set-off and otherwise
apply the Obligation of the Borrower to make such payment to or for the
account of such Defaulting Lender against the Obligation of such Defaulting
Lender to make such Defaulted Advance. In the event that the Borrower shall so
set-off and otherwise apply the Obligation of the Borrower to make any such
payment against the Obligation of such Defaulting Lender to make any such
Defaulted Advance on any date, the amount so set-off and otherwise applied by
the Borrower shall constitute for all purposes of this Agreement and the other
Loan Documents an Advance by such Defaulting Lender made on such date under
the Facility pursuant to which such Defaulted Advance was originally required
to have been made pursuant to Section 2.01. Such Advance shall be considered,
for all purposes of this Agreement, to comprise part of the Borrowing in
connection with which such Defaulted Advance was originally required to have
been made pursuant to Section 2.01. The Borrower shall notify the
Administrative Agent at any time the Borrower reduces the amount of the
Obligation of the Borrower to make any payment otherwise required to be made
by it hereunder or under any other Loan Document as a result of the exercise
by the Borrower of its right set forth in this subsection (a) and shall set
forth in such notice (A) the name of the Defaulting Lender and the Defaulted
Advance required to be made by such Defaulting Lender and (B) the amount
set-off and otherwise applied in respect of such Defaulted Advance pursuant to
this subsection (a). Any portion of such payment otherwise required to be made
by the Borrower to or for the account of such Defaulting Lender which is paid
by the Borrower, after giving effect to the amount set-off and otherwise
applied by the Borrower pursuant to this subsection (a), shall be applied by
the Administrative Agent as specified in subsection (b) or (c) of this Section
2.16.
(b) In the event that, at any one time, (i) any Lender Party
shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a
Defaulted Amount to the Administrative Agent, the Collateral Agent or any of
the other Lender Parties and (iii) the Borrower shall make any payment
hereunder or under any other Loan Document to the Administrative Agent for the
account of such Defaulting Lender, then the Administrative Agent may, on its
behalf or on behalf of such other Lender Parties and to the fullest extent
permitted by applicable law, apply at such time the amount so paid by the
Borrower to or for
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the account of such Defaulting Lender to the payment of each such Defaulted
Amount up to the amount required to pay such Defaulted Amount. In the event
that the Administrative Agent shall so apply any such amount to the payment of
any such Defaulted Amount on any date, the amount so applied by the
Administrative Agent shall constitute for all purposes of this Agreement and
the other Loan Documents payment, to such extent, of such Defaulted Amount on
such date. Any such amount so applied by the Administrative Agent shall be
retained by the Administrative Agent or distributed by the Administrative
Agent to such other Lender Parties, ratably in accordance with the respective
portions of such Defaulted Amounts payable at such time to the Administrative
Agent and such other Lender Parties and, if the amount of such payment made by
the Borrower shall at such time be insufficient to pay all Defaulted Amounts
owing at such time to the Administrative Agent, the Collateral Agent and the
other Lender Parties, in the following order of priority:
(i) first, to the Administrative Agent and the Collateral
Agent for any Defaulted Amounts then owing to the Administrative
Agent and the Collateral Agent, ratably in accordance with such
respective Defaulted Amounts then owing to the Administrative Agent
and the Collateral Agent; and
(ii) second, to any other Lender Parties for any Defaulted
Amounts then owing to such other Lender Parties, ratably in
accordance with such respective Defaulted Amounts then owing to such
other Lender Parties.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.16.
(c) In the event that, at any one time, (i) any Lender Party
shall be Defaulting Lender, (ii) such Defaulting Lender shall not owe a
Defaulted Advance or a Defaulted Amount and (iii) the Borrower, the
Administrative Agent, the Collateral Agent or any other Lender Party shall be
required to pay or distribute any amount hereunder or under any other Loan
Document to or for the account of such Defaulting Lender, then the Borrower,
the Collateral Agent or such other Lender Party shall pay such amount to the
Administrative Agent to be held by the Administrative Agent, to the fullest
extent permitted by applicable law, in escrow or the Administrative Agent
shall, to the fullest extent permitted by applicable law, hold in escrow such
amount otherwise held by it. Any funds held by the Administrative Agent in
escrow under this subsection (c) shall be deposited by the Administrative
Agent in an account with Citibank, in the name and under the control of the
Administrative Agent, but subject to the provisions of this subsection (c).
The terms applicable to such account, including the rate of interest payable
with respect to the credit balance of such account from time to time, shall be
Citibank's standard terms applicable to escrow accounts maintained with it.
Any interest credited to such account from time to time
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shall be held by the Administrative Agent in escrow under, and applied by the
Administrative Agent from time to time in accordance with the provisions of,
this subsection (c). The Administrative Agent shall, to the fullest extent
permitted by applicable law, apply all funds so held in escrow from time to
time to the extent necessary to make any Advances required to be made by such
Defaulting Lender and to pay any amount payable by such Defaulting Lender
hereunder and under the other Loan Documents to the Administrative Agent, the
Collateral Agent or any other Lender Party, as and when such Advances or
amounts are required to be made or paid and, if the amount so held in escrow
shall at any time be insufficient to make and pay all such Advances and
amounts required to be made or paid at such time, in the following order of
priority:
(i) first, to the Administrative Agent and the Collateral
Agent for any amount then due and payable by such Defaulting Lender
to the Administrative Agent and the Collateral Agent hereunder,
ratably in accordance with such respective amounts then due and
payable to the Administrative Agent and the Collateral Agent;
(ii) second, to any other Lender Parties for any amount then
due and payable by such Defaulting Lender to such other Lender
Parties hereunder, ratably in accordance with such respective amounts
then due and payable to such other Lender Parties; and
(iii) third, to the Borrower for any Advance then required
to be made by such Defaulting Lender pursuant to the Commitment of
such Defaulting Lender.
In the event that such Defaulting Lender shall, at any time, cease to be a
Defaulting Lender, any funds held by the Administrative Agent in escrow at
such time with respect to such Defaulting Lender shall be distributed by the
Administrative Agent to such Defaulting Lender and applied by such Defaulting
Lender to the Obligations owing to such Lender Party at such time under this
Agreement and the other Loan Documents ratably in accordance with the
respective amounts of such Obligations outstanding at such time.
(d) The rights and remedies against a Defaulting Lender
under this Section 2.16 are in addition to other rights and remedies which the
Borrower may have against such Defaulting Lender with respect to any Defaulted
Advance and which the Administrative Agent, the Collateral Agent or any Lender
Party may have against such Defaulting Lender with respect to any Defaulted
Amount.
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ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Effective Date.
Article II hereof shall be effective on and as of the date (the "Effective
Date"), on which each of the following conditions precedent shall have been
satisfied or duly waived:
(a) There shall have been no adverse change since June 3,
1996 in the corporate and legal structure and capitalization of each
A Company, each Designated Operating Company and the Bank, including
the terms and conditions of the charter, bylaws and each class of
capital stock of each such Person and of each agreement or instrument
relating to such structure or capitalization, except as contemplated
by existing consents, amendments and waivers delivered in connection
with the Existing Credit Agreement; the Lenders shall be satisfied
with the corporate and legal structure and capitalization of each of
National Health Care Group Inc., Revlon Guarantor, Revlon Holdings
Inc., Revlon Worldwide Corporation and Revlon, including the terms
and conditions of the charter, by-laws and each class of capital
stock of each such Person and of each agreement or instrument
relating to such structure or capitalization.
(b) Before giving effect to the transactions contemplated by
this Agreement, there shall have occurred no Material Adverse Change
since December 31, 1995 relating to any of the Loan Parties, the FN
Parties and the Designated Operating Companies.
(c) There shall exist no action, suit, investigation,
litigation or proceeding affecting any of the Loan Parties, the FN
Parties and the Designated Operating Companies pending or threatened
before any court, governmental agency or arbitrator that (i) would be
reasonably likely to have a Material Adverse Effect (in the case of
clause (a) of the definition thereof, the term "Person" shall refer
to such Loan Party, such FN Party or such Designated Operating
Company, as the case may be) or (ii) purports to affect the legality,
validity or enforceability of this Agreement, any Note, any other
Loan Document, any Related Document, any FN Document or the
consummation of the transactions contemplated hereby and thereby.
(d) Nothing shall have come to the attention of the Lender
Parties in respect of any of the A Companies, the Designated
Operating Companies or the Bank that is inconsistent with or
different from in any adverse respect any of the results of the due
diligence investigations of such Persons conducted in connection with
the Original Credit Agreement, the Second Credit Agreement, the Third
Credit Agreement or the Existing Credit Agreement; the Lenders shall
be satisfied with the
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results of their due diligence investigation of National Health Care
Group Inc., Revlon Guarantor, Revlon Holdings Inc., Revlon Worldwide
Corporation and Revlon; and the Lender Parties shall have been given
such access to the management, records, books of account, contracts
and properties of each A Company, each Designated Operating Company
or the Bank as they shall have requested.
(e) The Borrower shall have paid all accrued fees of the
Administrative Agent and the Lender Parties and all accrued expenses
of the Administrative Agent (including the reasonable fees and
expenses of counsel to the Administrative Agent).
(f) The Lenders shall be satisfied that the Borrower
has the ability to service the interest payments in respect of the
Facilities.
(g) Ronald O. Perelman shall beneficially own at least
a majority of the Voting Stock of Marvel.
(h) The Administrative Agent or the Collateral Agent, as the
case may be, shall have received on or before the Effective Date the
following, each dated as of the Effective Date (unless otherwise
specified), in form and substance satisfactory to the Administrative
Agent (unless otherwise specified) and (except for the Notes) in
sufficient copies for each Lender Party:
(i) the Tranche A Revolving Credit Notes to the
order of the Lenders;
(ii) the Tranche B Revolving Credit Notes to the
order of the Lenders;
(iii) certified copies of the resolutions of the
board of directors of the Borrower and each other Loan Party
approving this Agreement, the Notes and each other Loan
Document to which it is or is to be a party, and of all
documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this
Agreement, the Notes and each other Loan Document;
(iv) a certificate of the Secretary or an Assistant
Secretary of the Borrower and each other Loan Party
certifying the names and true signatures of the officers of
the Borrower and such other Loan Party authorized to sign
this Agreement, the Notes and each other Loan Document to
which they are or are to be parties and the other documents
to be delivered hereunder and thereunder;
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70
(v) a copy of a certificate of the Secretary of
State of the state of incorporation of the Borrower, each
other Loan Party, each Designated Operating Company and each
other A Company, dated reasonably near the Effective Date,
listing the charter of such Person and each amendment
thereto on file in his office and certifying that (A) such
amendments are the only amendments to such Person's charter
on file in his office, (B) such Person has paid all
franchise taxes to the date of such certificate and (C) such
Person is duly incorporated or organized and in good
standing under the laws of such state, and a copy of a
certificate of corporate existence of the Bank, dated
reasonably near the Effective Date from the Office of Thrift
Supervision;
(vi) (A) a certificate of each A Company signed on
behalf of such Person by its President or a Vice President
and its Secretary or any Assistant Secretary, dated as of
the Effective Date (the statements made in such certificate
shall be true on and as of the Effective Date), certifying
as to (1) the absence of any amendments to the charter of
such Person since the date of the Secretary of State's
certificate referred to in clause (v) above, (2) the absence
of any amendments to the bylaws of such Person since the
date of the certificate in respect of such bylaws that was
delivered to the Administrative Agent pursuant to the terms
of Section 3.01 or 3.02, as the case may be, of the Original
Credit Agreement, (3) the due incorporation and good
standing of such Person as a corporation under the laws of
the relevant state of incorporation, and the absence of any
proceeding for the dissolution or liquidation of such
Person, (4) the truth in all material respects of the
representations and warranties made by such Person contained
in the Loan Documents as though made on and as of the
Effective Date and (5) the absence of any event occurring
and continuing, or resulting from the Effective Date, that
constitutes a Default, (B) a certificate of Coleman
Guarantor signed on behalf of Coleman Guarantor by its
President or a Vice President and its Secretary or any
Assistant Secretary, dated as of the Effective Date (the
statements made in such certificate shall be true on and as
of the Effective Date), certifying as to (1) the absence of
any amendments to the charter of Coleman since the date of
the Secretary of State's certificate referred to in clause
(v) above, (2) the absence of any amendments to the bylaws
of Coleman since the date of the certificate in respect of
such bylaws that was delivered to the Administrative Agent
pursuant to the terms of Sections 3.01 and 3.02 of the
Original Credit Agreement and (3) the due incorporation and
good standing of Coleman as a corporation organized under
the laws of the State of Delaware, and the absence of any
proceeding for the dissolution or liquidation of Coleman,
(C) a certificate of the Borrower signed on behalf of the
Borrower by its President or a Vice President and its
Secretary or any Assistant Secretary, dated as of the
Effective Date (the statements made in
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71
such certificate shall be true on and as of the Effective
Date), certifying as to (1) the absence of any amendments to
the charter of Marvel since the date of the Secretary of
State's certificate referred to in clause (v) above, (2) the
absence of any amendments to the bylaws of Marvel since the
date of the certificate in respect of such bylaws that was
delivered to the Administrative Agent pursuant to the terms
of Sections 3.01 and 3.02 of the Original Credit Agreement,
and (3) the due incorporation and good standing of Marvel as
a corporation organized under the laws of the State of
Delaware, and the absence of any proceeding for the
dissolution or liquidation of Marvel, (D) a certificate of
New World Guarantor signed on behalf of New World Guarantor
by its President or a Vice President and its Secretary or
any Assistant Secretary, dated as of the Effective Date (the
statements made in such certificate shall be true on and as
of the Effective Date), certifying as to (1) the absence of
any amendments to the charter of New World since the date of
the Secretary of State's certificate referred to in clause
(v) above, (2) the absence of any amendments to the bylaws
of New World since the date of the certificate in respect of
such bylaws that was delivered to the Administrative Agent
pursuant to the terms of Section 3.02 of the Original Credit
Agreement and (3) the due incorporation and good standing of
New World as a corporation organized under the laws of the
State of Delaware, and the absence of any proceeding for the
dissolution or liquidation of New World, and (E) a
certificate of C&F Guarantor signed on behalf of C&F
Guarantor by its President or a Vice President and its
Secretary or any Assistant Secretary, dated as of the
Effective Date (the statements made in such certificate
shall be true on and as of the Effective Date), certifying
as to (1) the absence of any amendments to the charter of
MCG since the date of the Secretary of State's certificate
referred to in clause (v) above, (2) the absence of any
amendments to the bylaws of MCG since the date of the
certificate in respect of such bylaws that was delivered to
the Administrative Agent pursuant to the terms of Section
3.01 of the Third Credit Agreement and (3) the due
incorporation and good standing of MCG as a corporation
organized under the laws of the State of Delaware, and the
absence of any proceeding for the dissolution or liquidation
of MCG;
(vii) a certificate of Mafco to the effect (A) that
no information provided by Mafco or any Subsidiary of Mafco
to the Administrative Agent or any Lender in connection with
the Original Credit Agreement, the Second Credit Agreement,
the Third Credit Agreement, the Existing Credit Agreement or
this Agreement, as such information has been amended,
supplemented or superseded by any other information
delivered to the same parties receiving such information
contained or contains any material misstatement of fact or
omitted or omits to state any material fact necessary to
make the statements
<PAGE>
72
therein, in the light of the circumstances under which they
were made, not misleading except that, as to any financial
model included therein, such certificate shall be limited to
a statement that such model was prepared in good faith by
Mafco's or such Subsidiary's management based on assumptions
believed to be reasonable when made and may be further
qualified by a statement to the effect that because
assumptions as to future results are inherently subject to
uncertainty and contingencies beyond Mafco's or such
Subsidiary's control, actual results of Mafco or such
Subsidiary may be higher or lower, (B) the Mafco Guaranty is
in full force and effect on the Effective Date, (C) that
other than the agreements referenced in Section 3.01(h)(xi),
the charter documents of each A Company and each FN Party,
the Loan Documents and the Related Documents, there is no
other agreement, contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding
on or affecting any A Company or any FN Party that imposes
any material Obligation or any material restriction on any A
Company or any FN Party, (D) that the agreements referenced
in Section 3.01(h)(xi) are the only agreements, contracts,
loan agreements, indentures, mortgages, deeds of trust,
leases or other instruments (1) evidencing Debt of any
Designated Operating Company or any of their Subsidiaries
outstanding on the Effective Date, (2) governing the terms
of Debt of any Designated Operating Company or any of their
Subsidiaries outstanding on the Effective Date, or (3)
containing any commitment or other agreement by any Person
to extend credit that would constitute Debt to any
Designated Operating Company or any of their Subsidiaries,
in each case that imposes or will impose material
Obligations or material restrictions on any Designated
Operating Company and its Subsidiaries taken as a whole and
(E) that there is no other agreement or contract binding on
or affecting any Designated Operating Company or any of
their Subsidiaries that contains provisions that would
restrict any Loan Party from performing or that would impair
the ability of any Loan Party to perform, any of the
obligations of such Loan Party under the Loan Documents;
(viii) the Mafco Security Agreement in
substantially the form of Exhibit D-1 duly executed by
Mafco, the Borrower Security Agreement in substantially the
form of Exhibit D-2 duly executed by the Borrower, and the
Borrower Parent Security Agreement in substantially the form
of Exhibit D-3 duly executed by Borrower Parent, in each
case together with evidence that all other action that the
Administrative Agent may deem necessary or desirable in
order to perfect and protect the Liens created by such
Security Agreement have been taken, together with:
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73
(1) acknowledgement copies or stamped
receipt copies of proper amendments to the
financing statements previously filed in connection
with each Security Agreement; and
(2) evidence that all other action that
the Administrative Agent may deem necessary or
desirable in order to perfect and protect the Liens
created by each Security Agreement;
(ix) the Mafco Guaranty in substantially the form
of Exhibit E-1, duly executed by Mafco, the Borrower Parent
Guaranty in substantially the form of Exhibit E-2, duly
executed by Borrower Parent, the C&F Guaranty in
substantially the form of Exhibit E-3, duly executed by the
C&F Guarantor, the Cigar Guaranty in substantially the form
of Exhibit E-4, duly executed by Cigar Guarantor, the
Coleman Guaranty in substantially the form of Exhibit E-5,
duly executed by Coleman Guarantor, the Flavors Guaranty in
substantially the form of Exhibit E-6, duly executed by
Flavors Guarantor, and the New World Guaranty in
substantially the form of Exhibit E-7, duly executed by New
World Guarantor;
(x) the C&F Pledge Agreement in substantially the
form of Exhibit F-1, duly executed by C&F Guarantor, the
Cigar Pledge Agreement in substantially the form of Exhibit
F-2, duly executed by Cigar Guarantor, the Coleman Pledge
Agreement in substantially the form of Exhibit F-3, duly
executed by Coleman Guarantor, the Coleman Worldwide Pledge
Agreement in substantially the form of Exhibit F-4, duly
executed by Coleman Worldwide, the Flavors Pledge Agreement
in substantially the form of Exhibit F-5, duly executed by
Flavors Guarantor, the Four Star Pledge Agreement in
substantially the form of Exhibit F-6, duly executed by Four
Star, the Mafco Pledge Agreement in substantially the form
of Exhibit F-7, duly executed by Mafco, the M&F Pledge
Agreement in substantially the form of Exhibit F-8, duly
executed by M&F, the New Coleman Pledge Agreement in
substantially the form of Exhibit F-9, duly executed by New
Coleman, the New World Pledge Agreement in substantially the
form of Exhibit F-10, duly executed by New World Guarantor,
and the Second Andrews Pledge Agreement in substantially the
form of Exhibit F-11, duly executed by Andrews, together
with:
(1) acknowledgment copies or stamped
receipt copies of proper amendments to the
financing statements previously filed in connection
with each Pledge Agreement, in form and substance
satisfactory to the Administrative Agent,
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74
(2) completed requests for information,
dated on or before the Effective Date, listing the
financing statements referred to in clause(1) above,
(3) in the case of the Second Andrews
Pledge Agreement, copies of the News Corp. Contract,
and
(4) evidence that all other action that
the Administrative Agent may deem necessary or
desirable in order to perfect and protect the Liens
created by the each Pledge Agreement has been
taken;
(xi) a certificate of Mafco to the effect that,
other than the agreements delivered to the Administrative
Agent pursuant to Section 3.01(g)(xii)(B) and Section
3.02(i)(xi)(B) of the Original Credit Agreement and other
than as specified in and delivered pursuant to such
certificate and the certificate of Mafco delivered pursuant
to Section 3.01(f)(x) of the Second Credit Agreement,
Section 3.01(f)(ix) of the Third Credit Agreement and
Section 3.01(f)(x) of the Existing Credit Agreement, there
is no other contract, loan agreement, indenture, mortgage,
deed of trust, lease or other instrument (1) evidencing Debt
of any A Company, (2) governing the terms of Debt of any A
Company, or (3) containing any commitment or other agreement
by any Person to extend credit that would constitute Debt to
any A Company or any Designated Operating Company or any of
its Subsidiaries, in each case that imposes any material
obligation or any material restriction on any A Company or
any Designated Operating Company and its Subsidiaries, taken
as a whole;
(xii) such financial, business and other
information regarding each Loan Party and their Subsidiaries
as the Lender Parties shall have reasonably requested,
including, without limitation, information as to possible
contingent liabilities, tax matters, environmental matters,
obligations under ERISA and Welfare Plans, collective
bargaining agreements and other arrangements with employees,
annual financial statements of the Bank dated December 31,
1995, interim financial statements of the Bank dated the end
of the most recent fiscal quarter for which financial
statements are available, pro forma financial statements as
to the Borrower, and forecasts prepared by management of the
Bank, in form and substance satisfactory to the Lender
Parties, of balance sheets, income statements and cash flow
statements of the Bank on a quarterly basis for the term of
the Tranche A Revolving Credit Facility;
(xiii) certified copies of (A) an amendment and
restatement (each in form and substance satisfactory to the
Lender Parties) of the voting trust agreement relating to
the capital stock of the Borrower, the Borrower Parent,
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75
C&F Guarantor, Cigar Guarantor, Coleman Guarantor, Flavors
Guarantor, New World Guarantor, FG Guarantor and First
Gibraltar and (B) the Term Credit Agreement;
(xiv) copies of the Equity Contribution Agreement,
duly executed by the Borrower and Borrower Parent, in
substantially the form of Exhibit G, and the First Gibraltar
Loan Agreement, duly executed by First Gibraltar and
Borrower Parent, in substantially the form of Exhibit H;
(xv) a letter, in form and substance satisfactory
to the Administrative Agent, from Mafco to Ernst & Young,
independent certified public accountants, advising such
accountants that the Administrative Agent and the Lender
Parties have relied upon the financial statements of
Coleman, New World and MCG in determining whether to enter
into the Loan Documents and have been authorized to exercise
all rights of Mafco to require such accountants to disclose
any and all financial statements and any other information
of any kind that they may have with respect to such Persons
and their Subsidiaries and directing such accountants to
comply with any reasonable request of the Administrative
Agent or any Lender Party for such information;
(xvi) a letter, in form and substance satisfactory
to the Administrative Agent, from the Bank to KPMG Peat
Marwick, independent certified public accountants, advising
such accountants that the Administrative Agent and the
Lender Parties have relied upon the financial statements of
the Bank in determining whether to enter into the Loan
Documents and have been authorized to exercise all rights of
the Bank to require such accountants to disclose any and all
financial statements and any other information of any kind
that they may have with respect to the Bank and its
Subsidiaries and directing such accountants to comply with
any reasonable request of the Administrative Agent or any
Lender Party for such information;
(xvii) favorable opinions of counsel to Mafco
reasonably satisfactory to the Lender Parties, in form and
substance reasonably satisfactory to the Lender Parties;
(xviii) a favorable opinion of Shearman & Sterling,
counsel for the Administrative Agent, in form and substance
reasonably satisfactory to the Administrative Agent; and
(xix) such other information, approvals, opinions
or other documents as the Administrative Agent may
reasonably request.
<PAGE>
76
SECTION 3.02. Conditions Precedent to Each Borrowing and
Issuance. The obligation of each Lender to make an Advance (other than a
Letter of Credit Advance made by the Issuing Bank or a Lender pursuant to
Section 2.03(c)) on the occasion of each Borrowing (including the initial
Borrowing), and the obligation of the Issuing Bank to issue a Letter of Credit
(including the initial issuance) or renew a Letter of Credit and the right of
the Borrower to request the issuance or renewal of a Letter of Credit, shall
be subject to the further conditions precedent that on the date of such
Borrowing or issuance (a) the following statements shall be true (and each of
the giving of the applicable Notice of Borrowing or Notice of Issuance and the
acceptance by the Borrower of the proceeds of such Borrowing or of such Letter
of Credit or the renewal of such Letter of Credit shall constitute a
representation and warranty by the Borrower that both on the date of such
notice and on the date of such Borrowing or issuance or renewal such
statements are true):
(i) The representations and warranties contained in the Loan
Documents are correct in all material respects on and as of such
date, before and after giving effect to such Borrowing or issuance
and to the application of the proceeds therefrom, as though made on
and as of such date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties were true, correct and complete in all
material respects on and as of such earlier date; and
(ii) No event has occurred and is continuing, or would
result from such Borrowing or issuance or from the application of the
proceeds therefrom, which constitutes a Default,
(b) the Borrower shall, on the seventh Business Day prior to the date of such
Borrowing or issuance, deliver to the Administrative Agent either (1) a
Look-Forward Certificate or (2) a Deposit Certificate if a Look-Forward
Certificate has been delivered to the Administrative Agent within 90 days
prior to the date of such Borrowing or issuance, and the Required Lenders
shall not have determined, within 4 Business Days following the date of
receipt of such Look-Forward Certificate or Deposit Certificate, as the case
may be, in their reasonable discretion, that the pro forma amounts available
to be loaned by First Gibraltar to Borrower Parent, together with amounts
received by Mafco pursuant to or in connection with any Related Document, will
be less than $8 million in any calendar quarter or will not be sufficient to
pay interest on the Advances then outstanding, (c) in the case of the first
Borrowing after the New Marvel Shares have been pledged pursuant to the Loan
Documents and the "Loan Documents" under the Term Credit Agreement, the
Borrower shall have delivered to the Administrative Agent an appropriately
completed Federal Reserve Form U-1 for each Lender and (d) the Administrative
Agent shall have received such other certificates, opinions and other
documents as any Lender Party through the Administrative Agent may reasonably
request in order to confirm (i) the accuracy of the Borrower's representations
and
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77
warranties, (ii) the Borrower's timely compliance with the terms, covenants
and agreements set forth in this Agreement, and (iii) the absence of any
Default.
SECTION 3.03. Determinations Under Section 3.01. For
purposes of determining compliance with the conditions specified in Section
3.01, each Lender Party shall be deemed to have consented to, approved or
accepted or to be satisfied with each document or other matter required
thereunder to be consented to or approved by or acceptable or satisfactory to
the Lender Parties unless an officer of the Administrative Agent responsible
for the transactions contemplated by this Agreement shall have received notice
from such Lender Party prior to the earlier of the initial Borrowing or the
initial issuance of a Letter of Credit specifying its objection thereto and if
such earlier event consists of a Borrowing, such Lender Party shall not have
made available to the Administrative Agent such Lender Party's ratable portion
of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Borrower. The Borrower represents and warrants as follows:
(a) The Borrower (i) is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) is duly qualified and in good
standing as a foreign corporation in each other jurisdiction in which
it owns or leases property or in which the conduct of its business
requires it to so qualify or be licensed except where the failure to
so qualify or be licensed would not have a Material Adverse Effect
(with respect to clause (a) of the definition thereof, the term
"Person" shall refer to the Borrower) and (iii) has all requisite
corporate power and authority to own or lease and operate its
properties and to carry on its business as now conducted and as
proposed to be conducted. All of the outstanding capital stock of the
Borrower has been validly issued, is fully paid and non-assessable
and is owned by the Borrower Parent free and clear of all Liens
except for the Liens created by the Collateral Documents.
(b) Set forth on Schedule II hereto is a complete and
accurate list relating to the Borrower, showing as of the date hereof
the jurisdiction of its incorporation, the number of shares of each
class of capital stock authorized, and the number outstanding, on the
date hereof and the percentage of the outstanding shares of each such
class owned (directly or indirectly) by Borrower Parent and the
number of shares covered by all outstanding options, warrants, rights
of conversion or purchase and similar rights at the date hereof.
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78
(c) The execution, delivery and performance by the Borrower
of this Agreement, the Notes, each Loan Document and each Related
Document to which it is or is to be a party and the consummation by
the Borrower of the transactions contemplated hereby, are within the
Borrower's corporate powers, have been duly authorized by all
necessary corporate action, and do not (i) contravene the Borrower's
charter or by-laws, (ii) violate any law (including, without
limitation, the Exchange Act), rule, regulation (including, without
limitation, Regulation X of the Board of Governors of the Federal
Reserve System), order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the breach
of, or constitute a default under, any loan agreement, contract,
indenture, mortgage, deed of trust, lease or other instrument binding
on or affecting any Loan Party, any of its Subsidiaries (other than
any Subsidiaries of the Borrower) or any of its or their properties,
the effect of which conflict, breach or default is reasonably likely
to have a Material Adverse Effect (with respect to clause (a) of the
definition thereof, the term "Person" shall refer to the Borrower) or
(iv) except for the liens created by the Collateral Documents, the
voting trust agreements (other than the voting trust agreements
relating to the capital stock of FN Holdings and FN Parent) referred
to in Sections 3.01(g)(xvi) and 3.02(i)(xv) of the Original Credit
Agreement, the Amended and Restated Voting Trust Agreement dated as
of December 16, 1996 among The Bank of New York, the Cigar Guarantor,
C&F Guarantor and the Collateral Agent, the Amended and Restated
Voting Trust Agreement dated as of December 16, 1996 among The Bank
of New York, the Flavors Guarantor, C&F Guarantor and the Collateral
Agent, the Amended and Restated Voting Trust Agreement dated as of
December 16 , 1996 among Trans Network Insurance Services Inc., FG
Guarantor, The Bank of New York and the Collateral Agent, the Second
Amended and Restated Voting Trust Agreement dated as of December 16,
1996 among FG Guarantor, First Gibraltar, The Bank of New York and
the Collateral Agent and the voting trust agreement to be entered
into (on or prior to the Revlon Inclusion Date) by Revlon Finance
Corporation, Revlon Guarantor, The Bank of New York and the
Collateral Agent, result in or require the creation or imposition of
any Lien upon or with respect to any of the properties of any Loan
Party or any of its Subsidiaries (other than the Subsidiaries of the
Borrower). The Borrower is not in violation of any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination
or award or in breach of any such contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument, the
violation or breach of which would be reasonably likely to have a
Material Adverse Effect (with respect to clause (a) of the definition
thereof, the term "Person" shall refer to the Borrower).
(d) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory
body is required for (i) the due execution, delivery and performance
by the Borrower of this Agreement or the Notes or any other Loan
Document or any Related Document to which it is or is to be a
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79
party or for the consummation of the transactions contemplated
hereby, (ii) the grant by the Borrower of the Liens granted by it
pursuant to the Collateral Documents, (iii) the perfection or
maintenance of the Liens created by the Collateral Documents
(including the first priority nature thereof) or (iv) the exercise by
the Administrative Agent or any Lender Party of its rights under the
Loan Documents or the remedies in respect of the Collateral pursuant
to the Collateral Documents, except for the filing of financing
statements in accordance with Sections 3.01 and 3.02 of the Original
Credit Agreement, Section 3.01(f)(vii) and (viii) of the Second
Credit Agreement, Section 3.01(f)(vii) of the Third Credit Agreement,
Section 3.01(f)(ix) of the Existing Credit Agreement and the filing
of amendments to financing statements in accordance with Section 3.01
and except as may be required in connection with the disposition of
any portion of the Collateral by laws affecting the offering and sale
of securities generally; provided, however, that no representation or
warranty is made as to any consent of, authorization, approval or
other action by, or notice to or filing with, any banking agency or
regulatory body applicable to the Administrative Agent, the
Collateral Agent, the Syndication Agent or the Documentation Agent.
(e) This Agreement has been, and each of the Notes, each
other Loan Document to which the Borrower is a party when delivered
hereunder will have been, duly executed and delivered by the
Borrower. This Agreement is, and each of the Notes and each other
Loan Document to which the Borrower is a party when delivered
hereunder will be, the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforceability of creditor's
rights generally.
(f) The Consolidated and consolidating balance sheets of
Marvel III and its Subsidiaries as at December 31, 1995, and the
related Consolidated and consolidating statements of income and cash
flows of Marvel III and its Subsidiaries for the fiscal year then
ended, accompanied, in the case of the aforementioned Consolidated
balance sheets and related Consolidated statements of income and cash
flows, by an opinion of Ernst & Young, independent public
accountants, and the Consolidated and consolidating balance sheets of
Marvel III and its Subsidiaries as at September 30, 1996, and the
related Consolidated and consolidating statements of income and cash
flows of Marvel III and its Subsidiaries for the nine months then
ended, duly certified by the chief financial officer of Marvel III,
copies of which have been furnished to each Lender Party, fairly
present, subject, in the case of said balance sheets as at September
30, 1996, and said statements of income and cash flows for the three
months then ended, to year-end audit adjustments, the Consolidated
and consolidating financial condition of Marvel III and its
Subsidiaries as at such dates and the Consolidated and consolidating
results of the operations of Marvel III and its
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Subsidiaries for the periods ended on such dates, all in accordance
with generally accepted accounting principles applied on a consistent
basis.
(g) There is no pending or threatened action, proceeding,
governmental investigation or arbitration affecting any Loan Party,
the Bank or any of their Subsidiaries (other than any Subsidiary of
the Borrower ) before any court, governmental agency or arbitrator,
which is reasonably likely to have a Material Adverse Effect (with
respect to clause (a) of the definition thereof, the term "Person"
shall refer to such Loan Party or the Bank, as the case may be) or
that purports to affect the legality, validity or enforceability of
this Agreement, any Note, any other Loan Document or any Related
Document or the consummation of the transactions contemplated hereby
or thereby.
(h) The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock and no
proceeds of any Advance or drawings under any Letter of Credit will
be used to purchase or carry any Margin Stock (other than the Coleman
Worldwide LYONS, common stock of Coleman or the New Marvel Shares),
or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock.
(i) No proceeds of any Advance or drawings under any Letter
of Credit will be used to acquire any equity security of a class that
is registered pursuant to Section 12 of the Exchange Act (other than
the Coleman Worldwide LYONS, common stock of Coleman and the New
Marvel Shares).
(j) The Borrower and its ERISA Affiliates are in compliance
in all material respects with the applicable provisions of ERISA and
the Code with respect to each Plan thereof. No ERISA Event has
occurred or is reasonably expected to occur with respect to any Plan
of the Borrower or any of its ERISA Affiliates. The amount of all
Unfunded Pension Liabilities under all Plans of the Borrower and its
ERISA Affiliates does not exceed $60,000,000. None of the Borrower or
any of its ERISA Affiliates has made contributions or incurred any
Withdrawal Liability to any Multiemployer Plan within the past five
years, and it is not reasonably expected that such contributions
shall be made or required or that such liability shall be incurred in
any such case in amounts or under circumstances that would be
reasonably likely to result in a material liability to the Borrower
or any of its ERISA Affiliates. Schedule B (Actuarial Information) to
the 1995 annual report (Form 5500 Series) for each Plan of the
Borrower and each of its ERISA Affiliates, copies of which have been
filed with the Internal Revenue Service and furnished or made
available to the Lender Parties, is complete and accurate in all
material respects and fairly presents the funding status of such
Plan, and since the date of such Schedule B there has been no
material adverse change in such funding status. The obligations of
the Borrower
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81
and its Subsidiaries for post-retirement benefits to be provided
under Plans which are welfare benefit plans (as defined in Section
3(l) of ERISA) are not reasonably likely to have a Material Adverse
Effect (in the case of clause (a) of the definition thereof, the term
"Person" shall refer to the Borrower).
(k) The operations and properties of the Borrower are in
substantial compliance with all Environmental Laws, all necessary
Environmental Permits have been obtained and are in effect for the
operations and properties of the Borrower and the Borrower is in
compliance with all such Environmental Permits, except, as to all of
the above, where the failure to do so would not be reasonably likely
to have a Material Adverse Effect (in the case of clause (a) of the
definition thereof, the term "Person" shall refer to the Borrower);
and no circumstances exist that are reasonably likely to (i) form the
basis of an Environmental Action against the Borrower or any of its
properties or (ii) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under
any Environmental Law that would, in the case of either (i) or (ii)
above, be reasonably likely to have a Material Adverse Effect (in the
case of clause (a) of the definition thereof, the term "Person" shall
refer to the Borrower).
(l) The Borrower has filed, has caused to be filed or has
been included in all tax returns (Federal, state, local and foreign)
required to be filed and has paid all taxes shown thereon to be due,
together with applicable interest and penalties.
(m) The Borrower is not an "investment company," or an
"affiliated person" of, or "promoter" or "principal underwriter" for,
an "investment company", as such terms are defined in the Investment
Company Act of 1940, as amended. Neither the making of any Advances,
nor the issuance of any Letters of Credit, nor the application of the
proceeds or repayment thereof by the Borrower, nor the consummation
of the other transactions contemplated hereby, will violate any
provision of such Act or any rule, regulation or order of the
Securities and Exchange Commission thereunder.
(n) The Borrower is Solvent.
(o) Set forth on Schedule III hereto is a complete and
accurate list of all Debt (other than intercompany Debt, Debt under
the Loan Documents and Debt under the Term Credit Agreement and the
"Loan Documents" referred to therein) of the Borrower as of the date
hereof, showing as of the date hereof the principal amount
outstanding thereunder; and there is no other agreement, contract,
loan agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting the Borrower that imposes any
material Obligation or material restriction on the Borrower.
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(p) Set forth on Schedule IV hereto is a complete and
accurate list of all Investments held by the Borrower as of the date
hereof, showing as of the date hereof the amount, obligor or issuer
and maturity, if any, thereof.
SECTION 4.02. Representations and Warranties Applicable to
Marvel. During the Marvel Inclusion Period, the representations and warranties
contained in Section 4.01(g), (k), (l) and (m) and in the last sentence of
Section 4.01(c) shall be deemed to also cover Marvel and its Subsidiaries as
if such Persons were explicitly referred to in such Sections.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
Party shall have any Commitment hereunder, the Borrower will:
(a) Compliance with Laws, Etc. Comply, and, during the
Marvel Inclusion Period, cause Marvel and each of its Subsidiaries to
comply, in all material respects with all applicable laws, rules,
regulations and orders (such compliance to include, without
limitation, paying before the same become delinquent all taxes,
assessments and governmental charges imposed upon it or upon its
property except to the extent contested in good faith), the failure
to comply with which would, individually or in the aggregate, be
reasonably likely to have a Material Adverse Effect (with respect to
clause (a) of the definition thereof, the term "Person" shall refer
to the Borrower).
(b) Compliance with Environmental Laws. Comply and, during
the Marvel Inclusion Period, cause Marvel and each of its
Subsidiaries and all lessees and all other Persons occupying its
properties to comply, in all material respects, with all
Environmental Laws and Environmental Permits applicable to its
operations and properties; obtain and renew all Environmental Permits
necessary for its operations and properties; and conduct, and cause,
during the Marvel Inclusion Period, Marvel and each of its
Subsidiaries to conduct, any investigation, study, sampling and
testing, and undertake any cleanup, removal, remedial or other action
necessary to remove and clean up all Hazardous Materials from any of
its properties, in accordance with the requirements of all
Environmental Laws; provided, however, that the Borrower and, during
the Marvel Inclusion Period, Marvel and its Subsidiaries shall not be
required to undertake any such cleanup, removal, remedial or other
action to the extent that its obligation to do so is being contested
in good faith and by proper
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83
proceedings and appropriate reserves are being maintained with
respect to such circumstances.
(c) Maintenance of Insurance. Maintain, and, during the
Marvel Inclusion Period, cause Marvel and each of its Subsidiaries to
maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as
is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which the
Borrower, Marvel or such Subsidiary operates.
(d) Preservation of Corporate Existence, Etc. Preserve and
maintain, and, during the Marvel Inclusion Period, cause Marvel to
preserve and maintain, its corporate existence, rights (charter and
statutory) and franchises; provided, however, that neither the
Borrower nor Marvel shall be required to preserve any of its rights
or franchises if the Board of Directors of the Borrower (or, in the
case of Marvel, the executive committee of the Board of Directors of
Marvel) shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Borrower or Marvel,
as the case may be, and that the loss thereof is not disadvantageous
in any material respect to the Borrower, Marvel or the Lender
Parties.
(e) Visitation Rights. At any reasonable time and from time
to time, upon reasonable prior notice permit the Administrative Agent
or any of the Lender Parties or any agents or representatives
thereof, to the extent reasonably requested to examine and make
copies of and abstracts from the records and books of account of, and
visit the properties of, the Borrower and, during the Marvel
Inclusion Period, Marvel and its Subsidiaries, and to discuss the
affairs, finances and accounts of the Borrower and, during the Marvel
Inclusion Period, Marvel and its Subsidiaries with any of their
officers or directors and with their independent certified public
accountants.
(f) Keeping of Books. Keep, and cause, during the Marvel
Inclusion Period, Marvel and each of its Subsidiaries to keep, proper
books of record and account, in which full and correct entries shall
be made of all financial transactions and the assets and business of
the Borrower, Marvel and each such Subsidiary to the extent necessary
to permit the preparation of the financial statements required to be
delivered hereunder.
(g) Maintenance of Properties, Etc. Maintain and preserve,
and cause, during the Marvel Inclusion Period, Marvel and each of its
Subsidiaries to maintain and preserve, all of its properties that are
used or useful in the conduct of its business in good working order
and condition, ordinary wear and tear excepted.
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84
(h) Termination of Financing Statements. Upon the request of
the Administrative Agent, and at the expense of the Borrower, within
10 days after such request, furnish to the Administrative Agent
proper termination statements on Form UCC-3 covering such financing
statements as the Administrative Agent may reasonably request that
were listed in the completed requests for information referred to in
Section 3.01(h)(x)(4).
(i) Collateral Account. Maintain the Borrower
Collateral Account and the L/C Cash Collateral Account with Citibank
pursuant to the terms of the Borrower Security Agreement.
(j) Reporting Requirements. Furnish to the Lender
Parties through the Administrative Agent:
(i) as soon as available and in any event within 50
days after the end of each of the first three quarters of
each fiscal year of the Borrower, Consolidated balance
sheets of the Borrower and its Subsidiaries as of the end of
such quarter and Consolidated statements of earnings, cash
flows and stockholders' equity of the Borrower and its
Subsidiaries for the period commencing at the end of the
previous fiscal year and ending with the end of such
quarter, certified (subject to normal year-end audit
adjustment and the absence of footnotes) on behalf of the
Borrower by the chief financial officer of the Borrower;
(ii) as soon as available and in any event within
105 days after the end of each fiscal year of the Borrower,
a copy of the annual audit report for such year for the
Borrower and its Subsidiaries, containing financial
statements for such year certified in a manner reasonably
acceptable to the Marvel IV Required Lenders by Ernst &
Young or other independent public accountants reasonably
acceptable to the Marvel IV Required Lenders;
(iii) together with each delivery of financial
statements pursuant to clauses (i) and (ii) above, a
certificate executed on behalf of the Borrower by a senior
officer of the Borrower stating that no Default has occurred
and is continuing or, if a Default has occurred and is
continuing, a statement as to the nature thereof and the
action that the Borrower has taken and proposes to take with
respect thereto;
(iv) as soon as possible and in any event within
five days after knowledge of the occurrence of each Default
continuing on the date of such statement, a statement
executed on behalf of the Borrower by the chief
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85
financial officer of the Borrower setting forth details of
such Default and the action which the Borrower has taken and
proposes to take with respect thereto;
(v) as soon as available and in any event no later
than February 1 of each fiscal year of the Bank, forecasts
prepared by management of the Bank, in form satisfactory to
the Administrative Agent, of balance sheets and income
statements on a quarterly basis for the term of the
Facilities;
(vi) promptly after the sending or filing thereof,
copies of any filings and statements that the Borrower or
any Subsidiary of the Borrower files with the Securities and
Exchange Commission or any national securities exchange;
(vii) promptly and in any event within (A) thirty
days after the Borrower knows or has reason to know that any
ERISA Event with respect to the Borrower or any of its ERISA
Affiliates has occurred, a statement describing such ERISA
Event and the action, if any, that the Borrower or such
ERISA Affiliate proposes to take with respect thereto, (B)
thirty days either after receipt thereof by the Borrower or
after the Borrower knows or has reason to know of the
receipt thereof by any of its ERISA Affiliates from the
sponsor of a Multiemployer Plan of the Borrower or any of
its ERISA Affiliates, a copy of each notice received by any
such Person concerning the imposition of Withdrawal
Liability upon such Person, the reorganization or
termination of such Multiemployer Plan, or the amount of the
liability incurred, or that may be incurred, by the Borrower
or any of its ERISA Affiliates in connection with any such
event and (C) ten Business Days either after receipt thereof
by the Borrower or after the Borrower knows or has reason to
know of the receipt thereof by any of its ERISA Affiliates,
copies of each notice from the PBGC stating its intention to
terminate any Plan of the Borrower or any of its ERISA
Affiliates or to have a trustee appointed to administer any
such Plan, provided that in the case of any event described
in clauses (A), (B) or (C) hereof, such event shall have a
Material Adverse Effect (with respect to clause (a) of the
definition thereof, the term "Person" shall refer to the
Borrower);
(viii) in the event of any change in GAAP from the
date of the annual financial statements referred to in
Section 4.01(f) and upon delivery of any financial statement
required to be furnished under clauses (i) or (ii) of this
Section 5.01(j), a statement of reconciliation conforming
any information contained in such financial statement with
GAAP as in effect on the date of the annual financial
statements referred to in Section 4.01(f);
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86
(ix) promptly upon any officer of the Borrower
obtaining knowledge thereof, written notice of (A) the
institution or non-frivolous threat of any action, suit,
proceeding, governmental investigation or arbitration
against or affecting the Borrower or any of its Subsidiaries
or any property of the Borrower or any of its Subsidiaries
(any such action, suit, proceeding, investigation or
arbitration being a "Proceeding") or (B) any material
development in any Proceeding that is already pending, where
such Proceeding or development has not previously been
disclosed by the Borrower hereunder and would be reasonably
likely to have a Material Adverse Effect (in the case of
clause (a) of the definition of Material Adverse Effect, the
term "Person" shall refer to the Borrower); together in each
case with such other information as any Lender through the
Administrative Agent may reasonably request to enable the
Lenders and their counsel to evaluate such matters;
(x) promptly after the furnishing thereof, copies
of any statement or report furnished to any other holder of
the securities of the Borrower or, during the Marvel
Inclusion Period, of Marvel or of any Subsidiary of Marvel
pursuant to the terms of any indenture, loan or credit or
similar agreement and not otherwise required to be furnished
to the Lenders pursuant to any other clause of this Section
5.01(j);
(xi) promptly upon receipt thereof, copies of all
notices, requests and other documents received by any Loan
Party or any Subsidiary of any Loan Party under or pursuant
to any Related Document and, from time to time upon request
by the Administrative Agent, such information and reports
regarding the Related Documents as the Administrative Agent
may reasonably request;
(xii) within 10 days after receipt, copies of all
Revenue Agent Reports (Internal Revenue Service Form 886),
or other written proposals of the Internal Revenue Service,
that propose, determine or otherwise set forth positive
adjustments to the Federal income tax liability of the
affiliated group (within the meaning of Section 1504(a)(1)
of the Internal Revenue Code) of which the Borrower is a
member aggregating $5,000,000 or more;
(xiii) promptly, and in any event within five
Business Days after the due date (with extensions) for
filing the final Federal income tax return in respect of
each taxable year, a certificate of the Borrower (a "Tax
Certificate"), signed on behalf of the Borrower by the
President or the chief financial officer of the Borrower,
stating that the common parent of the affiliated group
(within the meaning of Section 1504(a)(1) of the Internal
Revenue Code) of which the Borrower is a member has paid to
the Internal
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87
Revenue Service or other taxing authority the full amount
that such affiliated group is required to pay in respect of
Federal income tax for such year;
(xiv) promptly after the occurrence thereof, notice
of any condition or occurrence on any property of the
Borrower or, during the Marvel Inclusion Period, Marvel or
any Subsidiary of Marvel that results in a material
noncompliance by the Borrower, Marvel or any of Marvel's
Subsidiaries with any Environmental Law or Environmental
Permit or would be reasonably likely to (i) form the basis
of an Environmental Action against the Borrower, Marvel or
any of Marvel's Subsidiaries or any such property that would
be reasonably likely to have a Material Adverse Effect (in
the case of clause (a) of the definition of Material Adverse
Effect, the term "Person" shall refer to the Borrower) or
(ii) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability
under any Environmental Law or Environmental Permit or would
be reasonably likely to (i) form the basis of an
Environmental Action against the Borrower, Marvel or any of
Marvel's Subsidiaries or such property that could have a
Material Adverse Effect (in the case of clause (a) of the
definition of Material Adverse Effect, the term "Person"
shall refer to the Borrower);
(xv) promptly after any deposit in the Borrower
Collateral Account, a certificate signed on behalf of the
Borrower by the president or chief financial officer of the
Borrower, stating the amount of such deposit and the source
of the funds of such deposit, together with a schedule in
form and substance reasonably satisfactory to the
Administrative Agent setting forth in reasonable detail the
computations and other information on which the amount and
source of such deposit were determined; and
(xvi) such other information respecting the
condition (financial or otherwise), operations, assets or
business of the Borrower or any of its Subsidiaries as any
Lender Party through the Administrative Agent may from time
to time reasonably request.
(k) Look-Forward Certificate. With respect to each deposit
(other than of income or proceeds of Collateral Investments) to the
Collateral Accounts (other than the Second Mafco Collateral Account
and the L/C Cash Collateral Account), the Borrower shall, within 15
Business Days prior to the date of such deposit or within five
Business Days after the date of such deposit, deliver a certificate
(the "Look-Forward Certificate") to the Administrative Agent stating
that the pro forma amounts available to be loaned by First Gibraltar
to Borrower Parent, together with amounts received by Mafco pursuant
to or in connection with any Related Document, will not be less than
$8 million in any calendar quarter and will not be insufficient to
pay
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88
interest on the Advances then outstanding, together with a schedule
in form reasonably satisfactory to the Administrative Agent setting
forth in reasonable detail the computations, assumptions and other
information on which such certification is based) (taking into
account, among other things, the Bank's performance to date, the
quality of the Bank's assets and the presence of any agreement with
the Bank's regulators including, but not limited to, an agreement
relating to capital, asset quality, dividends or management);
provided, however, that, notwithstanding the foregoing, if a
Look-Forward Certificate has been delivered to the Administrative
Agent within 90 days prior to a deposit in the Mafco Collateral
Account of amounts paid under or in connection with any Related
Document or Asset Sale, the Borrower may, instead of delivering a
Look-Forward Certificate to the Administrative Agent, deliver a
certificate (a "Deposit Certificate") to the Administrative Agent,
within 15 Business Days prior to the date of such deposit or within
five Business Days after the date of such deposit, stating that (x)
there has been no adverse change in (1) the financial condition of
each of the Bank and Mafco and its Subsidiaries, taken as a whole,
since the date of the last Look-Forward Certificate that was
delivered to the Administrative Agent or (2) the projections
contained in such Look-Forward Certificate and (y) no event has
occurred and is continuing which constitutes an Event of Default or
would constitute an Event of Default but for the requirement that
notice be given or time elapse or both.
(l) Transactions with Affiliates. Conduct, and cause each of
its Subsidiaries to conduct, all transactions otherwise permitted
under the Loan Documents with any of their Affiliates (other than the
Borrower or any of its Subsidiaries) on terms that are fair and
reasonable and no less favorable to the Borrower or such Subsidiary
than it would obtain in a comparable arm's-length transaction with a
Person that is not an Affiliate; provided, however, that for purposes
of this Section 5.01(l), the term "Affiliate" shall not include any
officer or director of the Borrower or such Subsidiary, as the case
may be, who does not possess directly or indirectly the power to vote
5% or more of the Voting Stock of the Borrower or its Subsidiaries;
provided further that nothing in this Section 5.01(l) shall restrict
the performance by the parties to (i) the Tax Sharing Agreement dated
as of April 22, 1993 between Mafco and Marvel Holdings Inc., (ii) the
Tax Sharing Agreement dated as of October 20, 1993 between Mafco and
Marvel (Parent) Holdings Inc. and (iii) the Amended and Restated Tax
Sharing Agreement dated as of January 1, 1994 among Mafco, Marvel III
Holdings Inc., Marvel and certain Subsidiaries of Marvel, in each
case, as the same may be amended, modified or otherwise supplemented
from time to time, of their respective obligations thereunder.
(m) Use of Proceeds. Use the proceeds of the Advances
for general corporate purposes of Mafco and its Subsidiaries;
provided, however, that on and after the Tranche B Termination Date,
no more than $200 million of the proceeds of
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89
the Advances outstanding at any time may be used for general
corporate purposes of Mafco and its Subsidiaries other than for the
purchase of the Coleman Worldwide LYONS or for the payment, in cash,
of the exchange price to a holder of Coleman Worldwide LYONS in
respect of such holder's Coleman Worldwide LYONS.
(n) Mafco Tax Group. Maintain its status as a member
of the affiliated group (within the meaning of Section 1504(a)(1)
of the Code) of which Mafco is the common parent.
(o) Net Cash Proceeds. Deposit all of the Net Cash Proceeds
received by the Borrower from and after the Effective Date from Asset
Sales (other than Net Cash Proceeds required to be applied to prepay
or repay the Facilities or the Debt outstanding under the Term Credit
Agreement) in the Mafco Collateral Account.
(p) LYONS Utilization. On the first Business Day of each
month or upon request of the Administrative Agent, deliver a written
report to the Administrative Agent and each Lender Party summarizing
the LYONS Utilization since the Effective Date.
SECTION 5.02. Negative Covenants. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
Party shall have any Commitment hereunder, the Borrower will not:
(a) Liens, Etc. Create or suffer to exist any Lien, upon or
with respect to any of its properties, whether now owned or hereafter
acquired, or sign or file under the Uniform Commercial Code of any
jurisdiction, a financing statement that names the Borrower as debtor
or sign any security agreement authorizing any secured party
thereunder to file such financing statement, or assign any right to
receive income, other than the following Liens: (i) Liens created by
the Loan Documents or the "Loan Documents" referred to in the Term
Credit Agreement; (ii) the Liens described on Schedule V provided
that in the event any property subject to any such Lien is released
from such Lien, such released property may not thereafter be
subjected to any Lien other than Liens created by the Loan Documents
or the "Loan Documents" referred to in the Term Credit Agreement;
(iii) mechanics', materialmen's, carriers' and similar Liens arising
in the ordinary course of business securing obligations that are not
overdue for a period of more than 30 days or which are being
contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained; (iv) Liens for taxes,
assessments and governmental charges or levies not yet due and
payable or which are being contested in good faith and by proper
proceedings and as to which appropriate reserves are being
maintained; and (v) judgment or other similar Liens, provided that
there shall be no period of more
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than 10 consecutive days during which a stay of enforcement of the
related judgment shall not be in effect.
(b) Lease Obligations. Create, incur, assume or suffer to
exist any obligations as lessee (i) for the rental or hire of real or
personal property in connection with any sale and leaseback
transaction, or (ii) for the rental or hire of other real or personal
property of any kind under leases or agreements to lease having an
original term of one year or more.
(c) Mergers, Etc. Merge into or consolidate with any
Person or permit any Person to merge into it.
(d) Sales, Etc. of Assets. Sell, lease, transfer or
otherwise dispose of any assets or grant any option or other right
to purchase, lease or otherwise acquire any assets except (i)
dispositions of obsolete, worn out or surplus property disposed of in
the ordinary course of business, (ii) a transfer of any Coleman
Worldwide LYONS held by the Borrower to Coleman Worldwide and (iii)
sales, leases, transfers or other dispositions of assets for cash
and for no less than fair market value, provided that, in the case
of an Asset Sale, the Borrower complies with the provisions of Section
5.01(o) in respect of the Net Cash Proceeds of such Asset Sale.
(e) Dividends, Repurchases, Etc. Declare or pay any
dividends, purchase, redeem, retire, defease or otherwise acquire for
value any of its capital stock or any warrants, rights or options to
acquire such capital stock, now or hereafter outstanding, return any
capital to its stockholders as such, make any distribution of assets,
capital stock, warrants, rights, options, obligations or securities
to its stockholders as such, except that the Borrower may (i) declare
and deliver dividends and distributions payable only in common stock
or warrants, rights or options to acquire common stock, (ii) declare
and pay cash dividends to its stockholders in an amount not to exceed
the amount released by the Collateral Agent from the Borrower
Collateral Account pursuant to the provisions of Section 7 of the
Borrower Security Agreement or the proceeds of the Advances and the
proceeds of borrowings under the Term Credit Agreement, (iii) declare
and pay cash dividends to its stockholders in an amount not to exceed
the Net Cash Proceeds received by Mafco and its Subsidiaries from
Asset Sales on and after the Effective Date solely to permit the
compliance by Mafco and its Subsidiaries with the requirements of
Section 5.01(o) and Section 7(q) of the Mafco Guaranty and (iv) from
and after the later to occur of (A) the Tranche B Termination Date
and (B) the Term Credit Agreement Termination Date, declare and pay
cash dividends to its stockholders in an amount, together with the
aggregate amount of Investments made pursuant to Section 5.02(f)(ix),
not to exceed the aggregate amount of proceeds received by the
Borrower or any of its Subsidiaries from any sale, lease, transfer or
other disposition of all or any portion of the capital
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91
stock or assets of Marvel III Holdings Inc., Marvel (Parent) Holdings
Inc., Marvel Holdings Inc. and Marvel (or any of its Subsidiaries).
(f) Investments. Make or hold any Investment in any Person,
other than (i) Investments by the Borrower and its Subsidiaries in
Cash Equivalents, (ii) a loan by the Borrower to Mafco of up to
$650,000,000 out of the proceeds of the Advances and the proceeds of
borrowings under the Term Credit Agreement, (iii) Investments by the
Borrower in Mafco or any of its Subsidiaries in an amount not to
exceed the sum of the amount released by the Collateral Agent from
the Borrower Collateral Account pursuant to the provisions of Section
7 of the Borrower Security Agreement plus the aggregate amount of any
Investments in the Borrower made by Mafco or any of its Subsidiaries
out of the proceeds from the amount released by the Collateral Agent
from the Mafco Collateral Accounts pursuant to Section 7 of the Mafco
Security Agreement, (iv) Investments existing on the date hereof, (v)
contributions by the Borrower of common stock of Marvel to Marvel III
Holdings Inc., Marvel Holdings Inc. or Marvel (Parent) Holdings Inc.,
(vi) Investments by the Borrower in the Coleman Worldwide LYONS,
(vii) Investments by the Borrower in the New Marvel Shares, (viii)
Investments in Mafco in an amount not to exceed the Net Cash Proceeds
received by Mafco and its Subsidiaries from Asset Sales on and after
the Effective Date solely to permit the compliance by Mafco and its
Subsidiaries with the requirements of Section 5.01(o) and Section
7(q) of the Mafco Guaranty and (ix) from and after the later to occur
of (A) the Tranche B Termination Date and (B) the Term Credit
Agreement Termination Date, Investments by the Borrower in Mafco or
any of its Subsidiaries in an amount, together with the aggregate
amount of the cash dividends paid by the Borrower pursuant to Section
5.02(e)(iv), not to exceed the aggregate amount of proceeds recevied
by the Borrower or any of its Subsidiaries from any sale, lease,
transfer or other disposition of all or any portion of the capital
stock or assets of Marvel III Holdings Inc., Marvel (Parent) Holdings
Inc., Marvel Holdings Inc. and Marvel (or any of its Subsidiaries).
(g) Change in Nature of Business. Engage in any
business other than the ownership of the capital stock of Marvel III
Holdings Inc.
(h) Accounting Changes. Make or permit any change in
accounting policies affecting (i) the presentation of financial
statements or (ii) reporting practices, except in either case as
required or permitted by GAAP.
(i) Debt. Create, incur, assume or suffer to exist any Debt
other than: (i) Debt under the Loan Documents and under the Term
Credit Agreement and the "Loan Documents" referred to therein and
(ii) endorsement of negotiable instruments for deposit or collection
or similar transactions in the ordinary course of business.
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(j) Charter Amendments. Amend its certificate of
incorporation or bylaws except that the Borrower may change its name
to Mafco Finance Corp.
(k) Prepayments, Etc. of Debt. Prepay, redeem,
purchase, defease or otherwise satisfy prior to the scheduled
maturity thereof in any manner, or make any payment in violation of
any subordination terms of, any Debt, other than the prepayment of
the Advances in accordance with the terms of this Agreement, or
amend, modify or change in any manner any term or condition of any
Debt or any agreement relating to such Debt other than (i) to make
mandatory or optional prepayments of the Debt under the Term Credit
Agreement pursuant to the terms thereof, (ii) prepayments of Debt
required by Section 7(q) of the Mafco Guaranty and (iii) amendments,
modifications and changes to the terms and conditions of the Term
Credit Agreement pursuant to its terms.
(l) Negative Pledge. Enter into or suffer to exist any
agreement prohibiting or conditioning the creation or assumption of
any Lien upon any of its property or assets other than (i) in favor
of the Administrative Agent and the Lender Parties, (ii) any
prohibition or condition existing on the date hereof or (iii) any
prohibition or condition contained in the Term Credit Agreement or
the "Loan Documents" referred to therein.
(m) Partnerships. Become a general partner in any
general or limited partnership.
(n) Capital Expenditures. Make any Capital
Expenditures.
(o) Issuance of Capital Stock. Issue any capital stock
or warrants, rights or options to acquire such capital stock.
(p) Payment Restrictions. Create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of the Borrower to (i) pay
dividends or make any other distributions on any of the Borrower's
capital stock, (ii) make loans or advances to Mafco or any subsidiary
of Mafco or (iii) repay or prepay any Debt owed by the Borrower other
than any (x) consensual encumbrances or restrictions existing on the
date hereof and (y) other consensual encumbrances or restrictions
that are no more onerous than those encumbrances and restrictions in
existence on the date hereof with respect to the Borrower.
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ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following
events ("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of, or
interest on, any Advance or any fees payable to the Administrative
Agent or any Lender hereunder, in each case when the same becomes due
and payable, or any Loan Party shall fail to make any other payment
hereunder within five Business Days after the same becomes due and
payable; or
(b) Any representation or warranty made by any Loan Party or
any FN Party or under or in connection with any Loan Document or FN
Document shall prove to have been incorrect in any material respect
when made or confirmed; or
(c) (i) The Borrower shall fail to perform or observe any
term, covenant or agreement contained in Section 5.01(h), 5.01(i),
5.01(j), 5.01(k), 5.01(m), 5.01(n), 5.01(o) or 5.02, (ii) Mafco shall
fail to perform or observe any term, covenant or agreement contained
in Section 7(i), 7(j), 7(l), 7(o), 7(p), 7(q) or 8 of the Mafco
Guaranty, (iii) Coleman Guarantor shall fail to perform or observe
any term, covenant or agreement contained in Section 7(i), 7(k), 7(m)
or 8 of the Coleman Guaranty, (iv) Borrower Parent shall fail to
perform or observe any term, covenant or agreement contained in
Section 7(j) or 8 of the Borrower Parent Guaranty, (v) New World
Guarantor shall fail to perform or observe any term, covenant or
agreement contained in Section 7(h), 7(j), 7(k) or 8 of the New World
Guaranty, (vii) C&F Guarantor shall fail to perform or observe any
term, covenant or agreement contained in Section 7(h), 7(j), 7(k) or
8 of the C&F Guaranty, (vii) Cigar Guarantor shall fail to perform or
observe any term, covenant or agreement contained in Section 7(h),
7(j), 7(k) or 8 of the Cigar Guaranty, (viii) Flavors Guaranty shall
fail to perform or observe any term, covenant or agreement contained
in Section 7(h), 7(j), 7(k) or 8 of the Flavors Guaranty, (ix) on and
after the Revlon Inclusion Date, Revlon Guarantor shall fail to
perform or observe any term, covenant or agreement contained in
Section 7(h), 7(j) or 8 of the Revlon Guaranty or (x) any Loan Party
shall fail to perform or observe any other term, covenant or
agreement contained in any Loan Document on its part to be performed
or observed if such failure shall remain unremedied for 30 days after
written notice thereof shall have been given to the Borrower by the
Administrative Agent or any Lender Party; or
(d) (i) Any A Company, any Designated Operating Company
or the Bankshall fail to pay any principal of or premium or interest
on any Debt which is
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94
outstanding in a principal amount of at least $10,000,000 in the
aggregate (but excluding Debt outstanding hereunder) of such A
Company, such Designated Operating Company or the Bank (as the case
may be), when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise),
and such failure shall continue after the applicable grace period, if
any, specified in the agreement or instrument relating to such Debt;
or (ii) any other event shall occur or condition shall exist (other
than (x) during the period from the date hereof through June 30,
1997, the breach by Marvel of certain financial covenants for the
fiscal quarter ended September 30, 1996, for the fiscal quarter
ending December 31, 1996, for the fiscal quarter ending March 31,
1997 and for the fiscal quarter ending June 30, 1997 under its senior
bank credit agreements and (y) in the case of the Specified Holding
Company Debt, any event or condition relating to Marvel, Marvel III
Holdings Inc., Marvel (Parent) Holdings Inc. or Marvel Holdings Inc.)
under any agreement or instrument relating to any such Debt and shall
continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is
to accelerate, or to permit the acceleration of, the maturity of such
Debt; or (iii) any such Debt shall be declared to be due and payable,
or required to be prepaid (other than by a regularly scheduled
required prepayment), redeemed, purchased or defeased, or an offer to
prepay, redeem, purchase or defease such Debt shall be required to be
made, in each case prior to the stated maturity thereof; or (iv) in
the case of any Specified Holding Company Debt, any event or
condition relating to Marvel, Marvel III Holdings Inc., Marvel
(Parent) Holdings Inc. or Marvel Holdings Inc. shall occur and shall
continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is
to accelerate the maturity of such Debt; or
(e) Any A Company, any Designated Operating Company (other
than Marvel) or the Bank shall generally not pay its debts as such
debts become due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the benefit
of creditors; or any proceeding shall be instituted by or against any
A Company, any Designated Operating Company (other than Marvel) or
any FN Party seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property and, in
the case of any such proceeding instituted against it (but not
instituted by it), either such proceeding shall remain undismissed or
unstayed for a period of 45 days, or any of the actions sought in
such proceeding (including, without limitation, the entry of an order
for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or for any substantial
part of its property) shall occur; or any A Company, any Designated
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95
Operating Company (other than Marvel) or the Bank shall take any
corporate action to authorize any of the actions set forth above in
this Section 6.01(e); or
(f) Any judgment or order for the payment of money in
excess of $10,000,000 shall be rendered against any A Company, any
Designated Operating Company or the Bank and there shall be any
period of 10 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect unless such judgment or order shall have been
vacated, satisfied or dismissed or bonded pending appeal; provided,
however, that any such judgment or order shall not be an Event of
Default under this Section 6.01(f) if and for so long as (i) the
entire amount of such judgment or order is covered by a valid and
binding policy of insurance between the defendant and the insurer
covering payment thereof and (ii) such insurer, which shall be rated
at least "A" by A.M. Best Company, has been notified of, and has not
disputed the claim made for payment of the amount of such judgment or
order; or
(g) Any non-monetary judgment or order shall be rendered
against any A Company, any Designated Operating Company or the Bank
that is reasonably likely to have a Material Adverse Effect (in the
case of clause (a) of the definition thereof, the term "Person" shall
refer to the Borrower) and there shall be any period of 10
consecutive days during which a stay of enforcement of such judgment
or order, by reason of a pending appeal or otherwise, shall not be in
effect unless such judgment or order shall have been vacated,
satisfied, discharged or bonded pending appeal; or
(h) Ronald O. Perelman (or in the event of his incompetence
or death, his estate, heirs, executor, administrator, committee or
other personal representative) shall cease to beneficially own (i) at
least 80% of the Voting Stock of any A Company, any Designated
Operating Company (other than Marvel, New World and Revlon) or the
Bank, (ii) during the Marvel Inclusion Period, at least a majority of
the voting power of the Voting Stock of Marvel, (iii) prior to the
consummation of the New World Acquisition, at least a majority of the
voting power of the Voting Stock of New World or (iv) on and after
the Revlon Inclusion Date, at least a majority of the voting power of
the Voting Stock of Revlon, in each case other than as a result of an
Asset Sale pursuant to which all of the common stock held by Mafco
and its Subsidiaries in any A Company, any Designated Operating
Company or the Bank (or, in any such case, in such Person's direct or
indirect parent) is sold and the Net Cash Proceeds of such Asset Sale
is applied in accordance with the terms of the Loan Documents and the
"Loan Documents" referred to in the Term Credit Agreement; or
(i) Any ERISA Event shall have occurred with respect to
Mafco or any of its ERISA Affiliates and such ERISA Event, together
with any and all other ERISA
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96
Events that shall have occurred with respect to Mafco or any of its
ERISA Affiliates, is reasonably likely to have a Material Adverse
Effect (with respect to clause (a) of the definition thereof, the
term "Person" shall refer to Mafco); or
(j) Mafco or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan of the Borrower or
any of its ERISA Affiliates that it has incurred Withdrawal Liability
to such Multiemployer Plan in an amount that, when aggregated with
all other amounts required to be paid to Multiemployer Plans by Mafco
and its ERISA Affiliates as Withdrawal Liability (determined as of
the date of such notification), exceeds $10,000,000 or requires
payments exceeding $10,000,000 per annum; or
(k) Mafco or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan of the Borrower or
any of its ERISA Affiliates that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV
of ERISA, and as a result of such reorganization or termination the
aggregate annual contributions of Mafco and its ERISA Affiliates to
all Multiemployer Plans that are then in reorganization or being
terminated have been or will be increased over the amounts
contributed to such Multiemployer Plans for the plan years of such
Multiemployer Plans immediately preceding the plan year in which such
reorganization or termination occurs by an amount exceeding
$10,000,000; or
(l) Any provision of any Loan Document, Related Document or
FN Document after delivery thereof pursuant to the Original Credit
Agreement, the Second Credit Agreement, the Third Credit Agreement,
the Existing Credit Agreement, Section 3.01 hereof or pursuant to the
definition of "Revlon Inclusion Date" shall for any reason (other
than pursuant to the terms thereof) cease to be valid and binding on
or enforceable against any party to it, or any party to any such
document shall so state in writing; or
(m) Any Collateral Document after delivery thereof pursuant
to the Original Credit Agreement, the Second Credit Agreement, the
Third Credit Agreement, the Existing Credit Agreement, Section 3.01
hereof or the definition of "Revlon Inclusion Date" shall for any
reason (other than pursuant to the terms thereof) cease to create a
valid and perfected first priority Lien on the Collateral purported
to be covered thereby; or
(n) Any provision of the FN Holdings Debt Document, the FN
Holdings New Debt Document, the Second New FN Holdings Debt Document,
the FN Holdings Preferred Stock or the FN Parent Debt Document shall
be terminated, amended, waived or otherwise modified without the
consent of the Marvel IV Required Lenders or any provision of the
First Gibraltar Charter Document shall be
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amended or modified without the consent of the Marvel IV Required
Lenders (other than as permitted by the terms of the Mafco Guaranty);
or
(o) The Bank fails to maintain the minimum capital and
leverage ratios required as of the Effective Date for the Bank to be
considered as a "well capitalized" "savings association" pursuant to
12 U.S.C. Section 1831o and 12 C.F.R. Section 565, as such Sections
may be amended, reenacted or redesignated from time to time; or
(p) (i) The common stock of any Designated Operating Company
(other than New World, Marvel and Revlon) trading on the date hereof
shall cease to be publicly traded on the New York Stock Exchange;
(ii) at any time prior to the consummation of the New World
Acquisition, the common stock of New World shall cease to be publicly
traded on the New York Stock Exchange or the Nasdaq National Market
System; (iii) at any time prior to the later of the Tranche B
Termination Date and the Term Credit Agreement Termination Date, News
Corp. Preferred ADRs shall cease to be publicly traded; (iv) during
the Marvel Inclusion Period, the common stock of Marvel shall cease
to be publicly traded on the New York Stock Exchange or the Nasdaq
National Market System; or (v) on and after the Revlon Inclusion
Date, the common stock of Revlon shall cease to be publicly traded on
the New York Stock Exchange; or
(q) Gerald J. Ford shall beneficially or legally own
shares of the common stock of FN Holdings other than shares of the
Class B Common Stock; or
(r) Any Person party to the Related Documents shall fail to
directly deposit in the Mafco Collateral Account (i) a payment to
Mafco under any Related Document (which payment is required to be
made and is permitted under each indenture and credit agreement to
which such Person is a party) or (ii) a loan to Mafco of the proceeds
of any payment received by such Person under any Related Document
(which loan is required to be made and is permitted under each
indenture and credit agreement to which such Person is a party) and
such failure shall remain unremedied for three Business Days; or
(s) (i) Mafco shall fail to furnish to the Administrative
Agent and the Lender Parties on or prior to December 1, 1997, a
business plan setting forth, in respect of all of the Debt of Mafco
and its Subsidiaries (other than Debt of the Designated Operating
Companies, the Bank, Revlon, Marvel, Marvel III Holdings Inc., Marvel
(Parent) Holdings Inc., Marvel Holdings Inc., Meridian Sports
Incorporated and their respective Subsidiaries) that is scheduled to
come due during calendar year 1998 and 1999, the method by which all
such Debt shall be repaid, prepaid, redeemed or refinanced on a
timely basis, including without limitation,
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through Asset Sales, issuances of Debt, issuances of equity or
contributions to capital, in each case in reasonable detail as to the
identity of the assets to be sold, the issuer of the Debt or equity
and such other details as the Marvel IV Required Lenders shall
request or (ii) the Marvel IV Required Lenders shall not have
approved the form and substance of such business plan on or prior to
December 31, 1997;
then, and in any such event, the Administrative Agent (i) shall at the
request, or may with the consent, of the Required Lenders, by notice to the
Borrower, declare the Commitment of each Appropriate Lender to make Advances
(other than Letter of Credit Advances by the Issuing Bank or a Tranche A
Revolving Credit Lender pursuant to Section 2.03(c)) and of the Issuing Bank
to issue Letters of Credit to be terminated, whereupon the same shall
forthwith terminate, and (ii) shall at the request, or may with the consent,
of the Required Lenders, by notice to the Borrower, declare the Notes, all
interest thereon and all other amounts payable under this Agreement to be
forthwith due and payable, whereupon the Notes, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby
expressly waived by the Borrower; provided, however, that, in the event of an
actual or deemed entry of an order for relief with respect to the Borrower
under the Federal Bankruptcy Code, (A) the obligation of each Lender to make
Advances (other than Letter of Credit Advances by an Issuing Bank or a Lender
pursuant to Section 2.03(c)) and of each Issuing Bank to issue Letters of
Credit shall automatically be terminated and (B) the Notes, all such interest
and all such amounts shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of which
are hereby expressly waived by the Borrower.
SECTION 6.02. Actions in Respect of the Letters of Credit
upon Event of Default. If any Event of Default shall have occurred and be
continuing, the Administrative Agent may, or shall at the request of the
Required Lenders, irrespective of whether it is taking any of the actions
described in Section 6.01 or otherwise, make demand upon the Borrower to, and
forthwith upon such demand the Borrower will, pay to the Administrative Agent
on behalf of the Lender Parties in same day funds at the Administrative
Agent's office designated in such demand, for deposit in the L/C Cash
Collateral Account, an amount equal to the aggregate Available Amount of all
Letters of Credit then outstanding. If at any time the Administrative Agent
determines that any funds held in the L/C Cash Collateral Account are subject
to any right or claim of any Person other than the Administrative Agent and
the Lender Parties or that the total amount of such funds is less than the
aggregate Available Amount of all Letters of Credit then outstanding, the
Borrower will, forthwith upon demand by the Administrative Agent, pay to the
Administrative Agent, as additional funds to be deposited and held in the L/C
Cash Collateral Account, an amount equal to the excess of (a) such aggregate
Available Amount over (b) the total amount of funds, if any, then held in the
L/C Cash Collateral Account that the Administrative Agent determines to be
free and clear of any such right and claim.
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ARTICLE VII
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
SECTION 7.01. Authorization and Action. Each Lender Party
(in its capacities as a Lender and the Issuing Bank (if applicable)) hereby
appoints and authorizes each of the Administrative Agent and the Collateral
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement and the other Loan Documents as are delegated to the
Administrative Agent and the Collateral Agent, as the case may be, by the
terms hereof and thereof, together with such powers as are reasonably
incidental thereto. As to any matters not expressly provided for by the Loan
Documents (including, without limitation, enforcement or collection of the
Notes), each of the Administrative Agent and the Collateral Agent shall not be
required to exercise any discretion or take any action, but shall be required
to act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and
such instructions shall be binding upon all Lender Parties and all holders of
Notes; provided, however, that neither the Administrative Agent nor the
Collateral Agent shall be required to take any action which exposes the
Administrative Agent or the Collateral Agent, as the case may be, to personal
liability or which is contrary to this Agreement or applicable law. Each of
the Administrative Agent and the Collateral Agent agrees to give to each
Lender Party prompt notice of each notice and other report given to it by the
Borrower pursuant to the terms of this Agreement.
SECTION 7.02. Administrative Agent's and Collateral Agent's
Reliance, Etc. Neither the Administrative Agent nor the Collateral Agent nor
any of their respective directors, officers, agents or employees, shall be
liable for any action taken or omitted to be taken by it or them under or in
connection with the Loan Documents, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, each of the Administrative Agent and the Collateral Agent: (i) may
treat the payee of any Note as the holder thereof until the Administrative
Agent receives and accepts an Assignment and Acceptance entered into by the
Lender that is the payee of such Note, as assignor, and an Eligible Assignee,
as assignee, as provided in Section 8.07; (ii) may consult with legal counsel
(including counsel for the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (iii) makes no warranty or representation to any
Lender Party and shall not be responsible to any Lender Party for any
statements, warranties or representations (whether written or oral) made in or
in connection with the Loan Documents; (iv) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions of the Loan Documents on the part of the
Borrower or to inspect the property (including the books and records) of the
Borrower; (v) shall not be responsible to any Lender
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Party for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any lien or security
interest created or purported to be created under or in connection with the
Loan Documents or any other instrument or document furnished pursuant hereto;
and (vi) shall incur no liability under or in respect of the Loan Documents by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by telecopier, telegram, cable or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
SECTION 7.03. Citibank and Affiliates. With respect to its
Commitments, the Advances made by it and the Note issued to it, Citibank shall
have the same rights and powers under the Loan Documents as any other Lender
Party and may exercise the same as though it were not the Administrative Agent
or the Collateral Agent and the term "Lender Party" or "Lender Parties" shall,
unless otherwise expressly indicated, include Citibank hereunder in its
individual capacity. Citibank and its affiliates may accept deposits from,
lend money to, act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business with, the
Borrower, any of its Subsidiaries and any Person who may do business with or
own securities of the Borrower or any such Subsidiary, all as if Citibank were
not the Administrative Agent or the Collateral Agent and without any duty to
account therefor to the Lender Parties.
SECTION 7.04. Lender Party Credit Decision. Each Lender
Party acknowledges that it has, independently and without reliance upon either
the Administrative Agent or the Collateral Agent or any other Lender Party and
based on the financial statements referred to in Section 4.01(f) and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender Party
also acknowledges that it will, independently and without reliance upon the
Administrative Agent, the Collateral Agent or any other Lender Party and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement.
SECTION 7.05. Indemnification. (a) Each Lender Party
severally agrees to indemnify each of the Administrative Agent and the
Collateral Agent (in each case to the extent not promptly reimbursed by the
Borrower) from and against such Lender Party's ratable share (determined as
provided below) of any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by, or asserted
against the Administrative Agent or the Collateral Agent, as the case may be,
in any way relating to or arising out of the Loan Documents or any action
taken or omitted by the Administrative Agent or the Collateral Agent, as the
case may be, under the Loan Documents; provided, however, that no Lender Party
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Administrative Agent's or the Collateral
Agent's gross negligence or
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willful misconduct. Without limitation of the foregoing, each Lender Party
agrees to reimburse the Administrative Agent and the Collateral Agent promptly
upon demand for its ratable share of any costs and expenses (including,
without limitation, fees and expenses of counsel) payable by the Borrower
under Section 8.04, to the extent that the Administrative Agent or the
Collateral Agent, as the case may be, is not promptly reimbursed for such
costs and expenses by the Borrower. For purposes of this Section 7.05(a), the
Lender Parties' respective ratable shares of any amount shall be determined,
at any time, according to the sum of (a) the aggregate principal amount of the
Advances outstanding at such time and owing to the respective Lender Parties,
(b) their respective Pro Rata Shares of the aggregate Available Amount of all
Letters of Credit outstanding at such time and (c) their respective Unused
Tranche A Revolving Credit Commitments and Unused Tranche B Revolving Credit
Commitments at such time; provided that the aggregate principal amount of
Letter of Credit Advances owing to the Issuing Bank shall be considered to be
owed to the Tranche A Revolving Credit Lenders ratably in accordance with
their respective Tranche A Revolving Credit Commitments. In the event that any
Defaulted Advance shall be owing by any Defaulting Lender at any time, such
Lender Party's Commitment with respect to the Facility under which such
Defaulted Advance was required to have been made shall be considered to be
unused for purposes of this Section 7.05(a) to the extent of the amount of
such Defaulted Advance. The failure of any Lender Party to reimburse the
Administrative Agent or the Collateral Agent promptly upon demand for its
ratable share of any amount required to be paid by the Lender Party to the
Administrative Agent or the Collateral Agent, as the case may be, as provided
herein shall not relieve any other Lender Party of its obligation hereunder to
reimburse the Administrative Agent or the Collateral Agent, as the case may
be, for its ratable share of such amount, but no Lender Party shall be
responsible for the failure of any other Lender Party to reimburse the
Administrative Agent or the Collateral Agent, as the case may be, for such
other Lender Party's ratable share of such amount. Without prejudice to the
survival of any other agreement of any Lender Party hereunder, the agreement
and obligations of each Lender Party contained in this Section 7.05(a) shall
survive the payment in full of principal, interest and all other amounts
payable hereunder and under the other Loan Documents.
(b) Each Lender Party severally agrees to indemnify the
Issuing Bank (to the extent not promptly reimbursed by the Borrower) from and
against such Lender Party's ratable share (determined as provided below) of
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against the
Issuing Bank in any way relating to or arising out of the Loan Documents or
any action taken or omitted by the Issuing Bank under the Loan Documents;
provided, however, that no Lender Party shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Issuing Bank's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Lender Party agrees to reimburse the Issuing Bank promptly upon demand
for its
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ratable share of any costs and expenses (including, without limitation, fees
and expenses of counsel) payable by the Borrower under Section 8.04, to the
extent that the Issuing Bank is not promptly reimbursed for such costs and
expenses by the Borrower. For purposes of this Section 7.05(b), the Lender
Party's respective ratable shares of any amount shall be determined, at any
time, according to the sum of (a) the aggregate principal amount of the
Advances outstanding at such time and owing to the respective Lender Parties,
(b) their respective Pro Rata Shares of the aggregate Available Amount of all
Letters of Credit outstanding at such time plus (c) their respective Unused
Tranche A Revolving Credit Commitments and Unused Tranche B Revolving Credit
Commitments at such time; provided that the aggregate principal amount of
Letter of Credit Advances owing to the Issuing Bank shall be considered to be
owed to the Tranche A Revolving Credit Lenders ratably in accordance with
their respective Tranche A Revolving Credit Commitments. In the event that any
Defaulted Advance shall be owing by any Defaulting Lender at any time, such
Lender Party's Commitment with respect to the Facility under which such
Defaulted Advance was required to have been made shall be considered to be
unused for purposes of this Section 7.05(b) to the extent of the amount of
such Defaulted Advance. The failure of any Lender Party to reimburse the
Issuing Bank promptly upon demand for its ratable share of any amount required
to be paid by the Lender Parties to the Issuing Bank as provided herein shall
not relieve any other Lender Party of its obligation hereunder to reimburse
the Issuing Bank for its ratable share of such amount, but no Lender Party
shall be responsible for the failure of any other Lender Party to reimburse
the Issuing Bank for such other Lender Party's ratable share of such amount.
Without prejudice to the survival of any other agreement of any Lender Party
hereunder, the agreement and obligations of each Lender contained in this
Section 7.05(b) shall survive the payment in full of principal, interest and
all other amounts payable hereunder and under the other Loan Documents.
SECTION 7.06. Successor Administrative Agent and Collateral
Agent. Each of the Administrative Agent and the Collateral Agent may resign at
any time by giving written notice thereof to the Lender Parties and the
Borrower and may be removed at any time with or without cause by, in the case
of the Administrative Agent, the Required Lenders and, in the case of the
Collateral Agent, the Marvel IV Required Lenders. Upon any such resignation or
removal, the Required Lenders or the Marvel IV Required Lenders shall have the
right to appoint, with the consent of the Borrower, a successor Administrative
Agent or Collateral Agent, respectively, which shall be a Lender, or if no
Lender consents to act as Administrative Agent or Collateral Agent, as the
case may be, hereunder, an institution that would be permitted to be an
Eligible Assignee hereunder. If no successor Administrative Agent or
Collateral Agent, as the case may be, shall have been so appointed by the
Required Lenders or the Marvel IV Required Lenders, as the case may be, and
shall have accepted such appointment, within 30 days after the retiring
Administrative Agent's or Collateral Agent's giving of notice of resignation
or the Required Lenders' or the Marvel IV Required Lenders' removal of the
retiring Administrative Agent or Collateral Agent, then the retiring
Administrative Agent, or Collateral Agent, as the case may be, may, on behalf
of the Lender
<PAGE>
103
Parties, appoint a successor Administrative Agent or Collateral Agent, as the
case may be, which shall be a commercial bank that is acceptable to the
Borrower (which shall not unreasonably withhold its approval). Upon the
acceptance of any appointment as Administrative Agent or Collateral Agent, as
the case may be, thereunder by a successor Administrative Agent or Collateral
Agent, as the case may be, such successor Administrative Agent or Collateral
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Administrative Agent or
Collateral Agent, as the case may be, and the retiring Administrative Agent or
Collateral Agent, as the case may be, shall be discharged from its duties and
obligations under the Loan Documents. After any retiring Administrative
Agent's or Collateral Agent's resignation or removal hereunder as
Administrative Agent or Collateral Agent, the provisions of this Article VII
shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Administrative Agent or Collateral Agent, as the case may be.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes, nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Marvel IV Required Lenders, and then such waiver
or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment, waiver
or consent shall, unless in writing and signed by each of the Lender Parties
(other than any Lender Party which is, at such time, a Defaulting Lender) and
the Term Credit Agreement Lenders (other than any Term Credit Agreement Lender
which is, at such time, a "Defaulting Lender" under the Term Credit
Agreement), do any of the following: (i) waive any of the conditions specified
in Section 3.01 or 3.02, (ii) change the definition of the term " Marvel IV
Required Lenders", (iii) release any material portion of the Collateral or
permit the creation, incurrence, assumption or existence of any Lien on any
material portion of the Collateral other than (A) releases of any material
portion of the Collateral or the creation, incurrence, assumption or existence
of any such Lien in connection with Asset Sales (which shall include, for
purposes of this Section 8.01, sales, monetizations or other disposals of the
News Corp. Preferred ADRs and the New Marvel Shares) the Net Cash Proceeds of
which are applied as contemplated by the Loan Documents and the "Loan
Documents" referred to in the Term Credit Agreement, (B) releases of the News
Corp. Preferred ADRs and the New Marvel Shares pursuant to the terms of the
Loan Documents and the "Loan Documents" under the Term Credit Agreement and
(C) the Liens created by the Collateral Documents and the Liens permitted by
Section 5.02(a), Section 8(a) of the Borrower Parent Guaranty, Section 8(a) of
the Coleman Guaranty, Section 8(a) of the Mafco Guaranty, Section 8(a) of the
C&F Guaranty, Section 8(a) of the Cigar Guaranty,
<PAGE>
104
Section 8(a) of the Flavors Guaranty, Section 8(a) of the New World Guaranty
and Section 8(a) of the Revlon Guaranty, (iv) amend this Section 8.01, (v)
increase the Commitments of the Lenders or subject the Lenders to any
additional obligations, (vi) reduce the principal of, or interest on, the
Notes or any fees or other amounts payable hereunder or (vii) postpone any
date fixed for any mandatory reduction in the Commitments or for any payment
of principal of, or interest on, the Notes or any fees or other amounts
payable hereunder or amend Section 2.04, 2.05(b) or 2.06(b) (other than
Section 2.05(b)(v), 2.06(b)(iv) or 2.06(b)(viii)); provided further that no
change may be made to the definition of the term "Required Lenders" unless
such change is in writing and signed by all of the Lender Parties (other than
any Lender Party which is, at such time, a Defaulting Lender); provided
further that no amendment, waiver or consent shall, unless in writing and
signed by the Administrative Agent in addition to the Lenders and Term Credit
Agreement Lenders required above to take such action, affect the rights or
duties of the Administrative Agent under this Agreement or any Note; provided
further that no amendment, waiver or consent shall, unless in writing and
signed by the Collateral Agent in addition to the Lenders and Term Credit
Agreement Lenders required above to take such action, affect the rights or
duties of the Collateral Agent under this Agreement; provided further that no
amendment, waiver or consent shall, unless in writing and signed by the
Issuing Bank, in addition to the Lenders required above to take such action,
affect the rights or obligations of the Issuing Bank under this Agreement.
SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including
telecopier, telegraphic, telex or cable communication) and mailed, telecopied,
telegraphed, telexed, cabled or delivered, if to the Borrower, at its address
at c/o MacAndrews and Forbes Holdings Inc., 35 East 62nd Street, New York, New
York 10021, Attention: Secretary, if to any Financial Institution at its
Domestic Lending Office on Schedule I-A hereto; if to any other Lender Party,
at the address specified in the Assignment and Acceptance pursuant to which it
became a Lender Party; and if to the Administrative Agent or the Collateral
Agent, at its address at 399 Park Avenue, New York, New York 10043, Attention:
___________, or, as to the Borrower, the Administrative Agent or the
Collateral Agent, at such other address as shall be designated by such party
in a written notice to the other parties and, as to each other party, at such
other address as shall be designated by such party in a written notice to the
Borrower, the Administrative Agent and the Collateral Agent. All such notices
and communications shall be effective (i) when received, if mailed or
delivered or telecopied (including machine acknowledgment), or (ii) when
delivered to the telegraph company, confirmed by telex answerback or delivered
to the cable company, respectively, except that notices and communications to
the Administrative Agent pursuant to Article II or VII shall not be effective
until received by the Administrative Agent.
SECTION 8.03. No Waiver; Remedies. No failure on the part
of any Lender Party or the Administrative Agent or the Collateral Agent to
exercise, and no delay
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105
in exercising, any right hereunder or under any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude
any other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 8.04. Costs; Expenses. (a) The Borrower agrees to
pay on demand all reasonable out-of-pocket costs and expenses of the
Administrative Agent and the Collateral Agent in connection with the
preparation, execution, delivery, administration, modification and amendment
of the Loan Documents and the other documents to be delivered hereunder
(including, without limitation, (A) all due diligence, transportation,
computer, duplication, appraisal, audit and insurance expenses and fees and
expenses of consultants engaged with the prior consent of the Borrower (which
consent shall not be unreasonably withheld) and (B) the reasonable fees and
out-of-pocket expenses of counsel for the Administrative Agent with respect
thereto, with respect to advising the Administrative Agent and the Collateral
Agent as to their respective rights and responsibilities, or the protection or
preservation of rights or interests, under the Loan Documents, with respect to
negotiations with the Borrower or with other creditors of the Borrower arising
out of any Default or any events or circumstances that may give rise to a
Default and with respect to presenting claims in, monitoring or otherwise
participating in any bankruptcy, insolvency or other similar proceeding
affecting creditors' rights generally and any proceeding ancillary thereto).
The Borrower further agrees to pay on demand all reasonable out-of-pocket
costs and expenses of the Administrative Agent, the Collateral Agent and the
Lender Parties in connection with the enforcement of the Loan Documents and
the other documents to be delivered hereunder, whether in action, suit,
litigation, any bankruptcy, insolvency or other similar proceeding affecting
creditors' rights generally or otherwise (including, without limitation, the
reasonable fees (including the allocated costs of internal counsel) and
reasonable expenses of counsel for the Administrative Agent, the Collateral
Agent and each Lender Party with respect thereto) and expenses in connection
with the enforcement of rights under this Section 8.04(a).
(b) If any payment of principal of any Eurodollar Rate
Advance is made by the Borrower to or for the account of a Lender Party other
than on the last day of the Interest Period for such Advance, as a result of a
payment or Conversion pursuant to Section 2.10(c) or 2.11, acceleration of the
maturity of the Notes pursuant to Section 6.01 or for any other reason, the
Borrower shall, upon demand by such Lender Party (with a copy of such demand
to the Administrative Agent), pay to the Administrative Agent for the account
of such Lender Party any amounts required to compensate such Lender Party for
any additional losses, costs or expenses which it may reasonably incur as a
result of such payment, including, without limitation, any loss, cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender Party to fund or maintain such Advance.
<PAGE>
106
(c) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, the Collateral Agent, the Documentation Agent, the
Syndication Agent and each Lender Party and each of their affiliates and their
officers, directors, trustees, employees, agents and advisors (each, an
"Indemnified Party") from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against
any Indemnified Party, in each case arising out of or in connection with or by
reason of (or in connection with the preparation for a defense of) any
investigation, litigation or proceeding arising out of, related to or in
connection with this Agreement and the transactions contemplated hereby,
whether or not an Indemnified Party is a party thereto, whether or not the
transactions contemplated hereby are consummated, whether or not any such
claim, investigation, litigation or proceeding is brought by the Borrower or
any other person and whether or not such Indemnified Party is a Lender Party
at such time) except (i) to the extent such claim, damage, loss, liability or
expense (x) is found in a final, non-appealable judgment by a court of
competent jurisdiction (a "Final Judgment") to have resulted from such
Indemnified Party's gross negligence or willful misconduct or (y) arises from
any legal proceedings commenced against any Lender Party by any other Lender
Party (in its capacity as such and not as Administrative Agent, Collateral
Agent, Documentation Agent or Syndication Agent), and (ii) in the case of any
litigation brought by the Borrower (A) seeking a judgment against any
Indemnified Party for any wrongful act or omission of such Indemnified Party
and (B) in which a Final Judgment is rendered in the Borrower's favor against
such Indemnified Party, the provisions of this paragraph will not be available
to provide indemnification for any damage, loss, liability or expense incurred
by such Indemnified Party in connection with such litigation described in
clause (i) or in connection with any claim for which Final Judgment is
rendered in the Borrower's favor in a litigation described in clause (ii) of
this Section 8.04(c).
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and
during the continuance of any Event of Default and (ii) the making of the
request or the granting of the consent specified by Section 6.01 to authorize
the Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Lender Party is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set-off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such
Lender Party to or for the credit or the account of the Borrower against any
and all of the obligations of the Borrower to such Lender Party now or
hereafter existing under this Agreement and the Note or Notes held by such
Lender Party, whether or not such Lender Party shall have made any demand
under this Agreement or such Note or Notes and although such obligations may
be unmatured. Each Lender Party agrees promptly to notify the Borrower after
any such set-off and application shall be made by such Lender Party, provided
that the failure to give such notice shall not affect the validity of such
set-off and application; provided further that no Lender Party shall exercise
any such right of set-off or any other right of set-off without the
<PAGE>
107
prior consent of the Administrative Agent. The rights of each Lender Party
under this Section 8.05 are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which such Lender
Party may have.
SECTION 8.06. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower and the
Administrative Agent and when the Administrative Agent shall have been
notified by each Financial Institution that such Financial Institution has
executed it and thereafter shall be binding upon and inure to the benefit of
the Borrower, the Administrative Agent and each Lender Party and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Administrative Agent and the Required Lenders.
SECTION 8.07. Assignments and Participations. (a) Each
Lender may and, if demanded by the Borrower pursuant to Section 2.15, will
assign to one or more banks or other entities all or a portion of its rights
and obligations under this Agreement (including, without limitation, all or a
portion of its Commitment, the Advances owing to it and the Note or Notes held
by it); provided, however, that (i) each such assignment shall be of a
uniform, and not a varying, percentage of all rights and obligations under and
in respect of one or more Facilities; (ii) the amount of the Commitment of the
assigning Lender being assigned pursuant to each such assignment (determined
as of the date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than $5,000,000 and shall be an integral
multiple of $1,000,000 in excess thereof, or shall be an assignment to another
Lender or an assignment of all of the assigning Lender's rights and
obligations hereunder and under the Notes, (iii) each such assignment shall be
to another Lender, an Affiliate of the assigning Lender or to an Eligible
Assignee, (iv) each such assignment made as a result of a demand by the
Borrower pursuant to Section 2.15 shall be arranged by the Borrower after
consultation with the Administrative Agent and shall be either an assignment
of all of the rights and obligations of the assigning Lender under this
Agreement or an assignment of a portion of such rights and obligations made
concurrently with another such assignment or other such assignments that
together cover all of the rights and obligations of the assigning Lender under
this Agreement, (v) no Lender shall be obligated to make any such assignment
as a result of a demand by the Borrower pursuant to Section 2.15 unless and
until such Lender shall have received one or more payments from either the
Borrower or one or more Eligible Assignees in an aggregate amount at least
equal to the aggregate outstanding principal amount of the Advances owing to
such Lender, together with accrued interest thereon to the date of payment of
such principal amount and all other amounts payable to such Lender under this
Agreement, (vi) the parties to each such assignment shall execute and deliver
to the Administrative Agent, for its acceptance and recording in the Register,
an Assignment and Acceptance, together with any Note or Notes subject to such
assignment and a processing and recordation fee of $3,000 from the assignee
and (vii) no such assignments shall be permitted without the consent of the
Administrative Agent and the Borrower (such
<PAGE>
108
consent not to be unreasonably withheld). Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each
Assignment and Acceptance, (x) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to
it pursuant to such Assignment and Acceptance, have the rights and obligations
of a Lender hereunder and (y) the Lender assignor thereunder shall, to the
extent that rights and obligations hereunder have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights and be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto).
(b) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (i)
other than as provided in such Assignment and Acceptance, such assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any
other instrument or document furnished pursuant hereto; (ii) such assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under this Agreement or
any other instrument or document furnished pursuant hereto; (iii) such
assignee confirms that it has received a copy of this Agreement, together with
copies of the financial statements referred to in Section 4.01(f) and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the
Administrative Agent, the Collateral Agent, such assigning Lender or any other
Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking
or not taking action under this Agreement; (v) such assignee confirms that it
is an Eligible Assignee; (vi) such assignee appoints and authorizes each of
the Administrative Agent and the Collateral Agent to take such action as agent
on its behalf and to exercise such powers under this Agreement as are
delegated to the Administrative Agent or the Collateral Agent, as the case may
be, by the terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
(c) The Administrative Agent shall maintain at its address
referred to in Section 8.02 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of the
Advances owing under each Facility to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for
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109
all purposes, absent manifest error, and the Borrower, the Administrative
Agent, and the Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Lender at
any reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee representing that it is an
Eligible Assignee, together with any Note or Notes subject to such assignment,
the Administrative Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit C hereto, (i) accept
such Assignment and Acceptance, (ii) record the information contained therein
in the Register and (iii) give prompt notice thereof to the Borrower. Within
five Business Days after its receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Administrative Agent in exchange for
the surrendered Note or Notes a new Note or Notes to the order of such
Eligible Assignee in an amount equal to the Commitment assumed by it under a
Facility pursuant to such Assignment and Acceptance and, if the assigning
Lender has retained a Commitment hereunder under such Facility, a new Note to
the order of the assigning Lender in an amount equal to such Commitment
retained by it hereunder. Such new Note or Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Note or Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit A.
(e) The Issuing Bank may assign to an Eligible Assignee all
of its rights and obligations under the undrawn portion of its Letter of
Credit Commitment at any time; provided, however, that (i) except in the case
of an assignment to a Person that immediately prior to such assignment was an
Issuing Bank or an assignment of all of an Issuing Bank's rights and
obligations under this Agreement, the amount of the Letter of Credit
Commitment of the assigning Issuing Bank being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $3,000,000 and
shall be in an integral multiple of $1,000,000 in excess thereof, (ii) each
such assignment shall be to an Eligible Assignee, (iii) the parties to each
such assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance,
together with a processing and recordation fee of $3000 and (iv) no such
assignments shall be permitted without the consent of the Administrative Agent
and the Borrower (such consent not to be unreasonably withheld).
(f) Each Lender may sell participations to one or more banks
or other entities in or to all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Commitment, the Advances owing to it and the Note or Notes held by it);
provided, however, that (i) such Lender's obligations under this
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110
Agreement (including, without limitation, its Commitment to the Borrower
hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any such Note for
all purposes of this Agreement, (iv) the Borrower, the Administrative Agent,
the Collateral Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and (v) no participant under any such
participation shall have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by the
Borrower therefrom, except to the extent that such amendment, waiver or
consent would reduce or postpone any date fixed for payment of principal of,
or interest on, the Notes or any fees or other amounts payable hereunder, in
each case to the extent subject to such participation.
(g) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided that, prior to any such disclosure,
the assignee or participant or proposed assignee or participant shall agree
pursuant to an agreement substantially in the form of Exhibit I to preserve
the confidentiality of any confidential information relating to the Borrower
received by it from such Lender.
(h) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
SECTION 8.08. Governing Law; Submission to Jurisdiction.
(a) This Agreement and the Notes shall be governed by, and construed in
accordance with, the laws of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or Federal court of the United States of America sitting
in New York City, and any appellate court thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the
extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. Subject to the foregoing and to
paragraph (c) below, nothing in this Agreement shall affect any right that any
party hereto
<PAGE>
111
may otherwise have to bring any action or proceeding relating to this
Agreement against any other party hereto in the courts of any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement in any
New York State or Federal court and the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.
(d) The Borrower agrees that service of process may be made
on the Borrower by personal service of a copy of the summons and complaint or
other legal process in any such suit, action or proceeding, or by registered
or certified mail (postage prepaid) to the address of the Borrower specified
in Section 8.02, or by any other method of service provided for under the
applicable laws in effect in the State of New York.
SECTION 8.09. Execution in Counterparts. This Agreement may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.10. No Liability of the Issuing Bank. The Borrower
assumes all risks of the acts or omissions of any beneficiary or transferee of
any Letter of Credit with respect to its use of such Letter of Credit. Neither
the Issuing Bank nor any of its officers or directors shall be liable or
responsible for: (a) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith;
(b) the validity, sufficiency or genuineness of documents, or of any
endorsement thereon, even if such documents should prove to be in any or all
respects invalid, insufficient, fraudulent or forged; (c) payment by the
Issuing Bank against presentation of documents that do not comply with the
terms of a Letter of Credit, including failure of any documents to bear any
reference or adequate reference to the Letter of Credit; or (d) any other
circumstances whatsoever in making or failing to make payment under any Letter
of Credit, except that the Borrower shall have a claim against the Issuing
Bank, and the Issuing Bank shall be liable to the Borrower, to the extent of
any direct, but not consequential, damages suffered by the Borrower that the
Borrower proves were caused by (i) the Issuing Bank's willful misconduct or
gross negligence in determining whether documents presented under any Letter
of Credit comply with the terms of the Letter of Credit or (ii) the Issuing
Bank's willful failure to make lawful payment under a Letter of Credit after
the presentation to it of a draft and certificates strictly complying with the
terms and conditions of the Letter of Credit. In furtherance and not in
limitation of the foregoing, the Issuing Bank may accept
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112
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the
contrary.
SECTION 8.11. WAIVER OF JURY TRIAL. EACH OF THE BORROWER,
THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE DOCUMENTATION AGENT, THE
SYNDICATION AGENT AND THE LENDER PARTIES IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS,
THE ADVANCES OR THE ACTIONS OF THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT,
THE DOCUMENTATION AGENT, THE
<PAGE>
SYNDICATION AGENT OR ANY LENDER PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
MARVEL IV HOLDINGS INC.
By /s/ Glenn P. Dickes
------------------------------------------
Name: Glenn P. Dickes
Title: Vice President and Secretary
CITIBANK, N.A.,
as Administrative Agent and Collateral Agent
By
-----------------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON,
as Documentation Agent
By
------------------------------------------
Name:
Title:
CHASE SECURITIES INC.,
as Syndication Agent
By
------------------------------------------
Name:
Title:
BANK OF AMERICA ILLINOIS,
as Managing Agent
By
--------------------------------------
Name:
Title:
<PAGE>
SYNDICATION AGENT OR ANY LENDER PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
MARVEL IV HOLDINGS INC.
By
------------------------------------------
Name:
Title:
CITIBANK, N.A.,
as Administrative Agent and Collateral Agent
By /s/ James Buchanan
-----------------------------------------
Name: James Buchanan
Title: Attorney-in-Fact
THE FIRST NATIONAL BANK OF BOSTON,
as Documentation Agent
By
------------------------------------------
Name:
Title:
CHASE SECURITIES INC.,
as Syndication Agent
By
------------------------------------------
Name:
Title:
BANK OF AMERICA ILLINOIS,
as Managing Agent
By
--------------------------------------
Name:
Title:
<PAGE>
SYNDICATION AGENT OR ANY LENDER PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
MARVEL IV HOLDINGS INC.
By
------------------------------------------
Name:
Title:
CITIBANK, N.A.,
as Administrative Agent and Collateral Agent
By
-----------------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON,
as Documentation Agent
By /s/ Richard D. Hill, Jr.
------------------------------------------
Name: Richard D. Hill, Jr.
Title: Director
CHASE SECURITIES INC.,
as Syndication Agent
By
------------------------------------------
Name:
Title:
BANK OF AMERICA ILLINOIS,
as Managing Agent
By
--------------------------------------
Name:
Title:
<PAGE>
SYNDICATION AGENT OR ANY LENDER PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
MARVEL IV HOLDINGS INC.
By
------------------------------------------
Name:
Title:
CITIBANK, N.A.,
as Administrative Agent and Collateral Agent
By
-----------------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON,
as Documentation Agent
By
------------------------------------------
Name:
Title:
CHASE SECURITIES INC.,
as Syndication Agent
By /s/
------------------------------------------
Name:
Title:
BANK OF AMERICA ILLINOIS,
as Managing Agent
By
--------------------------------------
Name:
Title:
<PAGE>
SYNDICATION AGENT OR ANY LENDER PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
MARVEL IV HOLDINGS INC.
By
------------------------------------------
Name:
Title:
CITIBANK, N.A.,
as Administrative Agent and Collateral Agent
By
-----------------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON,
as Documentation Agent
By
------------------------------------------
Name:
Title:
CHASE SECURITIES INC.,
as Syndication Agent
By
------------------------------------------
Name:
Title:
BANK OF AMERICA ILLINOIS,
as Managing Agent
By /s/ L. Dustin Vincent, III
--------------------------------------
Name: L. Dustin Vincent, III
Title: Managing Director
<PAGE>
ING (U.S.) CAPITAL CORPORATION,
as Managing Agent
By /s/ Kunduck Moon
---------------------------------------
Name: Kunduck Moon
Title: Managing Director
SALOMON BROTHERS HOLDING COMPANY
INC, as Managing Agent
By
--------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Managing Agent
By
--------------------------------------
Name:
Title:
THE FUJI BANK, LIMITED,
as Managing Agent
By
--------------------------------------
Name:
Title:
FINANCIAL INSTITUTIONS AND
ISSUING BANK
BANK OF AMERICA ILLINOIS
By
---------------------------------------
Name:
Title:
<PAGE>
ING (U.S.) CAPITAL CORPORATION,
as Managing Agent
By
---------------------------------------
Name:
Title:
SALOMON BROTHERS HOLDING COMPANY
INC, as Managing Agent
By /s/
--------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Managing Agent
By
--------------------------------------
Name:
Title:
THE FUJI BANK, LIMITED,
as Managing Agent
By
--------------------------------------
Name:
Title:
FINANCIAL INSTITUTIONS AND
ISSUING BANK
BANK OF AMERICA ILLINOIS
By
---------------------------------------
Name:
Title:
<PAGE>
ING (U.S.) CAPITAL CORPORATION,
as Managing Agent
By
---------------------------------------
Name:
Title:
SALOMON BROTHERS HOLDING COMPANY
INC, as Managing Agent
By
--------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Managing Agent
By /s/ Catherine G. Goff
--------------------------------------
Name: Catherine G. Goff
Title: AVP
THE FUJI BANK, LIMITED,
as Managing Agent
By
--------------------------------------
Name:
Title:
FINANCIAL INSTITUTIONS AND
ISSUING BANK
BANK OF AMERICA ILLINOIS
By
---------------------------------------
Name:
Title:
<PAGE>
ING (U.S.) CAPITAL CORPORATION,
as Managing Agent
By
---------------------------------------
Name:
Title:
SALOMON BROTHERS HOLDING COMPANY
INC, as Managing Agent
By
--------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Managing Agent
By
--------------------------------------
Name:
Title:
THE FUJI BANK, LIMITED,
as Managing Agent
By /s/ Teiji Teramoto
--------------------------------------
Name: Teiji Teramoto
Title: Vice President & Manager
FINANCIAL INSTITUTIONS AND
ISSUING BANK
BANK OF AMERICA ILLINOIS
By
---------------------------------------
Name:
Title:
<PAGE>
ING (U.S.) CAPITAL CORPORATION,
as Managing Agent
By
---------------------------------------
Name:
Title:
SALOMON BROTHERS HOLDING COMPANY
INC, as Managing Agent
By
--------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Managing Agent
By
--------------------------------------
Name:
Title:
THE FUJI BANK, LIMITED,
as Managing Agent
By
--------------------------------------
Name:
Title:
FINANCIAL INSTITUTIONS AND
ISSUING BANK
BANK OF AMERICA ILLINOIS
By /s/ L. Dustin Vincent, III
---------------------------------------
Name: L. Dustin Vincent, III
Title: Managing Director
<PAGE>
CITIBANK, N.A.,
as Lender and Issuing Bank
By /s/ James Buchanan
----------------------------------------
Name: James Buchanan
Title: Attorney-in-Fact
CREDIT LYONNAIS NEW YORK BRANCH
By
-----------------------------------------
Name:
Title:
CREDIT SUISSE
By
------------------------------------------
Name:
Title:
By
-------------------------------------------
Name:
Title:
ING (U.S.) CAPITAL CORPORATION
By
-------------------------------------------
Name:
Title:
NATIONSBANK, N.A.
By
-------------------------------------------
Name:
Title:
PILGRIM AMERICA PRIME RATE TRUST
By
-------------------------------------------
Name:
Title:
<PAGE>
CITIBANK, N.A.,
as Lender and Issuing Bank
By
----------------------------------------
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By /s/ W. Michael George
-----------------------------------------
Name: W. Michael George
Title: Vice President
CREDIT SUISSE
By
------------------------------------------
Name:
Title:
By
-------------------------------------------
Name:
Title:
ING (U.S.) CAPITAL CORPORATION
By
-------------------------------------------
Name:
Title:
NATIONSBANK, N.A.
By
-------------------------------------------
Name:
Title:
PILGRIM AMERICA PRIME RATE TRUST
By
-------------------------------------------
Name:
Title:
<PAGE>
CITIBANK, N.A.,
as Lender and Issuing Bank
By
----------------------------------------
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By
-----------------------------------------
Name:
Title:
CREDIT SUISSE
By /s/ Joel Glodowski
------------------------------------------
Name: Joel Glodowski
Title: Member Management
By /s/ Chris T. Horgan
-------------------------------------------
Name: Chris T. Horgan
Title: Associate
ING (U.S.) CAPITAL CORPORATION
By
-------------------------------------------
Name:
Title:
NATIONSBANK, N.A.
By
-------------------------------------------
Name:
Title:
PILGRIM AMERICA PRIME RATE TRUST
By
-------------------------------------------
Name:
Title:
<PAGE>
CITIBANK, N.A.,
as Lender and Issuing Bank
By
----------------------------------------
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By
-----------------------------------------
Name:
Title:
CREDIT SUISSE
By
------------------------------------------
Name:
Title:
By
-------------------------------------------
Name:
Title:
ING (U.S.) CAPITAL CORPORATION
By /s/ Kunduck Moon
-------------------------------------------
Name: Kunduck Moon
Title: Managing Director
NATIONSBANK, N.A.
By
-------------------------------------------
Name:
Title:
PILGRIM AMERICA PRIME RATE TRUST
By
-------------------------------------------
Name:
Title:
<PAGE>
CITIBANK, N.A.,
as Lender and Issuing Bank
By
----------------------------------------
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By
-----------------------------------------
Name:
Title:
CREDIT SUISSE
By
------------------------------------------
Name:
Title:
By
-------------------------------------------
Name:
Title:
ING (U.S.) CAPITAL CORPORATION
By
-------------------------------------------
Name:
Title:
NATIONSBANK, N.A.
By /s/ Margaret Flanagan
-------------------------------------------
Name: Margaret Flanagan
Title: Associate
PILGRIM AMERICA PRIME RATE TRUST
By
-------------------------------------------
Name:
Title:
<PAGE>
CITIBANK, N.A.,
as Lender and Issuing Bank
By
----------------------------------------
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By
-----------------------------------------
Name:
Title:
CREDIT SUISSE
By
------------------------------------------
Name:
Title:
By
-------------------------------------------
Name:
Title:
ING (U.S.) CAPITAL CORPORATION
By
-------------------------------------------
Name:
Title:
NATIONSBANK, N.A.
By
-------------------------------------------
Name:
Title:
PILGRIM AMERICA PRIME RATE TRUST
By /s/ Howard Tiffen
-------------------------------------------
Name: Howard Tiffen
Title: Senior Vice President
<PAGE>
SALOMON BROTHERS HOLDING
COMPANY INC
By /s/
---------------------------------------
Name:
Title:
THE BANK OF NEW YORK
By
----------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK
By
----------------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON
By
-----------------------------------------
Name:
Title:
THE FUJI BANK, LIMITED
By
-----------------------------------------
Name:
Title:
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD.
By
------------------------------------------
Name:
Title:
<PAGE>
SALOMON BROTHERS HOLDING
COMPANY INC
By
---------------------------------------
Name:
Title:
THE BANK OF NEW YORK
By /s/ Catherine G. Goff
----------------------------------------
Name: Catherine G. Goff
Title: AVP
THE CHASE MANHATTAN BANK
By
----------------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON
By
-----------------------------------------
Name:
Title:
THE FUJI BANK, LIMITED
By
-----------------------------------------
Name:
Title:
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD.
By
------------------------------------------
Name:
Title:
<PAGE>
SALOMON BROTHERS HOLDING
COMPANY INC
By
---------------------------------------
Name:
Title:
THE BANK OF NEW YORK
By
----------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK
By /s/ Neil R. Boylan
----------------------------------------
Name: Neil R. Boylan
Title: Vice President
THE FIRST NATIONAL BANK OF BOSTON
By
-----------------------------------------
Name:
Title:
THE FUJI BANK, LIMITED
By
-----------------------------------------
Name:
Title:
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD.
By
------------------------------------------
Name:
Title:
<PAGE>
SALOMON BROTHERS HOLDING
COMPANY INC
By
---------------------------------------
Name:
Title:
THE BANK OF NEW YORK
By
----------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK
By
----------------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON
By /s/ Richard D. Hill, Jr.
-----------------------------------------
Name: Richard D. Hill, Jr.
Title: Director
THE FUJI BANK, LIMITED
By
-----------------------------------------
Name:
Title:
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD.
By
------------------------------------------
Name:
Title:
<PAGE>
SALOMON BROTHERS HOLDING
COMPANY INC
By
---------------------------------------
Name:
Title:
THE BANK OF NEW YORK
By
----------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK
By
----------------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON
By
-----------------------------------------
Name:
Title:
THE FUJI BANK, LIMITED
By /s/ Masanobu Kobayashi
-----------------------------------------
Name: Masanobu Kobayashi
Title: Vice President & Manager
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD.
By
------------------------------------------
Name:
Title:
<PAGE>
SALOMON BROTHERS HOLDING
COMPANY INC
By
---------------------------------------
Name:
Title:
THE BANK OF NEW YORK
By
----------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK
By
----------------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON
By
-----------------------------------------
Name:
Title:
THE FUJI BANK, LIMITED
By
-----------------------------------------
Name:
Title:
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD.
By /s/ Paul B. Clifford
------------------------------------------
Name: Paul B. Clifford
Title: Deputy General Manager
<PAGE>
VAN KAMPEN AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By /s/ Jeffrey W. Maillet
--------------------------------------------
Name: Jeffrey W. Maillet
Title: Sr. Vice Pres. Portfolio Mgr.
<PAGE>
[REVOLVING CREDIT AGREEMENT]
SCHEDULE I
ADVANCES, COMMITMENTS AND APPLICABLE LENDING OFFICES
<TABLE>
<CAPTION>
TRANCHE A TRANCHE B
REVOLVING CREDIT REVOLVING CREDIT
NAME OF BANK COMMITMENT COMMITMENT LETTER OF CREDIT COMMITMENT APPLICABLE LENDING OFFICE
- ------------ ---------- ------------ --------------------------- -------------------------
<S> <C> <C> <C> <C>
CITIBANK, N.A. $40,000,000 $4,250,000 $25,000,000 DOMESTIC:
--------
399 PARK AVENUE
NEW YORK, NEW YORK 10043
ATTENTION: ED VOWINKEL
TEL: NO. 718-248-4523
FAX NO.: 718-248-4844
ABA NO.: 021000089
VIA FED TRANSFER
ACCOUNT NO.: 3685-2248
ACCOUNT NAME: MEDIUM TERM
FIN.
ATTENTION: ED VOWINKEL
REFERENCE: MARVEL IV HOLDINGS
EURODOLLAR:
----------
SAME
<PAGE>
2
TRANCHE A TRANCHE B
REVOLVING CREDIT REVOLVING CREDIT
NAME OF BANK COMMITMENT COMMITMENT LETTER OF CREDIT COMMITMENT APPLICABLE LENDING OFFICE
- ------------ ---------- ------------ --------------------------- -------------------------
<S> <C> <C> <C> <C>
THE BANK OF
NEW YORK $20,000,000 $4,250,000 -0- DOMESTIC:
--------
ONE WALL STREET
NEW YORK, NY 10286
ATTENTION: ZORAIDA DOUGHERTY
TEL. NO.: 212-635-8730
FAX NO.: 212-635-8679/34
ABA NO.: 021000018
VIA FED TRANSFER
ACCOUNT NO.: GLA/ 111556
ACCOUNT NAME: COMMERCIAL
LOAN DEPT.
ATTENTION: ZORAIDA DOUGHERTY
REFERENCE: MARVEL IV
HOLDINGS
EURODOLLAR:
----------
SAME
BANK OF AMERICA
ILLINOIS $15,000,000 $4,250,000 -0- DOMESTIC:
--------
231 SOUTH LASALLE
CHICAGO, IL 60697
ATTENTION: LILY REYES
TEL. NO.: 312-828-3873
FAX NO.: 312-974-9626
ABA NO.: 071-000-039
VIA FED TRANSFER
ACCOUNT NO.: 47-03421
ATTENTION: ACCOUNT
ADMINISTRATION-L.REYES
REFERENCE: MARVEL IV HOLDINGS
EURODOLLAR:
-----------
SAME
<PAGE>
3
TRANCHE A TRANCHE B
REVOLVING CREDIT REVOLVING CREDIT
NAME OF BANK COMMITMENT COMMITMENT LETTER OF CREDIT COMMITMENT APPLICABLE LENDING OFFICE
- ------------ ---------- ------------ --------------------------- -------------------------
<S> <C> <C> <C> <C>
THE CHASE MANHATTAN
BANK $30,000,000 $4,250,000 -0- DOMESTIC:
--------
2 CHASE MANHATTAN PLAZA
NEW YORK, N.Y. 10081
ATTENTION: ROCKY CHAN
TEL. NO.: 212-552-2920
FAX NO.: 212-552-7325
ABA NO.: 021-0000-21
VIA FED TRANSFER
ACCOUNT NO.: 900-9-0000-36
ACCOUNT NAME: COMMERCIAL
LOAN DEPT.
ATTENTION: ROCKY CHAN
REFERENCE: MAFCO HOLDING
EURODOLLAR:
----------
SAME
CREDIT LYONNAIS
NEW YORK BRANCH -0- $2,500,000 -0- DOMESTIC:
--------
1301 AVENUE OF THE AMERICAS
NEW YORK, NY 10019
ATTENTION: LUCIE MERCADO
TEL. NO.: 212-261-7271
FAX NO.: 212-261-3401
ABA NO.: 026008073
VIA FED TRANSFER
ACCOUNT NO.: 01-008820-001-00
ACCOUNT NAME: LOAN SERVICING
ATTENTION: LUCY MERCADO
REFERENCE: MAFCO
EURODOLLAR:
----------
SAME
<PAGE>
4
TRANCHE A TRANCHE B
REVOLVING CREDIT REVOLVING CREDIT
NAME OF BANK COMMITMENT COMMITMENT LETTER OF CREDIT COMMITMENT APPLICABLE LENDING OFFICE
- ------------ ---------- ------------ --------------------------- -------------------------
<S> <C> <C> <C> <C>
CREDIT SUISSE $30,000,000 $4,250,000 -0- DOMESTIC:
--------
12 EAST 49TH STREET
NEW YORK, NY 10017
ATTENTION: ED SIDDONS
TEL. NO.: 212-238-5407
FAX NO.: 212-238-5439
ABA NO.: 026009179
VIA FED TRANSFER
ACCOUNT NO.: 904996-02
ACCOUNT NAME: LOAN DEPT.
ATTENTION: ED SIDDONS
REFERENCE: MARVEL IV HOLDINGS
EURODOLLAR:
----------
SAME
THE FIRST NATIONAL
BANK OF BOSTON $15,000,000 $4,250,000 -0- DOMESTIC:
--------
100 RUSTCRAFT ROAD
DEDHAM, MA 02026
ATTENTION: ANGELA MOORE
TEL. NO.: 617-467-2292
FAX NO.: 617-467-2276
ABA NO.: 01000390
ACCOUNT NO.: 0411214
VIA FED TRANSFER
ATTENTION: ANGELA MOORE
REFERENCE: MARVEL IV
HOLDINGS
EURODOLLAR:
----------
SAME
<PAGE>
5
TRANCHE A TRANCHE B
REVOLVING CREDIT REVOLVING CREDIT
NAME OF BANK COMMITMENT COMMITMENT LETTER OF CREDIT COMMITMENT APPLICABLE LENDING OFFICE
- ------------ ---------- ------------ --------------------------- -------------------------
<S> <C> <C> <C> <C>
THE FUJI BANK,
LIMITED $30,000,000 $4,250,000 -0- DOMESTIC:
--------
2 WORLD TRADE CENTER
NEW YORK, NY 10048
ATTENTION: GEMMA DIZON
TEL. NO.: 212-898-2069
FAX NO.: 212-488-8216
ABA NO.: 026009700
VIA FED TRANSFER
ACCOUNT NO.: 515011U3
ACCOUNT NAME: USCF III
ATTENTION: GEMMA DIZON
REFERENCE: MAFCO HOLDINGS
EURODOLLAR:
---------
SAME
THE LONG-TERM
CREDIT BANK
OF JAPAN, LTD. -0- $2,500,000 -0- DOMESTIC:
--------
444 SOUTH FLOWER STREET
LOS ANGELES, CA 90071
ATTENTION: KEN NAKAGAWA
TEL. NO.: 213-689-6244
FAX NO.: 213-626-1067
ABA NO.: 122000218
VIA FED TRANSFER
ACCOUNT NO.: 220234834
ACCOUNT NAME: LONG-TERM
CREDIT BANK OF JAPAN
ATTENTION: KEN NAKAGAWA
REFERENCE: MAFCO HOLDINGS
INC.
EURODOLLAR:
----------
SAME
<PAGE>
6
TRANCHE A TRANCHE B
REVOLVING CREDIT REVOLVING CREDIT
NAME OF BANK COMMITMENT COMMITMENT LETTER OF CREDIT COMMITMENT APPLICABLE LENDING OFFICE
- ------------ ---------- ------------ --------------------------- -------------------------
<S> <C> <C> <C> <C>
NATIONSBANK, N.A. -0- $4,250,000 -0- DOMESTIC:
--------
101 NO. TRYON STREET
CHARLOTTE, NC 28255
ATTENTION: CHARLIE FRANKLIN
TEL. NO.: 704-386-4199
FAX NO.: 704-386-8694
ABA NO.: 053000196
VIA FED TRANSFER
ACCOUNT NO.: 13662122506
ACCOUNT NAME: CORPORATE
CREDIT SERVICES SUPPORT
ATTENTION: CHARLIE FRANKLIN
REFERENCE: MARVEL IV
HOLDINGS
EURODOLLAR:
----------
SAME
ING (U.S.) CAPITAL $15,000,000 $4,250,000 -0- DOMESTIC:
CORPORATION --------
135 EAST 57TH STREET
NEW YORK, NY 10022
ATTENTION: KUNDUCK MOON
TEL. NO.: (212) 446-0911
FAX NO.: (212) 593-3362
ABA NO.: 021000238
VIA FED TRANSFER
ACCOUNT NO.: 60007116
ACCOUNT NAME: INTERNATIONALE
NEDERLANDEN (U.S.) CAPITAL
CORPORATION
REFERENCE: MARVEL IV
HOLDINGS
EURODOLLAR:
----------
SAME
<PAGE>
7
TRANCHE A TRANCHE B
REVOLVING CREDIT REVOLVING CREDIT
NAME OF BANK COMMITMENT COMMITMENT LETTER OF CREDIT COMMITMENT APPLICABLE LENDING OFFICE
- ------------ ---------- ------------ --------------------------- -------------------------
<S> <C> <C> <C> <C>
VAN KAMPEN AMERICAN $25,000,000 -0- -0- DOMESTIC:
CAPITAL PRIME RATE --------
INCOME TRUST ONE PARKVIEW PLAZA
OAKBROOK TERRACE, IL 60181
ATTENTION: JEFFREY MAILET
TEL. NO.: (708) 684-6438
FAX NO.: (708) 684-6740
ABA NO.: 011000028
VIA FED TRANSFER
ACCOUNT NO.: 99001265
ACCOUNT NAME: VKM PRIT
REFERENCE: MARVEL IV
HOLDINGS
EURODOLLAR:
----------
SAME
PILGRIM AMERICA
PRIME RATE
TRUST $30,000,000 $2,500,000 -0- DOMESTIC:
---------
40 N. CENTRAL AVE.
SUITE 1200
PHOENIX, AZ 85004
ATTENTION:
TEL. NO.: (602) 417-8259
FAX. NO.: (602) 417-8327
ABA NO.: 011000028
VIA FED TRANSFER
ACCOUNT NO.: 37926342
ACCOUNT NAME: PL1F - PILGRIM
PRIME RATE TRUST
REFERENCE: MAFCO HOLDINGS
EURODOLLAR:
-----------
SAME
SALOMON BROTHERS -0- $4,250,000 -0- DOMESTIC:
HOLDING COMPANY INC --------
8800 HIDDEN RIVER PARKWAY
TAMPA, FL 33637
ATTENTION: ROBIN KIDD
TEL. NO.: (813) 558-7575
FAX. NO.: (813) 558-4142
ABA NO.: 0710000013
VIA FED TRANSFER
ACCOUNT NO.: 5143322
ACCOUNT NAME:
REFERENCE:
EURODOLLAR:
----------
SAME
</TABLE>
<PAGE>
FOURTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
SCHEDULE II
-----------
BORROWER
MARVEL IV HOLDINGS INC.
Jurisdiction of Incorporation: Delaware
Authorized Capital Stock: 1,000 shares of Common Stock
Shares Outstanding: 1,000 shares of Common Stock
Percentage Owned: 99.5% by Marvel V Holdings Inc.
Options, Warrants and Similar Rights: None
<PAGE>
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
SCHEDULE III
------------
DEBT
NONE
<PAGE>
FOURTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
SCHEDULE IV
-----------
INVESTMENTS
<TABLE>
<CAPTION>
INVESTMENT
PERSON ISSUER TYPE AMOUNT
- ------ ------ ---- ----------
<S> <C> <C> <C>
Marvel IV Holdings Inc. Marvel III Holdings Inc. Common 100%
Stock
</TABLE>
Investment in Marvel
Entertainment Group, Inc.
("Marvel") in respect of
Marvel's reimbursement
obligations relating to a
Letter of Credit (as defined
in the Revolving Credit
Agreement) in a face amount of
$4,000,000 to be issued under
the Existing Agreement or the
Revolving Credit Agreement in
favor of the landlord of a
building located in Las Vegas,
Nevada leased to a joint
venture between a subsidiary
of Marvel and Ebco Management,
Inc.
<PAGE>
FOURTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
SCHEDULE V
-----------
LIENS
NONE
<PAGE>
SCHEDULE VI
Defeased Debt Calculations
The Defeased Debt Amount for each Designated Person listed
below for any date of determination shall be calculated as follows for each
such Designated Person:
Coleman
Guarantor: The Defeased Debt Amount for Coleman Guarantor
shall be an amount equal to the sum of:
(i) the lesser of (x) the amount, if on
such date of determination Coleman Holdings is
permitted to optionally redeem, pursuant to the
terms of the Coleman Holdings Indenture, the Debt
outstanding thereunder, that Coleman Holdings would
be required to pay to redeem such Debt and (y) the
greater of (A) the "repurchase price" (assuming a
repurchase date 105 days after the date of
determination) of the aggregate amount of all Debt
outstanding under the Coleman Holdings Indenture as
of the repurchase date plus accrued and unpaid
interest thereon through the repurchase date, as
determined pursuant to Section 4.08(a) of the
Coleman Holdings Indenture and (B) the aggregate
amount required as of the date of determination to
be deposited with the Trustee (as defined in the
Coleman Holdings Indenture) to effect the "legal
defeasance option" or the "covenant defeasance
option" under the Coleman Holdings Indenture
(assuming a redemption date of July 15, 1996), as
provided for in Sections 8.02(1) and 8.02(2) of the
Coleman Holdings Indenture and Section 5 of Exhibit
B to the Coleman Holdings Indenture, plus
(ii) the "Redemption Price" as defined in
Section 5 of Exhibit A to the Coleman Worldwide
Indenture (assuming a redemption date of May 27,
1998) of the aggregate amount of all Debt
outstanding under the Coleman Worldwide Indenture
as of the redemption date.
New World
Guarantor: The Defeased Debt Amount for New World Guarantor
shall be an amount equal to the lesser of (x) the
amount, if on such date of determination NWCG
Holdings is permitted to optionally redeem,
pursuant to the terms of the NWCG Holdings
Indenture, the Debt outstanding thereunder,
that NWCG Holdings would be required to pay to
redeem such Debt and (y) the greater of (A) the
"repurchase price" (assuming a repurchase date
105 days after the date of determination) of the
aggregate amount of all Debt outstanding under the
NWCG
<PAGE>
2
Holdings Indenture as of the repurchase date, as
determined pursuant to Section 4.07(a) of the NWCG
Holdings Indenture and (B) the aggregate amount
required as of the date of determination to be
deposited with the Trustee (as defined in the NWCG
Holdings Indenture) to effect the "legal defeasance
option" or the "covenant defeasance option" under
the NWCG Holdings Indenture (assuming a maturity
date of June 15, 1999), as provided for in Sections
8.02(1) and 8.02(2) of the NWCG Holdings Indenture.
Revlon Guarantor: The Defeased Debt Amount for the Revlon Guarantor
shall be an amount equal to the lesser of (x) the
amount, if on such date of determination Revlon
Worldwide is permitted to optionally redeem,
pursuant to the terms of the Revlon Worldwide
Indenture, the Debt outstanding thereunder, that
Revlon Worldwide would be required to pay to redeem
such Debt and (y)the greater of (A) the "purchase
price" (assuming a repurchase date 105 days after
the date of determination) of the aggregate amount
of all Debt outstanding under the Revlon Worldwide
Indenture as of the date of purchase plus accrued
and unpaid interest thereon through the date of
purchase, as determined pursuant to Section 4.09(a)
of the Revlon Worldwide Indenture and (B) the
"redemption price" (assuming a redemption date 60
days after the date of determination) for a "Change
of Control" (as defined in the Revlon Worldwide
Indenture) of the aggregate amount of all Debt
outstanding under the Revlon Worldwide Indenture as
of the redemption date, as determined pursuant to
Section 5 of Exhibit B to the Revlon Worldwide
Indenture.
As used in this Schedule VI, the following terms shall have
the following meanings:
"Coleman Worldwide Indenture" means the Indenture, dated as of May
27, 1993, made by Coleman Worldwide in favor of Continental Bank, National
Association as trustee pursuant to which Coleman Worldwide issued its Liquid
Yield Option(TM) Notes due 2013.
"Coleman Holdings Indenture" means the Indenture, dated as of July
15, 1993 made by Coleman Holdings in favor of Continental Bank, National
Association as trustee pursuant to which Coleman Holdings issued its Senior
Secured Discount Notes due 1998 and its Series B Senior Secured Discount Notes
due 1998.
"NWCG Holdings Indenture" means the Indenture, dated as of June 30,
1994 made by NWCG Holdings in favor of Nationsbank of Georgia, National
Association as trustee
<PAGE>
3
pursuant to which NWCG Holdings issued its Senior Secured Discount Notes due
1999 and will issue its Series B Senior Secured Discount Notes due 1999.
"Revlon Worldwide Indenture" means the Indenture, dated as of March
15, 1993, made by Revlon Worldwide Corporation ("Revlon Worldwide") in favor
of The First National Bank of Boston as trustee pursuant to which Revlon
Worldwide issued its Senior Secured Discount Notes due 1998 and will issue its
Series B Senior Secured Discount Notes due 1998.
<PAGE>
Schedule VII
List of Debt for Definition of
Net Cash Proceeds
1. MacAndrews & Forbes Holdings Inc.
13% Subordinated Debentures due March 1, 1999 pursuant to the
Indenture dated as of March 1, 1984 between MacAndrews & Forbes
Holdings Inc. and the United States Trust Company of New York, as
trustee.
2. Andrews Group Incorporated
10% Senior Subordinated Debentures due 1999 pursuant to the Indenture
dated as of June 4, 1990 between Andrews Group Incorporated and First
Trust of California, National Association, as trustee (as successor
trustee to Security Pacific National Trust Company (New York)).
3. Four Star Holdings Corp.
Senior Notes due June 7, 1999 issued by Four Star Holdings Corp. to
former shareholders (Lawrence L. Kuppin, Robert C. Rehme and Harry
Evans Sloan) in the aggregate principal amount of $46,154,500.
4. MacAndrews & Forbes Group Inc.
15 5/8% Senior Subordinated Notes due 1997 pursuant to the Indenture
dated October 22, 1982 between MacAndrews & Forbes Group Inc. and
Security Pacific National Bank, as trustee.
5. Revlon Group Incorporated
Redemption of Series B Cumulative Redeemable Exchangeable Preferred
Stock of Revlon Group Incorporated.
<PAGE>
EXHIBIT A-1
TO THE FOURTH
AMENDED AND
RESTATED REVOLVING
CREDIT AGREEMENT
FORM OF TRANCHE A REVOLVING CREDIT NOTE
$____________ Dated: December __, 1996
FOR VALUE RECEIVED, the undersigned, MARVEL IV HOLDINGS
INC., a Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the
order of ___________ (the "Lender") for the account of its Applicable Lending
Office (as defined in the Fourth Amended and Restated Revolving Credit
Agreement referred to below) the aggregate principal amount of the Tranche A
Revolving Credit Advances (as defined below) owing to the Lender by the
Borrower pursuant to the Fourth Amended and Restated Revolving Credit
Agreement (as defined below) on the dates and in the amounts specified in the
Fourth Amended and Restated Revolving Credit Agreement, but in no event later
than June 3, 1999.
The Borrower promises to pay interest on the unpaid
principal amount of each Tranche A Revolving Credit Advance from the date of
each Tranche A Revolving Credit Advance until such principal amount is paid in
full, at such interest rates, and payable at such times, as are specified in
the Fourth Amended and Restated Revolving Credit Agreement.
Both principal and interest are payable in lawful money of
the United States of America to Citibank, N.A., as Agent, at its offices at
399 Park Avenue, New York, New York 10043, Account No. 3685-2248, in same day
funds. Each Tranche A Revolving Credit Advance owing to the Lender by the
Borrower and the maturity thereof, and all payments made on account of
principal thereof, shall be recorded by the Lender and, prior to any transfer
hereof, endorsed on the grid attached hereto, which is part of this Promissory
Note.
This Promissory Note is one of the Tranche A Revolving
Credit Notes referred to in, and is entitled to the benefits of, the Fourth
Amended and Restated Revolving Credit Agreement dated as of December 16, 1996
(such agreement, as it may hereafter be amended or modified, being the "Fourth
Amended and Restated Revolving Credit
<PAGE>
2
Agreement") among the Borrower, the Lender, certain other lenders parties
thereto, the initial issuing bank thereunder, Citibank, N.A., as
Administrative Agent, The First National Bank of Boston, as Documentation
Agent, Chase Securities, Inc., as Syndication Agent, Citibank, N.A., as
Collateral Agent and the managing agents party thereto. The Fourth Amended and
Restated Revolving Credit Agreement, among other things, (i) provides for the
making of Tranche A revolving credit advances (the "Tranche A Revolving Credit
Advances") by the Lender to the Borrower from time to time in an aggregate
amount not to exceed at any time outstanding the U.S. dollar amount first
above mentioned, the indebtedness of the Borrower resulting from such Tranche
A Revolving Credit Advances being evidenced by this Promissory Note, and (ii)
contains provisions for acceleration of the maturity hereof upon the happening
of certain stated events and also for prepayments on account of principal
hereof prior to the maturity hereof upon the terms and conditions therein
specified.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of New York.
MARVEL IV HOLDINGS INC.
By: ____________________________________
Title:
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
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<PAGE>
EXHIBIT A-2 TO THE
FOURTH AMENDED AND
RESTATED REVOLVING
CREDIT AGREEMENT
FORM OF TRANCHE B REVOLVING CREDIT NOTE
$____________ Dated: December__, 1996
FOR VALUE RECEIVED, the undersigned, MARVEL IV HOLDINGS
INC., a Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the
order of ___________ (the "Lender") for the account of its Applicable Lending
Office (as defined in the Fourth Amended and Restated Revolving Credit
Agreement referred to below) the aggregate principal amount of the Tranche B
Revolving Credit Advances (as defined below) owing to the Lender by the
Borrower pursuant to the Fourth Amended and Restated Revolving Credit
Agreement (as defined below) on the dates and in the amounts specified in the
Fourth Amended and Restated Revolving Credit Agreement, but in no event later
than June 30, 1997.
The Borrower promises to pay interest on the unpaid
principal amount of each Tranche B Revolving Credit Advance from the date of
each Tranche B Revolving Credit Advance until such principal amount is paid in
full, at such interest rates, and payable at such times, as are specified in
the Fourth Amended and Restated Revolving Credit Agreement.
Both principal and interest are payable in lawful money of
the United States of America to Citibank, N.A., as Agent, at its offices at
399 Park Avenue, New York, New York 10043, Account No. 3685-2248, in same day
funds. Each Tranche B Revolving Credit Advance owing to the Lender by the
Borrower and the maturity thereof, and all payments made on account of
principal thereof, shall be recorded by the Lender and, prior to any transfer
hereof, endorsed on the grid attached hereto, which is part of this Promissory
Note.
This Promissory Note is one of the Tranche B Revolving
Credit Notes referred to in, and is entitled to the benefits of, the Fourth
Amended and Restated Revolving Credit Agreement dated as of December 16, 1996
(such agreement, as it may hereafter be amended or modified, being the "Fourth
Amended and Restated Revolving
<PAGE>
2
Credit Agreement") among the Borrower, the Lender, certain other lenders
parties thereto, the initial issuing bank thereunder, Citibank, N.A., as
Administrative Agent, The First National Bank of Boston, as Documentation
Agent, Chase Securities, Inc., as Syndication Agent, Citibank, N.A., as
Collateral Agent and the managing agents party thereto. The Fourth Amended and
Restated Revolving Credit Agreement, among other things, (i) provides for the
making of Tranche B revolving credit advances (the "Tranche B Revolving Credit
Advances") by the Lender to the Borrower from time to time in an aggregate
amount not to exceed at any time outstanding the U.S. dollar amount first
above mentioned, the indebtedness of the Borrower resulting from such Tranche
B Revolving Credit Advances being evidenced by this Promissory Note, and (ii)
contains provisions for acceleration of the maturity hereof upon the happening
of certain stated events and also for prepayments on account of principal
hereof prior to the maturity hereof upon the terms and conditions therein
specified.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of New York.
MARVEL IV HOLDINGS INC.
By:________________________________
Title:
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
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Date Advance or Prepaid Balance Made by
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<PAGE>
EXHIBIT B
TO THE FOURTH AMENDED
AND RESTATED REVOLVING
CREDIT AGREEMENT
FORM OF
ASSIGNMENT AND ACCEPTANCE
Dated _________, 199_
Reference is made to the Fourth Amended and Restated
Revolving Credit Agreement dated as of December 16, 1996 (as amended or
otherwise modified from time to time, the "Fourth Amended and Restated
Revolving Credit Agreement") among Marvel IV Holdings Inc., a Delaware
corporation (the "Borrower"), the Lender Parties (as defined in the Fourth
Amended and Restated Revolving Credit Agreement), Citibank, N.A., as
Administrative Agent (the "Administrative Agent"), The First National Bank of
Boston, as Documentation Agent, Chase Securities, Inc., as Syndication Agent,
Citibank, N.A., as Collateral Agent and the managing agents party thereto.
Terms defined in the Fourth Amended and Restated Revolving Credit Agreement
are used herein with the same meaning.
____________ (the "Assignor") and ___________ (the
"Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee,
and the Assignee hereby purchases and assumes from the Assignor, an interest
in and to the Assignor's rights and obligations under the Fourth Amended and
Restated Revolving Credit Agreement as of the date hereof equal to the
percentage interest specified on Annex 1 of all outstanding rights and
obligations under the Facility or Facilities specified on Annex 1. After
giving effect to such sale and assignment, the Assignee's Commitment and the
amount of the Advances owing to the Assignee will be as set forth in Annex 1.
2. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Loan Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of any Loan Document or any other instrument
or document furnished pursuant thereto; (iii) makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of any Loan Party or the performance or observance by any Loan Party of any of
its obligations under the Loan Documents or any other instrument or document
furnished pursuant thereto; and (iv) attaches the Note or Notes
<PAGE>
2
held by the Assignor and requests that the Administrative Agent exchange such
Note or Notes for a new Note or Notes payable to the order of the Assignee in
an amount equal to the Commitments assumed by the Assignee pursuant hereto or
new Notes payable to the order of the Assignee in an amount equal to the
Commitments assumed by the Assignee pursuant hereto and the Assignor in an
amount equal to the Commitment retained by the Assignor under the Fourth
Amended and Restated Revolving Credit Agreement, respectively, as specified on
Annex 1.
3. The Assignee (i) confirms that it has received a copy of
the Fourth Amended and Restated Revolving Credit Agreement, together with
copies of the financial statements referred to in Section 4.01 thereof and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment and Acceptance;
(ii) agrees that it will, independently and without reliance upon the
Administrative Agent, any other Agent, the Assignor or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Fourth Amended and Restated Revolving Credit Agreement; (iii)
confirms that it is an Eligible Assignee; (iv) appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to
exercise such powers under the Fourth Amended and Restated Revolving Credit
Agreement as are delegated to the Administrative Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; (v) agrees
that it will perform in accordance with their terms all of the obligations
which by the terms of the Fourth Amended and Restated Revolving Credit
Agreement are required to be performed by it as a Lender; [and] (vi) specifies
as its Lending Office (and address for notices) the office set forth beneath
its name on the signature pages hereof [and (vii) attaches the forms
prescribed by the Internal Revenue Service of the United States certifying as
to the Assignee's status for purposes of determining exemption from United
States withholding taxes with respect to all payments to be made to the
Assignee under the Fourth Amended and Restated Revolving Credit Agreement or
such other documents as are necessary to indicate that all such payments are
subject to such rates at a rate reduced by an applicable tax treaty].(1)
4. Following the execution of this Assignment and Acceptance
by the Assignor and the Assignee, it will be delivered to the Administrative
Agent for acceptance and recording by the Administrative Agent. The effective
date of this Assignment and Acceptance shall be the date of acceptance thereof
by the Administrative Agent, unless otherwise specified on Annex 1 hereto (the
"Effective Date").
- ---------------------
1 Include clause (vii) if the Assignee is organized under the laws
of a jurisdiction outside the United States.
<PAGE>
3
5. Upon such acceptance and recording by the Administrative
Agent, as of the Effective Date, (i) the Assignee shall be a party to the
Fourth Amended and Restated Revolving Credit Agreement and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of
a Lender thereunder and (ii) the Assignor shall, to the extent provided in
this Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Fourth Amended and Restated Revolving Credit Agreement.
6. Upon such acceptance and recording by the Administrative
Agent, from and after the Effective Date, the Administrative Agent shall make
all payments under the Fourth Amended and Restated Revolving Credit Agreement
and the Notes in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and commitment fees with
respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Fourth Amended and Restated
Revolving Credit Agreement and the Notes for periods prior to the Effective
Date directly between themselves.
7. This Assignment and Acceptance shall be governed by,
and construed in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of Annex 1 to this Assignment and
Acceptance by telecopier shall be as effective as delivery of a manually
executed counterpart of this Assignment and Acceptance.
IN WITNESS WHEREOF, the parties hereto have caused Annex 1
to this Assignment and Acceptance to be executed by their respective officers
thereunto duly authorized, as of the date first above written, such execution
being made on Annex 1 hereto.
<PAGE>
Annex 1
to
Assignment and Acceptance
Dated , 199
As to each Facility in respect of which an interest is being assigned.
Percentage Interest assigned: _________%
Assignee's Tranche A Revolving Credit
Commitment: $_________
Aggregate outstanding principal
amount of Tranche A Revolving
Credit Advances assigned: $_________
Principal amount of Tranche A Revolving Credit
Note payable to Assignee: $_________
Principal amount of Tranche A Revolving Credit
Note payable to Assignor: $_________
Assignee's Tranche B Revolving
Credit Commitment: _______%
Aggregate outstanding principal amount of
Tranche B Revolving Credit Advances
assigned: $________
Principal amount of Tranche B Revolving
Credit Note payable to Assignee: $________
Principal amount of Tranche B Revolving
Credit Note payable to Assignor: $________
Effective Date**: _________________, 199_
[NAME OF ASSIGNOR, as Assignor]
By: _______________________________
Title:
- ------------------------
** This date should be no earlier than the date of acceptance by the
Administrative Agent.
<PAGE>
2
[NAME OF ASSIGNEE], as Assignee
By: ________________________________
Title:
Lending Office
(and address for notices):
[Address]
Accepted this ___ day of ___________,
199_
CITIBANK, N.A.,
as Administrative Agent
By:________________________
Title:
<PAGE>
EXHIBIT C
TO THE FOURTH AMENDED
AND RESTATED REVOLVING
CREDIT AGREEMENT
FORM OF
NOTICE OF BORROWING
Citibank, N.A.
as Administrative Agent for the Lenders parties
to the Fourth Amended and Restated Revolving
Credit Agreement referred to below [Date]
399 Park Avenue
New York, New York 10043
Attention: _____________
Ladies and Gentlemen:
The undersigned, Marvel IV Holdings Inc., refers to the Fourth
Amended and Restated Revolving Credit Agreement dated as of December 16, 1996
(as amended or otherwise modified from time to time, the "Fourth Amended and
Restated Revolving Credit Agreement"; the terms defined therein being used
herein as therein defined), among the undersigned, certain Lender Parties
parties thereto, Citibank, N.A., as Administrative Agent, The First National
Bank of Boston, as Documentation Agent, Chase Securities, Inc., as Syndication
Agent, Citibank, N.A., as Collateral Agent and the managing agents party
thereto and hereby gives you notice, irrevocably, pursuant to Section 2.02 of
the Fourth Amended and Restated Revolving Credit Agreement that the
undersigned hereby requests a Borrowing under the Fourth Amended and Restated
Revolving Credit Agreement, and in that connection sets forth below the
information relating to such Borrowing (the "Proposed Borrowing") as required
by Section 2.02(a) of the Fourth Amended and Restated Revolving Credit
Agreement:
(i) The Business Day of the Proposed Borrowing is ____________,
[199_].
(ii) The Facility under which the Proposed Borrowing is to be
made is the Tranche A] [Tranche B] Revolving Credit
Facility.
(iii) The Type of Advances comprising the Proposed Borrowing is
[Base Rate Advances] [Eurodollar Rate Advances].
(iv) The aggregate amount of the Proposed Borrowing is
$__________.
(v) The initial Interest Period for each Eurodollar Rate Advance
made as part of the Proposed Borrowing is _____ month[s].]
<PAGE>
2
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Borrowing:
(A) the representations and warranties contained in the Loan
Documents are correct in all material respects on and as of the date
of such Proposed Borrowing, before and after giving effect to the
Proposed Borrowing and to the application of the proceeds therefrom,
as though made on and as of such date, except to the extent such
representations and warranties specifically relate to an earlier
date, in which case such representations and warranties were true,
correct and complete in all material respects on and as of such
earlier date; and
(B) no Default has occurred and is continuing, or would result
from such Proposed Borrowing or from the application of the proceeds
therefrom.
Very truly yours,
MARVEL IV HOLDINGS INC.
By: ______________________
Title:
1
<PAGE>
EXHIBIT I
TO THE FOURTH AMENDED
AND RESTATED REVOLVING
CREDIT AGREEMENT
FORM OF CONFIDENTIALITY LETTER
[BANK LETTERHEAD]
[Date]
Citibank, N.A.
as Administrative Agent
399 Park Avenue
New York, NY 10043
[Name and address of Bank
selling a participation or
making an assignment under
the Fourth Amended and Restated Revolving Credit Agreement
referred to below]
Dear Sirs:
We understand that Citibank, N.A. ("Citibank") is acting as
Administrative Agent under the Fourth Amended and Restated Revolving Credit
Agreement dated as of December 16, 1996 (as amended or otherwise modified from
time to time, the "Fourth Amended and Restated Revolving Credit Agreement";
terms used herein and not otherwise defined are used as defined therein) among
Marvel IV Holdings Inc. (the "Borrower"), Citibank, as Administrative Agent,
the Initial Issuing Bank, the banks and financial institutions and other
institutional lenders party thereto (the "Lender Parties"), The First National
Bank of Boston, as Documentation Agent, Chase Securities, Inc., as Syndication
Agent, Citibank, as Collateral Agent and the managing agents party thereto. In
connection with our evaluation of a proposed purchase of a participation in,
or acceptance of an assignment of, a portion of the Advances and Commitments,
Citibank and/or a Lender or an affiliate of Citibank or a Lender have
furnished, and will furnish, us with a copy of the Fourth Amended and Restated
Revolving Credit Agreement and non-public information concerning the Borrower
and the Bank (all such non-public information, whether furnished before or
after the date of this letter, and including, without limitation, the
financial model referred to below, collectively the "Transaction
Information").
<PAGE>
2
We agree to keep confidential (and to cause our officers, directors,
employees, agents and representatives to keep confidential) all Transaction
Information and, in the event we do not participate or accept an assignment
under the Fourth Amended and Restated Revolving Credit Agreement, at
Citibank's, such Lender's or the Borrower's request, to return (and to cause
such other person to return) to Citibank, such Lender or the Borrower, as the
case may be, all written Transaction Information and all copies thereof,
extracts therefrom and analyses and other materials based thereon, except that
we shall be permitted to disclose details of the Transaction Information (i)
to such of our officers, directors, employees, agents and representatives
(which agents and representatives shall not include any financial
institutions) and legal or other advisors who need to know such information in
connection with our evaluation of a possible participation in, or possible
acceptance of an assignment of, Advances and Commitment thereunder and who
agree to be bound by the restrictions set forth herein; (ii) to the extent
required by applicable laws and regulations or by any subpoena or similar
legal process (provided that we will promptly notify the Borrower of such
requirement as far in advance of its disclosure as is practicable to enable
the Borrower to seek a protective order and, to the extent practicable, we
will cooperate with the Borrower in seeking any such order), or requested by
any governmental agency or authority having jurisdiction over us (provided
that we will first inform the Borrower of any such request other than those
from bank regulatory authorities or examiners and, in either case, we will
inform any such agency or authority that such information is subject to this
letter agreement); (iii) to the extent Citibank and the Borrower shall have
consented to such disclosure in writing; and (iv) to the extent that a public
announcement or dissemination of such Transaction Information shall have been
made other than as a result of a breach of this Confidentiality Letter.
We further agree that we will use the Transaction Information only in
connection with our evaluation of becoming a possible participant or Eligible
Assignee under the Fourth Amended and Restated Revolving Credit Agreement.
The undertakings contained herein are for your benefit and the
benefit of the Borrower.
Upon its receipt of this confidentiality letter signed by us, we
understand that Citibank or a Lender may forward to us a financial model for
the periods through 1999 pertaining to the Borrower and the Bank. Such
information will subsequently form part of the Transaction Information for all
purposes hereunder.
We understand that the financial model was prepared in good faith by
Mafco's management based on assumptions believed to be reasonable when made.
However, because assumptions as to future results are inherently subject to
uncertainty and contingencies
<PAGE>
3
beyond Mafco's control, actual results of the Borrower and the Bank may be
higher or lower.
[Name of Lender]
By: __________________________
Title:
<PAGE>
$350,000,000
TERM CREDIT AGREEMENT
Dated as of December 16, 1996
Among
MARVEL IV HOLDINGS INC.,
(to be renamed MAFCO FINANCE CORP.)
as Borrower,
THE FINANCIAL INSTITUTIONS AND
THE INITIAL ISSUING BANK NAMED HEREIN,
as Financial Institutions and
Initial Issuing Bank,
CITIBANK, N.A.,
as Administrative Agent and Collateral Agent ,
NATIONSBANC CAPITAL MARKETS, INC.,
as Documentation Agent,
CREDIT SUISSE,
as Syndication Agent,
and
BANK OF AMERICA ILLINOIS,
ING (U.S.) CAPITAL CORPORATION,
SALOMON BROTHERS HOLDING COMPANY INC,
THE BANK OF NEW YORK,
THE FUJI BANK, LIMITED,
as Managing Agents
<PAGE>
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms...................................... 2
SECTION 1.02. Computation of Time Periods................................ 35
SECTION 1.03. Accounting Terms........................................... 36
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances............................................... 36
SECTION 2.02. Making the Advances........................................ 36
SECTION 2.03. Repayment.................................................. 38
SECTION 2.04. Optional Termination or Reduction of the Commitments....... 38
SECTION 2.05. Prepayments................................................ 38
SECTION 2.06. Interest................................................... 43
SECTION 2.07. Interest Rate Determination................................ 44
SECTION 2.08. Fees ................................................... 45
SECTION 2.09. Increased Costs; Illegality................................ 45
SECTION 2.10. Conversion of Advances..................................... 47
SECTION 2.11. Payments and Computations.................................. 48
SECTION 2.12. Taxes ................................................... 49
SECTION 2.13. Sharing of Payments, Etc................................... 52
SECTION 2.14. Removal of Lender.......................................... 52
SECTION 2.15. Defaulting Lender.......................................... 53
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Effective Date..................... 56
SECTION 3.02. Conditions Precedent to the Tranche A Term Borrowing. ..... 63
SECTION 3.03. Conditions Precedent to the Tranche B Term Borrowings...... 64
SECTION 3.04. Conditions Precedent to Each Borrowing..................... 65
SECTION 3.05. Determinations Under Section 3.01.......................... 65
ARTICLE IV
<PAGE>
ii
Page
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower............. 66
SECTION 4.02. Representations and Warranties Applicable to Marvel........ 70
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants...................................... 71
(a) Compliance with Laws, Etc............................ 71
(b) Compliance with Environmental Laws................... 71
(c) Maintenance of Insurance............................. 71
(d) Preservation of Corporate Existence, Etc............. 71
(e) Visitation Rights.................................... 72
(f) Keeping of Books..................................... 72
(g) Maintenance of Properties, Etc....................... 72
(h) Termination of Financing Statements.................. 72
(i) Collateral Account................................... 72
(j) Reporting Requirements............................... 72
(k) Look-Forward Certificate............................. 76
(l) Transactions with Affiliates......................... 77
(m) Mafco Tax Group...................................... 77
(n) Net Cash Proceeds.................................... 77
SECTION 5.02. Negative Covenants......................................... 77
(a) Liens, Etc........................................... 77
(b) Lease Obligations.................................... 78
(c) Mergers, Etc......................................... 78
(d) Sales, Etc. of Assets................................ 78
(e) Dividends, Repurchases, Etc.......................... 78
(f) Investments.......................................... 79
(g) Change in Nature of Business......................... 79
(h) Accounting Changes................................... 79
(i) Debt................................................. 79
(j) Charter Amendments................................... 79
(k) Prepayments, Etc. of Debt............................ 80
(l) Negative Pledge...................................... 80
(m) Partnerships......................................... 80
(n) Capital Expenditures................................. 80
(o) Issuance of Capital Stock............................ 80
(p) Payment Restrictions................................. 80
<PAGE>
iii
Page
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default........................................... 81
ARTICLE VII
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
SECTION 7.01. Authorization and Action.................................... 86
SECTION 7.02. Administrative Agent's and Collateral Agent's Reliance, Etc. 87
SECTION 7.03. Citibank and Affiliates..................................... 87
SECTION 7.04. Lender Credit Decision...................................... 88
SECTION 7.05. Indemnification............................................. 88
SECTION 7.06. Successor Administrative Agent and Collateral Agent......... 89
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc............................................. 90
SECTION 8.02. Notices, Etc................................................ 91
SECTION 8.03. No Waiver; Remedies......................................... 91
SECTION 8.04. Costs; Expenses............................................. 91
SECTION 8.05. Right of Set-off............................................ 93
SECTION 8.06. Binding Effect.............................................. 93
SECTION 8.07. Assignments and Participations.............................. 93
SECTION 8.08. Governing Law; Submission to Jurisdiction................... 96
SECTION 8.09. Execution in Counterparts................................... 97
SECTION 8.10. WAIVER OF JURY TRIAL........................................ 97
<PAGE>
iv
Schedule I - List of Existing Advances, Advances, Commitments and Lending
Offices
Schedule II - Borrower Information
Schedule III - List of Existing Debt
Schedule IV - List of Investments
Schedule V - List of Existing Liens
Schedule VI - Calculation of Defeased Debt Amount
Schedule VII - List of Debt for the Definition of Net Cash Proceeds
Exhibit A-1 - Form of Tranche A Revolving Credit Note
Exhibit A-2 - Form of Tranche B Revolving Credit Note
Exhibit B - Form of Assignment and Acceptance
Exhibit C - Form of Notice of Borrowing
Exhibit D-1 - Form of Mafco Security Agreement
Exhibit D-2 - Form of Borrower Security Agreement
Exhibit D-3 - Form of Borrower Parent Security Agreement
Exhibit E-1 - Form of Mafco Guaranty
Exhibit E-2 - Form of Borrower Parent Guaranty
Exhibit E-3 - Form of C&F Guaranty
Exhibit E-4 - Form of Cigar Guaranty
Exhibit E-5 - Form of Coleman Guaranty
Exhibit E-6 - Form of Flavors Guaranty
Exhibit E-7 - Form of New World Guaranty
Exhibit E-8 - Form of Revlon Guaranty
<PAGE>
v
Exhibit F-1 - Form of C&F Pledge Agreement
Exhibit F-2 - Form of Cigar Pledge Agreement
Exhibit F-3 - Form of Coleman Pledge Agreement
Exhibit F-4 - Form of Coleman Worldwide Pledge Agreement
Exhibit F-5 - Form of Flavors Pledge Agreement
Exhibit F-6 - Form of Four Star Pledge Agreement
Exhibit F-7 - Form of Mafco Pledge Agreement
Exhibit F-8 - Form of M&F Pledge Agreement
Exhibit F-9 - Form of New Coleman Pledge Agreement
Exhibit F-10 - Form of New World Pledge Agreement
Exhibit F-11 - Form of Second Andrews Pledge Agreement
Exhibit F-12 - Form of Revlon Pledge Agreement
Exhibit G - Form of Equity Contribution Agreement
Exhibit H - Form of First Gibraltar Loan Agreement
Exhibit I - Form of Confidentiality Letter
<PAGE>
TERM CREDIT AGREEMENT
TERM CREDIT AGREEMENT dated as of December 16, 1996 among MARVEL IV
HOLDINGS INC. (to be renamed MAFCO FINANCE CORP.), a Delaware corporation (the
"Borrower"), the banks, financial institutions and other institutional lenders
(the "Financial Institutions") listed on the signature pages hereof, CITIBANK,
N.A. ("Citibank"), as administrative agent (together with any successor
appointed pursuant to Article VII, the "Administrative Agent") for the Lenders
(as hereinafter defined) hereunder, NATIONSBANC CAPITAL MARKETS, INC., as
documentation agent (the "Documentation Agent") for the Lenders hereunder,
CREDIT SUISSE, as syndication agent (the "Syndication Agent") for the Lenders
hereunder, BANK OF AMERICA ILLINOIS, ING (U.S.) CAPITAL CORPORATION, SALOMON
BROTHERS HOLDING COMPANY INC, THE BANK OF NEW YORK and THE FUJI BANK, LIMITED,
as managing agents (the "Managing Agents"; together with the Administrative
Agent, the Documentation Agent and the Syndication Agent, the "Agents") for the
Lenders hereunder and Citibank, as collateral agent (together with any
successor appointed pursuant to Article VII, the "Collateral Agent") for the
Lenders hereunder and the Revolving Credit Agreement Lenders (as hereinafter
defined).
PRELIMINARY STATEMENTS
(1) Mafco Holdings Inc., a Delaware corporation and an indirect parent
corporation of the Borrower ("Mafco") intends to acquire, directly or
indirectly through Subsidiaries, newly issued equity in Marvel Entertainment
Group, Inc., a Delaware corporation and an indirect Subsidiary (as hereinafter
defined) of the Borrower ("Marvel").
(2) The Borrower has requested that the Financial Institutions lend to
it up to $350,000,000 which will be used to finance a series of related and
simultaneous transactions which will result in (x) the acquisition by Mafco,
directly or indirectly, of such newly issued equity in Marvel and (y) Toy Biz
Inc., a Delaware corporation ("Toy Biz"), becoming a wholly-owned Subsidiary of
Marvel. A portion of proceeds of the Borrowings hereunder may also be used to
provide working capital to Marvel.
(3) The Financial Institutions hereunder have indicated their
willingness to agree to lend such amounts on the terms and conditions of this
Agreement.
(4) Concurrently with entering into this Agreement, the Borrower is
entering into a Fourth Amended and Restated Revolving Credit Agreement dated as
of the date hereof (as it may hereafter be amended or otherwise modified from
time to time, the "Revolving Credit Agreement") with the banks, financial
institutions and other institutional lenders party thereto (the "Revolving
Credit Agreement Lenders"), Citibank, as initial issuing bank, Citibank, as
administrative agent (in such capacity, the "Revolving Administrative Agent"),
The First National Bank of Boston as documentation agent (in such
<PAGE>
2
capacity, the "Revolving Documentation Agent"), Chase Securities, Inc., as
syndication agent (in such capacity, the "Revolving Syndication Agent"), the
managing agents party thereto (the "Revolving Managing Agents"); together with
the Revolving Administrative Agent, the Revolving Documentation Agent and the
Revolving Syndication Agent, the "Revolving Agents") and the Collateral Agent.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"A Company" means (i) each Loan Party, FN Parent, FN Holdings, Coleman
Holdings Inc., Coleman Worldwide and NWCG Holdings and (ii) on and after the
Revlon Inclusion Date, National Health Care Group Inc., Revlon Holdings Inc.
and Revlon Worldwide Corporation; provided, however, that on and after (i) the
consummation of the New World Acquisition, NWCG Holdings shall no longer be an
"A Company" and (ii) the date of sale, monetization or other disposal by Mafco
or any of its Subsidiaries of all of the News Corp. Preferred ADRs, New World
Guarantor shall no longer be an "A Company".
"Administrative Agent" has the meaning specified in the recital of
parties to this Agreement.
"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent with Citibank at
399 Park Avenue, New York, New York 10043, Account No.3685-2248.
"Advance" means a Tranche A Term Advance or a Tranche B Term Advance.
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term "control" (including the terms "controlling", "controlled
by" and "under common control with") of a Person means the possession, direct
or indirect, of the power to vote 5% or more of the Voting Stock of such Person
or to direct or cause direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or otherwise.
<PAGE>
3
"Agents" has the meaning specified in the recital of parties to this
Agreement.
"Andrews" means Andrews Group Incorporated, a Delaware corporation.
"Applicable Lending Office" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of a Base Rate Advance and such
Lender's Eurodollar Lending Office in the case of a Eurodollar Rate Advance.
"Applicable Margin" means, at any time, 2.50% per annum for Base Rate
Advances and 4.50% per annum for Eurodollar Rate Advances.
"Asset Sale" means the sale, lease, transfer or other disposition
(collectively, a "disposition") of assets of Mafco or any of its Subsidiaries
other than a disposition of any of the following:
(i) all or any portion of the capital stock of Laboratory
Corporation of America Holdings, or Meridian Sports Incorporated,
(ii) all or any portion of the capital stock or assets of the
Bank or any of its Subsidiaries,
(iii) all or any portion of the real property located at 1440
South Sepulveda, Los Angeles, California in connection with the New
World Acquisition,
(iv) from and after the later to occur of (A) the Tranche B
Termination Date and (B) the Term Credit Agreement Termination Date,
all or any portion of the capital stock or assets of Marvel III
Holdings Inc., Marvel (Parent) Holdings Inc., Marvel Holdings Inc. and
Marvel (or any of its Subsidiaries), and
(v) any asset of Ropa Two Corporation so long as the Net Cash
Proceeds from any disposition of an asset of Ropa Two Corporation
shall be reinvested, within twelve months following the date of such
disposition, in the business of Ropa Two Corporation or any of its
Subsidiaries;
provided, however, that
(a) a disposition of assets of (x) a Designated Operating Company
or any of its Subsidiaries, (y) Meridian Sports Incorporated or any of
its Subsidiaries or (z) Marvel or any of its Subsidiaries prior to and
following the Marvel Inclusion Period shall, in each case, only be
considered an Asset Sale
<PAGE>
4
for purposes of this Agreement to the extent, and only to the extent,
that all or a portion of the proceeds of such disposition are received
by any of Mafco or any of its Subsidiaries (other than (i) a
Designated Operating Company or any of its Subsidiaries, (ii) Meridian
Sports Incorporated or any of its Subsidiaries or (iii) Marvel or any
of its Subsidiaries prior to and following the Marvel Inclusion
Period, as the case may be) through a dividend, distribution, loan,
advance or other similar payment,
(b) subject to the other clauses of this proviso, so long as the
Revlon Holdings Statement is true and correct both before and after
giving effect to such disposition, a disposition of assets of Revlon
Holdings Inc. or any of its Subsidiaries shall only be considered an
Asset Sale for purposes of this Agreement to the extent, and only to
the extent, that all or a portion of the proceeds of such disposition
are received by any of Mafco or any of its Subsidiaries (other than
Revlon Holdings Inc. or any of its Subsidiaries) through a dividend,
distribution, loan, advance or other similar payment,
(c) notwithstanding clause (b) of this proviso, a disposition of
all or any portion of the capital stock of Revlon Worldwide
Corporation, National Health Care Group, Inc. or Charles of the Ritz
Group Ltd. (but in the case of Charles of the Ritz Group Ltd., only if
it owns any of the capital stock of Revlon Worldwide Corporation at
the time of such disposition) shall be considered an Asset Sale for
purposes of this Agreement,
(d) notwithstanding clause (b) of this proviso, a disposition of
any asset (other than assets specifically excluded from this
definition of "Asset Sale") of National Health Care Group, Inc. or any
of its Subsidiaries (other than (i) prior to the Revlon Inclusion
Date, Revlon Worldwide and its Subsidiaries and (ii) from and after
the Revlon Inclusion Date, Revlon and its Subsidiaries) shall be
considered an Asset Sale for purposes of this Agreement, and
(e) notwithstanding clause (b) of this proviso, prior to the
Revlon Inclusion Date, a disposition of assets by Revlon Worldwide or
any of its Subsidiaries shall not be considered an Asset Sale for
purposes of this Agreement.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an assignee of such Lender, and accepted by the
Administrative Agent, in substantially the form of Exhibit B hereto.
<PAGE>
5
"Bank" means First Nationwide Bank, A Federal Savings Bank, and any
successor thereto, including the surviving bank of the merger of the Bank with
and into California Federal.
"Bank Preferred Stock Document" means the Federal Stock Charter of
First Madison Bank, FSB, as supplemented by the First Supplementary Section to
Section 5 of the Charter of First Gibraltar Bank, FSB and the Second
Supplemental Section to Section 5 of the Charter of First Madison Bank, FSB.
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the highest
of:
(a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearest 1/4 of 1% or, if there is no
nearest 1/4 of 1%, to the next higher 1/4 of 1%) of (i) 1/2 of 1% per
annum, plus (ii) the rate obtained by dividing (A) the latest
three-week moving average of secondary market morning offering rates
in the United States for three-month certificates of deposit of major
United States money market banks, such three-week moving average
(adjusted to the basis of a year of 360 days) being determined weekly
on each Monday (or, if such day is not a Business Day, on the next
succeeding Business Day) for the three-week period ending on the
previous Friday by Citibank on the basis of such rates reported by
certificate of deposit dealers to and published by the Federal Reserve
Bank of New York or, if such publication shall be suspended or
terminated, on the basis of quotations for such rates received by
Citibank from three New York certificate of deposit dealers of
recognized standing selected by Citibank, by (B) a percentage equal to
100% minus the average of the daily percentages specified during such
three-week period by the Board of Governors of the Federal Reserve
System (or any successor thereto) for determining the maximum reserve
requirement (including, but not limited to, any emergency,
supplemental or other marginal reserve requirement) for Citibank with
respect to liabilities consisting of or including (among other
liabilities) three-month U.S. dollar non-personal time deposits in the
United States, plus (iii) the average during such three-week period of
the annual assessment rates estimated by Citibank for determining the
then current annual assessment payable by Citibank to the Federal
Deposit Insurance Corporation (or any successor thereto) for insuring
U.S. dollar deposits of Citibank in the United States; and
(c) 1/2 of 1% per annum above the Federal Funds Rate.
"Base Rate Advance" means an Advance that bears interest as provided
in Section 2.06(a)(i).
<PAGE>
6
"Borrower" has the meaning specified in the recital of parties to this
Agreement.
"Borrower Collateral Account" has the meaning specified in the
Borrower Security Agreement.
"Borrower Parent" means Marvel V Holdings Inc., a Delaware
corporation.
"Borrower Parent Guaranty" means the Third Amended and Restated
Guaranty dated as of December 16, 1996 made by the Borrower Parent in favor of
the Lenders, the Revolving Credit Agreement Lenders, the Agents, the Revolving
Agents and the Collateral Agent, as such guaranty may be amended or otherwise
modified from time to time in accordance with its terms.
"Borrower Parent Security Agreement" means the Amended and Restated
Security Agreement dated as of December 16, 1996 made by the Borrower Parent
and The Bank of New York, in its capacity as voting trustee, to the Collateral
Agent, as such agreement may be amended or otherwise modified from time to time
in accordance with its terms.
"Borrower Security Agreement" means the Fourth Amended and Restated
Borrower Security Agreement dated as of December 16, 1996 made by the Borrower
to the Collateral Agent, as such agreement may be amended or otherwise modified
from time to time in accordance with its terms.
"Borrower's Account" means the account of the Borrower maintained by
the Borrower with Citibank, N.A., at its office at 399 Park Avenue, New York,
New York 10043, Account No. 40650489.
"Borrowing" means a Tranche A Term Borrowing or a Tranche B Term
Borrowing.
"Business Day" means a day of the year on which banks are not required
or authorized by law to close in New York City and, if the applicable Business
Day relates to any Eurodollar Rate Advances, on which dealings are carried on
in the London interbank market and banks are open for business in London.
"C&F Guarantor" means Mafco Consolidated Holdings Inc., a Delaware
corporation (formerly known as C&F (Parent) Holdings Inc.).
"C&F Guaranty" means the Second Amended and Restated Guaranty dated as
of December 16, 1996 made by C&F Guarantor in favor of the Lenders, the
Revolving
<PAGE>
7
Credit Agreement Lenders, the Agents, the Revolving Agents and the Collateral
Agent, as such guaranty may be amended or otherwise modified from time to time
in accordance with its terms.
"C&F Pledge Agreement" means the Amended and Restated Pledge Agreement
dated as of December 16, 1996 made by C&F Guarantor to the Collateral Agent, as
such agreement may be amended or otherwise modified from time to time in
accordance with its terms.
"Calculation Period" means, for any date in respect of any common
stock, the immediately preceding five Business Days during which such common
stock traded on the relevant national stock exchange or the Nasdaq national
market system.
"California Federal" means California Federal Bank, A Federal Savings
Bank.
"Capital Expenditures" means, for any period, the sum of (a) all
expenditures during such period for equipment, fixed assets, real property or
improvements, or for replacements or substitutions therefor or additions
thereto, that have a useful life of more than one year plus (b) the aggregate
principal amount of all Debt (including obligations under Capitalized Leases)
assumed or incurred in connection with any such expenditures.
"Capitalized Leases" has the meaning specified in clause (e) of the
definition of "Debt".
"Cash Equivalents" means any of the following, to the extent owned by
the Borrower or its Subsidiaries free and clear of all Liens and having a
maturity not greater than 180 days from the date of issuance thereof: (a)
direct obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
faith and credit of the Government of the United States, (b) insured
certificates of deposit of or time deposits with any commercial bank that is a
Lender or a member of the Federal Reserve System, issues (or the parent of
which issues) commercial paper rated as described in clause (c), is organized
under the laws of the United States or any State thereof and has combined
capital and surplus of at least $1,000,000,000, (c) commercial paper in an
aggregate amount of not more than $10,000,000 per issuer outstanding at any
time, issued by any corporation organized under the laws of any State of the
United States and rated at least "Prime-1" (or the then equivalent grade) by
Moody's Investors Services, Inc. or "A-1" (or the then equivalent grade) by
Standard & Poor's Ratings Group or (d) shares of money market mutual or similar
funds having assets in excess of $100,000,000 and which invest exclusively in
assets satisfying the requirements of clauses (a) through (c) of this
definition.
<PAGE>
8
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980.
"Cigar Guarantor" means Consolidated Cigar II Holdings Inc., a
Delaware corporation.
"Cigar Guaranty" means the Third Amended and Restated Cigar Guaranty
dated as of December 16, 1996 made by Cigar Guarantor in favor of the Lenders,
the Revolving Credit Agreement Lenders, the Agents, the Revolving Agents and
the Collateral Agent, as such guaranty may be amended or otherwise modified
from time to time in accordance with its terms.
"Cigar Non-Operating Subsidiary" means C&F Guarantor.
"Cigar Pledge Agreement" means the Second Amended and Restated Cigar
Pledge Agreement dated as of December 16, 1996 made by Cigar Guarantor and The
Bank of New York, in its capacity as voting trustee, to the Collateral Agent,
as such agreement may be amended or otherwise modified from time to time in
accordance with its terms.
"Citibank" has the meaning specified in the recital of parties to this
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and the rulings issued thereunder.
"Coleman" means The Coleman Company, Inc., a Delaware corporation.
"Coleman Guarantor" means Coleman (Parent) Holdings Inc., a Delaware
corporation.
"Coleman Guaranty" means the Third Amended and Restated Coleman
Guaranty dated as of December 16, 1996 made by Coleman Guarantor in favor of
the Lenders, the Revolving Credit Agreement Lenders, the Agents, the Revolving
Agents and the Collateral Agent, as such guaranty may be amended or otherwise
modified from time to time in accordance with its terms.
"Coleman Holdings" means Coleman Holdings Inc., a Delaware
corporation.
"Coleman Non-Operating Subsidiaries" means Coleman Holdings and
Coleman Worldwide.
<PAGE>
9
"Coleman Pledge Agreement" means the Second Amended and Restated
Pledge Agreement dated as of December 16, 1996 made by Coleman Guarantor to the
Collateral Agent, as such agreement may be amended or otherwise modified from
time to time in accordance with its terms.
"Coleman Tax Agreements" means (i) the Tax Allocation Agreement dated
as of August 24, 1990, as amended through the date hereof, between Mafco and
New Coleman, (ii) the Tax Sharing Agreement dated as of February 26, 1992, as
amended through the date hereof, among Mafco, Coleman Finance Holdings Inc.,
Coleman and the Subsidiaries of Coleman party thereto, (iii) the Tax Sharing
Agreement dated as of February 26, 1992, as amended through the date hereof,
among Mafco, New Coleman, Coleman Finance Holdings Inc. and the Subsidiaries of
Coleman Finance Holdings Inc. party thereto, (iv) the Tax Equivalent Payment
Agreement dated as of March 4, 1992, as amended through the date hereof,
between Mafco and Coleman Finance Holdings Inc., (v) the Supplemental Tax
Sharing Agreement dated as of February 26, 1992, as amended through the date
hereof, between Coleman and M&F, (vi) the Tax Sharing Agreement dated as of May
27, 1993 among Mafco, Coleman Worldwide, Coleman and its Subsidiaries party
thereto, (vii) the Tax Sharing Agreement dated as of May 27, 1993 among Mafco,
Coleman Worldwide and the other Persons party thereto, (viii) the Tax Sharing
Agreement dated as of July 22, 1993 between Mafco and Coleman Holdings, and
(ix) the Tax Sharing Termination Agreement dated as of May 27, 1993 among
Mafco, New Coleman, Coleman and the other Persons party thereto.
"Coleman Worldwide" means Coleman Worldwide Corporation, a Delaware
corporation.
"Coleman Worldwide Indenture" has the meaning specified in Schedule
VI.
"Coleman Worldwide LYONS" means the Liquid Yield Option Notes Due 2013
issued by Coleman Worldwide.
"Coleman Worldwide Pledge Agreement" means the Amended and Restated
Non-Recourse Guaranty and Pledge Agreement dated as of December 16, 1996 made
by Coleman Worldwide to the Collateral Agent, as such agreement may be amended
or otherwise modified from time to time in accordance with its terms.
"Collateral" means all "Collateral" referred to in the Collateral
Documents and all other property that is or is intended to be subject to any
Lien in favor of the Collateral Agent, the Lenders, the Revolving Credit
Agreement Lenders, the Agents and the Revolving Agents.
<PAGE>
10
"Collateral Accounts" means the Borrower Collateral Account, the Mafco
Collateral Account, the Second Mafco Collateral Account and the L/C Cash
Collateral Account.
"Collateral Agent" has the meaning specified in the recital of the
parties hereto. "Collateral Documents" means each Security Agreement and each
Pledge Agreement.
"Commitment" means a Tranche A Term Commitment or a Tranche B Term
Commitment.
"Consolidated" for any Person refers to the consolidation of the
financial statements of such Person and its Subsidiaries in accordance with
GAAP.
"Conversion", "Convert" and "Converted" each refer to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section 2.10.
"Debt" of any Person means, without duplication, (a) all indebtedness
of such Person for borrowed money; (b) all Obligations of such Person for the
deferred purchase price of property or services (other than trade payables not
overdue by more than 60 days incurred in the ordinary course of such Person's
business); (c) all Obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments; (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property); (e) all Obligations of
such Person as lessee under leases that have been or should be, in accordance
with GAAP, recorded as capital leases ("Capitalized Leases"); (f) all
Obligations, contingent or otherwise, of such Person under acceptance, letter
of credit or similar facilities; (g) all Obligations of such Person to
purchase, redeem, retire, defease or otherwise acquire for value any capital
stock of such Person or any warrants, rights or options to acquire such capital
stock; (h) all Obligations of such Person in respect of Hedge Agreements; (i)
all Debt of others referred to in clauses (a) through (h) above guaranteed
directly or indirectly in any manner by such Person, or in effect guaranteed
directly or indirectly by such Person through an agreement (i) to pay or
purchase such Debt or to advance or supply funds for the payment or purchase of
such Debt, (ii) to purchase, sell or lease (as lessee or lessor) property, or
to purchase or sell services, primarily for the purpose of enabling the debtor
to make payment of such Debt or to assure the holder of such Debt against loss,
(iii) to supply funds to or in any other manner invest in the debtor (including
any agreement to pay for property or services irrespective of whether such
property is received or such services are rendered) or (iv) otherwise to assure
a creditor against loss; and (j) all Debt referred to in clauses (a) through
(i) above secured by (or for which the holder of
<PAGE>
11
such Debt has an existing right, contingent or otherwise, to be secured by) any
Lien on property (including, without limitation, accounts and contract rights)
owned by such Person, even though such Person has not assumed or become liable
for the payment of such Debt. For all purposes of this Agreement and the other
Loan Documents, "Debt" shall not include Obligations of any Designated
Operating Company, Revlon, Marvel or any of their respective Subsidiaries in
respect of Hedge Agreements.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given or
time elapse or both.
"Defaulted Advance" means, with respect to any Lender at any time, the
amount of any Advance required to be made by such Lender to the Borrower
pursuant to Section 2.01 at or prior to such time which has not been so made as
of such time; provided, however, that any Advance made by the Administrative
Agent for the account of such Lender pursuant to Section 2.02(c) shall not be
considered a Defaulted Advance even if, at such time, such Lender shall not
have reimbursed the Administrative Agent therefor as provided in Section
2.02(c). In the event that a portion of a Defaulted Advance shall be deemed
made pursuant to Section 2.15(a), the remaining portion of such Defaulted
Advance shall be considered a Defaulted Advance originally required to be made
pursuant to Section 2.01 on the same date as the Defaulted Advance so deemed
made in part.
"Defaulted Amount" means, with respect to any Lender at any time, any
amount required to be paid by such Lender to the Administrative Agent, the
Collateral Agent or any other Lender hereunder or under any other Loan Document
at or prior to such time which has not been so paid as of such time, including,
without limitation, any amount required to be paid by such Lender to (a) the
Administrative Agent pursuant to Section 2.02(c) to reimburse the
Administrative Agent for the amount of any Advance made by the Administrative
Agent for the account of such Lender, (b) any other Lender pursuant to Section
2.13 to purchase any interest or participating interest in Advances owing to
such other Lender and (c) the Administrative Agent or the Collateral Agent
pursuant to Section 7.05 to reimburse the Administrative Agent or the
Collateral Agent, as the case may be, for such Lender's ratable share of any
amount required to be paid by the Lenders to the Administrative Agent or the
Collateral Agent as provided therein. In the event that a portion of a
Defaulted Amount shall be deemed paid pursuant to Section 2.15(b), the
remaining portion of such Defaulted Amount shall be considered a Defaulted
Amount originally required to be made hereunder or under any other Loan
Document on the same date as the Defaulted Amount so deemed paid in part.
"Defaulting Lender" means, at any time, any Lender that, at such time,
(a) owes a Defaulted Advance or a Defaulted Amount or (b) shall take or be the
subject of any action or proceeding of a type described in Section 6.01(e).
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12
"Defeased Debt Amount" means for any date of determination for any
Designated Person listed on Schedule VI an amount calculated in the manner set
forth on Schedule VI for such Designated Person or such other amount as may be
agreed by the Administrative Agent and the Borrower.
"Deposit Certificate" has the meaning specified in Section 5.01(k).
"Designated Coleman Subsidiaries" means Coleman Holdings, Coleman
Worldwide and Coleman.
"Designated New World Subsidiaries" means New World Guarantor, NWCG
Holdings and New World; provided, however, that (i) on and after the date of
the sale, monetization or other disposal by Mafco or any of its Subsidiaries of
all of the News Corp. Preferred ADRs, New World Guarantor shall no longer be a
"Designated New World Subsidiary" and (ii) on and after the consummation of the
New World Acquisition, each of NWCG Holdings and New World shall no longer be a
"Designated New World Subsidiary".
"Designated Operating Companies" means (i) Coleman, New World and MCG,
(ii) on and after the Revlon Inclusion Date, Revlon and (iii) solely during the
Marvel Inclusion Period, Marvel; provided, however, that on and after the
consummation of the New World Acquisition, New World shall no longer be a
"Designated Operating Company".
"Designated Persons" means Coleman Guarantor, New World Guarantor, C&F
Guarantor and, on and after the Revlon Inclusion Date, Revlon Guarantor;
provided, however, that on and after the date of the sale, monetization or
other disposal by Mafco or any of its Subsidiaries of all of the News Corp.
Preferred ADRs, New World Guarantor shall no longer be a "Designated Person".
"Documentation Agent" has the meaning specified in the recital of
parties to this Agreement.
"Dollars" and the sign "$" each mean lawful money of the United
States.
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite its
name on Schedule I hereto or in the Assignment and Acceptance pursuant to which
it became a Lender, as the case may be, or such other office of such Lender as
such Lender may from time to time specify to the Borrower and the
Administrative Agent.
"Effective Date" has the meaning specified in Section 3.01.
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13
"Eligible Assignee" means (a) any commercial bank organized under the
laws of the United States, or any State thereof, and having total assets in
excess of $1,000,000,000; (b) any savings and loan association or savings bank
organized under the laws of the United States, or any State thereof, and having
a net worth determined in accordance with GAAP in excess of $500,000,000; (c)
any commercial bank organized under the laws of any other country that is a
member of the Organization for Economic Cooperation and Development ("OECD") or
has concluded special lending arrangements with the International Monetary Fund
Associated with its General Arrangements to Borrow, or a political subdivision
of any such country, and having total assets in excess of $1,000,000,000, so
long as such bank is acting through a branch or agency located in the United
States, in the Cayman Islands or in the country in which it is organized or
another country that is described in this clause (c); (d) the central bank of
any country that is a member of the OECD; (e) any finance company, insurance
company or other financial institution or fund (whether a corporation,
partnership, trust or other entity) that (i) is not affiliated with the
Borrower, (ii) is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business and (iii) has total
assets in excess of $500,000,000; and (f) any other Person (other than an
Affiliate of the Borrower) approved by the Administrative Agent and the
Borrower, such approval not to be unreasonably withheld.
"Environmental Action" means any administrative, regulatory or
judicial action, suit, demand, demand letter, claim, notice of non-compliance
or violation, investigation, proceeding, consent order or consent agreement
based upon or arising out of any Environmental Law or any Environmental Permit,
including without limitation (a) any claim by any governmental or regulatory
authority for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any Environmental Law and (b) any claim by any
third party seeking damages, contribution, or injunctive relief arising from
alleged injury or threat of injury to health, safety or the environment.
"Environmental Law" means any federal, state or local law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
relating to the environment, health or safety including, without limitation,
CERCLA, the Resource Conservation and Recovery Act, the Hazardous Materials
Transportation Act, the Clean Water Act, the Toxic Substances Control Act, the
Clean Air Act, the Safe Drinking Water Act, the Atomic Energy Act, the Federal
Insecticide, Fungicide and Rodenticide Act and the Occupational Safety and
Health Act.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
"Equity Contribution Agreement" means the Amended and Restated Equity
Contribution Agreement dated as of December 16, 1996, between the Borrower and
the
<PAGE>
14
Borrower Parent, as such agreement may be amended or otherwise modified from
time to time in accordance with its terms.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" of any Person means any other Person that for
purposes of Title IV of ERISA is a member of such Person's controlled group, or
under common control with such Person, within the meaning of Section 414 of the
Code.
"ERISA Event" with respect to any Person means (a) the occurrence of a
reportable event, within the meaning of Section 4043 of ERISA, with respect to
any Plan of such Person or any of its ERISA Affiliates unless the 30-day notice
requirement with respect to such event has been waived by the PBGC; (b) the
provision by the administrator of any Plan of such Person or any of its ERISA
Affiliates of a notice of intent to terminate such Plan, pursuant to Section
4041(a)(2) of ERISA (including any such notice with respect to a plan amendment
referred to in Section 4041(e) of ERISA); (c) the cessation of operations at a
facility of such Person or any of its ERISA Affiliates in the circumstances
described in Section 4062(e) of ERISA; (d) the withdrawal by such Person or any
of its ERISA Affiliates from a Multiple Employer Plan during a plan year for
which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA;
(e) the failure by such Person or any of its ERISA Affiliates to make a payment
to a Plan described in Section 302(f)(1) of ERISA; (f) the adoption of an
amendment to a Plan of such Person or any of its ERISA Affiliates requiring the
provision of security to such Plan, pursuant to Section 307 of ERISA; or (g)
the institution by the PBGC of proceedings to terminate a Plan of such Person
or any of its ERISA Affiliates, pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA that
would constitute grounds for the termination of, or the appointment of a
trustee to administer, such Plan; provided, however, that an event described in
clause (a), (c) or (d) of this definition, or in clause (b) of this definition
solely with respect to a standard termination under Section 4041(b) of ERISA,
shall be an ERISA Event only if such event is reasonably likely to result in a
material liability of such Person or any of its ERISA Affiliates.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite its
name on Schedule I hereto or in the Assignment and Acceptance pursuant to which
it became a Lender (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Administrative Agent.
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15
"Eurodollar Rate" means, for any Interest Period for each Eurodollar
Rate Advance comprising part of the same Borrowing, an interest rate per annum
equal to the rate per annum obtained by dividing (a) the average (rounded
upward to the nearest whole multiple of 1/100 of 1% per annum, if such average
is not such a multiple) of the rate per annum at which deposits in U.S. dollars
are offered by the principal office of Citibank in London, England to prime
banks in the London interbank market at 11:00 A.M. (London time) two Business
Days before the first day of such Interest Period for a period equal to such
Interest Period by (b) a percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage for such Interest Period. The Eurodollar Rate for each
Interest Period shall be determined by the Administrative Agent on the basis of
applicable rates furnished to and received by the Administrative Agent from
Citibank two Business Days before the first day of such Interest Period,
subject, however, to the provisions of Section 2.06.
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.06(a)(ii).
"Eurodollar Rate Reserve Percentage" of any Lender for any Interest
Period for any Advance means the reserve percentage applicable during such
Interest Period (or if more than one such percentage shall be so applicable,
the daily average of such percentages for those days in such Interest Period
during which any such percentage shall be so applicable) under regulations
issued from time to time by the Board of Governors of the Federal Reserve
System (or any successor) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other marginal
reserve requirement) for such Lender with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities having a term equal to such
Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Agreement" means the Exchange Agreement dated as of October
3, 1994 among FN Parent, FN Holdings and Gerald J. Ford.
"Existing Credit Agreement" has the meaning given such term under the
Revolving Credit Agreement.
"Facility" means the Tranche A Term Facility or the Tranche B Term
Facility.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day
(or, if such day is not a Business Day,
<PAGE>
16
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
"FG Guarantor" means First Gibraltar Guarantor Corp., a Delaware
corporation.
"Financial Institutions" has the meaning specified in the recital of
parties to this Agreement.
"First Gibraltar" means First Gibraltar Holdings Inc., a Delaware
corporation.
"First Gibraltar Charter Document" means the restated certificate of
incorporation of First Gibraltar.
"First Gibraltar Credit Agreement" means the $150,000,000 Credit
Agreement dated as of September 27, 1996 among First Gibraltar, FG Guarantor,
the banks and other financial institutions party thereto, NationsBank, N.A., as
administrative agent, NationsBanc Capital Markets, Inc., as syndication agent
and Citibank, as documentation agent, as the same may be amended, modified or
otherwise supplemented from time to time.
"First Gibraltar Loan Agreement" means the Amended and Restated Loan
Agreement dated as of December 16, 1996 between the Borrower Parent and First
Gibraltar, as amended or otherwise modified from time to time in accordance
with its terms.
"Flavors Guarantor" means Flavors (Parent) Holdings Inc., a Delaware
corporation.
"Flavors Guaranty" means the Third Amended and Restated Flavors
Guaranty dated as of December 16, 1996 made by Flavors Guarantor in favor of
the Lenders, the Revolving Credit Agreement Lenders, the Agents, the Revolving
Agents and the Collateral Agent, as such guaranty may be amended or otherwise
modified from time to time in accordance with its terms.
"Flavors Non-Operating Subsidiary" means C&F Guarantor.
"Flavors Pledge Agreement" means the Second Amended and Restated
Flavors Pledge Agreement dated as of December 16, 1996 made by Flavors
Guarantor and The Bank of New York, in its capacity as voting trustee, to the
Collateral Agent, as such agreement may be amended or otherwise modified from
time to time in accordance with its terms.
<PAGE>
17
"FN Documents" means the FN Holdings Debt Document, the FN Holdings
New Debt Document, the Second New FN Holdings Debt Document, the FN Parent Debt
Document, the Exchange Agreement and the Stockholders Agreement.
"FN Escrow" means First Nationwide Escrow Corp., a Delaware
corporation.
"FN Holdings" means First Nationwide Holdings Inc., a Delaware
corporation.
"FN Holdings Debt" means the 12-1/4% Senior Notes due 2001 issued by
FN Holdings in an aggregate principal amount equal to $200,000,000.
"FN Holdings Debt Document" means the Indenture dated as of July 15,
1994 made by FN Holdings in favor of The First National Bank of Boston, as
trustee, in connection with the FN Holdings Debt and any other agreement or
instrument which governs the terms of the FN Holdings Debt.
"FN Holdings New Debt" means the 9-1/8% Senior Subordinated Notes Due
2003 issued by FN Holdings in an aggregate principal amount equal to
$140,000,000.
"FN Holdings New Debt Document" means the Indenture dated as of
January 31, 1996 made by FN Holdings in favor of The Bank of New York, as
trustee, in connection with the FN Holdings New Debt and any other agreement or
instrument which governs the terms of the FN Holdings New Debt.
"FN Holdings Preferred Stock" means the $150,000,000 liquidation value
of Cumulative Perpetual Preferred Stock issued by FN Holdings and any shares of
Cumulative Perpetual Preferred Stock to be issued in lieu of cash dividends
payable on the FN Holdings Preferred Stock.
"FN Management Incentive Plan" means the Management Incentive Plan for
Certain Employees of the Bank established by FN Holdings to provide long-term
incentives to certain key executives of the Bank.
"FN Parent" means First Nationwide (Parent) Holdings Inc., a Delaware
corporation.
"FN Parent Debt" means the 12-1/2% Senior Notes due 2003 issued by FN
Parent in an aggregate principal amount equal to $455,000,000.
"FN Parent Debt Document" means the Indenture dated as of April 15,
1996 made by FN Parent in favor of The Bank of New York, as trustee, in
connection with the
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18
FN Parent Debt and any other agreement or instrument which governs the terms of
the FN Parent Debt.
"FN Parties" means the Bank, FN Holdings and FN Parent.
"FN Tax Agreement" means the Tax Sharing Agreement dated as of January
1, 1994 among Mafco, FN Holdings, the Bank and certain Subsidiaries of FN
Holdings and the Bank.
"Four Star" means Four Star Holdings Corp., a Delaware corporation.
"Four Star Pledge Agreement" means the Amended and Restated
Non-Recourse Guaranty and Pledge Agreement dated as of December 16, 1996 made
by Four Star and The Bank of New York, in its capacity as voting trustee, to
the Collateral Agent, as such agreement may be amended or otherwise modified
from time to time in accordance with its terms.
"Fully Satisfied" shall mean, with respect to the Payment Obligations
as of any date, that, on or before such date, (a) the principal of and interest
accrued to such date on all outstanding Advances shall have been paid in full
in cash, (b) the Commitments shall have been terminated in full and (c) all
fees, expenses and other amounts then due and payable which constitute Payment
Obligations shall have been paid in cash; provided, however, that on such date
none of the Administrative Agent and the Lenders shall have made any claims in
respect of Payment Obligations against the Borrower or any other Loan Party
under any provision of any of the Loan Documents that has not been cash
collateralized by an amount sufficient in the reasonable judgment of the
Administrative Agent, the Required Lenders and any such Lender (if such Lender
is not one of the Lenders constituting the Required Lenders) to secure such
claim.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the date of, and used in, the preparation
of the audited consolidated financial statements referred to in Section
4.01(f), except that with respect to (x) the preparation of any financial
statement required to be furnished pursuant to clause (i), (ii) or (iii) of
Section 5.01(j) and (y) changes to financial statement presentation and
accounting policies contemplated by Section 5.02(h), "GAAP" shall mean such
principles as in effect from time to time in the United States of America.
"Guarantor" means each of Mafco, Borrower Parent, Coleman Guarantor,
New World Guarantor, Flavors Guarantor, Cigar Guarantor, C&F Guarantor and, on
and after the Revlon Inclusion Date, Revlon Guarantor; provided, however, that
on and after the date of the sale, monetization or other disposal by Mafco or
any of its Subsidiaries of all of the News Corp. Preferred ADRs, New World
Guarantor shall no longer be a "Guarantor".
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19
"Guaranty" means each of the Borrower Parent Guaranty, the C&F
Guaranty, the Cigar Guaranty, the Coleman Guaranty, the Flavors Guaranty, the
Mafco Guaranty, the New World Guaranty and, on and after the Revlon Inclusion
Date, the Revlon Guaranty; provided, however, that on and after the date of the
sale, monetization or other disposal by Mafco or any of its Subsidiaries of all
of the News Corp. Preferred ADRs, the New World Guaranty shall no longer be a
"Guaranty".
"Hazardous Materials" means (a) petroleum or petroleum products,
natural or synthetic gas, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation and radon gas, (b) any substances defined as
or included in the definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "extremely hazardous wastes", "restricted hazardous
wastes", "toxic substances", "toxic pollutants", "contaminants" or
"pollutants", or words of similar import, under any Environmental Law and (c)
any other substance exposure to which is regulated under any Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other similar agreements.
"Indemnified Party" has the meaning specified in Section 8.04(c).
"Initial Date" means, for purposes of Section 2.12, in the case of the
Administrative Agent and each Financial Institution, the date of its execution
and delivery of this Agreement and, in the case of each Lender other than a
Financial Institution, the date of the Assignment and Acceptance pursuant to
which it becomes a Lender.
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such
Eurodollar Rate Advance or the date of the Conversion of any Base Rate Advance
into such Eurodollar Rate Advance, and ending on the last day of the period
selected by the Borrower pursuant to the provisions below and, thereafter, each
subsequent period commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period selected by the
Borrower pursuant to the provisions below. The duration of each such Interest
Period shall be one, two, three or six months, as the Borrower may, upon notice
received by the Administrative Agent not later than 11:00 A.M. (New York City
time) on the third Business Day prior to the first day of such Interest Period,
select; provided, however, that
(i) the Borrower may not select any Interest Period with respect
to any Eurodollar Rate Advance which ends after June 30, 1997;
(ii) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such
Interest Period shall be extended
<PAGE>
20
to occur on the next succeeding Business Day, provided that, if such
extension would cause the last day of such Interest Period to occur in
the next following calendar month, the last day of such Interest
Period shall occur on the next preceding Business Day; and
(iii) whenever the first day of any Interest Period occurs on a
day in a calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months
in such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
"Investment" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any capital stock, warrants, rights,
options, debt obligations or other securities of such Person, any capital
contribution to such Person or any other investment in such Person, including,
without limitation, any arrangement pursuant to which the investor incurs Debt
of the types referred to in clauses (i) and (j) of the definition of "Debt" in
respect of such Person.
"L/C Cash Collateral Account" has the meaning specified in the
Borrower Security Agreement.
"Lenders" means the Financial Institutions listed on the signature
pages hereof and each Eligible Assignee that shall become a party hereto
pursuant to Section 8.07.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on title
to real property.
"Loan Documents" means this Agreement, the Notes, each Guaranty, each
Collateral Document, the Equity Contribution Agreement and the First Gibraltar
Loan Agreement.
"Loan Party" means each of the Borrower, each Guarantor, M&F, Andrews,
Four Star, New Coleman and First Gibraltar.
"Look-Forward Certificate" has the meaning specified in Section
5.01(k).
"M&F" means MacAndrews & Forbes Holdings Inc., a Delaware corporation.
"M&F Pledge Agreement" means the Amended and Restated Non-Recourse
Guaranty and Pledge Agreement dated as of December 16, 1996 made by M&F to the
<PAGE>
21
Collateral Agent, as such agreement may be amended or otherwise modified from
time to time in accordance with its terms.
"Mafco" has the meaning specified in the Preliminary Statements.
"Mafco Collateral Account" has the meaning specified in the Mafco
Security Agreement.
"Mafco Guaranty" means the Fourth Amended and Restated Mafco Guaranty
dated as of December 16, 1996 made by Mafco in favor of the Lenders, the
Revolving Credit Agreement Lenders, the Agents, the Revolving Agents and the
Collateral Agent, as such guaranty may be amended or otherwise modified from
time to time in accordance with its terms.
"Mafco Pledge Agreement" means the Second Amended and Restated Pledge
Agreement dated as of December 16, 1996 made by Mafco and The Bank of New York,
in its capacity as voting trustee, to the Collateral Agent, as such agreement
may be amended or otherwise modified from time to time in accordance with its
terms.
"Mafco Security Agreement" means the Fourth Amended and Restated Mafco
Security Agreement dated as of December 16, 1996 made by Mafco to the
Collateral Agent, as such agreement may be amended or otherwise modified from
time to time in accordance with its terms.
"Managing Agents" has the meaning specified in the recital of parties
hereto.
"Margin Stock" has the meaning specified in Regulation U of the Board
of Governors of the Federal Reserve System and any successor regulations
thereto, as in effect from time to time.
"Marvel" means Marvel Entertainment Group, Inc., a Delaware
corporation.
"Marvel IV Required Lenders" means at any time Lenders and Revolving
Credit Agreement Lenders owed or holding at least a majority in interest of the
sum of (a) the aggregate principal amount of the Advances outstanding at such
time, (b) the aggregate principal amount of the Debt outstanding at such time
under the Revolving Credit Agreement, (c) the aggregate Available Amount (as
defined in the Revolving Credit Agreement) of all Letters of Credit (as defined
in the Revolving Credit Agreement) outstanding at such time, (d) the aggregate
unused Commitments, (e) the aggregate "Unused Tranche A Revolving Credit
Commitment" under the Revolving Credit Agreement and (f) the aggregate "Unused
Tranche B Revolving Credit Commitment" under the Revolving Credit Agreement
(provided that, for purposes hereof, neither the Borrower, nor any of its
<PAGE>
22
Affiliates, if a Lender or a Revolving Credit Agreement Lender, shall be
included in (x) the Lenders and the Revolving Credit Agreement Lenders holding
such amount of the Advances, the Debt or the Available Amount of all Letters of
Credit or having such amount of the Commitments, the "Unused Tranche A
Revolving Credit Commitment" or the "Unused Tranche B Revolving Credit
Commitment" or (y) determining the aggregate unpaid principal amount of the
Advances or such Debt, the total Commitments, the total "Unused Tranche A
Revolving Credit Commitments" under the Revolving Credit Agreement or the total
"Unused Tranche B Revolving Credit Commitments" under the Revolving Credit
Agreement); provided, however, that if any Lender shall be a Defaulting Lender
at such time or any Revolving Credit Agreement Lender shall be a "Defaulting
Lender" under the Revolving Credit Agreement at such time, there shall be
excluded from the determination of Marvel IV Required Lenders at such time (i)
the aggregate principal amount of the Advances owing to such Lender (in its
capacity as Lender) and outstanding at such time, (ii) the aggregate principal
amount of Debt under the Revolving Credit Agreement owing to such Revolving
Credit Agreement Lender and outstanding at such time, (iii) such Lender's Pro
Rata Share (as defined in the Revolving Credit Agreement) of the aggregate
Available Amount of all Letters of Credit issued by such Revolving Credit
Agreement Lender as of such time, (iv) the aggregate unused portion of the
Commitments of such Lender at such time and (v) the aggregate "Unused Tranche A
Revolving Credit Commitment" and "Unused Tranche B Revolving Credit Commitment"
of such Revolving Credit Agreement Lender under the Revolving Credit Agreement
at such time; provided, further, that on and after the Revolving Credit
Agreement Termination Date, the Marvel IV Required Lenders shall be the
Required Lenders hereunder. For purposes of this definition, the aggregate
principal amount of Letter of Credit Advances owing to the Issuing Bank (as
defined in the Revolving Credit Agreement) and the Available Amount of each
Letter of Credit shall be considered to be owed to the Revolving Credit
Agreement Lenders ratably in accordance with their respective Tranche A
Revolving Credit Commitment (as defined in the Revolving Credit Agreement).
"Marvel Inclusion Period" means the period commencing on the date that
Mafco or any of its Affiliates acquires the New Marvel Shares and terminating
on the later to occur of (x) the Term Credit Agreement Termination Date and (y)
the "Tranche B Termination Date" under the Revolving Credit Agreement.
"Material Adverse Change" means, with respect to any Person, a
material adverse change in the condition (financial or otherwise), operations,
assets, business or prospects of such Person and its Subsidiaries, taken as a
whole.
"Material Adverse Effect" means, with respect to any Person, a
material adverse effect upon (a) the condition (financial or otherwise),
operations, assets, business or prospects of such Person and its Subsidiaries,
taken as a whole, or (b) the ability of a Loan Party to perform its obligations
under any Loan Document, or (c) the rights and remedies of the Administrative
Agent, the Collateral Agent or any Lender under any Loan Document.
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23
"MCG" means Mafco Consolidated Group Inc., a Delaware corporation.
"MCG Tax Agreement" means the Tax Sharing Agreement dated as of June
15, 1995 among Mafco, MCG and Subsidiaries of MCG party thereto.
"Multiemployer Plan" of any Person means a multiemployer plan, as
defined in Section 4001(a)(3) of ERISA, which is subject to Title IV of ERISA,
and to which such Person or any of its ERISA Affiliates is making or accruing
an obligation to make contributions, or has within any of the preceding five
plan years made or accrued an obligation to make contributions.
"Multiple Employer Plan" of any Person means a single employer plan,
as defined in Section 4001(a)(15) of ERISA, which is subject to Title IV of
ERISA, and (a) that is maintained for employees of such Person or any of its
ERISA Affiliates and at least one Person other than such Person and its ERISA
Affiliates or (b) that was so maintained and in respect of which such Person or
any of its ERISA Affiliates could have liability under Section 4064 or 4069 of
ERISA in the event such plan has been or were to be terminated.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer
or other disposition of any asset or the sale or issuance by any Person of any
Debt or capital stock, any securities convertible into or exchangeable for
capital stock or any warrants, rights or options to acquire capital stock, the
sum of (i) the aggregate amount of cash received from time to time by or on
behalf of such Person in connection with such transaction plus (ii) the
aggregate principal amount of any Debt listed on Schedule VII hereto that is
assumed, directly or indirectly, by any Person (other than Mafco or an
Affiliate of Mafco) in connection with, or as a result of, such transaction,
after deducting therefrom only (a) reasonable and customary brokerage
commissions, underwriting fees and discounts, legal fees and expenses, finder's
fees, accountants' fees and expenses and other similar fees, expenses and
commissions, (b) the amount of taxes payable or estimated in good faith to be
payable within 12 months following the date of the consummation of such
transaction in connection with or as a result of such transaction and (c) the
amount of any Debt that, by the terms of such Debt, is required to be repaid
upon such disposition, in each case to the extent, but only to the extent, that
the amounts so deducted are payable to a Person that is not an Affiliate (other
than such amounts that are payable by the Borrower and its Subsidiaries to an
Affiliate pursuant to a Related Document) and are properly attributable to such
transaction or to the asset that is the subject thereof.
"Net Equity Value" means for any day of determination for any
Designated Person:
(i) with respect to Coleman Guarantor, an amount (not less than
$0) equal to the excess of (A) the product of the number of shares of
common stock of Coleman
<PAGE>
24
owned directly or indirectly by Coleman Guarantor times the average
closing price during the Calculation Period relating to such day of
determination of such common stock on the New York Stock Exchange over
(B) the Defeased Debt Amount of Coleman Guarantor;
(ii) with respect to New World Guarantor, (x) prior to the date
of the consummation of the New World Acquisition, an amount (not less
than $0) equal to the excess of (A) the product of the number of
shares of Class B common stock of New World owned directly or
indirectly by New World Guarantor times the average closing price of
the Class A common stock during the Calculation Period relating to
such day of determination for such Class A Common Stock on either the
New York Stock Exchange or the Nasdaq National Market System over (B)
the Defeased Debt Amount of New World Guarantor and (y) on and after
the date of the consummation of the New World Acquisition, an amount
(not less than $0) equal to the excess of (1) the product of the
number of News Corp. Preferred ADRs pledged in favor of the Collateral
Agent under the Collateral Documents times, the average closing price
of the News Corp. Preferred ADRs during the Calculation Period
relating to such day of determination for such News Corp. Preferred
ADRs on either the New York Stock Exchange or the Nasdaq National
Market System over (2) the product of (A) the aggregate principal
amount of Advances outstanding on such day times (B) 1.25;
(iii) with respect to C&F Guarantor, an amount (not less than $0)
equal to the product of the number of shares of common stock of MCG
owned directly or indirectly by C&F Guarantor times the average
closing price during the Calculation Period relating to such day of
determination of such common stock on the New York Stock Exchange; and
(iv) with respect to Revlon Guarantor (on and after the Revlon
Inclusion Date), an amount (not less than $0) equal to the excess of
(A) the product of the number of shares of common stock of Revlon
owned directly or indirectly by Revlon Guarantor times the average
closing price during the Calculation Period relating to such day of
determination of such common stock on the New York Stock Exchange over
(B) the Defeased Debt Amount of Revlon Guarantor.
"Net Residual Value" means for any day of determination an amount
equal to the aggregate Net Equity Value of the Designated Persons on such day.
"New Coleman" means New Coleman Holdings Inc., a Kansas corporation.
"New Coleman Pledge Agreement" means the Amended and Restated
Non-Recourse Guaranty and Pledge Agreement dated as of December 16, 1996 made
by New Coleman and The Bank of New York, in its capacity as voting trustee, to
the Collateral
<PAGE>
25
Agent, as such agreement may be amended or otherwise modified from time to time
in accordance with its terms.
"New Marvel Shares" means all shares of capital stock of Marvel issued
after the date hereof and received by Andrews or any of its Affiliates.
"New World" means New World Communications Group Incorporated, a
Delaware corporation.
"New World Acquisition" means the acquisition by News Corp. of NWCG
Holdings and the shares of Class B common stock of New World held by New World
Guarantor pursuant to the News Corp. Contract and related documents.
"New World Guarantor" means NWCG (Parent) Holdings Corporation, a
Delaware corporation.
"New World Guaranty" means the Fourth Amended and Restated New World
Guaranty dated as of December 16, 1996 made by New World Guarantor in favor of
the Lenders, the Revolving Credit Agreement Lenders, the Agents, the Revolving
Agents and the Collateral Agent, as such guaranty may be amended or otherwise
modified from time to time in accordance with its terms.
"New World Pledge Agreement" means the Second Amended and Restated
Pledge and Assignment Agreement dated as of December 16, 1996 made by New World
Guarantor to the Collateral Agent, as such agreement may be amended or
otherwise modified from time to time in accordance with its terms.
"Newco" means DROF Holdings Inc., a Delaware corporation.
"Newco Loan" means the loan by First Gibraltar to Newco in an
aggregate principal amount of $150,000,000 for the sole purpose of purchasing
the FN Holdings Preferred Stock.
"News Corp." means The News Corporation Limited, a South Australia
corporation.
"News Corp. Contract" means the Stock Purchase Agreement dated as of
September 24, 1996 among New World Guarantor, News Corp. and Fox Television
Stations, Inc., as such agreement may be amended, modified or supplemented in
accordance with the terms of the Loan Documents.
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26
"News Corp. Preferred ADRs" means the American Depositary Shares of
News Corp., each of which represents four fully paid and nonassessable
Preferred Limited Voting Ordinary Shares, of A $.50 each of News Corp.,
received by New World Guarantor pursuant to the terms of the News Corp.
Contract.
"Notes" means the Tranche A Term Notes and the Tranche B Term Notes.
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
"NWCG Holdings" means NWCG Holdings Corporation, a Delaware
corporation.
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim, whether or not the right
of any creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 6.01(e). Without limiting the generality of the foregoing, the
Obligations of the Loan Parties under the Loan Documents include (a) the
obligation to pay principal, interest, charges, expenses, fees, attorneys' fees
and disbursements, indemnities and other amounts payable by any Loan Party
under any Loan Document and (b) the obligation to reimburse any amount in
respect of any of the foregoing that any Lender, in its sole discretion, may
elect to pay or advance on behalf of such Loan Party.
"Original Credit Agreement" has the meaning given such term in the
Revolving Credit Agreement.
"Other Taxes" has the meaning specified in Section 2.13(b).
"Payment Obligations" shall mean all principal, interest, fees,
charges, expenses, attorneys' fees and expenses, indemnities and any other
amounts payable by the Loan Parties under the Loan Documents.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor agency or entity performing substantially the same functions.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture or other entity, or a government or any political subdivision or agency
thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
<PAGE>
27
"Pledge Agreements" means the C&F Pledge Agreement, the Cigar Pledge
Agreement, the Coleman Pledge Agreement, the Coleman Worldwide Pledge
Agreement, the Flavors Pledge Agreement, the Four Star Pledge Agreement, the
Mafco Pledge Agreement, the M&F Pledge Agreement, the New Coleman Pledge
Agreement, the New World Pledge Agreement, the Second Andrews Pledge Agreement
and, on and after the Revlon Inclusion Date, the Revlon Pledge Agreement;
provided, however, that, on and after the date of the sale, monetization or
other disposal by Mafco or any of its Subsidiaries of all of the News Corp.
Preferred ADRs, the New World Pledge Agreement shall no longer be a "Pledge
Agreement".
"Register" has the meaning specified in Section 8.07(c).
"Related Documents" means the Coleman Tax Agreements, the FN Tax
Agreement and the MCG Tax Agreement.
"Required Lenders" means at any time Lenders owed or holding at least
a majority in interest of the sum of the aggregate principal amount of the
Advances outstanding at such time, or, if no such principal amount is
outstanding at such time, Lenders holding at least a majority in interest of
the aggregate of the Commitments (provided that, for purposes hereof, neither
the Borrower, nor any of its Affiliates, if a Lender, shall be included in (x)
the Lenders holding such amount of the Advances or having such amount of the
Commitments or (y) determining the aggregate unpaid principal amount of the
Advances or the total Commitments); provided, however, that if any Lender shall
be a Defaulting Lender at such time, there shall be excluded from the
determination of Required Lenders at such time (i) the aggregate principal
amount of the Advances owing to such Lender (in its capacity as a Lender) and
outstanding at such time and (ii) the aggregate unused portion of the
Commitments of such Lender at such time.
"Revlon" means Revlon, Inc., a Delaware corporation.
"Revlon Guarantor" means Revlon Guarantor Corp., a Delaware
corporation.
"Revlon Guaranty" means the Revlon Guaranty to be made, at the
Borrower's option, by Revlon Guarantor in favor of the Lenders, the Revolving
Credit Agreement Lenders, the Agents, the Revolving Agents and the Collateral
Agent in substantially the form of Exhibit E-8, as such guaranty may be amended
or otherwise modified from time to time in accordance with its terms.
"Revlon Holdings Statement" shall mean a statement that the sum of the
fair market value of Revlon Worldwide Corporation plus the fair market value of
National Health Care Group, Inc. constitutes at least 95% of the fair market
value of Revlon Holdings Inc.
<PAGE>
28
"Revlon Inclusion Date" means the date on which the Administrative
Agent and the Revolving Administrative Agent deliver a notice to the Borrower
that the Administrative Agent or the Collateral Agent, as the case may be,
shall have received, in form and substance satisfactory to the Administrative
Agent and in sufficient copies for each Lender (or the requirement that such
document be delivered shall have been duly waived):
(i) certified copies of the resolutions of the board of directors
of Revlon Guarantor approving the Revlon Guaranty and the Revlon
Pledge Agreement, and of all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to
the Revlon Guaranty and the Revlon Pledge Agreement;
(ii) a certificate of the Secretary or an Assistant Secretary of
Revlon Guarantor certifying the names and true signatures of the
officers of Revlon Guarantor authorized to sign the Revlon Guaranty
and the Revlon Pledge Agreement;
(iii) a copy of a certificate of the Secretary of State of the
state of incorporation of each of National Health Care Group Inc.,
Revlon Guarantor, Revlon Holdings Inc., Revlon Worldwide Corporation
and Revlon, dated reasonably near the Revlon Inclusion Date, listing
the charter of such Person and each amendment thereto on file in his
office and certifying that (A) such amendments are the only amendments
to such Person's charter on file in his office, (B) such Person has
paid all franchise taxes to the date of such certificate and (C) such
Person is duly incorporated or organized and in good standing under
the laws of such state;
(iv) (A) a certificate of each of National Health Care Group
Inc., Revlon Guarantor, Revlon Holdings Inc. and Revlon Worldwide
Corporation signed on behalf of such Person by its President or a Vice
President and its Secretary or any Assistant Secretary, dated as of
the Revlon Inclusion Date (the statements made in such certificate
shall be true on and as of the Revlon Inclusion Date), certifying as
to (1) the absence of any amendments to the charter of such Person
since the date of the Secretary of State's certificate referred to in
clause (iii) above, (2) the trueness and correctness of the bylaws of
such Person attached to such certificate, (3) the due incorporation
and good standing of such Person as a corporation under the laws of
the relevant state of incorporation, and the absence of any proceeding
for the dissolution or liquidation of such Person, (4) the truth in
all material respects of the representations and warranties made by
such Person contained in the Revlon Guaranty and the Revlon Pledge
Agreement as though made on and as of the Revlon Inclusion Date and
(5) the absence of any event occurring and
<PAGE>
29
continuing, or resulting from the Revlon Inclusion Date, that
constitutes a Default and (B) a certificate of Revlon Guarantor signed
on behalf of Revlon Guarantor by its President or a Vice President and
its Secretary or any Assistant Secretary, dated as of the Revlon
Inclusion Date (the statements made in such certificate shall be true
on and as of the Revlon Inclusion Date), certifying as to (1) the
absence of any amendments to the charter of Revlon since the date of
the Secretary of State's Certificate referred to in clause (iii)
above, (2) the trueness and correctness of the bylaws of Revlon
attached to such certificate and (3) the due incorporation and good
standing of Revlon as a corporation organized under the laws of the
State of Delaware, and the absence of any proceeding for the
dissolution or liquidation of Revlon;
(v) the Revlon Guaranty in substantially the form of Exhibit E-8,
duly executed by Revlon Guarantor;
(vi) the Revlon Pledge Agreement in substantially the form of
Exhibit F-12, duly executed by Revlon Guarantor, together with (1)
certificates representing the Pledged Shares referred to in the Revlon
Pledge Agreement accompanied by undated stock powers executed in
blank, (2) acknowledgment copies or stamped receipt copies of
financing statements, duly filed on or before such date under the
Uniform Commercial Code of all jurisdictions that the Administrative
Agent may deem necessary or desirable in order to perfect the Liens
created by the Revlon Pledge Agreement, covering the Collateral
described in the Revlon Pledge Agreement, and (3) completed requests
for information, dated on or before such date listing the financing
statements referred to in clause (2) above and all other effective
financing statements filed in the jurisdictions referred to in clause
(2) above that name Revlon Guarantor, as debtor, together with copies
of such other financing statements;
(vii) certified copies of (A) a voting trust agreement among
Revlon Finance Corporation, Revlon Guarantor, the Collateral Agent and
The Bank of New York, as voting trustee, in substantially the form of
the voting trust agreements delivered pursuant to Section
3.01(h)(xiii)(A) and (B) the charter of Revlon Guarantor, the terms
and conditions of which shall be substantially similar to those
contained in the charter of Coleman Guarantor;
(viii) a letter, in form and substance satisfactory to the
Administrative Agent, from Revlon Guarantor to KPMG Peat Marwick,
independent certified public accountants, advising such accountants
that the Administrative Agent and the Lenders have relied upon the
financial statements of Revlon in determining whether to enter into
the Loan Documents and have been authorized to exercise all rights of
Revlon to require such accountants to
<PAGE>
30
disclose any and all financial statements and any other information of
any kind that they may have with respect to Revlon and its
Subsidiaries and directing such accountants to comply with any
reasonable request of the Administrative Agent or any Lender for such
information; and
(ix) favorable opinions of counsel to Mafco reasonably
satisfactory to the Lenders, in form and substance reasonably
satisfactory to the Lenders.
"Revlon Pledge Agreement" means the Pledge Agreement to be made, at
the Borrower's option, by Revlon Guarantor to the Collateral Agent in
substantially the form of Exhibit F-12, as such agreement may be amended or
otherwise modified from time to time in accordance with its terms.
"Revlon Tax Agreements" shall have the meaning specified in the Revlon
Guaranty.
"Revolving Agents" has the meaning specified in the Preliminary
Statements.
"Revolving Administrative Agent" has the meaning specified in the
Preliminary Statements.
"Revolving Credit Agreement" has the meaning specified in the
Preliminary Statements.
"Revolving Credit Agreement Lenders" has the meaning specified in the
Preliminary Statement.
"Revolving Credit Facilities" has the meaning given such term in the
Revolving Credit Agreement.
"Revolving Credit Agreement Termination Date" means the date on which
the "Payment Obligations" (as defined in the Revolving Credit Agreement) shall
be "Fully Satisfied" (as defined in the Revolving Credit Agreement).
"Revolving Documentation Agent" has the meaning specified in the
Preliminary Statements.
"Revolving Syndication Agent" has the meaning specified in the
Preliminary Statements.
"Second Andrews Pledge Agreement" means the Second Amended and
Restated Non-Recourse Guaranty and Pledge Agreement dated as of December 16,
1996
<PAGE>
31
made by Andrews and The Bank of New York, in its capacity as voting trustee, to
the Collateral Agent, as such agreement may be amended or otherwise modified
from time to time in accordance with its terms.
"Second Credit Agreement" has the meaning given such term in the
Revolving Credit Agreement.
"Second Mafco Collateral Account" has the meaning specified in the
Mafco Security Agreement.
"Second New FN Holdings Debt" means the 10-5/8% Senior Subordinated
Notes due 2003 issued by FN Escrow in an aggregate principal amount equal to
$575,000,000, which will be assumed by FN Holdings upon the merger of FN Escrow
with and into FN Holdings.
"Second New FN Holdings Debt Document" means the Indenture dated as of
September 19, 1996 between FN Escrow and The Bank of New York, as trustee, in
connection with the Second New FN Holdings Debt and any other agreement or
instrument which governs the terms of the Second New FN Holdings Debt.
"Security Agreements" means the Borrower Security Agreement, the
Borrower Parent Security Agreement and the Mafco Security Agreement.
"Single Employer Plan" of any Person means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, which is subject to Title IV of ERISA,
and (a) that is maintained for employees of such Person or any of its ERISA
Affiliates and no Person other than such Person and its ERISA Affiliates or (b)
in respect of which such Person or any of its ERISA Affiliates could have
liability under Section 4069 of ERISA in the event such plan has been or were
to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair
salable value of the assets of such Person is not less than the amount that
will be required to pay the probable liability of such Person on its debts as
they become absolute and matured, (c) such Person does not intend to, and does
not believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature and (d) such Person is not
engaged in business or a transaction, and is not about to engage in business or
a transaction, for which such Person's property would constitute an
unreasonably small capital. The amount of contingent liabilities at any time
shall be computed as the amount that, in the light of all the facts and
circumstances existing at such
<PAGE>
32
time, represents the amount that can reasonably be expected to become an actual
or matured liability.
"Specified Holding Company Debt" means the 13% Subordinated Debentures
due March 1, 1999 issued by M&F pursuant to the Indenture dated as of March 1,
1984 between M&F and the United States Trust Company of New York and the 10%
Senior Subordinated Debentures due 1999 issued by Andrews pursuant to the
Indenture dated as of June 4, 1990 between Andrews and First Trust of
California, National Association (as successor trustee to Security Pacific
National Trust Company (New York)).
"Stockholders Agreement" means the Stockholders Agreement dated as of
October 3, 1994, among FN Parent, FN Holdings and Gerald J. Ford, as such
agreement may be amended, modified or otherwise supplemented from time to time
with the consent of the Required Lenders.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, trust or estate of which (or in which) more than 50% of (a) the Voting
Stock of such corporation, (b) the interest in the capital or profits of such
partnership or joint venture or (c) the beneficial interest in such trust or
estate is at the time directly or indirectly owned or controlled by such
Person, by such Person and one or more of its other Subsidiaries or by one or
more of such Person's other Subsidiaries; provided, however, that for all
purposes of the Loan Documents, Toy Biz, Inc. shall not be a Subsidiary of any
of the Loan Parties.
"Supermajority Lenders" means at any time Lenders owed or holding at
least 67% of the sum of the aggregate principal amount of the Advances
outstanding at such time or, if no such principal amount is outstanding at such
time, Lenders holding at least a majority in interest of the aggregate of the
Commitments (provided that, for purposes hereof, neither the Borrower nor any
of its Affiliates, if a Lender, shall be included in (x) the Lenders holding
such amount of the Advances or having such amount of the Commitments or (y)
determining the aggregate unpaid principal amount of the Advances or the total
Commitments); provided, however, that if any Lender shall be a Defaulting
Lender at such time, there shall be excluded from the determination of
Supermajority Lenders at such time (i) the aggregate principal amount of the
Advances owing to such Lender (in its capacity as a Lender) and outstanding at
such time and (ii) the aggregate unused portions of the Commitments of such
Lender at such time.
"Syndication Agent" has the meaning specified in the recital of
parties to this Agreement.
"Tax Certificate" has the meaning specified in Section 5.01(j)(xiii).
"Taxes" has the meaning specified in Section 2.12(a).
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33
"Term Credit Agreement Termination Date" means the date on which the
Payment Obligations have been Fully Satisfied.
"Term Facilities" means the Tranche A Term Facility and the Tranche B
Term Facility.
"Third Credit Agreement" has the meaning specified in the Revolving
Credit Agreement.
"Toy Biz" has the meaning specified in the Preliminary Statements.
"Tranche A Required Lenders" means at any time Lenders owed or holding
at least a majority in interest of the sum of the aggregate principal amount of
the Tranche A Term Advances outstanding at such time, or, if no such principal
amount is outstanding at such time, Lenders holding at least a majority in
interest of the aggregate of the Tranche A Term Commitments (provided that, for
purposes hereof, neither the Borrower, nor any of its Affiliates, if a Lender,
shall be included in (x) the Lenders holding such amount of the Tranche A Term
Advances or having such amount of the Tranche A Term Commitments or (y)
determining the aggregate unpaid principal amount of the Tranche A Term
Advances or the total Tranche A Term Commitments); provided, however, that if
any Lender shall be a Defaulting Lender at such time, there shall be excluded
from the determination of Tranche A Required Lenders at such time (i) the
aggregate principal amount of the Tranche A Term Advances owing to such Lender
(in its capacity as a Lender) and outstanding at such time and (ii) the
aggregate unused portion of the Tranche A Term Commitments of such Lender at
such time.
"Tranche A Term Advance" has the meaning specified in Section 2.01(a).
"Tranche A Term Borrowing" means a borrowing consisting of
simultaneous Tranche A Term Advances of the same Type made by the Lenders.
"Tranche A Term Commitment" means, with respect to any Lender at any
time, the amount set forth opposite such Lender's name on Schedule I hereto
under the caption "Tranche A Term Commitment" or, if such Lender has entered
into one or more Assignments and Acceptances, set forth for such Lender in the
Register maintained by the Administrative Agent pursuant to Section 8.07(c) as
such Lender's "Tranche A Term Commitment", as such amount may be reduced at or
prior to such time pursuant to Section 2.04.
"Tranche A Term Facility" means, at any time, the aggregate amount of
the Lenders' Tranche A Term Commitments at such time.
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34
"Tranche A Term Note" means a promissory note of the Borrower payable
to the order of any Lender, in substantially the form of Exhibit A-1 hereto,
evidencing the aggregate indebtedness of the Borrower to such Lender resulting
from the Tranche A Term Advances made by such Lender.
"Tranche A Termination Date" means the earliest of (a) June 30, 1997,
(b) the date of the termination (and abandonment) of the News Corp. Contract,
(c) the date of the sale, monetization or other disposal by Mafco or any of its
Subsidiaries of all of the News Corp. Preferred ADRs or (d) the date of
termination in whole of the Tranche A Term Commitments pursuant to Section 2.04
or 6.01.
"Tranche B Required Lenders" means at any time Lenders owed or holding
at least a majority in interest of the sum of the aggregate principal amount of
the Tranche B Term Advances outstanding at such time, or, if no such principal
amount is outstanding at such time, Lenders holding at least a majority in
interest of the aggregate of the Tranche B Term Commitments (provided that, for
purposes hereof, neither the Borrower, nor any of its Affiliates, if a Lender,
shall be included in (x) the Lenders holding such amount of the Tranche B Term
Advances or having such amount of the Tranche B Term Commitments or (y)
determining the aggregate unpaid principal amount of the Tranche B Term
Advances or the total Tranche B Term Commitments); provided, however, that if
any Lender shall be a Defaulting Lender at such time, there shall be excluded
from the determination of Tranche B Required Lenders at such time (i) the
aggregate principal amount of the Tranche B Term Advances owing to such Lender
(in its capacity as a Lender) and outstanding at such time and (ii) the
aggregate unused portion of the Tranche B Term Commitments of such Lender at
such time.
"Tranche B Term Advance" has the meaning specified in Section 2.01(b).
"Tranche B Term Borrowing" means a borrowing consisting of
simultaneous Tranche B Term Advances of the same Type made by the Lenders.
"Tranche B Term Commitment" means, with respect to any Lender at any
time, the amount set forth opposite such Lender's name on Schedule I hereto
under the caption "Tranche B Term Commitment" or, if such Lender has entered
into one or more Assignments and Acceptances, set forth for such Lender in the
Register maintained by the Administrative Agent pursuant to Section 8.07(c) as
such Lender's "Tranche B Term Commitment", as such amount may be reduced at or
prior to such time pursuant to Section 2.04.
"Tranche B Term Facility" means, at any time, the aggregate amount of
the Lenders' Tranche B Term Commitments at such time.
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35
"Tranche B Term Note" means a promissory note of the Borrower payable
to the order of any Lender, in substantially the form of Exhibit A-2 hereto,
evidencing the aggregate indebtedness of the Borrower to such Lender resulting
from the Tranche B Term Advances made by such Lender.
"Tranche B Termination Date" means the earliest of (a) June 30, 1997,
(b) the date of the termination (and abandonment) of the News Corp. Contract,
(c) the date of the sale, monetization or other disposal by Mafco or any of its
Subsidiaries of all of the News Corp. Preferred ADRs or (d) the date of
termination in whole of the Tranche B Term Commitments pursuant to Section 2.04
or 6.01.
"Treasury Regulations" means the temporary and final regulations
promulgated under the Internal Revenue Code of 1986, as amended from time to
time.
"Type" refers to the distinction between Advances bearing interest at
the Base Rate and Advances bearing interest at the Eurodollar Rate.
"Unfunded Pension Liabilities" with respect to any Plan means the
excess, if any, of its accumulated benefit obligation ("ABO"), as determined in
accordance with Statement of Financial Accounting Standards No. 87 or any
successor thereto ("FAS 87") over the fair market value of its assets (as of
such date) (provided that in determining the ABO for this purpose, the
interest, mortality and other relevant actuarial assumptions used to fund such
Plan as of its most recent actuarial valuation) shall be used instead of the
interest, mortality and other relevant actuarial assumptions that would
otherwise be prescribed by FAS 87.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even though the right
so to vote has been suspended by the happening of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
ERISA.
"Withdrawal Liability" has the meaning specified in Part I of Subtitle
E of Part IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
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36
SECTION 1.03. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances. (a) The Tranche A Term Advances. Each
Lender severally agrees, on the terms and conditions hereinafter set forth, to
make a single advance (a "Tranche A Term Advance") to the Borrower on any
Business Day during the period from the date hereof until the Tranche A
Termination Date in an amount not to exceed such Lender's Tranche A Term
Commitment at such time. The Tranche A Term Borrowing shall consist of Tranche
A Term Advances made simultaneously by the Lenders ratably according to their
Tranche A Term Commitments. Amounts borrowed under this Section 2.01(a) and
repaid or prepaid may not be reborrowed.
(b) The Tranche B Term Advances. Each Lender severally agrees, on the
terms and conditions hereinafter set forth, to make advances (each a "Tranche B
Term Advance") to the Borrower from time to time on any Business Day during the
period from the date hereof until the Tranche B Termination Date in an
aggregate amount not to exceed at any time outstanding such Lender's Tranche B
Term Commitment on such Business Day. Each Tranche B Term Borrowing shall be in
an aggregate amount not less than $5,000,000 or an integral multiple of
$1,000,000 in excess thereof and shall consist of Tranche B Term Advances made
on the same day by the Lenders ratably according to their Tranche B Term
Commitments. Amounts borrowed under this Section 2.01(b) and repaid or prepaid
may not be reborrowed.
SECTION 2.02. Making the Advances. (a) Except as otherwise provided in
Section 2.15, each Borrowing shall be made on notice given not later than 11:00
A.M. (New York City time) on the first Business Day prior to the date of a
proposed Borrowing consisting of Base Rate Advances or the third Business Day
prior to the date of a proposed Borrowing consisting of Eurodollar Rate
Advances, by the Borrower to the Administrative Agent, which shall give to each
Lender prompt notice thereof by telecopier, telex or cable. Each such notice of
a Borrowing (a "Notice of Borrowing") shall be by telecopier, telex or cable,
and, with respect to a Notice of Borrowing by telex or cable, confirmed
immediately thereafter in writing, in substantially the form of Exhibit C
hereto, specifying therein the requested (i) date of such Borrowing, (ii)
Facility under which such Borrowing is to be made, (iii) Type of Advances
comprising such Borrowing, (iv) aggregate amount of such Borrowing and (v)
Interest Period for each Eurodollar Rate Advance included in such Borrowing. In
the case of a proposed Borrowing comprised of Eurodollar Rate Advances, the
Administrative Agent shall promptly notify the Borrower and each Lender of the
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37
applicable interest rate under Section 2.06(a)(ii). Each Lender shall, before
12:00 noon (New York City time) on the date of such Borrowing, make available
for the account of its Applicable Lending Office to the Administrative Agent at
the Administrative Agent's Account, in same day funds, such Lender's ratable
portion of such Borrowing. After the Administrative Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in Article
III, the Administrative Agent will make such funds available by crediting the
Borrower's Account.
(b) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. In the case of any Borrowing that the related Notice of Borrowing
specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall
indemnify each Lender against any loss, cost or expense incurred by such Lender
as a result of any failure to fulfill on or before the date specified in such
Notice of Borrowing for such Borrowing the applicable conditions set forth in
Article III, including, without limitation, any loss, cost or expense incurred
by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the Advance to be made by such Lender as part
of such Borrowing when such Advance, as a result of such failure, is not made
on such date.
(c) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume, or at its option request
confirmation from such Lender, that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
subsection (a) of this Section 2.02 and the Administrative Agent may, in
reliance upon such assumption or confirmation (as the case may be), make
available to the Borrower on such date a corresponding amount. If and to the
extent that such Lender shall not have so made such ratable portion available
to the Administrative Agent, such Lender and the Borrower severally agree to
repay to the Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the
Administrative Agent, at (i) in the case of the Borrower, the interest rate
applicable at such time under Section 2.06 to Advances comprising such
Borrowing and (ii) in the case of such Lender, the cost (expressed as a rate
per annum) to the Administrative Agent of funding such Lender's ratable
portion; provided, however, that, upon the request of such Lender, the
Administrative Agent shall provide such Lender with a certificate as to the
calculation of such amount. If such Lender shall repay to the Administrative
Agent such corresponding amount, such amount so repaid shall constitute such
Lender's Advance as part of such Borrowing for purposes of this Agreement.
(d) The failure of any Lender to make the Advance to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Advance on the date of such Borrowing, but no Lender
shall be responsible for
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38
the failure of any other Lender to make the Advance to be made by such other
Lender on the date of any Borrowing.
(e) The Borrower may not request a Borrowing comprised of Eurodollar
Rate Advances or, pursuant to Section 2.10, Convert Base Rate Advances into
Eurodollar Rate Advances or select a new Interest Period for existing
Eurodollar Rate Advances if, after the making or Conversion of such Advances or
the selection of such Interest Period, the number of outstanding Borrowings
comprised of Eurodollar Rate Advances having different Interest Periods
(whether of different duration or commencing on different dates) would exceed
6.
SECTION 2.03. Repayment. (a) Tranche A Term Advances. The Borrower
shall repay to the Administrative Agent for the ratable account of the Lenders
on the Tranche A Termination Date the aggregate principal amount of the Tranche
A Term Advances then outstanding.
(b) Tranche B Term Advances. The Borrower shall repay to the
Administrative Agent for the ratable account of the Lenders on the Tranche B
Termination Date the aggregate principal amount of the Tranche B Term Advances
then outstanding.
SECTION 2.04. Optional Termination or Reduction of the Commitments.
The Borrower shall have the right, upon at least three Business Days' prior
notice to the Administrative Agent, to terminate in whole or reduce ratably in
part the unused portions of the Tranche A Term Commitments and the Tranche B
Term Commitments; provided that each partial reduction of a Facility (i) shall
be in an aggregate amount of $10,000,000 or an integral multiple of $1,000,000
in excess thereof and (ii) shall be made ratably among the Lenders in
accordance with their Commitments with respect to such Facility.
SECTION 2.05. Prepayments. (a) Optional. The Borrower may, upon at
least one Business Day's notice to the Administrative Agent, in the case of
Base Rate Advances, and three Business Days' notice to the Administrative
Agent, in the case of Eurodollar Rate Advances, stating the proposed date, and
the aggregate principal amount of the prepayment, and if such notice is given,
the Borrower shall, prepay the outstanding principal amounts of the Advances
comprising part of the same Borrowing in whole or ratably in part, together
with accrued interest to the date of such prepayment on the principal amount so
prepaid; provided, however, that, with respect to any prepayment made in
connection with the provisions of Section 7(o) of the Mafco Guaranty, no such
notice shall be required; provided further that (x) each partial prepayment
(other than a prepayment made in connection with the provisions of Section 7(o)
of the Mafco Guaranty) shall be in an aggregate principal amount not less than
$10,000,000 or an integral multiple of $1,000,000 in excess thereof (or, if the
aggregate principal amount of all Advances that constitute part of such
Borrowing is less, such aggregate principal amount) and (y) in the event any
such
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39
prepayment of Eurodollar Rate Advances is not made on the last day of an
Interest Period, the Borrower shall be obligated to reimburse the Lenders in
respect thereof pursuant to Section 8.04(b).
(b) Mandatory. (i) The Borrower shall, on any date (A) on which a cash
equity contribution is deposited in the Borrower Collateral Account as a result
of a loan made by First Gibraltar to the Borrower Parent pursuant to the terms
of the First Gibraltar Loan Agreement or on which a deposit of amounts paid
under or in connection with any Related Documents is made to the Mafco
Collateral Account or on which a deposit of amounts constituting Net Cash
Proceeds from an Asset Sale is made to the Mafco Collateral Account and (B)
either (I) a Default has occurred and is continuing, (II) the Borrower fails to
deliver a Look-Forward Certificate or a Deposit Certificate with respect to
such deposit in accordance with the terms of Section 5.01(k) or (III) the
Marvel IV Required Lenders determine, in their reasonable discretion, within 15
Business Days following the date of the receipt of the Look-Forward Certificate
or within 2 Business Days following the date of the receipt of Deposit
Certificate, as the case may be, referred to in clause (B)(II), that the pro
forma amounts available to be loaned by First Gibraltar to Borrower Parent,
together with amounts received by Mafco pursuant to or in connection with any
Related Document, will be less than $8 million in any calendar quarter or will
not be sufficient to pay interest on the Debt then outstanding under the
Revolving Credit Agreement, prepay an aggregate principal amount of the
Advances comprising part of the same Borrowings equal to an amount equal to the
excess of (x) the amount of such cash equity contribution or the amount on
deposit in the Mafco Collateral Account, as the case may be, plus any interest
on Collateral Investments made with such contribution or deposit over (y) the
sum of (1) the amount of interest and fees then due and payable in respect of
the Facilities plus (2) the amount of expenses of the Administrative Agent
(including the reasonable fees and expenses of counsel to the Administrative
Agent) then due and payable plus (3) the aggregate amount paid (including the
aggregate amount of interest, fees and expenses then due and payable in respect
of the Revolving Credit Facilities) from such cash equity contribution or such
amount on deposit in the Mafco Collateral Account, as the case may be, or from
any interest on Collateral Investments made with such contribution or deposit
pursuant to the terms of Section 2.05(b)(i) and/or Section 2.06(b)(i) or (ii)
of the Revolving Credit Agreement. Each such prepayment of the Facilities shall
be applied ratably first to the Tranche B Term Facility and second to the
Tranche A Term Facility. Each such prepayment of a Facility shall be made
ratably among the Lenders in accordance with their Commitments with respect to
such Facility.
(ii) The Borrower shall:
(A) on the date of receipt by any A Company of the Net Cash
Proceeds of issuances, sales or liquidations of any capital stock
(including any securities convertible into or exchangeable for capital
stock or any warrants, rights or options to
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40
acquire capital stock) of any A Company (other than (x) any Net Cash
Proceeds in respect of any Asset Sale and (y) the preferred stock to
be issued by FN Holdings in exchange for the preferred stock of FN
Escrow upon consummation of the merger of FN Escrow with and into FN
Holdings which preferred stock will be redeemed in full concurrently
with or immediately after the consummation of such merger),
(B) on the date of receipt by any A Company of any dividends,
other distributions or any loans or advances made in respect of the
capital stock of any other A Company (other than FN Holdings and FN
Parent) (provided that this clause (B) shall not apply to the receipt
by any A Company of any dividends, other distributions or any loans or
advances made in respect of all or any portion of the proceeds
received by Mafco or any of its Subsidiaries from any Asset Sale or
any sale, lease, transfer or other disposition specified in clauses
(i) through (v) of the definition of "Asset Sale".
(C) on the date of receipt by any A Company of the proceeds of
distributions, dividends or any loans or advances made on account of
or as a result of the issuance, sale or liquidation of any capital
stock (including any securities convertible into or exchangeable for
capital stock or any warrants, rights or options to acquire capital
stock but excluding any Asset Sale) of, or the sale, issuance or
incurrence of any Debt by, any Designated Operating Company, and
(D) on the date of receipt by any A Company of the Net Cash
Proceeds from the sale, issuance or incurrence by any A Company of any
Debt (other than any sale, issuance or incurrence by Revlon Holdings
Inc. of any Debt to any of its Subsidiaries),
prepay an aggregate principal amount of the Advances comprising part of the
same Borrowings equal to an amount equal to the excess of (x) the amount so
received (except, in each case, to the extent (1) required pursuant to the
terms of any agreement or instruments relating to Debt existing on the date
hereof or otherwise approved by the Marvel IV Required Lenders of any A Company
or Designated Operating Company to prepay or redeem or purchase such Debt or
(2) prohibited to be so applied by the terms of any agreement or instrument
relating to Debt existing on the date hereof or otherwise approved by the
Marvel IV Required Lenders of any A Company or Designated Operating Company)
over (y) the sum of (1) the amount of interest and fees then due and payable in
respect of the Facilities plus (2) the amount of expenses of the Administrative
Agent (including the reasonable fees and expenses of counsel to the
Administrative Agent) then due and payable plus (3) the aggregate amount paid
(including the aggregate amount of interest, fees and expenses then due and
payable in respect of the "Facilities" under the Revolving Credit Agreement)
from the amounts so received pursuant to the terms of Section 2.05(b)(ii)
and/or 2.06(b)(i) or (ii) of the Revolving Credit Agreement. Each such
prepayment of a Facility shall be applied
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41
ratably first to the Tranche B Term Facility and second to the Tranche A Term
Facility. Each such prepayment of a Facility shall be made ratably among the
Lenders in accordance with their Commitments with respect to such Facility.
(iii) The Borrower shall, on the date of receipt by Mafco or any of
its Subsidiaries (other than the Bank and its Subsidiaries) of the Net Cash
Proceeds from the sale, transfer or other disposition of (x) all or any portion
of the capital stock of the Bank (other than any issuance of capital stock by
the Bank or any Subsidiary of the Bank) or (y) any asset of the Bank, prepay an
aggregate principal amount of the Advances comprising part of the same
Borrowings equal to an amount equal to the excess of (A) such Net Cash Proceeds
(other than the portion of such Net Cash Proceeds required to be paid to the
holders of the Class B common stock of FN Holdings and the holders of the FN
Holdings Preferred Stock) over (B) the sum of (1) the amount of interest and
fees then due and payable in respect of the Facilities plus (2) the amount of
expenses of the Administrative Agent (including the reasonable fees and
expenses of counsel to the Administrative Agent) then due and payable plus (3)
the aggregate amount paid (including the aggregate amount of interest, fees and
expenses then due and payable in respect of the "Facilities" under the
Revolving Credit Agreement) from such Net Cash Proceeds pursuant to the terms
of Section 2.05(b)(iii) and/or 2.06(b)(i) or (ii) of the Revolving Credit
Agreement. Each such prepayment of the Facilities shall be applied ratably
first to the Tranche B Term Facility and second to the Tranche A Term Facility.
Each such prepayment of a Facility shall be made ratably among the Lenders in
accordance with their Commitments with respect to such Facility.
(iv) The Borrower shall, on the date of receipt by Mafco or any of its
Subsidiaries, on or prior to the later of the Term Credit Agreement Termination
Date and the "Tranche B Termination Date" under the Revolving Credit Agreement,
of the Net Cash Proceeds from any Asset Sale (other than the sale, disposal or
other monetization of the News Corp. Preferred ADRs or the New Marvel Shares),
prepay an aggregate principal amount of the Advances comprising part of the
same Borrowings in an amount equal to the excess of (A) such Net Cash Proceeds
over (B) the sum of (1) the amount of interest and fees then due and payable in
respect of the Facilities plus (2) the amount of expenses of the Administrative
Agent (including the reasonable fees and expenses of counsel to the
Administrative Agent) then due and payable plus (3) the aggregate amount paid
(including the aggregate amount of interest, fees and expenses then due and
payable in respect of the "Facilities" under the Revolving Credit Agreement)
from such Net Cash Proceeds pursuant to the terms of Section 2.05(b)(iv) and/or
2.06(b)(ii) or (iii) of the Revolving Credit Agreement. Each such prepayment of
the Facilities shall be applied ratably first to the Tranche A Term Facility
and second to the Tranche B Facility; provided, however, that if the initial
Borrowing under each of the Tranche A Term Facility and the Tranche B Term
Facility occurs on the same date, such prepayment shall be applied ratably to
the Facilities. Each
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42
such prepayment of a Facility shall be applied ratably among the Lenders in
accordance with their Commitments with respect to such Facility.
(v) The Borrower shall, on the date of receipt by Mafco or any of its
Subsidiaries, on or prior to the later to occur of the Term Credit Agreement
Termination Date and the "Tranche B Termination Date" under the Revolving
Credit Agreement, of the Net Cash Proceeds from the sale, disposal or other
monetization of the News Corp. Preferred ADRs or the New Marvel Shares, prepay
an aggregate principal amount of the Advances comprising part of the same
Borrowings in an amount equal to the excess of (x) such Net Cash Proceeds over
(y) the sum of (1) the amount of interest and fees then due and payable in
respect of the Facilities plus (2) the amount of expenses of the Administrative
Agent (including the reasonable fees and expenses of counsel to the
Administrative Agent) then due and payable. Each such prepayment of the
Facility shall be applied ratably first to the Tranche A Term Facility and
second to the Tranche B Term Facility; provided, however, that if the initial
Borrowing under each of the Tranche A Term Facility and the Tranche B Term
Facility occurs on the same date, such prepayment shall be applied ratably to
the Facilities. Each such prepayment of the Facilities shall be applied ratably
among the Lenders in accordance with their Commitments with respect to such
Facility. Any Net Cash Proceeds remaining after the foregoing application shall
be applied as set forth in Section 2.05(b)(v) of the Revolving Credit
Agreement.
(vi) The Borrower shall, on each date that an "Event of Default" set
forth in Section 6.01(a) of the Revolving Credit Agreement shall have occurred
and be continuing, prepay an aggregate principal amount of the Advances
comprising part of the same Borrowings equal to an amount equal to the excess
of (x) the amount on deposit in the Second Mafco Collateral Account over (y)
the sum of (1) the amount of interest and fees then due and payable in respect
of the Facilities plus (2) the amount of expenses of the Administrative Agent
(including the reasonable fees and expenses of counsel to the Administrative
Agent) then due and payable plus (3) the aggregate amount paid (including the
aggregate amount of interest, fees and expenses then due and payable in respect
of the "Facilities" under the Revolving Credit Agreement) from such amount on
deposit pursuant to the terms of Section 2.05(b)(vii) and/or 2.06(b)(i) or (ii)
of the Revolving Credit Agreement. Each such prepayment of the Facilities shall
be applied ratably first to the Tranche B Term Facility and second to the
Tranche A Term Facility. Each such prepayment of a Facility shall be made
ratably among the Lenders in accordance with their Commitments with respect to
such Facility. If an "Event of Default" set forth in Section 6.01(a) of the
Revolving Credit Agreement shall occur and be continuing at the same time as an
Event of Default set forth in Section 6.01(a) shall occur and be continuing,
such amount shall be applied pro rata to the Facilities and the "Facilities"
under the Revolving Credit Agreement and such pro rata amount shall be applied
to the Facilities as set forth in this Section 2.05(b)(vi).
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43
(vii) The Borrower shall, on each date that an Event of Default set
forth in Section 6.01(a) shall have occurred and be continuing, prepay an
aggregate principal amount of the Advances comprising part of the same
Borrowings equal to an amount equal to the excess of (x) the amount on deposit
in the Second Mafco Collateral Account over (y) the sum of (1) the amount of
interest then due and payable in respect of the Facilities plus (2) the amount
of expenses of the Administrative Agent (including the reasonable fees and
expenses of counsel to the Administrative Agent) then due and payable. Each
such prepayment of the Facilities shall be applied ratably first to the Tranche
B Term Facility and second to the Tranche A Term Facility. Each such prepayment
of a Facility shall be made ratably among the Lenders in accordance with their
Commitments with respect to such Facility. Any amounts remaining on deposit in
the Second Mafco Account after the foregoing application shall be applied as
set forth in Section 2.05(b)(viii) of the Revolving Credit Agreement. If an
Event of Default set forth in Section 6.01(a) shall occur and be continuing at
the same time as an "Event of Default" set forth in Section 6.01(a) of the
Revolving Credit Agreement shall occur and be continuing, such amount (less the
sum of (1) the amount of interest then due and payable in respect of the
"Facilities" under the Revolving Credit Agreement plus (2) the amount of
expenses of the "Administrative Agent" under the Revolving Credit Agreement
(including the reasonable fees and expenses of counsel to such Administrative
Agent) then due and payable) shall be applied pro rata to the Facilities and to
the "Facilities" under the Revolving Credit Agreement and such pro rata amount
shall be applied to the Facilities as set forth in this Section 2.05(b)(vii).
(viii) If, as a result of the making of any prepayment required to be
made pursuant to this Section 2.05, the Borrower would incur costs pursuant to
Section 8.04(b), the Borrower may deposit the amount of such prepayment with
the Administrative Agent, for the benefit of the Lenders, in a cash collateral
account, until the end of the applicable Interest Period at which time such
payment shall be made. The Borrower hereby grants to the Administrative Agent,
for the benefit of the Lenders, a security interest in all amounts in which the
Borrower has any right, title or interest which are from time to time on
deposit in such cash collateral account and expressly waives all rights (which
rights the Borrower hereby acknowledges and agrees are vested exclusively in
the Administrative Agent) to exercise dominion or control over any such
amounts.
SECTION 2.06. Interest. (a) Ordinary Interest. The Borrower shall pay
interest on the unpaid principal amount of each Advance owing to each Lender
from the date of such Advance until such principal amount shall be paid in
full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance is a
Base Rate Advance, a rate per annum equal at all times to the sum of
the Base Rate in effect from time to time plus the Applicable Margin
in effect from time to time, payable in arrears quarterly on the first
Business Day of each March, June,
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44
September and December during such periods, commencing March 3, 1997,
and on the date such Base Rate Advance shall be Converted or paid in
full.
(ii) Eurodollar Rate Advances. During such periods as such
Advance is a Eurodollar Advance, a rate per annum equal at all times
during each Interest Period for such Advance to the sum of the
Eurodollar Rate for such Interest Period plus the Applicable Margin in
effect from time to time, payable in arrears on the last day of such
Interest Period and, if such Interest Period has a duration of more
than three months, on each day that occurs during such Interest Period
every three months from the first day of such Interest Period.
(b) Default Interest. The Borrower shall pay on demand interest on the
unpaid principal amount of each Advance that is not paid when due and on the
unpaid amount of all interest, fees and other amounts then due and payable
hereunder that is not paid when due from the due date thereof to the date paid,
at a rate per annum equal at such time to (i) in the case of any amount of
principal, 2% per annum above the rate of interest per annum required to be
paid on such Advance immediately prior to the date on which such amount became
due and payable and (ii) in the case of all other amounts, 2% per annum above
the rate per annum required to be paid on Base Rate Advances pursuant to
Section 2.06(a)(i) above.
SECTION 2.07. Interest Rate Determination. (a) The Administrative
Agent shall give prompt notice to the Borrower and each Lender of the
applicable interest rate determined by the Administrative Agent for purposes of
Section 2.06(a)(i) or (ii), and the applicable rate, if any, furnished by
Citibank for the purpose of determining the applicable interest rate under
Section 2.06(a)(i) or (ii).
(b) If Citibank cannot furnish timely information to the
Administrative Agent for determining the Eurodollar Rate, the Administrative
Agent shall forthwith notify the Borrower and each Lender that the interest
rate cannot be determined for such Eurodollar Rate Advances, whereupon (i) each
such Eurodollar Rate Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance and (ii)
the obligation of the Lenders to make, or to Convert Advances into, Eurodollar
Rate Advances shall be suspended until the Administrative Agent shall notify
the Borrower that Citibank has determined that the circumstances causing such
suspension no longer exist.
(c) If the Required Lenders notify the Administrative Agent that the
Eurodollar Rate for any Interest Period for such Eurodollar Rate Advances will
not adequately reflect the cost to such Required Lenders of making, funding or
maintaining their pro rata shares of such Eurodollar Rate Advances for such
Interest Period, the Administrative Agent shall forthwith so notify the
Borrower and the Lenders, whereupon (i) each such Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest
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45
Period therefor, Convert into a Base Rate Advance and (ii) the obligation of
the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances
shall be suspended until the Administrative Agent shall notify the Borrower
that such Required Lenders have determined that the circumstances causing such
suspension no longer exist.
(d) If the Borrower shall fail to select the duration of any Interest
Period for any Eurodollar Rate Advances in accordance with the provisions
contained in the definition of "Interest Period" in Section 1.01, the
Administrative Agent will forthwith notify the Borrower and the Lenders and the
Interest Period for such Eurodollar Rate Advances will be one month.
SECTION 2.08. Fees. (a) Commitment Fee. The Borrower agrees to pay to
the Administrative Agent for the account of the Lenders a commitment fee on the
average daily unused Tranche A Term Commitment of such Lender, from the date
hereof, in the case of each Financial Institution, and from the effective date
specified in the Assignment and Acceptance pursuant to which it became a
Lender, in the case of each other Lender, until the Tranche A Termination Date
at a rate equal to 1/2 of 1% per annum, payable in arrears on the date of the
Tranche A Term Borrowing, thereafter quarterly on the first Business Day of
each March, June, September and December commencing March 3, 1997 and on the
Tranche A Termination Date. The Borrower further agrees to pay to the
Administrative Agent for the account of the Lenders a commitment fee on the
average daily unused Tranche B Term Commitment of such Lender, from the date
hereof, in the case of each Financial Institution, and from the effective date
specified in the Assignment and Acceptance pursuant to which it became a
Lender, in the case of each other Lender, until the Tranche B Termination Date
at a rate equal to 1/2 of 1% per annum, payable in arrears on the date of the
initial Tranche B Term Borrowing, thereafter quarterly on the first Business
Day of each March, June, September and December commencing March 3, 1997 and on
the Tranche B Termination Date.
(b) Other Fees. The Borrower shall pay to the Administrative Agent for
its own account such fees as are set forth in the fee letter dated December 16,
1996 between Mafco and Citibank, as the same may be amended or otherwise
modified from time to time.
SECTION 2.09. Increased Costs; Illegality. (a) Except as to taxes,
levies, imposts, deductions, charges, withholdings or liabilities with respect
thereto (it being understood that the Borrower shall not have any liability for
any taxes, levies, imposts, deductions, charges, withholdings or liabilities
with respect thereto, except as provided in Section 2.12), if, due to either
(i) the introduction of or any change (other than any change by way of
imposition or increase of reserve requirements included in the Eurodollar Rate
Reserve Percentage) in or in the interpretation of any law or regulation or
(ii) the compliance by any Lender with any guideline or request from any
central bank or other governmental authority in any case introduced, changed,
interpreted or requested after the date hereof
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46
(whether or not having the force of law), there shall be (x) imposed, modified
or deemed applicable any reserve, special deposit or similar requirement
against assets held by, or letters of credit or guarantees issued by, or
deposits in or for the account of, any Lender or (y) imposed on any Lender any
other condition relating to this Agreement or the Advances made by it, and the
result of any event referred to in clause (x) or (y) shall be to increase the
cost to such Lender of agreeing to make or making, funding or maintaining
Eurodollar Rate Advances, then the Borrower shall from time to time, upon
demand by such Lender (with a copy of such demand to the Administrative Agent)
made within 60 days after the first date on which such Lender has actual
knowledge that it is entitled to make demand for payment under this Section
2.09(a), pay to the Administrative Agent for the account of such Lender
additional amounts sufficient to compensate such Lender for such increased
cost; provided, however, that if such Lender fails to so notify the Borrower
within such 60-day period, such increased cost shall commence accruing on such
later date on which the Lender notifies the Borrower; provided further that,
before making any such demand, such Lender agrees to use its best efforts
(consistent with its internal policy and legal and regulatory restrictions) to
designate a different Applicable Lending Office if the making of such a
designation would avoid the need for, or reduce the amount of, such increased
cost and would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender. A certificate as to the amount of such
increased cost, submitted to the Borrower and the Administrative Agent by such
Lender, shall be conclusive and binding for all purposes, absent manifest
error.
(b) If any Lender determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental or monetary authority in regard to capital adequacy (whether or
not having the force of law) including, without limitation, any guideline
contemplated by the report dated July 1988 entitled "International Convergence
of Capital Management and Capital Standards" issued by the Bank Committee on
Banking Regulations and Supervisory Practices, in any case in which such law,
regulation, guideline or request became effective or was made after the date
hereof, has or would have the effect of reducing the rate of return on the
capital of, or maintained by, such Lender or any corporation controlling such
Lender as a consequence of such Lender's Advances or Commitments hereunder and
other commitments of this type, by increasing the amount of capital required or
expected to be maintained by such Lender or any corporation controlling such
Lender, to a level below that which such Lender or any corporation controlling
such Lender could have achieved but for such adoption, effectiveness, change or
compliance (taking into account such Lender's or such corporation's policies
with respect to capital adequacy), then the Borrower shall, from time to time,
pay such Lender, upon demand by such Lender (with a copy of such demand to the
Administrative Agent) made within 60 days after the first date on which such
Lender has actual knowledge that it is entitled to make demand for payment
under this Section 2.09(b) of such reduction in return, such additional amount
as may be specified by such Lender as being sufficient to compensate such
Lender for such reduction in return, to the extent that such Lender reasonably
<PAGE>
47
determines such reduction to be attributable to the existence of such Lender's
commitment to lend hereunder; provided, however, that if such Lender fails to
so notify the Borrower within such 60-day period, such amounts shall commence
accruing on such later date on which the Lender notifies the Borrower. A
certificate as to such amounts submitted to the Borrower and the Administrative
Agent by such Lender shall be conclusive and binding for all purposes, absent
manifest error.
(c) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for any Lender or its Eurodollar Lending
Office to perform its obligations hereunder to make Eurodollar Rate Advances or
to fund or maintain Eurodollar Rate Advances hereunder, then, upon written
notice by such Lender to the Borrower (with a copy to the Administrative
Agent), (i) each Eurodollar Rate Advance of such Lender will automatically
Convert into a Base Rate Advance and (ii) the obligation under each Facility
under which such Lender has a Commitment to make, or to Convert Base Rate
Advances into, Eurodollar Rate Advances shall be suspended until the
Administrative Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist; provided, however, that,
before making any such demand, such Lender shall designate a different
Eurodollar Lending Office if the making of such a designation would avoid the
need for giving such notice and demand, and would not, in the judgment of such
Lender, be otherwise disadvantageous to such Lender. For purposes of this
Section 2.09(c), a notice to the Borrower by a Lender shall be effective with
respect to any Eurodollar Rate Advance on the last day of the then current
Interest Period for such Advance; provided, however, that, if it is not lawful
for such Lender to maintain such Advance until the end of the Interest Period
applicable thereto, then the notice to the Borrower shall be effective upon
receipt by the Borrower.
SECTION 2.10. Conversion of Advances. (a) Optional. The Borrower may
on any Business Day, upon notice given to the Administrative Agent not later
than noon (New York City time) on the third Business Day prior to the date of
the proposed Conversion and subject to the provisions of Section 2.07 and 2.09,
Convert all or any portion of the Advances of one Type comprising the same
Borrowing into Advances of the other Type; provided, however, that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made
on, and only on, the last day of an Interest Period for such Eurodollar Rate
Advances, and any Conversion of Base Rate Advances into Eurodollar Rate
Advances shall be subject to the limitation set forth in Section 2.02(e) and in
an amount not less than $5,000,000. Each such notice of Conversion shall,
within the restrictions specified above, specify (i) the date of such
Conversion, (ii) the Advances to be Converted and (iii) if such Conversion is
into Eurodollar Rate Advances, the duration of the initial Interest Period for
such Advances.
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48
(b) Mandatory. (i) On the date on which the aggregate unpaid principal
amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced,
by payment or prepayment or otherwise, to less than $5,000,000, such Advances
shall automatically Convert into Base Rate Advances.
(ii) Upon the occurrence and during the continuance of any Event of
Default (or, in the case of any involuntary proceeding described in Section
6.01(e), a Default), (A) each Eurodollar Rate Advance will automatically, on
the last day of the then existing Interest Period therefor, Convert into a Base
Rate Advance and (B) the obligation of the Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended.
SECTION 2.11. Payments and Computations. (a) The Borrower shall make
each payment hereunder and under the Notes not later than 11:00 A.M. (New York
City time) on the day when due in U.S. Dollars to the Administrative Agent at
the Administrative Agent's Account in same day funds. The Administrative Agent
will promptly thereafter cause to be distributed like funds relating to the
payment of principal or interest or commitment fees ratably (other than amounts
payable pursuant to Section 2.09 or 2.12) to the Lenders for the account of
their respective Applicable Lending Offices, and like funds relating to the
payment of any other amount payable to any Lender to such Lender for the
account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement. Upon its acceptance of an
Assignment and Acceptance and recording of the information contained therein in
the Register pursuant to Section 8.07(c), from and after the effective date
specified in such Assignment and Acceptance, the Administrative Agent shall
make all payments hereunder and under the Notes in respect of the interest
assigned thereby to the Lender assignee thereunder, and the parties to such
Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
(b) The Borrower hereby authorizes each Lender, if and to the extent
payment of principal, interest or fees owed to such Lender is not made when due
hereunder or, in the case of a Lender under the Note or Notes held by such
Lender, to charge from time to time against any or all of the Borrower's
accounts with such Lender any amount so due.
(c) All computations of interest based on the Eurodollar Rate, the
Base Rate or the Federal Funds Rate and of commitment fees shall be made by the
Administrative Agent, on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or commitment fees are payable.
Each determination by the Administrative Agent of an interest rate hereunder
shall be conclusive and binding for all purposes, absent manifest error.
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49
(d) Whenever any payment hereunder or under any Note shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fee, as the
case may be; provided, however, that, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(e) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to any Lender
hereunder or under any Note that the Borrower will not make such payment in
full, the Administrative Agent may assume, or at its option request
confirmation from the Borrower, that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender on
such due date an amount equal to the amount then due such Lender. If and to the
extent the Borrower shall not have so made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate.
(f) If the Administrative Agent receives funds for application to the
Obligations under the Loan Documents under circumstances for which the Loan
Documents do not specify the Advances or the Facility to which, or the manner
in which, such funds are to be applied, the Administrative Agent may, but shall
not be obligated to, elect to distribute such funds in respect of a Facility to
each appropriate Lender ratably in accordance with such Lender's proportionate
share of the principal amount of all outstanding Advances under such Facility,
in repayment or prepayment of such of the outstanding Advances under such
Facility or other Obligations owed to such Lender, and for application to such
principal installments, as the Administrative Agent shall direct.
SECTION 2.12. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.11,
free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender and the
Administrative Agent, (i) taxes imposed on its income, and franchise taxes and
backup withholding taxes imposed on it, by the United States or the
jurisdiction under the laws of which such Lender or the Administrative Agent
(as the case may be) is organized or any political subdivision or taxing
authority thereof or therein, (ii) taxes imposed on its income, and franchise
taxes imposed on it, by the jurisdiction of such Lender's or, in either such
case, the Administrative Agent's principal office or Applicable Lending Office
or any political subdivision or taxing authority thereof or therein and (iii)
United States withholding
<PAGE>
50
tax payable with respect to payments hereunder under laws (including, without
limitation any statute, treaty, ruling, determination or regulation) in effect
on the Initial Date with respect to such Lender or the Administrative Agent,
but not excluding any United States withholding tax payable as a result of any
change in such laws occurring after the Initial Date (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law
to deduct any Taxes from or in respect of any sum payable hereunder or under
any Note to any Lender or the Administrative Agent, (i) the sum payable shall
be increased as may be necessary so that after making all required deductions
of Taxes (including deductions of Taxes applicable to additional sums payable
under this Section 2.12) such Lender or the Administrative Agent (as the case
may be) receives an amount equal to the sum it would have received had no such
deductions of Taxes been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law; provided,
however, that any such Lender shall designate a different Applicable Lending
Office if, in the judgment of such Lender, such designation would avoid the
need for, or reduce the amount of, any Taxes required to be deducted from or in
respect of any sum payable hereunder to such Lender or the Administrative Agent
and would not, in the judgment of such Lender, be otherwise disadvantageous to
such Lender.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or under the Notes or
from the execution, delivery or registration of, or otherwise with respect to,
this Agreement or the Notes (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender and the Administrative
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.12) paid by such Lender or the Administrative
Agent (as the case may be) and any liability (including penalties, additions to
tax, interest and expenses) arising therefrom or with respect thereto; provided
that, in the event such Lender or the Administrative Agent, as the case may be,
successfully contests the assessment of such Taxes or Other Taxes or any
liability arising therefrom or with respect thereto, such Lender or the
Administrative Agent shall refund, to the extent of any refund thereof made to
such Lender or the Administrative Agent, any amounts paid by the Borrower under
this Section 2.12(c) in respect of such Taxes, Other Taxes or liabilities
arising therefrom or with respect thereto. Each Lender and the Administrative
Agent agree that it will contest such Taxes, Other Taxes or liabilities if (i)
the Borrower furnishes to it an opinion of reputable tax counsel acceptable to
such Lender or the Administrative Agent to the effect that such Taxes or Other
Taxes were wrongfully or illegally imposed and (ii) such Lender or the
Administrative Agent determines, in its sole discretion, that it would not be
disadvantaged or prejudiced in any manner whatsoever as a
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51
result of such contest. This indemnification shall be made within 30 days from
the date such Lender or the Administrative Agent (as the case may be) makes
written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower will furnish to the Administrative Agent, at its address referred to
in Section 8.02, appropriate evidence of payment thereof. If no Taxes are
payable in respect of any payment hereunder or under the Notes by the Borrower
from an account or branch outside the United States or on behalf of the
Borrower by a payor that is not a United States person, the Borrower will
furnish to the Administrative Agent, at such address, a certificate from each
appropriate taxing authority, or an opinion of counsel acceptable to the
Administrative Agent, in either case stating that such payment is exempt from
or not subject to Taxes. For purposes of this Section 2.12, the terms "United
States" and "United States person" shall have the meanings specified in Section
7701 of the Code.
(e) Each Lender organized under the laws of a jurisdiction outside the
United States and the Administrative Agent, if organized under the laws of a
jurisdiction outside the United States, shall, on or prior to the Initial Date
and from time to time thereafter if requested in writing by the Borrower or the
Administrative Agent (but only so long thereafter as such Lender or the
Administrative Agent remains lawfully able to do so), provide the Borrower and
(in the case of any such Lender other than the Administrative Agent) the
Administrative Agent with two duly completed copies of Internal Revenue Service
form 1001 or 4224, as appropriate, or any successor form prescribed by the
Internal Revenue Service, certifying that such Lender or the Administrative
Agent is entitled to benefits under an income tax treaty to which the United
States is a party that reduces the rate of withholding tax on payments under
this Agreement or the Notes or certifying that the income receivable pursuant
to this Agreement or the Notes is effectively connected with the conduct of a
trade or business in the United States.
(f) For any period with respect to which the Administrative Agent or a
Lender has failed to provide the Borrower with the appropriate forms described
in subsection (e) above (other than if such failure is due to a change in law
occurring after the date on which such person was originally required to
provide such forms, or if such forms are otherwise not required under
subsection (e) above), the Administrative Agent or such Lender shall not be
entitled to increased payments or indemnification under subsection (a) or (c)
above with respect to Taxes imposed by the United States; provided, however,
that should the Administrative Agent or a Lender become subject to Taxes
because of its failure to deliver a form required hereunder, the Borrower shall
take such steps as the Administrative Agent or such Lender shall reasonably
request to assist the Lender to recover such Taxes if, in the judgment of the
Borrower such steps would avoid the need for, or reduce the amount of, any
Taxes required to be deducted from or in respect of any sum payable hereunder
to the Administrative Agent or such Lender and would not, in the judgment of
the Borrower, be disadvantageous to the Borrower.
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52
(g) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.12 shall survive the payment in full of principal and interest
hereunder and under the Notes.
(h) If a Lender shall change its Applicable Lending Office other than
(i) at the request of the Borrower or (ii) at a time when such change would not
result in this Section 2.12 requiring the Borrower to make a greater payment
than if such change had not been made, such Lender shall not be entitled to
receive any greater payment under this Section 2.12 than such Lender would have
been entitled to receive had it not changed its Applicable Lending Office.
SECTION 2.13. Sharing of Payments, Etc. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Advances owing to it (other than
pursuant to Section 2.09 or 2.12) in excess of its ratable share of payments on
account of the Advances obtained by all the Lenders, such Lender shall
forthwith purchase from the other Lenders such interests or participating
interests in the Advances owing to them as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them;
provided, however, that, if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each
Lender shall be rescinded and such Lender shall repay to the purchasing Lender
the purchase price to the extent of such recovery together with an amount equal
to such Lender's ratable share (according to the proportion of (i) the amount
of such Lender's required repayment to (ii) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing an interest or participating interest from
another Lender pursuant to this Section 2.13 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such interest or participating interest, as the case
may be, as fully as if such Lender were the direct creditor of the Borrower in
the amount of such interest or participating interest, as the case may be.
SECTION 2.14. Removal of Lender. In the event that any Lender demands
payment of costs or additional amounts pursuant to Section 2.09 or Section 2.12
or asserts pursuant to Section 2.09(c) that it is unlawful for such Lender to
make Eurodollar Rate Advances, then (subject to such Lender's right to rescind
such demand or assertion within 10 days after the notice from the Borrower
referred to below) the Borrower may, upon 20 days' prior written notice to such
Lender and the Administrative Agent, elect to cause such Lender to assign its
Advances and Commitments in full to an assignee institution selected by the
Borrower that meets the criteria of an Eligible Assignee and is reasonably
satisfactory to the Administrative Agent, so long as such Lender receives
payment in full in cash of the outstanding principal amount of all Advances
made by it and all accrued and
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53
unpaid interest thereon and all other amounts due and payable to such Lender as
of the date of such assignment (including without limitation amounts owing
pursuant to Section 2.09 or 2.12), and in such case such Lender agrees to make
such assignment, and such assignee shall agree to accept such assignment and
assume all obligations of such Lender hereunder, in accordance with Section
8.07.
SECTION 2.15. Defaulting Lender. (a) In the event that, at any one
time, (i) any Lender shall be a Defaulting Lender, (ii) such Defaulting Lender
shall owe a Defaulted Advance to the Borrower and (iii) the Borrower shall be
required to make any payment hereunder or under any other Loan Document to or
for the account of such Defaulting Lender, then the Borrower may, so long as no
Default shall occur or be continuing at such time and to the fullest extent
permitted by applicable law, set-off and otherwise apply the Obligation of the
Borrower to make such payment to or for the account of such Defaulting Lender
against the Obligation of such Defaulting Lender to make such Defaulted
Advance. In the event that the Borrower shall so set-off and otherwise apply
the Obligation of the Borrower to make any such payment against the Obligation
of such Defaulting Lender to make any such Defaulted Advance on any date, the
amount so set-off and otherwise applied by the Borrower shall constitute for
all purposes of this Agreement and the other Loan Documents an Advance by such
Defaulting Lender made on such date under the Facility pursuant to which such
Defaulted Advance was originally required to have been made pursuant to Section
2.01. Such Advance shall be considered, for all purposes of this Agreement, to
comprise part of the Borrowing in connection with which such Defaulted Advance
was originally required to have been made pursuant to Section 2.01. The
Borrower shall notify the Administrative Agent at any time the Borrower reduces
the amount of the Obligation of the Borrower to make any payment otherwise
required to be made by it hereunder or under any other Loan Document as a
result of the exercise by the Borrower of its right set forth in this
subsection (a) and shall set forth in such notice (A) the name of the
Defaulting Lender and the Defaulted Advance required to be made by such
Defaulting Lender and (B) the amount set-off and otherwise applied in respect
of such Defaulted Advance pursuant to this subsection (a). Any portion of such
payment otherwise required to be made by the Borrower to or for the account of
such Defaulting Lender which is paid by the Borrower, after giving effect to
the amount set-off and otherwise applied by the Borrower pursuant to this
subsection (a), shall be applied by the Administrative Agent as specified in
subsection (b) or (c) of this Section 2.15.
(b) In the event that, at any one time, (i) any Lender shall be a
Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount to
the Administrative Agent, the Collateral Agent or any of the other Lenders and
(iii) the Borrower shall make any payment hereunder or under any other Loan
Document to the Administrative Agent for the account of such Defaulting Lender,
then the Administrative Agent may, on its behalf or on behalf of such other
Lenders and to the fullest extent permitted by applicable law, apply at such
time the amount so paid by the Borrower to or for the account of such
Defaulting
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54
Lender to the payment of each such Defaulted Amount up to the amount required
to pay such Defaulted Amount. In the event that the Administrative Agent shall
so apply any such amount to the payment of any such Defaulted Amount on any
date, the amount so applied by the Administrative Agent shall constitute for
all purposes of this Agreement and the other Loan Documents payment, to such
extent, of such Defaulted Amount on such date. Any such amount so applied by
the Administrative Agent shall be retained by the Administrative Agent or
distributed by the Administrative Agent to such other Lenders, ratably in
accordance with the respective portions of such Defaulted Amounts payable at
such time to the Administrative Agent and such other Lenders and, if the amount
of such payment made by the Borrower shall at such time be insufficient to pay
all Defaulted Amounts owing at such time to the Administrative Agent, the
Collateral Agent and the other Lenders, in the following order of priority:
(i) first, to the Administrative Agent and the Collateral Agent
for any Defaulted Amounts then owing to the Administrative Agent and
the Collateral Agent, ratably in accordance with such respective
Defaulted Amounts then owing to the Administrative Agent and the
Collateral Agent; and
(ii) second, to any other Lenders for any Defaulted Amounts then
owing to such other Lenders, ratably in accordance with such
respective Defaulted Amounts then owing to such other Lenders.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.15.
(c) In the event that, at any one time, (i) any Lender shall be
Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted
Advance or a Defaulted Amount and (iii) the Borrower, the Administrative Agent
the Collateral Agent or any other Lender shall be required to pay or distribute
any amount hereunder or under any other Loan Document to or for the account of
such Defaulting Lender, then the Borrower, the Collateral Agent or such other
Lender shall pay such amount to the Administrative Agent to be held by the
Administrative Agent, to the fullest extent permitted by applicable law, in
escrow or the Administrative Agent shall, to the fullest extent permitted by
applicable law, hold in escrow such amount otherwise held by it. Any funds held
by the Administrative Agent in escrow under this subsection (c) shall be
deposited by the Administrative Agent in an account with Citibank, in the name
and under the control of the Administrative Agent, but subject to the
provisions of this subsection (c). The terms applicable to such account,
including the rate of interest payable with respect to the credit balance of
such account from time to time, shall be Citibank's standard terms applicable
to escrow accounts maintained with it. Any interest credited to such account
from time to time shall be held by the Administrative Agent in
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55
escrow under, and applied by the Administrative Agent from time to time in
accordance with the provisions of, this subsection (c). The Administrative
Agent shall, to the fullest extent permitted by applicable law, apply all funds
so held in escrow from time to time to the extent necessary to make any
Advances required to be made by such Defaulting Lender and to pay any amount
payable by such Defaulting Lender hereunder and under the other Loan Documents
to the Administrative Agent, the Collateral Agent or any other Lender, as and
when such Advances or amounts are required to be made or paid and, if the
amount so held in escrow shall at any time be insufficient to make and pay all
such Advances and amounts required to be made or paid at such time, in the
following order of priority:
(i) first, to the Administrative Agent and the Collateral Agent
for any amount then due and payable by such Defaulting Lender to the
Administrative Agent and the Collateral Agent hereunder, ratably in
accordance with such respective amounts then due and payable to the
Administrative Agent and the Collateral Agent;
(ii) second, to any other Lenders for any amount then due and
payable by such Defaulting Lender to such other Lenders hereunder,
ratably in accordance with such respective amounts then due and
payable to such other Lenders; and
(iii) third, to the Borrower for any Advance then required to be
made by such Defaulting Lender pursuant to the Commitment of such
Defaulting Lender.
In the event that such Defaulting Lender shall, at any time, cease to be a
Defaulting Lender, any funds held by the Administrative Agent in escrow at such
time with respect to such Defaulting Lender shall be distributed by the
Administrative Agent to such Defaulting Lender and applied by such Defaulting
Lender to the Obligations owing to such Lender at such time under this
Agreement and the other Loan Documents ratably in accordance with the
respective amounts of such Obligations outstanding at such time.
(d) The rights and remedies against a Defaulting Lender under this
Section 2.15 are in addition to other rights and remedies which the Borrower
may have against such Defaulting Lender with respect to any Defaulted Advance
and which the Administrative Agent, the Collateral Agent or any Lender may have
against such Defaulting Lender with respect to any Defaulted Amount.
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56
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Effective Date. Article II
hereof shall be effective on and as of the date (the "Effective Date"), on
which each of the following conditions precedent shall have been satisfied or
duly waived:
(a) There shall have been no adverse change since June 3, 1996 in
the corporate and legal structure and capitalization of each A
Company, each Designated Operating Company and the Bank, including the
terms and conditions of the charter, bylaws and each class of capital
stock of each such Person and of each agreement or instrument relating
to such structure or capitalization, except as contemplated by
existing consents, amendments and waivers delivered in connection with
the Existing Credit Agreement; the Lenders shall be satisfied with the
corporate and legal structure and capitalization of each of National
Health Care Group Inc., Revlon Guarantor, Revlon Holdings Inc., Revlon
Worldwide Corporation and Revlon, including the terms and conditions
of the charter, by-laws and each class of capital stock of each such
Person and of each agreement or instrument relating to such structure
or capitalization.
(b) Before giving effect to the transactions contemplated by this
Agreement, there shall have occurred no Material Adverse Change since
December 31, 1995 relating to any of the Loan Parties, the FN Parties
and the Designated Operating Companies.
(c) There shall exist no action, suit, investigation, litigation
or proceeding affecting any of the Loan Parties, the FN Parties and
the Designated Operating Companies pending or threatened before any
court, governmental agency or arbitrator that (i) would be reasonably
likely to have a Material Adverse Effect (in the case of clause (a) of
the definition thereof, the term "Person" shall refer to such Loan
Party, such FN Party or such Designated Operating Company, as the case
may be) or (ii) purports to affect the legality, validity or
enforceability of this Agreement, any Note, any other Loan Document,
any Related Document, any FN Document or the consummation of the
transactions contemplated hereby and thereby.
(d) Nothing shall have come to the attention of the Lenders in
respect of any of the A Companies, the Designated Operating Companies
or the Bank that is inconsistent with or different from in any adverse
respect any of the results of the due diligence investigations of such
Persons conducted in connection with the Original Credit Agreement,
the Second Credit Agreement, the Third Credit Agreement or the
Existing Credit Agreement; the Lenders shall be satisfied with the
results of their due
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57
diligence investigation of National Health Care Group Inc., Revlon
Guarantor, Revlon Holdings Inc., Revlon Worldwide Corporation and
Revlon; and the Lenders shall have been given such access to the
management, records, books of account, contracts and properties of
each A Company, each Designated Operating Company or the Bank as they
shall have requested.
(e) The Borrower shall have paid all accrued fees of the
Administrative Agent and the Lenders and all accrued expenses of the
Administrative Agent (including the reasonable fees and expenses of
counsel to the Administrative Agent).
(f) The Lenders shall be satisfied that the Borrower has the
ability to service the interest payments in respect of the Facilities.
(g) Ronald O. Perelman shall beneficially own at least a majority
of the Voting Stock of Marvel.
(h) The Administrative Agent or the Collateral Agent, as the case
may be, shall have received on or before the Effective Date the
following, each dated as of the Effective Date (unless otherwise
specified), in form and substance satisfactory to the Administrative
Agent (unless otherwise specified) and (except for the Notes) in
sufficient copies for each Lender:
(i) the Tranche A Term Credit Notes to the order of the
Lenders;
(ii) the Tranche B Term Credit Notes to the order of the
Lenders;
(iii) certified copies of the resolutions of the board of
directors of the Borrower and each other Loan Party approving
this Agreement, the Notes and each other Loan Document to which
it is or is to be a party, and of all documents evidencing other
necessary corporate action and governmental approvals, if any,
with respect to this Agreement, the Notes and each other Loan
Document;
(iv) a certificate of the Secretary or an Assistant
Secretary of the Borrower and each other Loan Party certifying
the names and true signatures of the officers of the Borrower and
such other Loan Party authorized to sign this Agreement, the
Notes and each other Loan Document to which they are or are to be
parties and the other documents to be delivered hereunder and
thereunder;
(v) a copy of a certificate of the Secretary of State of the
state of incorporation of the Borrower, each other Loan Party,
each Designated
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58
Operating Company and each other A Company, dated reasonably near
the Effective Date, listing the charter of such Person and each
amendment thereto on file in his office and certifying that (A)
such amendments are the only amendments to such Person's charter
on file in his office, (B) such Person has paid all franchise
taxes to the date of such certificate and (C) such Person is duly
incorporated or organized and in good standing under the laws of
such state, and a copy of a certificate of corporate existence of
the Bank, dated reasonably near the Effective Date from the
Office of Thrift Supervision;
(vi) (A) a certificate of each A Company signed on behalf of
such Person by its President or a Vice President and its
Secretary or any Assistant Secretary, dated as of the Effective
Date (the statements made in such certificate shall be true on
and as of the Effective Date), certifying as to (1) the absence
of any amendments to the charter of such Person since the date of
the Secretary of State's certificate referred to in clause (v)
above, (2) the absence of any amendments to the bylaws of such
Person since the date of the certificate in respect of such
bylaws that was delivered to the Administrative Agent pursuant to
the terms of Section 3.01 or 3.02, as the case may be, of the
Original Credit Agreement, (3) the due incorporation and good
standing of such Person as a corporation under the laws of the
relevant state of incorporation, and the absence of any
proceeding for the dissolution or liquidation of such Person, (4)
the truth in all material respects of the representations and
warranties made by such Person contained in the Loan Documents as
though made on and as of the Effective Date and (5) the absence
of any event occurring and continuing, or resulting from the
Effective Date, that constitutes a Default, (B) a certificate of
Coleman Guarantor signed on behalf of Coleman Guarantor by its
President or a Vice President and its Secretary or any Assistant
Secretary, dated as of the Effective Date (the statements made in
such certificate shall be true on and as of the Effective Date),
certifying as to (1) the absence of any amendments to the charter
of Coleman since the date of the Secretary of State's certificate
referred to in clause (v) above, (2) the absence of any
amendments to the bylaws of Coleman since the date of the
certificate in respect of such bylaws that was delivered to the
Administrative Agent pursuant to the terms of Sections 3.01 and
3.02 of the Original Credit Agreement and (3) the due
incorporation and good standing of Coleman as a corporation
organized under the laws of the State of Delaware, and the
absence of any proceeding for the dissolution or liquidation of
Coleman, (C) a certificate of the Borrower signed on behalf of
the Borrower by its President or a Vice President and its
Secretary or any Assistant Secretary, dated as of the Effective
Date (the statements made in such certificate shall be true on
and as of the Effective Date), certifying as to (1) the absence
of any amendments to the charter of Marvel since the date of
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59
the Secretary of State's certificate referred to in clause (v)
above, (2) the absence of any amendments to the bylaws of Marvel
since the date of the certificate in respect of such bylaws that
was delivered to the Administrative Agent pursuant to the terms
of Sections 3.01 and 3.02 of the Original Credit Agreement, and
(3) the due incorporation and good standing of Marvel as a
corporation organized under the laws of the State of Delaware,
and the absence of any proceeding for the dissolution or
liquidation of Marvel, (D) a certificate of New World Guarantor
signed on behalf of New World Guarantor by its President or a
Vice President and its Secretary or any Assistant Secretary,
dated as of the Effective Date (the statements made in such
certificate shall be true on and as of the Effective Date),
certifying as to (1) the absence of any amendments to the charter
of New World since the date of the Secretary of State's
certificate referred to in clause (v) above, (2) the absence of
any amendments to the bylaws of New World since the date of the
certificate in respect of such bylaws that was delivered to the
Administrative Agent pursuant to the terms of Section 3.02 of the
Original Credit Agreement and (3) the due incorporation and good
standing of New World as a corporation organized under the laws
of the State of Delaware, and the absence of any proceeding for
the dissolution or liquidation of New World, and (E) a
certificate of C&F Guarantor signed on behalf of C&F Guarantor by
its President or a Vice President and its Secretary or any
Assistant Secretary, dated as of the Effective Date (the
statements made in such certificate shall be true on and as of
the Effective Date), certifying as to (1) the absence of any
amendments to the charter of MCG since the date of the Secretary
of State's certificate referred to in clause (v) above, (2) the
absence of any amendments to the bylaws of MCG since the date of
the certificate in respect of such bylaws that was delivered to
the Administrative Agent pursuant to the terms of Section 3.01 of
the Third Credit Agreement and (3) the due incorporation and good
standing of MCG as a corporation organized under the laws of the
State of Delaware, and the absence of any proceeding for the
dissolution or liquidation of MCG;
(vii) a certificate of Mafco to the effect (A) that no
information provided by Mafco or any Subsidiary of Mafco to the
Administrative Agent or any Lender in connection with this
Agreement, as such information has been amended, supplemented or
superseded by any other information delivered to the same parties
receiving such information contained or contains any material
misstatement of fact or omitted or omits to state any material
fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading
except that, as to any financial model included therein, such
certificate shall be limited to a statement that such model was
prepared in good faith by Mafco's or such Subsidiary's management
based on
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60
assumptions believed to be reasonable when made and may be
further qualified by a statement to the effect that because
assumptions as to future results are inherently subject to
uncertainty and contingencies beyond Mafco's or such Subsidiary's
control, actual results of Mafco or such Subsidiary may be higher
or lower, (B) the Mafco Guaranty is in full force and effect on
the Effective Date, (C) that other than the agreements referenced
in Section 3.01(h)(xi), the charter documents of each A Company
and each FN Party, the Loan Documents and the Related Documents,
there is no other agreement, contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or
affecting any A Company or any FN Party that imposes any material
Obligation or any material restriction on any A Company or any FN
Party, (D) that the agreements referenced in Section 3.01(h)(xi)
are the only agreements, contracts, loan agreements, indentures,
mortgages, deeds of trust, leases or other instruments (1)
evidencing Debt of any Designated Operating Company or any of
their Subsidiaries outstanding on the Effective Date, (2)
governing the terms of Debt of any Designated Operating Company
or any of their Subsidiaries outstanding on the Effective Date,
or (3) containing any commitment or other agreement by any Person
to extend credit that would constitute Debt to any Designated
Operating Company or any of their Subsidiaries, in each case that
imposes or will impose material Obligations or material
restrictions on any Designated Operating Company and its
Subsidiaries taken as a whole and (E) that there is no other
agreement or contract binding on or affecting any Designated
Operating Company or any of their Subsidiaries that contains
provisions that would restrict any Loan Party from performing or
that would impair the ability of any Loan Party to perform, any
of the obligations of such Loan Party under the Loan Documents;
(viii) the Mafco Security Agreement in substantially the
form of Exhibit D-1 duly executed by Mafco, the Borrower Security
Agreement in substantially the form of Exhibit D-2 duly executed
by the Borrower, and the Borrower Parent Security Agreement in
substantially the form of Exhibit D-3 duly executed by Borrower
Parent, in each case together with evidence that all other action
that the Administrative Agent may deem necessary or desirable in
order to perfect and protect the Liens created by such Security
Agreement have been taken, together with:
(1) acknowledgement copies or stamped receipt copies of
proper amendments to the financing statements previously
filed in connection with each Security Agreement; and
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61
(2) evidence that all other action that the
Administrative Agent may deem necessary or desirable in
order to perfect and protect the Liens created by each
Security Agreement;
(ix) the Mafco Guaranty in substantially the form of Exhibit
E-1, duly executed by Mafco, the Borrower Parent Guaranty in
substantially the form of Exhibit E-2, duly executed by Borrower
Parent, the C&F Guaranty in substantially the form of Exhibit
E-3, duly executed by the C&F Guarantor, the Cigar Guaranty in
substantially the form of Exhibit E-4, duly executed by Cigar
Guarantor, the Coleman Guaranty in substantially the form of
Exhibit E-5, duly executed by Coleman Guarantor, the Flavors
Guaranty in substantially the form of Exhibit E-6, duly executed
by Flavors Guarantor, and the New World Guaranty in substantially
the form of Exhibit E-7, duly executed by New World Guarantor.
(x) the C&F Pledge Agreement in substantially the form of
Exhibit F-1, duly executed by C&F Guarantor, the Cigar Pledge
Agreement in substantially the form of Exhibit F-2, duly executed
by Cigar Guarantor, the Coleman Pledge Agreement in substantially
the form of Exhibit F-3, duly executed by Coleman Guarantor, the
Coleman Worldwide Pledge Agreement in substantially the form of
Exhibit F-4, duly executed by Coleman Worldwide, the Flavors
Pledge Agreement in substantially the form of Exhibit F-5, duly
executed by Flavors Guarantor, the Four Star Pledge Agreement in
substantially the form of Exhibit F-6, duly executed by Four
Star, the Mafco Pledge Agreement in substantially the form of
Exhibit F-7, duly executed by Mafco, the M&F Pledge Agreement in
substantially the form of Exhibit F-8, duly executed by M&F, the
New Coleman Pledge Agreement in substantially the form of Exhibit
F-9, duly executed by New Coleman, the New World Pledge Agreement
in substantially the form of Exhibit F-10, duly executed by New
World Guarantor and the Second Andrews Pledge Agreement in
substantially the form of Exhibit F-11, duly executed by Andrews,
together with:
(1) acknowledgment copies or stamped receipt copies of
proper amendments to the financing statements previously
filed in connection with each Pledge Agreement, in form and
substance satisfactory to the Administrative Agent,
(2) completed requests for information, dated on or
before the Effective Date, listing the financing statements
referred to in clause (1) above,
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62
(3) in the case of the Second Andrews Pledge Agreement,
copies of the News Corp. Contract, and
(4) evidence that all other action that the
Administrative Agent may deem necessary or desirable in
order to perfect and protect the Liens created by the each
Pledge Agreement has been taken;
(xi) a certificate of Mafco to the effect that, other than
the agreements delivered to the Administrative Agent pursuant to
Section 3.01(g)(xii)(B) and Section 3.02(i)(xi)(B) of the
Original Credit Agreement and other than as specified in and
delivered pursuant to such certificate and the certificate of
Mafco delivered pursuant to Section 3.01(f)(x) of the Second
Credit Agreement, Section 3.01(f)(ix) of the Third Credit
Agreement and Section 3.01(f)(x) of the Existing Credit
Agreement, there is no other contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument (1) evidencing
Debt of any A Company, (2) governing the terms of Debt of any A
Company, or (3) containing any commitment or other agreement by
any Person to extend credit that would constitute Debt to any A
Company or any Designated Operating Company or any of its
Subsidiaries, in each case that imposes any material obligation
or any material restriction on any A Company or any Designated
Operating Company and its Subsidiaries, taken as a whole;
(xii) such financial, business and other information
regarding each Loan Party and their Subsidiaries as the Lenders
shall have reasonably requested, including, without limitation,
information as to possible contingent liabilities, tax matters,
environmental matters, obligations under ERISA and Welfare Plans,
collective bargaining agreements and other arrangements with
employees, annual financial statements of the Bank dated December
31, 1995, interim financial statements of the Bank dated the end
of the most recent fiscal quarter for which financial statements
are available, pro forma financial statements as to the Borrower,
and forecasts prepared by management of the Bank, in form and
substance satisfactory to the Lenders, of balance sheets, income
statements and cash flow statements of the Bank on a quarterly
basis for the term of the "Tranche A Revolving Credit Facility"
under the Revolving Credit Facility;
(xiii) certified copies of (A) an amendment and restatement
(each in form and substance satisfactory to the Lenders) of the
voting trust agreement relating to the capital stock of the
Borrower, the Borrower Parent, C&F Guarantor, Cigar Guarantor,
Coleman Guarantor, Flavors Guarantor, New World Guarantor, FG
Guarantor and First Gibraltar and (B) the Revolving Credit
Agreement;
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63
(xiv) copies of the Equity Contribution Agreement, duly
executed by the Borrower and Borrower Parent, in substantially
the form of Exhibit G and the First Gibraltar Loan Agreement,
duly executed by First Gibraltar and Borrower Parent, in
substantially the form of Exhibit H;
(xv) a letter, in form and substance satisfactory to the
Administrative Agent, from Mafco to Ernst & Young, independent
certified public accountants, advising such accountants that the
Administrative Agent and the Lenders have relied upon the
financial statements of Coleman, New World and MCG in determining
whether to enter into the Loan Documents and have been authorized
to exercise all rights of Mafco to require such accountants to
disclose any and all financial statements and any other
information of any kind that they may have with respect to such
Persons and their Subsidiaries and directing such accountants to
comply with any reasonable request of the Administrative Agent or
any Lender for such information;
(xvi) a letter, in form and substance satisfactory to the
Administrative Agent, from the Bank to KPMG Peat Marwick,
independent certified public accountants, advising such
accountants that the Administrative Agent and the Lenders have
relied upon the financial statements of the Bank in determining
whether to enter into the Loan Documents and have been authorized
to exercise all rights of the Bank to require such accountants to
disclose any and all financial statements and any other
information of any kind that they may have with respect to the
Bank and its Subsidiaries and directing such accountants to
comply with any reasonable request of the Administrative Agent or
any Lender for such information;
(xvii) favorable opinions of counsel to Mafco reasonably
satisfactory to the Lenders, in form and substance reasonably
satisfactory to the Lenders;
(xviii) a favorable opinion of Shearman & Sterling, counsel
for the Administrative Agent, in form and substance reasonably
satisfactory to the Administrative Agent; and
(xix) such other information, approvals, opinions or other
documents as the Administrative Agent may reasonably request.
SECTION 3.02. Conditions Precedent to the Tranche A Term
Borrowing. The obligation of each Lender to make its Tranche A Term Advance
shall be subject to the satisfaction of the following further conditions
precedent:
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64
(a) The transactions contemplated by the News Corp. Contract shall
have been consummated and Mafco and its Subsidiaries shall have
received the News Corp. Preferred ADRs;
(b) A registration statement relating to the News Corp. Preferred
ADRs that are pledged as Collateral and meeting the requirements
set out in Section 5.8 of the News Corp. Contract shall be in
effect;
(c) The terms of the proposed restructuring of the capital structure
of Marvel and the proposed acquisition of Toy Biz shall be
acceptable to the Tranche A Required Lenders (including
Citibank);
(d) The Tranche A Required Lenders (including Citibank) shall be
satisfied that (i) the requisite lenders in each of the Marvel
bank lending syndicates shall have approved (to the extent
required) the proposed restructuring of the capital structure of
Marvel and the proposed acquisition of Toy Biz and (ii) the
holders of the Debt of each of Marvel III Holdings Inc., Marvel
(Parent) Holdings Inc. and Marvel Holdings Inc. shall have
approved (to the extent required) the proposed restructuring of
the capital structure of Marvel and the proposed acquisition of
Toy Biz;
(e) Marvel shall have consummated the acquisition of Toy Biz in a
manner acceptable to the Tranche A Required Lenders (including
Citibank);
(f) (i) The Lenders shall be satisfied with all provisions and
arrangements relating to the lien and security interest of the
Collateral Agent in the New Marvel Shares and (ii) the
Collateral Agent shall have received certificates representing
the News Corp. Preferred ADRs pursuant to the terms of the New
World Pledge Agreement, accompanied by undated stock powers
executed in blank;
(g) The Revlon Inclusion Date shall have occurred; and
(h) The Borrower shall have delivered to the Administrative Agent an
appropriately completed Federal Reserve Form U-1 for each
Lender.
SECTION 3.03. Conditions Precedent to the Tranche B Term Borrowings.
The obligation of each Lender to make a Tranche B Term Advance on the occasion
of each Tranche B Term Borrowing (including the initial Tranche B Term
Borrowing) shall be subject to the further condition precedent that (a) the
Tranche B Required Lenders (including Citibank) are satisfied with the proposed
use of the proceeds of such Tranche B Term
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65
Borrowing and (b) in the case of the initial Tranche B Term Borrowing, the
Revlon Inclusion Date shall have occurred; provided, however, that if a Tranche
B Term Borrowing occurs on the same date as the Tranche A Term Borrowing, the
condition set forth in clause (a) shall be deemed to be satisfied if the
conditions set forth in Section 3.02 are satisfied or otherwise waived.
SECTION 3.04. Conditions Precedent to Each Borrowing. The obligation
of each Lender to make an Advance on the occasion of each Borrowing (including
the initial Borrowing), shall be subject to the further conditions precedent
that on the date of such Borrowing (a) the following statements shall be true
(and each of the giving of the applicable Notice of Borrowing and the
acceptance by the Borrower of the proceeds of such Borrowing shall constitute a
representation and warranty by the Borrower that both on the date of such
notice and on the date of such Borrowing such statements are true):
(i) The representations and warranties contained in the Loan
Documents are correct in all material respects on and as of such date,
before and after giving effect to such Borrowing and to the
application of the proceeds therefrom, as though made on and as of
such date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case such
representations and warranties were true, correct and complete in all
material respects on and as of such earlier date; and
(ii) No event has occurred and is continuing, or would result
from such Borrowing or issuance or from the application of the
proceeds therefrom, which constitutes a Default,
and (b) the Administrative Agent shall have received such other certificates,
opinions and other documents as any Lender through the Administrative Agent may
reasonably request in order to confirm (i) the accuracy of the Borrower's
representations and warranties, (ii) the Borrower's timely compliance with the
terms, covenants and agreements set forth in this Agreement, and (iii) the
absence of any Default.
SECTION 3.05. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the Lenders unless
an officer of the Administrative Agent responsible for the transactions
contemplated by this Agreement shall have received notice from such Lender
prior to the initial Borrowing specifying its objection thereto and such Lender
shall not have made available to the Administrative Agent such Lender's ratable
portion of such Borrowing.
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66
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) The Borrower (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of
its incorporation, (ii) is duly qualified and in good standing as a
foreign corporation in each other jurisdiction in which it owns or
leases property or in which the conduct of its business requires it to
so qualify or be licensed except where the failure to so qualify or be
licensed would not have a Material Adverse Effect (with respect to
clause (a) of the definition thereof, the term "Person" shall refer to
the Borrower) and (iii) has all requisite corporate power and
authority to own or lease and operate its properties and to carry on
its business as now conducted and as proposed to be conducted. All of
the outstanding capital stock of the Borrower has been validly issued,
is fully paid and non-assessable and is owned by the Borrower Parent
free and clear of all Liens except for the Liens created by the
Collateral Documents.
(b) Set forth on Schedule II hereto is a complete and accurate
list relating to the Borrower, showing as of the date hereof the
jurisdiction of its incorporation, the number of shares of each class
of capital stock authorized, and the number outstanding, on the date
hereof and the percentage of the outstanding shares of each such class
owned (directly or indirectly) by Borrower Parent and the number of
shares covered by all outstanding options, warrants, rights of
conversion or purchase and similar rights at the date hereof.
(c) The execution, delivery and performance by the Borrower of
this Agreement, the Notes, each Loan Document and each Related
Document to which it is or is to be a party and the consummation by
the Borrower of the transactions contemplated hereby, are within the
Borrower's corporate powers, have been duly authorized by all
necessary corporate action, and do not (i) contravene the Borrower's
charter or by-laws, (ii) violate any law (including, without
limitation, the Exchange Act), rule, regulation (including, without
limitation, Regulation X of the Board of Governors of the Federal
Reserve System), order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the breach
of, or constitute a default under, any loan agreement, contract,
indenture, mortgage, deed of trust, lease or other instrument binding
on or affecting any Loan Party, any of its Subsidiaries (other than
any Subsidiaries of the Borrower) or any of its or their properties,
the effect of which conflict, breach or default is reasonably likely
to have a Material Adverse Effect (with respect to clause (a) of the
definition thereof, the term "Person"
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67
shall refer to the Borrower) or (iv) except for the liens created by
the Collateral Documents, the voting trust agreements (other than the
voting trust agreements relating to the capital stock of FN Holdings
and FN Parent) referred to in Sections 3.01(g)(xvi) and 3.02(i)(xv) of
the Original Credit Agreement, the Amended and Restated Voting Trust
Agreement dated as of December 16, 1996 among The Bank of New York,
the Cigar Guarantor, C&F Guarantor and the Collateral Agent, the
Amended and Restated Voting Trust Agreement dated as of December 16,
1996 among The Bank of New York, the Flavors Guarantor, C&F Guarantor
and the Collateral Agent, the Amended and Restated Voting Trust
Agreement dated as of December 16, 1996 among Trans Network Insurance
Services Inc., FG Guarantor, The Bank of New York and the Collateral
Agent, the Second Amended and Restated Voting Trust Agreement dated as
of December 16, 1996 among FG Guarantor, First Gibraltar, The Bank of
New York and the Collateral Agent and the voting trust agreement to be
entered into (on or prior to the Revlon Inclusion Date) by Revlon
Finance Corporation, Revlon Guarantor, The Bank of New York and the
Collateral Agent, result in or require the creation or imposition of
any Lien upon or with respect to any of the properties of any Loan
Party or any of its Subsidiaries (other than any Subsidiaries of the
Borrower). The Borrower is not in violation of any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination
or award or in breach of any such contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument, the violation or
breach of which would be reasonably likely to have a Material Adverse
Effect (with respect to clause (a) of the definition thereof, the term
"Person" shall refer to the Borrower).
(d) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory
body is required for (i) the due execution, delivery and performance
by the Borrower of this Agreement or the Notes or any other Loan
Document or any Related Document to which it is or is to be a party or
for the consummation of the transactions contemplated hereby, (ii) the
grant by the Borrower of the Liens granted by it pursuant to the
Collateral Documents, (iii) the perfection or maintenance of the Liens
created by the Collateral Documents (including the first priority
nature thereof) or (iv) the exercise by the Administrative Agent or
any Lender of its rights under the Loan Documents or the remedies in
respect of the Collateral pursuant to the Collateral Documents, except
for the filing of financing statements in accordance with Sections
3.01 and 3.02 of the Original Credit Agreement, Section 3.01(f)(vii)
and (viii) of the Second Credit Agreement, Section 3.01(f)(vii) of the
Third Credit Agreement, Section 3.01(f)(ix) of the Existing Credit
Agreement and the filing of amendments to financing statements in
accordance with Section 3.01 of this Agreement and except as may be
required in connection with the disposition of any portion of the
Collateral by laws affecting the offering and sale of securities
generally; provided, however, that no representation or warranty is
made as to any consent of, authorization, approval or other action by,
or notice to or filing
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68
with, any banking agency or regulatory body applicable to the
Administrative Agent, the Collateral Agent, the Syndication Agent or
the Documentation Agent.
(e) This Agreement has been, and each of the Notes, each other
Loan Document to which the Borrower is a party when delivered
hereunder will have been, duly executed and delivered by the Borrower.
This Agreement is, and each of the Notes and each other Loan Document
to which the Borrower is a party when delivered hereunder will be, the
legal, valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforceability of creditor's rights
generally.
(f) The Consolidated and consolidating balance sheets of Marvel
III and its Subsidiaries as at December 31, 1995, and the related
Consolidated and consolidating statements of income and cash flows of
Marvel III and its Subsidiaries for the fiscal year then ended,
accompanied, in the case of the aforementioned Consolidated balance
sheets and related Consolidated statements of income and cash flows,
by an opinion of Ernst & Young, independent public accountants, and
the Consolidated and consolidating balance sheets of Marvel III and
its Subsidiaries as at September 30, 1996, and the related
Consolidated and consolidating statements of income and cash flows of
Marvel III and its Subsidiaries for the nine months then ended, duly
certified by the chief financial officer of Marvel III, copies of
which have been furnished to each Lender, fairly present, subject, in
the case of said balance sheets as at September 30, 1996, and said
statements of income and cash flows for the three months then ended,
to year-end audit adjustments, the Consolidated and consolidating
financial condition of Marvel III and its Subsidiaries as at such
dates and the Consolidated and consolidating results of the operations
of Marvel III and its Subsidiaries for the periods ended on such
dates, all in accordance with generally accepted accounting principles
applied on a consistent basis.
(g) There is no pending or threatened action, proceeding,
governmental investigation or arbitration affecting any Loan Party,
the Bank or any of their Subsidiaries (other than any Subsidiary of
the Borrower ) before any court, governmental agency or arbitrator,
which is reasonably likely to have a Material Adverse Effect (with
respect to clause (a) of the definition thereof, the term "Person"
shall refer to such Loan Party or the Bank, as the case may be) or
that purports to affect the legality, validity or enforceability of
this Agreement, any Note, any other Loan Document or any Related
Document or the consummation of the transactions contemplated hereby
or thereby.
(h) The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock and no
proceeds of any Advance will
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69
be used to purchase or carry any Margin Stock (other than the New
Marvel Shares), or to extend credit to others for the purpose of
purchasing or carrying any Margin Stock.
(i) No proceeds of any Advance will be used to acquire any equity
security of a class that is registered pursuant to Section 12 of the
Exchange Act (other than the New Marvel Shares).
(j) The Borrower and its ERISA Affiliates are in compliance in
all material respects with the applicable provisions of ERISA and the
Code with respect to each Plan thereof. No ERISA Event has occurred or
is reasonably expected to occur with respect to any Plan of the
Borrower or any of its ERISA Affiliates. The amount of all Unfunded
Pension Liabilities under all Plans of the Borrower and its ERISA
Affiliates does not exceed $60,000,000. None of the Borrower or any of
its ERISA Affiliates has made contributions or incurred any Withdrawal
Liability to any Multiemployer Plan within the past five years, and it
is not reasonably expected that such contributions shall be made or
required or that such liability shall be incurred in any such case in
amounts or under circumstances that would be reasonably likely to
result in a material liability to the Borrower or any of its ERISA
Affiliates. Schedule B (Actuarial Information) to the 1995 annual
report (Form 5500 Series) for each Plan of the Borrower and each of
its ERISA Affiliates, copies of which have been filed with the
Internal Revenue Service and furnished or made available to the
Lenders, is complete and accurate in all material respects and fairly
presents the funding status of such Plan, and since the date of such
Schedule B there has been no material adverse change in such funding
status. The obligations of the Borrower and its Subsidiaries for
post-retirement benefits to be provided under Plans which are welfare
benefit plans (as defined in Section 3(l) of ERISA) are not reasonably
likely to have a Material Adverse Effect (in the case of clause (a) of
the definition thereof, the term "Person" shall refer to the
Borrower).
(k) The operations and properties of the Borrower are in
substantial compliance with all Environmental Laws, all necessary
Environmental Permits have been obtained and are in effect for the
operations and properties of the Borrower and the Borrower is in
compliance with all such Environmental Permits, except, as to all of
the above, where the failure to do so would not be reasonably likely
to have a Material Adverse Effect (in the case of clause (a) of the
definition thereof, the term "Person" shall refer to the Borrower);
and no circumstances exist that are reasonably likely to (i) form the
basis of an Environmental Action against the Borrower or any of its
properties or (ii) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law that would, in the case of either (i) or (ii) above,
be reasonably likely to have a Material
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Adverse Effect (in the case of clause (a) of the definition thereof,
the term "Person" shall refer to the Borrower).
(l) The Borrower has filed, has caused to be filed or has been
included in all tax returns (Federal, state, local and foreign)
required to be filed and has paid all taxes shown thereon to be due,
together with applicable interest and penalties.
(m) The Borrower is not an "investment company," or an
"affiliated person" of, or "promoter" or "principal underwriter" for,
an "investment company", as such terms are defined in the Investment
Company Act of 1940, as amended. Neither the making of any Advances,
nor the application of the proceeds or repayment thereof by the
Borrower, nor the consummation of the other transactions contemplated
hereby, will violate any provision of such Act or any rule, regulation
or order of the Securities and Exchange Commission thereunder.
(n) The Borrower is Solvent.
(o) Set forth on Schedule III hereto is a complete and accurate
list of all Debt (other than intercompany Debt, Debt under the Loan
Documents and Debt under the Revolving Credit Agreement and the "Loan
Documents" referred to therein) of the Borrower as of the date hereof,
showing as of the date hereof the principal amount outstanding
thereunder; and there is no other agreement, contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument binding
on or affecting the Borrower that imposes any material Obligation or
material restriction on the Borrower.
(p) Set forth on Schedule IV hereto is a complete and accurate
list of all Investments held by the Borrower as of the date hereof,
showing as of the date hereof the amount, obligor or issuer and
maturity, if any, thereof.
SECTION 4.02. Representations and Warranties Applicable to Marvel.
During the Marvel Inclusion Period, the representations and warranties
contained in Section 4.01(g), (k), (l) and (m) and in the last sentence of
Section 4.01(c) shall be deemed to also cover Marvel and its Subsidiaries as if
such Persons were explicitly referred to in such Sections.
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71
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrower
will:
(a) Compliance with Laws, Etc. Comply, and, during the Marvel
Inclusion Period, cause Marvel and each of its Subsidiaries to comply,
in all material respects with all applicable laws, rules, regulations
and orders (such compliance to include, without limitation, paying
before the same become delinquent all taxes, assessments and
governmental charges imposed upon it or upon its property except to
the extent contested in good faith), the failure to comply with which
would, individually or in the aggregate, be reasonably likely to have
a Material Adverse Effect (with respect to clause (a) of the
definition thereof, the term "Person" shall refer to the Borrower).
(b) Compliance with Environmental Laws. Comply and, during the
Marvel Inclusion Period, cause Marvel and each of its Subsidiaries and
all lessees and all other Persons occupying its properties to comply,
in all material respects, with all Environmental Laws and
Environmental Permits applicable to its operations and properties;
obtain and renew all Environmental Permits necessary for its
operations and properties; and conduct, and cause, during the Marvel
Inclusion Period, Marvel and each of its Subsidiaries to conduct, any
investigation, study, sampling and testing, and undertake any cleanup,
removal, remedial or other action necessary to remove and clean up all
Hazardous Materials from any of its properties, in accordance with the
requirements of all Environmental Laws; provided, however, that the
Borrower and, during the Marvel Inclusion Period, Marvel and its
Subsidiaries shall not be required to undertake any such cleanup,
removal, remedial or other action to the extent that its obligation to
do so is being contested in good faith and by proper proceedings and
appropriate reserves are being maintained with respect to such
circumstances.
(c) Maintenance of Insurance. Maintain, and, during the Marvel
Inclusion Period, cause Marvel and each of its Subsidiaries to
maintain, insurance with responsible and reputable insurance companies
or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar
properties in the same general areas in which the Borrower, Marvel or
such Subsidiary operates.
(d) Preservation of Corporate Existence, Etc. Preserve and
maintain, and, during the Marvel Inclusion Period, cause Marvel to
preserve and maintain, its
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72
corporate existence, rights (charter and statutory) and franchises;
provided, however, that neither the Borrower nor Marvel shall be
required to preserve any of its rights or franchises if the Board of
Directors of the Borrower (or, in the case of Marvel, the executive
committee of the Board of Directors of Marvel) shall determine that
the preservation thereof is no longer desirable in the conduct of the
business of the Borrower or Marvel, as the case may be, and that the
loss thereof is not disadvantageous in any material respect to the
Borrower, Marvel or the Lenders.
(e) Visitation Rights. At any reasonable time and from time to
time, upon reasonable prior notice permit the Administrative Agent or
any of the Lenders or any agents or representatives thereof, to the
extent reasonably requested to examine and make copies of and
abstracts from the records and books of account of, and visit the
properties of, the Borrower and, during the Marvel Inclusion Period,
Marvel and its Subsidiaries, and to discuss the affairs, finances and
accounts of the Borrower and, during the Marvel Inclusion Period,
Marvel and its Subsidiaries with any of their officers or directors
and with their independent certified public accountants.
(f) Keeping of Books. Keep, and cause, during the Marvel
Inclusion Period, Marvel and each of its Subsidiaries to keep, proper
books of record and account, in which full and correct entries shall
be made of all financial transactions and the assets and business of
the Borrower, Marvel and each such Subsidiary to the extent necessary
to permit the preparation of the financial statements required to be
delivered hereunder.
(g) Maintenance of Properties, Etc. Maintain and preserve, and
cause, during the Marvel Inclusion Period, Marvel and each of its
Subsidiaries to maintain and preserve, all of its properties that are
used or useful in the conduct of its business in good working order
and condition, ordinary wear and tear excepted.
(h) Termination of Financing Statements. Upon the request of the
Administrative Agent, and at the expense of the Borrower, within 10
days after such request, furnish to the Administrative Agent proper
termination statements on Form UCC-3 covering such financing
statements as the Administrative Agent may reasonably request that
were listed in the completed requests for information referred to in
Section 3.01(h)(x)(4).
(i) Collateral Account. Maintain the Borrower Collateral Account
and the L/C Cash Collateral Account with Citibank pursuant to the
terms of the Borrower Security Agreement.
(j) Reporting Requirements. Furnish to the Lenders through the
Administrative Agent:
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73
(i) as soon as available and in any event within 50 days
after the end of each of the first three quarters of each fiscal
year of the Borrower, Consolidated balance sheets of the Borrower
and its Subsidiaries as of the end of such quarter and
Consolidated statements of earnings, cash flows and stockholders'
equity of the Borrower and its Subsidiaries for the period
commencing at the end of the previous fiscal year and ending with
the end of such quarter, certified (subject to normal year-end
audit adjustment and the absence of footnotes) on behalf of the
Borrower by the chief financial officer of the Borrower;
(ii) as soon as available and in any event within 105 days
after the end of each fiscal year of the Borrower, a copy of the
annual audit report for such year for the Borrower and its
Subsidiaries, containing financial statements for such year
certified in a manner reasonably acceptable to the Marvel IV
Required Lenders by Ernst & Young or other independent public
accountants reasonably acceptable to the Marvel IV Required
Lenders;
(iii) together with each delivery of financial statements
pursuant to clauses (i) and (ii) above, a certificate executed on
behalf of the Borrower by a senior officer of the Borrower
stating that no Default has occurred and is continuing or, if a
Default has occurred and is continuing, a statement as to the
nature thereof and the action that the Borrower has taken and
proposes to take with respect thereto;
(iv) as soon as possible and in any event within five days
after knowledge of the occurrence of each Default continuing on
the date of such statement, a statement executed on behalf of the
Borrower by the chief financial officer of the Borrower setting
forth details of such Default and the action which the Borrower
has taken and proposes to take with respect thereto;
(v) as soon as available and in any event no later than
February 1 of each fiscal year of the Bank, forecasts prepared by
management of the Bank, in form satisfactory to the
Administrative Agent, of balance sheets and income statements on
a quarterly basis for the term of the Facilities;
(vi) promptly after the sending or filing thereof, copies of
any filings and statements that the Borrower or any Subsidiary of
the Borrower files with the Securities and Exchange Commission or
any national securities exchange;
(vii) promptly and in any event within (A) thirty days after
the Borrower knows or has reason to know that any ERISA Event
with respect to the Borrower or any of its ERISA Affiliates has
occurred, a statement
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74
describing such ERISA Event and the action, if any, that the
Borrower or such ERISA Affiliate proposes to take with respect
thereto, (B) thirty days either after receipt thereof by the
Borrower or after the Borrower knows or has reason to know of the
receipt thereof by any of its ERISA Affiliates from the sponsor
of a Multiemployer Plan of the Borrower or any of its ERISA
Affiliates, a copy of each notice received by any such Person
concerning the imposition of Withdrawal Liability upon such
Person, the reorganization or termination of such Multiemployer
Plan, or the amount of the liability incurred, or that may be
incurred, by the Borrower or any of its ERISA Affiliates in
connection with any such event and (C) ten Business Days either
after receipt thereof by the Borrower or after the Borrower knows
or has reason to know of the receipt thereof by any of its ERISA
Affiliates, copies of each notice from the PBGC stating its
intention to terminate any Plan of the Borrower or any of its
ERISA Affiliates or to have a trustee appointed to administer any
such Plan, provided that in the case of any event described in
clauses (A), (B) or (C) hereof, such event shall have a Material
Adverse Effect (with respect to clause (a) of the definition
thereof, the term "Person" shall refer to the Borrower);
(viii) in the event of any change in GAAP from the date of
the annual financial statements referred to in Section 4.01(f)
and upon delivery of any financial statement required to be
furnished under clauses (i) or (ii) of this Section 5.01(j), a
statement of reconciliation conforming any information contained
in such financial statement with GAAP as in effect on the date of
the annual financial statements referred to in Section 4.01(f);
(ix) promptly upon any officer of the Borrower obtaining
knowledge thereof, written notice of (A) the institution or
non-frivolous threat of any action, suit, proceeding,
governmental investigation or arbitration against or affecting
the Borrower or any of its Subsidiaries or any property of the
Borrower or any of its Subsidiaries (any such action, suit,
proceeding, investigation or arbitration being a "Proceeding") or
(B) any material development in any Proceeding that is already
pending, where such Proceeding or development has not previously
been disclosed by the Borrower hereunder and would be reasonably
likely to have a Material Adverse Effect (in the case of clause
(a) of the definition of Material Adverse Effect, the term
"Person" shall refer to the Borrower); together in each case with
such other information as any Lender through the Administrative
Agent may reasonably request to enable the Lenders and their
counsel to evaluate such matters;
(x) promptly after the furnishing thereof, copies of any
statement or report furnished to any other holder of the
securities of the Borrower or,
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75
during the Marvel Inclusion Period, of Marvel or of any
Subsidiary of Marvel pursuant to the terms of any indenture, loan
or credit or similar agreement and not otherwise required to be
furnished to the Lenders pursuant to any other clause of this
Section 5.01(j);
(xi) promptly upon receipt thereof, copies of all notices,
requests and other documents received by any Loan Party or any
Subsidiary of any Loan Party under or pursuant to any Related
Document and, from time to time upon request by the
Administrative Agent, such information and reports regarding the
Related Documents as the Administrative Agent may reasonably
request;
(xii) within 10 days after receipt, copies of all Revenue
Agent Reports (Internal Revenue Service Form 886), or other
written proposals of the Internal Revenue Service, that propose,
determine or otherwise set forth positive adjustments to the
Federal income tax liability of the affiliated group (within the
meaning of Section 1504(a)(1) of the Internal Revenue Code) of
which the Borrower is a member aggregating $5,000,000 or more;
(xiii) promptly, and in any event within five Business Days
after the due date (with extensions) for filing the final Federal
income tax return in respect of each taxable year, a certificate
of the Borrower (a "Tax Certificate"), signed on behalf of the
Borrower by the President or the chief financial officer of the
Borrower, stating that the common parent of the affiliated group
(within the meaning of Section 1504(a)(1) of the Internal Revenue
Code) of which the Borrower is a member has paid to the Internal
Revenue Service or other taxing authority the full amount that
such affiliated group is required to pay in respect of Federal
income tax for such year;
(xiv) promptly after the occurrence thereof, notice of any
condition or occurrence on any property of the Borrower or,
during the Marvel Inclusion Period, Marvel or any Subsidiary of
Marvel that results in a material noncompliance by the Borrower,
Marvel or any of Marvel's Subsidiaries with any Environmental Law
or Environmental Permit or would be reasonably likely to (i) form
the basis of an Environmental Action against the Borrower, Marvel
or any of Marvel's Subsidiaries or any such property that would
be reasonably likely to have a Material Adverse Effect (in the
case of clause (a) of the definition of Material Adverse Effect,
the term "Person" shall refer to the Borrower) or (ii) cause any
such property to be subject to any restrictions on ownership,
occupancy, use or transferability under any Environmental Law or
Environmental Permit or would be reasonably likely to (i) form
the basis of an Environmental Action against the Borrower, Marvel
or any of Marvel's
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Subsidiaries or such property that could have a Material Adverse
Effect (in the case of clause (a) of the definition of Material
Adverse Effect, the term "Person" shall refer to the Borrower);
(xv) promptly after any deposit in the Borrower Collateral
Account, a certificate signed on behalf of the Borrower by the
president or chief financial officer of the Borrower, stating the
amount of such deposit and the source of the funds of such
deposit, together with a schedule in form and substance
reasonably satisfactory to the Administrative Agent setting forth
in reasonable detail the computations and other information on
which the amount and source of such deposit were determined; and
(xvi) such other information respecting the condition
(financial or otherwise), operations, assets or business of the
Borrower or any of its Subsidiaries as any Lender through the
Administrative Agent may from time to time reasonably request.
(k) Look-Forward Certificate. With respect to each deposit (other
than of income or proceeds of Collateral Investments) to the
Collateral Accounts (other than the Second Mafco Collateral Account
and the L/C Cash Collateral Account), the Borrower shall, within 15
Business Days prior to the date of such deposit or within five
Business Days after the date of such deposit, deliver a certificate
(the "Look- Forward Certificate") to the Administrative Agent stating
that the pro forma amounts available to be loaned by First Gibraltar
to Borrower Parent, together with amounts received by Mafco pursuant
to or in connection with any Related Document, will not be less than
$8 million in any calendar quarter and will not be insufficient to pay
interest on the "Advances" then outstanding under the Revolving Credit
Agreement, together with a schedule in form reasonably satisfactory to
the Administrative Agent setting forth in reasonable detail the
computations, assumptions and other information on which such
certification is based) (taking into account, among other things, the
Bank's performance to date, the quality of the Bank's assets and the
presence of any agreement with the Bank's regulators including, but
not limited to, an agreement relating to capital, asset quality,
dividends or management); provided, however, that, notwithstanding the
foregoing, if a Look-Forward Certificate has been delivered to the
Administrative Agent within 90 days prior to a deposit in the Mafco
Collateral Account of amounts paid under or in connection with any
Related Document or Asset Sale, the Borrower may, instead of
delivering a Look-Forward Certificate to the Administrative Agent,
deliver a certificate (a "Deposit Certificate") to the Administrative
Agent, within 15 Business Days prior to the date of such deposit or
within five Business Days after the date of such deposit, stating that
(x) there has been no adverse change in (1) the financial condition of
each of the Bank and Mafco and its Subsidiaries, taken as a whole,
since the date of the last Look-Forward
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Certificate that was delivered to the Administrative Agent or (2) the
projections contained in such Look-Forward Certificate and (y) no
event has occurred and is continuing which constitutes an Event of
Default or would constitute an Event of Default but for the
requirement that notice be given or time elapse or both.
(l) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under
the Loan Documents with any of their Affiliates (other than the
Borrower or any of its Subsidiaries) on terms that are fair and
reasonable and no less favorable to the Borrower or such Subsidiary
than it would obtain in a comparable arm's-length transaction with a
Person that is not an Affiliate; provided, however, that for purposes
of this Section 5.01(l), the term "Affiliate" shall not include any
officer or director of the Borrower or such Subsidiary, as the case
may be, who does not possess directly or indirectly the power to vote
5% or more of the Voting Stock of the Borrower or its Subsidiaries;
provided further that nothing in this Section 5.01(l) shall restrict
the performance by the parties to (i) the Tax Sharing Agreement dated
as of April 22, 1993 between Mafco and Marvel Holdings Inc., (ii) the
Tax Sharing Agreement dated as of October 20, 1993 between Mafco and
Marvel (Parent) Holdings Inc. and (iii) the Amended and Restated Tax
Sharing Agreement dated as of January 1, 1994 among Mafco, Marvel III
Holdings Inc., Marvel and certain Subsidiaries of Marvel, in each
case, as the same may be amended, modified or otherwise supplemented
from time to time, of their respective obligations thereunder.
(m) Mafco Tax Group. Maintain its status as a member of the
affiliated group (within the meaning of Section 1504(a)(1) of the
Code) of which Mafco is the common parent.
(n) Net Cash Proceeds. Deposit all of the Net Cash Proceeds
received by the Borrower from and after the Effective Date from Asset
Sales (other than Net Cash Proceeds required to be applied to prepay
or repay the Facilities or the Debt outstanding under the Revolving
Credit Agreement) in the Mafco Collateral Account.
SECTION 5.02. Negative Covenants. So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrower will
not:
(a) Liens, Etc. Create or suffer to exist any Lien, upon or with
respect to any of its properties, whether now owned or hereafter
acquired, or sign or file under the Uniform Commercial Code of any
jurisdiction, a financing statement that names the Borrower as debtor
or sign any security agreement authorizing any secured party
thereunder to file such financing statement, or assign any right to
receive income, other than the following Liens: (i) Liens created by
the Loan Documents or the "Loan Documents" referred to in the
Revolving Credit Agreement; (ii) the Liens
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described on Schedule V provided that in the event any property
subject to any such Lien is released from such Lien, such released
property may not thereafter be subjected to any Lien other than Liens
created by the Loan Documents or the "Loan Documents" referred to in
the Revolving Credit Agreement; (iii) mechanics', materialmen's,
carriers' and similar Liens arising in the ordinary course of business
securing obligations that are not overdue for a period of more than 30
days or which are being contested in good faith and by proper
proceedings and as to which appropriate reserves are being maintained;
(iv) Liens for taxes, assessments and governmental charges or levies
not yet due and payable or which are being contested in good faith and
by proper proceedings and as to which appropriate reserves are being
maintained; and (v) judgment or other similar Liens, provided that
there shall be no period of more than 10 consecutive days during which
a stay of enforcement of the related judgment shall not be in effect.
(b) Lease Obligations. Create, incur, assume or suffer to exist
any obligations as lessee (i) for the rental or hire of real or
personal property in connection with any sale and leaseback
transaction, or (ii) for the rental or hire of other real or personal
property of any kind under leases or agreements to lease having an
original term of one year or more.
(c) Mergers, Etc. Merge into or consolidate with any Person or
permit any Person to merge into it.
(d) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
dispose of any assets or grant any option or other right to purchase,
lease or otherwise acquire any assets except (i) dispositions of
obsolete, worn out or surplus property disposed of in the ordinary
course of business, (ii) a transfer of any Coleman Worldwide LYONS
held by the Borrower to Coleman Worldwide and (iii) sales, leases,
transfers or other dispositions of assets for cash and for no less
than fair market value, provided that, in the case of an Asset Sale,
the Borrower complies with the provisions of Section 5.01(o) in
respect of the Net Cash Proceeds of such Asset Sale.
(e) Dividends, Repurchases, Etc. Declare or pay any dividends,
purchase, redeem, retire, defease or otherwise acquire for value any
of its capital stock or any warrants, rights or options to acquire
such capital stock, now or hereafter outstanding, return any capital
to its stockholders as such, make any distribution of assets, capital
stock, warrants, rights, options, obligations or securities to its
stockholders as such, except that the Borrower may (i) declare and
deliver dividends and distributions payable only in common stock or
warrants, rights or options to acquire common stock, (ii) declare and
pay cash dividends to its stockholders in an amount not to exceed the
amount released by the Collateral Agent from the Borrower Collateral
Account pursuant to the provisions of Section 7 of the Borrower
Security Agreement
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or the proceeds of the Advances and the proceeds of borrowings under
the Revolving Credit Agreement and (iii) declare and pay cash
dividends to its stockholders in an amount not to exceed the Net Cash
Proceeds received by Mafco and its Subsidiaries from Asset Sales on
and after the Effective Date solely to permit the compliance by Mafco
and its Subsidiaries with the requirements of Section 5.01(n) and
Section 7(q) of the Mafco Guaranty.
(f) Investments. Make or hold any Investment in any Person, other
than (i) Investments by the Borrower and its Subsidiaries in Cash
Equivalents, (ii) a loan by the Borrower to Mafco of up to
$650,000,000 out of the proceeds of the Advances and the proceeds of
borrowings under the Revolving Credit Agreement, (iii) Investments by
the Borrower in Mafco or any of its Subsidiaries in an amount not to
exceed the sum of the amount released by the Collateral Agent from the
Borrower Collateral Account pursuant to the provisions of Section 7 of
the Borrower Security Agreement plus the aggregate amount of any
Investments in the Borrower made by Mafco or any of its Subsidiaries
out of the proceeds from the amount released by the Collateral Agent
from the Mafco Collateral Accounts pursuant to Section 7 of the Mafco
Security Agreement, (iv) Investments existing on the date hereof, (v)
contributions by the Borrower of common stock of Marvel to Marvel III
Holdings Inc., Marvel Holdings Inc. or Marvel (Parent) Holdings Inc.,
(vi) Investments by the Borrower in the Coleman Worldwide LYONS, (vii)
Investments by the Borrower in the New Marvel Shares and (viii)
Investments in Mafco in an amount not to exceed the Net Cash Proceeds
received by Mafco and its Subsidiaries from Asset Sales on and after
the Effective Date solely to permit the compliance by Mafco and its
Subsidiaries with the requirements of Section 5.01(n) and Section 7(q)
of the Mafco Guaranty.
(g) Change in Nature of Business. Engage in any business other
than the ownership of the capital stock of Marvel III Holdings Inc.
(h) Accounting Changes. Make or permit any change in accounting
policies affecting (i) the presentation of financial statements or
(ii) reporting practices, except in either case as required or
permitted by GAAP.
(i) Debt. Create, incur, assume or suffer to exist any Debt other
than: (i) Debt under the Loan Documents and under the Revolving Credit
Agreement and the "Loan Documents" referred to therein and (ii)
endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business.
(j) Charter Amendments. Amend its certificate of incorporation or
bylaws except that the Borrower may change its name to Mafco Finance
Corp.
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(k) Prepayments, Etc. of Debt. Prepay, redeem, purchase, defease
or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms
of, any Debt, other than the prepayment of the Advances in accordance
with the terms of this Agreement, or amend, modify or change in any
manner any term or condition of any Debt or any agreement relating to
such Debt other than (i) mandatory and optional prepayments of the
Debt under the Revolving Credit Agreement pursuant to the terms
thereof, (ii) prepayments of Debt required by Section 7(q) of the
Mafco Guaranty and (iii) amendments, modifications and changes to the
terms and conditions of the Revolving Credit Agreement pursuant to its
terms.
(l) Negative Pledge. Enter into or suffer to exist any agreement
prohibiting or conditioning the creation or assumption of any Lien
upon any of its property or assets other than (i) in favor of the
Administrative Agent and the Lenders, (ii) any prohibition or
condition existing on the date hereof or (iii) any prohibition or
condition contained in the Revolving Credit Agreement or the "Loan
Documents" referred to therein.
(m) Partnerships. Become a general partner in any general or
limited partnership.
(n) Capital Expenditures. Make any Capital Expenditures.
(o) Issuance of Capital Stock. Issue any capital stock or
warrants, rights or options to acquire such capital stock.
(p) Payment Restrictions. Create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction of
any kind on the ability of the Borrower to (i) pay dividends or make
any other distributions on any of the Borrower's capital stock, (ii)
make loans or advances to Mafco or any subsidiary of Mafco or (iii)
repay or prepay any Debt owed by the Borrower other than any (x)
consensual encumbrances or restrictions existing on the date hereof
and (y) other consensual encumbrances or restrictions that are no more
onerous than those encumbrances and restrictions in existence on the
date hereof with respect to the Borrower.
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ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of, or interest
on, any Advance or any fees payable to the Administrative Agent or any
Lender hereunder, in each case when the same becomes due and payable,
or any Loan Party shall fail to make any other payment hereunder
within five Business Days after the same becomes due and payable; or
(b) Any representation or warranty made by any Loan Party or any
FN Party or under or in connection with any Loan Document or FN
Document shall prove to have been incorrect in any material respect
when made or confirmed; or
(c) (i) The Borrower shall fail to perform or observe any term,
covenant or agreement contained in Section 5.01(h), 5.01(i), 5.01(j),
5.01(k), 5.01(m), 5.01(n), or 5.02, (ii) Mafco shall fail to perform
or observe any term, covenant or agreement contained in Section 7(i),
7(j), 7(l), 7(o), 7(p), 7(q) or 8 of the Mafco Guaranty, (iii) Coleman
Guarantor shall fail to perform or observe any term, covenant or
agreement contained in Section 7(i), 7(k), 7(m) or 8 of the Coleman
Guaranty, (iv) Borrower Parent shall fail to perform or observe any
term, covenant or agreement contained in Section 7(j) or 8 of the
Borrower Parent Guaranty, (v) New World Guarantor shall fail to
perform or observe any term, covenant or agreement contained in
Section 7(h), 7(j), 7(k) or 8 of the New World Guaranty, (vii) C&F
Guarantor shall fail to perform or observe any term, covenant or
agreement contained in Section 7(h), 7(j), 7(k) or 8 of the C&F
Guaranty, (vii) Cigar Guarantor shall fail to perform or observe any
term, covenant or agreement contained in Section 7(h), 7(j), 7(k) or 8
of the Cigar Guaranty, (viii) Flavors Guaranty shall fail to perform
or observe any term, covenant or agreement contained in Section 7(h),
7(j), 7(k) or 8 of the Flavors Guaranty, (ix) on and after the Revlon
Inclusion Date, Revlon Guarantor shall fail to perform or observe any
term, covenant or agreement contained in Section 7(h), 7(j) or 8 of
the Revlon Guaranty or (x) any Loan Party shall fail to perform or
observe any other term, covenant or agreement contained in any Loan
Document on its part to be performed or observed if such failure shall
remain unremedied for 30 days after written notice thereof shall have
been given to the Borrower by the Administrative Agent or any Lender;
or
(d) (i) Any A Company, any Designated Operating Company or the
Bank shall fail to pay any principal of or premium or interest on any
Debt which is
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outstanding in a principal amount of at least $10,000,000 in the
aggregate (but excluding Debt outstanding hereunder) of such A
Company, such Designated Operating Company or the Bank (as the case
may be), when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), and
such failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt; or
(ii) any other event shall occur or condition shall exist (other than
(x) during the period from the date hereof through June 30, 1997, the
breach by Marvel of certain financial covenants for the fiscal quarter
ended September 30, 1996, for the fiscal quarter ending December 31,
1996, for the fiscal quarter ending March 31, 1997 and for the fiscal
quarter ending June 30, 1997 under its senior bank credit agreements
and (y) in the case of the Specified Holding Company Debt, any event
or condition relating to Marvel, Marvel III Holdings Inc., Marvel
(Parent) Holdings Inc. or Marvel Holdings Inc.) under any agreement or
instrument relating to any such Debt and shall continue after the
applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate,
or to permit the acceleration of, the maturity of such Debt; or (iii)
any such Debt shall be declared to be due and payable, or required to
be prepaid (other than by a regularly scheduled required prepayment),
redeemed, purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Debt shall be required to be made, in each
case prior to the stated maturity thereof; or (iv) in the case of any
Specified Holding Company Debt, any event or condition relating to
Marvel, Marvel III Holdings Inc., Marvel (Parent) Holdings Inc. or
Marvel Holdings Inc. shall occur and shall continue after the
applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate
the maturity of such Debt; or
(e) Any A Company, any Designated Operating Company (other than
Marvel) or the Bank shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against any A
Company, any Designated Operating Company (other than Marvel) or any
FN Party seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property and, in
the case of any such proceeding instituted against it (but not
instituted by it), either such proceeding shall remain undismissed or
unstayed for a period of 45 days, or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for
relief against, or the appointment of a receiver, trustee, custodian
or other similar official for, it or for any substantial part of its
property) shall occur; or any A Company, any Designated
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Operating Company (other than Marvel) or the Bank shall take any
corporate action to authorize any of the actions set forth above in
this Section 6.01(e); or
(f) Any judgment or order for the payment of money in excess of
$10,000,000 shall be rendered against any A Company, any Designated
Operating Company or the Bank and there shall be any period of 10
consecutive days during which a stay of enforcement of such judgment
or order, by reason of a pending appeal or otherwise, shall not be in
effect unless such judgment or order shall have been vacated,
satisfied or dismissed or bonded pending appeal; provided, however,
that any such judgment or order shall not be an Event of Default under
this Section 6.01(f) if and for so long as (i) the entire amount of
such judgment or order is covered by a valid and binding policy of
insurance between the defendant and the insurer covering payment
thereof and (ii) such insurer, which shall be rated at least "A" by
A.M. Best Company, has been notified of, and has not disputed the
claim made for payment of the amount of such judgment or order; or
(g) Any non-monetary judgment or order shall be rendered against
any A Company, any Designated Operating Company or the Bank that is
reasonably likely to have a Material Adverse Effect (in the case of
clause (a) of the definition thereof, the term "Person" shall refer to
the Borrower) and there shall be any period of 10 consecutive days
during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect unless
such judgment or order shall have been vacated, satisfied, discharged
or bonded pending appeal; or
(h) Ronald O. Perelman (or in the event of his incompetence or
death, his estate, heirs, executor, administrator, committee or other
personal representative) shall cease to beneficially own (i) at least
80% of the Voting Stock of any A Company, any Designated Operating
Company (other than Marvel, New World and Revlon) or the Bank, (ii)
during the Marvel Inclusion Period, at least a majority of the voting
power of the Voting Stock of Marvel, (iii) prior to the consummation
of the New World Acquisition, at least a majority of the voting power
of the Voting Stock of New World or (iv) on and after the Revlon
Inclusion Date, at least a majority of the voting power of the Voting
Stock of Revlon, in each case other than as a result of an Asset Sale
pursuant to which all of the common stock held by Mafco and its
Subsidiaries in any A Company, any Designated Operating Company or the
Bank (or, in any such case, in such Person's direct or indirect
parent) is sold and the Net Cash Proceeds of such Asset Sale is
applied in accordance with the terms of the Loan Documents and the
"Loan Documents" referred to in the Revolving Credit Agreement; or
(i) Any ERISA Event shall have occurred with respect to Mafco or
any of its ERISA Affiliates and such ERISA Event, together with any
and all other ERISA
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Events that shall have occurred with respect to Mafco or any of its
ERISA Affiliates, is reasonably likely to have a Material Adverse
Effect (with respect to clause (a) of the definition thereof, the term
"Person" shall refer to Mafco); or
(j) Mafco or any of its ERISA Affiliates shall have been notified
by the sponsor of a Multiemployer Plan of the Borrower or any of its
ERISA Affiliates that it has incurred Withdrawal Liability to such
Multiemployer Plan in an amount that, when aggregated with all other
amounts required to be paid to Multiemployer Plans by Mafco and its
ERISA Affiliates as Withdrawal Liability (determined as of the date of
such notification), exceeds $10,000,000 or requires payments exceeding
$10,000,000 per annum; or
(k) Mafco or any of its ERISA Affiliates shall have been notified
by the sponsor of a Multiemployer Plan of the Borrower or any of its
ERISA Affiliates that such Multiemployer Plan is in reorganization or
is being terminated, within the meaning of Title IV of ERISA, and as a
result of such reorganization or termination the aggregate annual
contributions of Mafco and its ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or being terminated have been or
will be increased over the amounts contributed to such Multiemployer
Plans for the plan years of such Multiemployer Plans immediately
preceding the plan year in which such reorganization or termination
occurs by an amount exceeding $10,000,000; or
(l) Any provision of any Loan Document, Related Document or FN
Document after delivery thereof pursuant to the Original Credit
Agreement, the Second Credit Agreement, the Third Credit Agreement,
the Existing Credit Agreement, Section 3.01 hereof or pursuant to the
definition of "Revlon Inclusion Date" shall for any reason cease
(other than pursuant to the terms thereof) to be valid and binding on
or enforceable against any party to it, or any party to any such
document shall so state in writing; or
(m) Any Collateral Document after delivery thereof pursuant to
the Original Credit Agreement, the Second Credit Agreement, the Third
Credit Agreement, the Existing Credit Agreement, Section 3.01 hereof
or the definition of "Revlon Inclusion Date" shall for any reason
(other than pursuant to the terms thereof) cease to create a valid and
perfected first priority Lien on the Collateral purported to be
covered thereby; or
(n) Any provision of the FN Holdings Debt Document, the FN
Holdings New Debt Document, the Second New FN Holdings Debt Document,
the FN Holdings Preferred Stock or the FN Parent Debt Document shall
be terminated, amended, waived or otherwise modified without the
consent of the Marvel IV Required Lenders or any provision of the
First Gibraltar Charter Document shall be
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amended or modified without the consent of the Marvel IV Required
Lenders (other than as permitted by the terms of the Mafco Guaranty);
or
(o) The Bank fails to maintain the minimum capital and leverage
ratios required as of the Effective Date for the Bank to be considered
as a "well capitalized" "savings association" pursuant to 12 U.S.C.
Section 1831o and 12 C.F.R. Section 565, as such Sections may be
amended, reenacted or redesignated from time to time; or
(p) (i) The common stock of any Designated Operating Company
(other than New World, Marvel and Revlon) trading on the date hereof
shall cease to be publicly traded on the New York Stock Exchange; (ii)
at any time prior to the consummation of the New World Acquisition,
the common stock of New World shall cease to be publicly traded on the
New York Stock Exchange or the Nasdaq National Market System; (iii) at
any time prior to the later to occur of the Term Credit Agreement
Termination Date and the "Tranche B Termination Date" under the
Revolving Credit Agreement, News Corp. Preferred ADRs shall cease to
be publicly traded; (iv) during the Marvel Inclusion Period, the
common stock of Marvel shall cease to be publicly traded on the New
York Stock Exchange or the Nasdaq National Market System or (v) on and
after the Revlon Inclusion Date, the common stock of Revlon shall
cease to be publicly traded on the New York Stock Exchange;
(q) Gerald J. Ford shall beneficially or legally own shares of
the common stock of FN Holdings other than shares of the Class B
Common Stock; or
(r) Any Person party to the Related Documents shall fail to
directly deposit in the Mafco Collateral Account (i) a payment to
Mafco under any Related Document (which payment is required to be made
and is permitted under each indenture and credit agreement to which
such Person is a party) or (ii) a loan to Mafco of the proceeds of any
payment received by such Person under any Related Document (which loan
is required to be made and is permitted under each indenture and
credit agreement to which such Person is a party) and such failure
shall remain unremedied for three Business Days; or
(s) (i) Mafco shall fail to furnish to the Administrative Agent
and the Lenders on or prior to December 1, 1997, a business plan
setting forth, in respect of all of the Debt of Mafco and its
Subsidiaries (other than Debt of the Designated Operating Companies,
the Bank, Revlon, Marvel, Marvel III Holdings Inc., Marvel (Parent)
Holdings Inc., Marvel Holdings Inc., Meridian Sports Incorporated and
their respective Subsidiaries) that is scheduled to come due during
calendar year 1998 and 1999, the method by which all such Debt shall
be repaid, prepaid, redeemed or refinanced on a timely basis,
including without limitation, through Asset Sales,
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86
issuances of Debt, issuances of equity or contributions to capital, in
each case in reasonable detail as to the identity of the assets to be
sold, the issuer of the Debt or equity and such other details as the
Marvel IV Required Lenders shall request or (ii) the Marvel IV
Required Lenders shall not have approved the form and substance of
such business plan on or prior to December 31, 1997;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Commitment of each Lender to make Advances to be terminated,
whereupon the same shall forthwith terminate, and (ii) shall at the request, or
may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Notes, all interest thereon and all other amounts payable under
this Agreement to be forthwith due and payable, whereupon the Notes, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of
which are hereby expressly waived by the Borrower; provided, however, that, in
the event of an actual or deemed entry of an order for relief with respect to
the Borrower under the Federal Bankruptcy Code, (A) the obligation of each
Lender to make Advances shall automatically be terminated and (B) the Notes,
all such interest and all such amounts shall automatically become and be due
and payable, without presentment, demand, protest or any notice of any kind,
all of which are hereby expressly waived by the Borrower.
ARTICLE VII
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
SECTION 7.01. Authorization and Action. Each Lender hereby appoints
and authorizes each of the Administrative Agent and the Collateral Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to the Administrative
Agent and the Collateral Agent, as the case may be, by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto. As to
any matters not expressly provided for by the Loan Documents (including,
without limitation, enforcement or collection of the Notes), each of the
Administrative Agent and the Collateral Agent shall not be required to exercise
any discretion or take any action, but shall be required to act or to refrain
from acting (and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Required Lenders, and such instructions
shall be binding upon all Lenders and all holders of Notes; provided, however,
that neither the Administrative Agent nor the Collateral Agent shall be
required to take any action which exposes the Administrative Agent or the
Collateral Agent, as the case may be, to personal liability or which is
contrary to this Agreement or applicable law. Each of the Administrative Agent
and the Collateral Agent agrees to give to
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each Lender prompt notice of each notice and other report given to it by the
Borrower pursuant to the terms of this Agreement.
SECTION 7.02. Administrative Agent's and Collateral Agent's Reliance,
Etc. Neither the Administrative Agent nor the Collateral Agent nor any of their
respective directors, officers, agents or employees, shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
the Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, each of the
Administrative Agent and the Collateral Agent: (i) may treat the payee of any
Note as the holder thereof until the Administrative Agent receives and accepts
an Assignment and Acceptance entered into by the Lender that is the payee of
such Note, as assignor, and an Eligible Assignee, as assignee, as provided in
Section 8.07; (ii) may consult with legal counsel (including counsel for the
Borrower), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith
by it in accordance with the advice of such counsel, accountants or experts;
(iii) makes no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, warranties or representations
(whether written or oral) made in or in connection with the Loan Documents;
(iv) shall not have any duty to ascertain or to inquire as to the performance
or observance of any of the terms, covenants or conditions of the Loan
Documents on the part of the Borrower or to inspect the property (including the
books and records) of the Borrower; (v) shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any lien or security
interest created or purported to be created under or in connection with the
Loan Documents or any other instrument or document furnished pursuant hereto;
and (vi) shall incur no liability under or in respect of the Loan Documents by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by telecopier, telegram, cable or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
SECTION 7.03. Citibank and Affiliates. With respect to its
Commitments, the Advances made by it and the Note issued to it, Citibank shall
have the same rights and powers under the Loan Documents as any other Lender
and may exercise the same as though it were not the Administrative Agent or the
Collateral Agent and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include Citibank hereunder in its individual capacity.
Citibank and its affiliates may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking engagements from and
generally engage in any kind of business with, the Borrower, any of its
Subsidiaries and any Person who may do business with or own securities of the
Borrower or any such Subsidiary, all as if Citibank were not the Administrative
Agent or the Collateral Agent and without any duty to account therefor to the
Lenders.
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SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon either the Administrative Agent or
the Collateral Agent or any other Lender and based on the financial statements
referred to in Section 4.01(f) and such other documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon the Administrative Agent, the Collateral Agent or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 7.05. Indemnification. (a) Each Lender severally agrees to
indemnify each of the Administrative Agent and the Collateral Agent (in each
case to the extent not promptly reimbursed by the Borrower) from and against
such Lender's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever that
may be imposed on, incurred by, or asserted against the Administrative Agent or
the Collateral Agent, as the case may be, in any way relating to or arising out
of the Loan Documents or any action taken or omitted by the Administrative
Agent or the Collateral Agent, as the case may be, under the Loan Documents;
provided, however, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Administrative
Agent's or the Collateral Agent's gross negligence or willful misconduct.
Without limitation of the foregoing, each Lender agrees to reimburse the
Administrative Agent and the Collateral Agent promptly upon demand for its
ratable share of any costs and expenses (including, without limitation, fees
and expenses of counsel) payable by the Borrower under Section 8.04, to the
extent that the Administrative Agent or the Collateral Agent, as the case may
be, is not promptly reimbursed for such costs and expenses by the Borrower. For
purposes of this Section 7.05(a), the Lenders' respective ratable shares of any
amount shall be determined, at any time, according to the sum of (a) the
aggregate principal amount of the Advances outstanding at such time and owing
to the respective Lenders and (b) their respective unused Tranche A Term
Commitments and unused Tranche B Commitments at such time. In the event that
any Defaulted Advance shall be owing by any Defaulting Lender at any time, such
Lender's Commitment with respect to the Facility under which such Defaulted
Advance was required to have been made shall be considered to be unused for
purposes of this Section 7.05(a) to the extent of the amount of such Defaulted
Advance. The failure of any Lender to reimburse the Administrative Agent or the
Collateral Agent promptly upon demand for its ratable share of any amount
required to be paid by the Lender to the Administrative Agent or the Collateral
Agent, as the case may be, as provided herein shall not relieve any other
Lender of its obligation hereunder to reimburse the Administrative Agent or the
Collateral Agent, as the case may be, for its ratable share of such amount, but
no Lender shall be responsible for the failure of any other Lender to reimburse
the Administrative Agent or the Collateral Agent, as the case may be, for such
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other Lender's ratable share of such amount. Without prejudice to the survival
of any other agreement of any Lender hereunder, the agreement and obligations
of each Lender contained in this Section 7.05(a) shall survive the payment in
full of principal, interest and all other amounts payable hereunder and under
the other Loan Documents.
SECTION 7.06. Successor Administrative Agent and Collateral Agent.
Each of the Administrative Agent and the Collateral Agent may resign at any
time by giving written notice thereof to the Lenders and the Borrower and may
be removed at any time with or without cause by, in the case of the
Administrative Agent, the Required Lenders and, in the case of the Collateral
Agent, the Marvel IV Required Lenders. Upon any such resignation or removal,
the Required Lenders or the Marvel IV Required Lenders shall have the right to
appoint, with the consent of the Borrower, a successor Administrative Agent or
Collateral Agent, respectively, which shall be a Lender, or if no Lender
consents to act as Administrative Agent or Collateral Agent, as the case may
be, hereunder, an institution that would be permitted to be an Eligible
Assignee hereunder. If no successor Administrative Agent or Collateral Agent,
as the case may be, shall have been so appointed by the Required Lenders or the
Marvel IV Required Lenders, as the case may be, and shall have accepted such
appointment, within 30 days after the retiring Administrative Agent's or
Collateral Agent's giving of notice of resignation or the Required Lenders' or
the Marvel IV Required Lenders' removal of the retiring Administrative Agent or
Collateral Agent, then the retiring Administrative Agent, or Collateral Agent,
as the case may be, may, on behalf of the Lenders, appoint a successor
Administrative Agent or Collateral Agent, as the case may be, which shall be a
commercial bank that is acceptable to the Borrower (which shall not
unreasonably withhold its approval). Upon the acceptance of any appointment as
Administrative Agent or Collateral Agent, as the case may be, thereunder by a
successor Administrative Agent or Collateral Agent, as the case may be, such
successor Administrative Agent or Collateral Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent or Collateral Agent, as the case may be, and the
retiring Administrative Agent or Collateral Agent, as the case may be, shall be
discharged from its duties and obligations under the Loan Documents. After any
retiring Administrative Agent's or Collateral Agent's resignation or removal
hereunder as Administrative Agent or Collateral Agent, the provisions of this
Article VII shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent or Collateral Agent, as the case
may be.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any provision
of this Agreement or the Notes, nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Marvel IV Required Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by each of the Lenders (other than any Lender
which is, at such time, a Defaulting Lender) and the Revolving Credit Agreement
Lenders (other than any Revolving Credit Agreement Lender which is, at such
time, a "Defaulting Lender" under the Revolving Credit Agreement), do any of
the following: (i) waive any of the conditions specified in Section 3.01 or
3.02, (ii) change the definition of the term " Marvel IV Required Lenders",
(iii) release any material portion of the Collateral or permit the creation,
incurrence, assumption or existence of any Lien on any material portion of the
Collateral other than (A) releases of any material portion of the Collateral or
the creation, incurrence, assumption or existence of any such Lien in
connection with Asset Sales (which shall include, for purposes of this Section
8.01, sales, monetizations or other disposals of the News Corp. Preferred ADRs
and the New Marvel Shares) the Net Cash Proceeds of which are applied as
contemplated by the Loan Documents and the "Loan Documents" under the Revolving
Credit Agreement, (B) releases of the News Corp. Preferred ADRs and New Marvel
Shares pursuant to the terms of the Loan Documents and the "Loan Documents"
under the Revolving Credit Agreement and (C) the Liens created by the
Collateral Documents and the Liens permitted by Section 5.02(a), Section 8(a)
of the Borrower Parent Guaranty, Section 8(a) of the Coleman Guaranty, Section
8(a) of the Mafco Guaranty, Section 8(a) of the C&F Guaranty, Section 8(a) of
the Cigar Guaranty, Section 8(a) of the Flavors Guaranty, Section 8(a) of the
New World Guaranty and Section 8(a) of the Revlon Guaranty, (iv) amend this
Section 8.01, (v) increase the Commitments of the Lenders or subject the
Lenders to any additional obligations, (vi) reduce the principal of, or
interest on, the Notes or any fees or other amounts payable hereunder or (vii)
postpone any date fixed for any mandatory reduction in the Commitments or for
any payment of principal of, or interest on, the Notes or any fees or other
amounts payable hereunder or amend Section 2.03 or 2.05(b) (other than Section
2.05(b)(viii)); provided further, that no change to the definition of the term
"Required Lenders" shall be made unless in writing and signed by each of the
Lenders (other than any Lender which is, at such times a Defaulting Lender)
provided, further that no amendment, waiver or consent shall, unless in writing
and signed by the Administrative Agent in addition to the Lenders and Revolving
Credit Agreement Lenders required above to take such action, affect the rights
or duties of the Administrative Agent under this Agreement or any Note;
provided further that no amendment, waiver or consent shall, unless in writing
and signed by the Collateral Agent in addition to the Lenders
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and Revolving Credit Agreement Lenders required above to take such action,
affect the rights or duties of the Collateral Agent under this Agreement.
SECTION 8.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic,
telex or cable communication) and mailed, telecopied, telegraphed, telexed,
cabled or delivered, if to the Borrower, at its address at c/o MacAndrews and
Forbes Holdings Inc., 35 East 62nd Street, New York, New York 10021, Attention:
Secretary, if to any Financial Institution at its Domestic Lending Office on
Schedule I-A hereto; if to any other Lender, at the address specified in the
Assignment and Acceptance pursuant to which it became a Lender; and if to the
Administrative Agent or the Collateral Agent, at its address at 399 Park
Avenue, New York, New York 10043, Attention: ___________, or, as to the
Borrower, the Administrative Agent or the Collateral Agent, at such other
address as shall be designated by such party in a written notice to the other
parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower, the
Administrative Agent and the Collateral Agent. All such notices and
communications shall be effective (i) when received, if mailed or delivered or
telecopied (including machine acknowledgment), or (ii) when delivered to the
telegraph company, confirmed by telex answerback or delivered to the cable
company, respectively, except that notices and communications to the
Administrative Agent pursuant to Article II or VII shall not be effective until
received by the Administrative Agent.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any
Lender or the Administrative Agent or the Collateral Agent to exercise, and no
delay in exercising, any right hereunder or under any Note shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 8.04. Costs; Expenses. (a) The Borrower agrees to pay on
demand all reasonable out-of-pocket costs and expenses of the Administrative
Agent and the Collateral Agent in connection with the preparation, execution,
delivery, administration, modification and amendment of the Loan Documents and
the other documents to be delivered hereunder (including, without limitation,
(A) all due diligence, transportation, computer, duplication, appraisal, audit
and insurance expenses and fees and expenses of consultants engaged with the
prior consent of the Borrower (which consent shall not be unreasonably
withheld) and (B) the reasonable fees and out-of-pocket expenses of counsel for
the Administrative Agent with respect thereto, with respect to advising the
Administrative Agent and the Collateral Agent as to their respective rights and
responsibilities, or the protection or preservation of rights or interests,
under the Loan Documents, with respect to negotiations with the Borrower or
with other creditors of the Borrower arising out of any Default or any events
or circumstances that may give rise to a Default and with respect to presenting
claims
<PAGE>
92
in, monitoring or otherwise participating in any bankruptcy, insolvency or
other similar proceeding affecting creditors' rights generally and any
proceeding ancillary thereto). The Borrower further agrees to pay on demand all
reasonable out-of-pocket costs and expenses of the Administrative Agent, the
Collateral Agent and the Lenders in connection with the enforcement of the Loan
Documents and the other documents to be delivered hereunder, whether in action,
suit, litigation, any bankruptcy, insolvency or other similar proceeding
affecting creditors' rights generally or otherwise (including, without
limitation, the reasonable fees (including the allocated costs of internal
counsel) and reasonable expenses of counsel for the Administrative Agent, the
Collateral Agent and each Lender with respect thereto) and expenses in
connection with the enforcement of rights under this Section 8.04(a).
(b) If any payment of principal of any Eurodollar Rate Advance is made
by the Borrower to or for the account of a Lender other than on the last day of
the Interest Period for such Advance, as a result of a payment or Conversion
pursuant to Section 2.09(c) or 2.10, acceleration of the maturity of the Notes
pursuant to Section 6.01 or for any other reason, the Borrower shall, upon
demand by such Lender (with a copy of such demand to the Administrative Agent),
pay to the Administrative Agent for the account of such Lender any amounts
required to compensate such Lender for any additional losses, costs or expenses
which it may reasonably incur as a result of such payment, including, without
limitation, any loss, cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender to fund or
maintain such Advance.
(c) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, the Collateral Agent, the Documentation Agent, the
Syndication Agent and each Lender and each of their affiliates and their
officers, directors, trustees, employees, agents and advisors (each, an
"Indemnified Party") from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of (or in connection with the preparation for a defense of) any
investigation, litigation or proceeding arising out of, related to or in
connection with this Agreement and the transactions contemplated hereby,
whether or not an Indemnified Party is a party thereto, whether or not the
transactions contemplated hereby are consummated, whether or not any such
claim, investigation, litigation or proceeding is brought by the Borrower or
any other person and whether or not such Indemnified Party is a Lender at such
time) except (i) to the extent such claim, damage, loss, liability or expense
(x) is found in a final, non-appealable judgment by a court of competent
jurisdiction (a "Final Judgment") to have resulted from such Indemnified
Party's gross negligence or willful misconduct or (y) arises from any legal
proceedings commenced against any Lender by any other Lender (in its capacity
as such and not as Administrative Agent, Collateral Agent, Documentation Agent
or Syndication Agent), and (ii) in the case of any litigation brought by the
Borrower (A) seeking a judgment against any Indemnified Party for any wrongful
act or omission of such Indemnified Party and (B) in which a Final
<PAGE>
93
Judgment is rendered in the Borrower's favor against such Indemnified Party,
the provisions of this paragraph will not be available to provide
indemnification for any damage, loss, liability or expense incurred by such
Indemnified Party in connection with such litigation described in clause (i) or
in connection with any claim for which Final Judgment is rendered in the
Borrower's favor in a litigation described in clause (ii) of this Section
8.04(c).
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set-off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of the Borrower against any and all of the
obligations of the Borrower to such Lender now or hereafter existing under this
Agreement and the Note or Notes held by such Lender, whether or not such Lender
shall have made any demand under this Agreement or such Note or Notes and
although such obligations may be unmatured. Each Lender agrees promptly to
notify the Borrower after any such set-off and application shall be made by
such Lender, provided that the failure to give such notice shall not affect the
validity of such set-off and application; provided further that no Lender shall
exercise any such right of set-off or any other right of set-off without the
prior consent of the Administrative Agent. The rights of each Lender under this
Section 8.05 are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which such Lender may have.
SECTION 8.06. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower and the Administrative Agent
and when the Administrative Agent shall have been notified by each Financial
Institution that such Financial Institution has executed it and thereafter
shall be binding upon and inure to the benefit of the Borrower, the
Administrative Agent and each Lender and their respective successors and
assigns, except that the Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of the
Administrative Agent and the Required Lenders.
SECTION 8.07. Assignments and Participations. (a) Each Lender may and,
if demanded by the Borrower pursuant to Section 2.14, will assign to one or
more banks or other entities all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Commitment, the Advances owing to it and the Note or Notes held by it);
provided, however, that (i) each such assignment shall be of a uniform, and not
a varying, percentage of all rights and obligations under and in respect of all
of the Facilities; (ii) the amount of the Commitment of the assigning Lender
being assigned pursuant to each such assignment (determined as of the date of
the Assignment and Acceptance with respect to such assignment) shall in no
event be less than $5,000,000 and
<PAGE>
94
shall be an integral multiple of $1,000,000 in excess thereof, or shall be an
assignment to another Lender or an assignment of all of the assigning Lender's
rights and obligations hereunder and under the Notes, (iii) each such
assignment shall be to another Lender, an Affiliate of the assigning Lender or
to an Eligible Assignee, (iv) each such assignment made as a result of a demand
by the Borrower pursuant to Section 2.14 shall be arranged by the Borrower
after consultation with the Administrative Agent and shall be either an
assignment of all of the rights and obligations of the assigning Lender under
this Agreement or an assignment of a portion of such rights and obligations
made concurrently with another such assignment or other such assignments that
together cover all of the rights and obligations of the assigning Lender under
this Agreement, (v) no Lender shall be obligated to make any such assignment as
a result of a demand by the Borrower pursuant to Section 2.14 unless and until
such Lender shall have received one or more payments from either the Borrower
or one or more Eligible Assignees in an aggregate amount at least equal to the
aggregate outstanding principal amount of the Advances owing to such Lender,
together with accrued interest thereon to the date of payment of such principal
amount and all other amounts payable to such Lender under this Agreement, (vi)
the parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with any Note or Notes subject to such
assignment and a processing and recordation fee of $3,000 from the assignee and
(vii) no such assignments shall be permitted without the consent of the
Administrative Agent and the Borrower (such consent not to be unreasonably
withheld). Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance, (x) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrower or the performance or observance by the Borrower of
any of its obligations under this Agreement or any other instrument or document
furnished pursuant hereto; (iii) such assignee confirms
<PAGE>
95
that it has received a copy of this Agreement, together with copies of the
financial statements referred to in Section 4.01(f) and such other documents
and information as it has deemed appropriate to make its own credit analysis
and decision to enter into such Assignment and Acceptance; (iv) such assignee
will, independently and without reliance upon the Administrative Agent, the
Collateral Agent, such assigning Lender or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi)
such assignee appoints and authorizes each of the Administrative Agent and the
Collateral Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Administrative Agent
or the Collateral Agent, as the case may be, by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vii) such assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed
by it as a Lender.
(c) The Administrative Agent shall maintain at its address referred to
in Section 8.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitment of, and principal amount of the Advances owing
under each Facility to, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrower, the Administrative Agent, and the
Lenders may treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
together with any Note or Notes subject to such assignment, the Administrative
Agent shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower. Within five Business Days
after its receipt of such notice, the Borrower, at its own expense, shall
execute and deliver to the Administrative Agent in exchange for the surrendered
Note or Notes a new Note or Notes to the order of such Eligible Assignee in an
amount equal to the Commitment assumed by it under a Facility pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained a
Commitment hereunder under such Facility, a new Note to the order of the
assigning Lender in an amount equal to such Commitment retained by it
hereunder. Such new Note or Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note or Notes,
shall be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of Exhibit A-1 or A-2, as appropriate.
<PAGE>
96
(e) Each Lender may sell participations to one or more banks or other
entities in or to all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment,
the Advances owing to it and the Note or Notes held by it); provided, however,
that (i) such Lender's obligations under this Agreement (including, without
limitation, its Commitment to the Borrower hereunder) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations, (iii) such Lender shall remain the
holder of any such Note for all purposes of this Agreement, (iv) the Borrower,
the Administrative Agent, the Collateral Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and (v) no participant
under any such participation shall have any right to approve any amendment or
waiver of any provision of any Loan Document, or any consent to any departure
by the Borrower therefrom, except to the extent that such amendment, waiver or
consent would reduce or postpone any date fixed for payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation.
(f) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 8.07, disclose
to the assignee or participant or proposed assignee or participant, any
information relating to the Borrower furnished to such Lender by or on behalf
of the Borrower; provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree pursuant to an
agreement substantially in the form of Exhibit I to preserve the
confidentiality of any confidential information relating to the Borrower
received by it from such Lender.
(g) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Advances
owing to it and the Note or Notes held by it) in favor of any Federal Reserve
Bank in accordance with Regulation A of the Board of Governors of the Federal
Reserve System.
SECTION 8.08. Governing Law; Submission to Jurisdiction. (a) This
Agreement and the Notes shall be governed by, and construed in accordance with,
the laws of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or Federal court of the United States of America sitting in New York
City, and any appellate court thereof, in any action or proceeding arising out
of or relating to this Agreement, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted
<PAGE>
97
by law, in such Federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Subject to the foregoing and to paragraph (c) below, nothing
in this Agreement shall affect any right that any party hereto may otherwise
have to bring any action or proceeding relating to this Agreement against any
other party hereto in the courts of any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any New York State or Federal
court and the defense of an inconvenient forum to the maintenance of such
action or proceeding in any such court.
(d) The Borrower agrees that service of process may be made on the
Borrower by personal service of a copy of the summons and complaint or other
legal process in any such suit, action or proceeding, or by registered or
certified mail (postage prepaid) to the address of the Borrower specified in
Section 8.02, or by any other method of service provided for under the
applicable laws in effect in the State of New York.
SECTION 8.09. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE DOCUMENTATION AGENT, THE
SYNDICATION AGENT AND THE LENDERS IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
ADVANCES OR THE ACTIONS OF THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE
DOCUMENTATION AGENT, THE
<PAGE>
SYNDICATION AGENT OR ANY LENDER IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
MARVEL IV HOLDINGS INC.
By /s/ Glenn P. Dickes
---------------------------------
Name: Glenn P. Dickes
Title: Vice President and Secretary
CITIBANK, N.A.,
as Administrative Agent and
Collateral Agent
By
---------------------------------
Name:
Title:
NATIONSBANC CAPITAL MARKETS, INC.,
as Documentation Agent
By
---------------------------------
as Documentation Agent
CREDIT SUISSE,
as Syndication Agent
By
---------------------------------
Name:
Title:
By
---------------------------------
Name:
Title:
<PAGE>
SYNDICATION AGENT OR ANY LENDER IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
MARVEL IV HOLDINGS INC.
By
---------------------------------
Name:
Title:
CITIBANK, N.A.,
as Administrative Agent and
Collateral Agent
By /s/ James Buchanan
---------------------------------
Name: James Buchanan
Title:
NATIONSBANC CAPITAL MARKETS, INC.,
as Documentation Agent
By
---------------------------------
as Documentation Agent
CREDIT SUISSE,
as Syndication Agent
By
---------------------------------
Name:
Title:
By
---------------------------------
Name:
Title:
<PAGE>
SYNDICATION AGENT OR ANY LENDER IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
MARVEL IV HOLDINGS INC.
By
---------------------------------
Name:
Title:
CITIBANK, N.A.,
as Administrative Agent and
Collateral Agent
By
---------------------------------
Name:
Title:
NATIONSBANC CAPITAL MARKETS, INC.,
as Documentation Agent
By /s/ Margaret Flanagan
---------------------------------
as Documentation Agent
CREDIT SUISSE,
as Syndication Agent
By
---------------------------------
Name:
Title:
By
---------------------------------
Name:
Title:
<PAGE>
SYNDICATION AGENT OR ANY LENDER IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
MARVEL IV HOLDINGS INC.
By
---------------------------------
Name:
Title:
CITIBANK, N.A.,
as Administrative Agent and
Collateral Agent
By
---------------------------------
Name:
Title:
NATIONSBANC CAPITAL MARKETS, INC.,
as Documentation Agent
By
---------------------------------
as Documentation Agent
CREDIT SUISSE,
as Syndication Agent
By /s/ Joel Glodowski
---------------------------------
Name: Joel Glodowski
Title: Member of Senior Management
By /s/ Chris T. Horgan
---------------------------------
Name: Chris T. Horgan
Title: Associate
<PAGE>
BANK OF AMERICA ILLINOIS,
as Managing Agent
By /s/ L. Dustin Vincent, III
---------------------------------
Name: L. Dustin Vincent, III
Title: Managing Director
ING (U.S.) CAPITAL CORPORATION,
as Managing Agent
By
---------------------------------
Name:
Title:
SALOMON BROTHERS HOLDING COMPANY
INC, as Managing Agent
By
---------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Managing Agent
By
---------------------------------
Name:
Title:
THE FUJI BANK, LIMITED,
as Managing Agent
By
---------------------------------
Name:
Title:
<PAGE>
BANK OF AMERICA ILLINOIS,
as Managing Agent
By
---------------------------------
Name:
Title:
ING (U.S.) CAPITAL CORPORATION,
as Managing Agent
By /s/ Kunduck Moon
---------------------------------
Name: Kunduck Moon
Title: Managing Director
SALOMON BROTHERS HOLDING COMPANY
INC, as Managing Agent
By
---------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Managing Agent
By
---------------------------------
Name:
Title:
THE FUJI BANK, LIMITED,
as Managing Agent
By
---------------------------------
Name:
Title:
<PAGE>
BANK OF AMERICA ILLINOIS,
as Managing Agent
By
---------------------------------
Name:
Title:
ING (U.S.) CAPITAL CORPORATION,
as Managing Agent
By
---------------------------------
Name:
Title:
SALOMON BROTHERS HOLDING COMPANY
INC, as Managing Agent
By /s/
---------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Managing Agent
By
---------------------------------
Name:
Title:
THE FUJI BANK, LIMITED,
as Managing Agent
By
---------------------------------
Name:
Title:
<PAGE>
BANK OF AMERICA ILLINOIS,
as Managing Agent
By
---------------------------------
Name:
Title:
ING (U.S.) CAPITAL CORPORATION,
as Managing Agent
By
---------------------------------
Name:
Title:
SALOMON BROTHERS HOLDING COMPANY
INC, as Managing Agent
By
---------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Managing Agent
By /s/ Catherine G. Goff
---------------------------------
Name: Catherine G. Goff
Title: ASP
THE FUJI BANK, LIMITED,
as Managing Agent
By
---------------------------------
Name:
Title:
<PAGE>
BANK OF AMERICA ILLINOIS,
as Managing Agent
By
---------------------------------
Name:
Title:
ING (U.S.) CAPITAL CORPORATION,
as Managing Agent
By
---------------------------------
Name:
Title:
SALOMON BROTHERS HOLDING COMPANY
INC, as Managing Agent
By
---------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Managing Agent
By
---------------------------------
Name:
Title:
THE FUJI BANK, LIMITED,
as Managing Agent
By /s/ Teiji Teramoto
---------------------------------
Name: Teiji Teramoto
Title: Vice President & Manager
<PAGE>
FINANCIAL INSTITUTIONS
----------------------
BANK OF AMERICA ILLINOIS
By /s/ L. Dustin Vincent, III
---------------------------------
Name: L. Dustin Vincent, III
Title: Managing Director
CITIBANK, N.A.
By
---------------------------------
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By
---------------------------------
Name:
Title:
CREDIT SUISSE
By
---------------------------------
Name:
Title:
By
---------------------------------
Name:
Title:
ING (U.S.) CAPITAL CORPORATION
By
---------------------------------
Name:
Title:
<PAGE>
FINANCIAL INSTITUTIONS
----------------------
BANK OF AMERICA ILLINOIS
By
---------------------------------
Name:
Title:
CITIBANK, N.A.
By /s/ James Buchanan
---------------------------------
Name: James Buchanan
Title: Attorney-In-Fact
CREDIT LYONNAIS NEW YORK BRANCH
By
---------------------------------
Name:
Title:
CREDIT SUISSE
By
---------------------------------
Name:
Title:
By
---------------------------------
Name:
Title:
ING (U.S.) CAPITAL CORPORATION
By
---------------------------------
Name:
Title:
<PAGE>
FINANCIAL INSTITUTIONS
----------------------
BANK OF AMERICA ILLINOIS
By
---------------------------------
Name:
Title:
CITIBANK, N.A.
By
---------------------------------
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By /s/ W. Michael George
---------------------------------
Name: W. Michael George
Title: Vice President
CREDIT SUISSE
By
---------------------------------
Name:
Title:
By
---------------------------------
Name:
Title:
ING (U.S.) CAPITAL CORPORATION
By
---------------------------------
Name:
Title:
<PAGE>
FINANCIAL INSTITUTIONS
----------------------
BANK OF AMERICA ILLINOIS
By
---------------------------------
Name:
Title:
CITIBANK, N.A.
By
---------------------------------
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By
---------------------------------
Name:
Title:
CREDIT SUISSE
By /s/ Joel Glodowski
---------------------------------
Name: Joel Glodowski
Title: Member of Senior Management
By /s/ Chris T. Horgan
---------------------------------
Name: Chris T. Horgan
Title: Associate
ING (U.S.) CAPITAL CORPORATION
By
---------------------------------
Name:
Title:
<PAGE>
FINANCIAL INSTITUTIONS
----------------------
BANK OF AMERICA ILLINOIS
By
---------------------------------
Name:
Title:
CITIBANK, N.A.
By
---------------------------------
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By
---------------------------------
Name:
Title:
CREDIT SUISSE
By
---------------------------------
Name:
Title:
By
---------------------------------
Name:
Title:
ING (U.S.) CAPITAL CORPORATION
By /s/ Kunduck Moon
---------------------------------
Name: Kunduck Moon
Title: Managing Director
<PAGE>
NATIONSBANK, N.A.
By /s/ Margaret Flanagan
---------------------------------
Name: Margaret Flanagan
Title: Associate
PILGRIM AMERICA PRIME RATE TRUST
By
---------------------------------
Name:
Title:
SALOMON BROTHERS HOLDING
COMPANY INC
By
---------------------------------
Name:
Title:
THE BANK OF NEW YORK
By
---------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK
By
---------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON
By
---------------------------------
Name:
Title:
<PAGE>
NATIONSBANK, N.A.
By
---------------------------------
Name:
Title:
PILGRIM AMERICA PRIME RATE TRUST
By /s/ Howard Tiffen
---------------------------------
Name: Howard Tiffen
Title: Senior Vice President
SALOMON BROTHERS HOLDING
COMPANY INC
By
---------------------------------
Name:
Title:
THE BANK OF NEW YORK
By
---------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK
By
---------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON
By
---------------------------------
Name:
Title:
<PAGE>
NATIONSBANK, N.A.
By
---------------------------------
Name:
Title:
PILGRIM AMERICA PRIME RATE TRUST
By
---------------------------------
Name:
Title:
SALOMON BROTHERS HOLDING
COMPANY INC
By /s/ ???????
---------------------------------
Name:
Title:
THE BANK OF NEW YORK
By
---------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK
By
---------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON
By
---------------------------------
Name:
Title:
<PAGE>
NATIONSBANK, N.A.
By
---------------------------------
Name:
Title:
PILGRIM AMERICA PRIME RATE TRUST
By
---------------------------------
Name:
Title:
SALOMON BROTHERS HOLDING
COMPANY INC
By
---------------------------------
Name:
Title:
THE BANK OF NEW YORK
By /s/ Catherine G. Goff
---------------------------------
Name: Catherine G. Goff
Title: ASP
THE CHASE MANHATTAN BANK
By
---------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON
By
---------------------------------
Name:
Title:
<PAGE>
NATIONSBANK, N.A.
By
---------------------------------
Name:
Title:
PILGRIM AMERICA PRIME RATE TRUST
By
---------------------------------
Name:
Title:
SALOMON BROTHERS HOLDING
COMPANY INC
By
---------------------------------
Name:
Title:
THE BANK OF NEW YORK
By
---------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK
By /s/ Neil R. Boylan
---------------------------------
Name: Neil R. Boylan
Title: Vice President
THE FIRST NATIONAL BANK OF BOSTON
By
---------------------------------
Name:
Title:
<PAGE>
NATIONSBANK, N.A.
By
---------------------------------
Name:
Title:
PILGRIM AMERICA PRIME RATE TRUST
By
---------------------------------
Name:
Title:
SALOMON BROTHERS HOLDING
COMPANY INC
By
---------------------------------
Name:
Title:
THE BANK OF NEW YORK
By
---------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK
By
---------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON
By /s/ Richard D. Hill Jr.
---------------------------------
Name: Richard D. Hill Jr.
Title: Director
<PAGE>
THE FUJI BANK, LIMITED
By /s/ Masanobu Kobayashi
---------------------------------
Name: Masanobu Kobayashi
Title: Vice President & Manager
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD.
By
---------------------------------
Name:
Title:
<PAGE>
THE FUJI BANK, LIMITED
By
---------------------------------
Name:
Title:
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD.
By /s/ Paul B. Clifford
---------------------------------
Name: Paul B. Clifford
Title: Deputy General Manager
<PAGE>
[TERM CREDIT AGREEMENT]
SCHEDULE I
ADVANCES, COMMITMENTS AND APPLICABLE LENDING OFFICES
<TABLE>
<CAPTION>
TRANCHE A TRANCHE B
NAME OF BANK TERM COMMITMENT TERM COMMITMENT APPLICABLE LENDING OFFICE
------------ --------------- --------------- -------------------------
<S> <C> <C> <C>
CITIBANK, N.A. $25,500,000 $4,250,000 DOMESTIC:
--------
399 PARK AVENUE
NEW YORK, NEW YORK 10043
ATTENTION: ED VOWINKEL
TEL: NO. 718-248-4523
FAX NO.: 718-248-4844
ABA NO.: 021000089
VIA FED TRANSFER
ACCOUNT NO.: 3685-2248
ACCOUNT NAME: MEDIUM TERM FIN.
ATTENTION: ED VOWINKEL
REFERENCE: MARVEL IV HOLDINGS
EURODOLLAR:
----------
SAME
THE BANK OF NEW YORK $25,500,000 $4,250,000 DOMESTIC:
--------
ONE WALL STREET
NEW YORK, NY 10286
ATTENTION: ZORAIDA DOUGHERTY
TEL. NO.: 212-635-8730
FAX NO.: 212-635-8679/34
ABA NO.: 021000018
VIA FED TRANSFER
ACCOUNT NO.: GLA/ 111556
ACCOUNT NAME: COMMERCIAL LOAN DEPT.
ATTENTION: ZORAIDA DOUGHERTY
REFERENCE: MARVEL IV HOLDINGS
EURODOLLAR:
----------
SAME
<PAGE>
2
TRANCHE A TRANCHE B
NAME OF BANK TERM COMMITMENT TERM COMMITMENT APPLICABLE LENDING OFFICE
------------ --------------- --------------- -------------------------
BANK OF AMERICA ILLINOIS $25,500,000 $4,250,000 DOMESTIC:
--------
231 SOUTH LASALLE
CHICAGO, IL 60697
ATTENTION: LILY REYES
TEL. NO.: 312-828-3873
FAX NO.: 312-974-9626
ABA NO.: 071-000-039
VIA FED TRANSFER
ACCOUNT NO.: 47-03421
ATTENTION: ACCOUNT
ADMINISTRATION-L.REYES
REFERENCE: MARVEL IV HOLDINGS
EURDOLLAR:
---------
SAME
THE CHASE MANHATTAN BANK $25,500,000 $4,250,000 DOMESTIC:
--------
2 CHASE MANHATTAN PLAZA
NEW YORK, N.Y. 10081
ATTENTION: ROCKY CHAN
TEL. NO.: 212-552-2920
FAX NO.: 212-552-7325
ABA NO.: 021-0000-21
VIA FED TRANSFER
ACCOUNT NO.: 900-9-0000-36
ACCOUNT NAME: COMMERCIAL LOAN DEPT.
ATTENTION: ROCKY CHAN
REFERENCE: MAFCO HOLDING
EURODOLLAR:
----------
SAME
<PAGE>
3
TRANCHE A TRANCHE B
NAME OF BANK TERM COMMITMENT TERM COMMITMENT APPLICABLE LENDING OFFICE
------------ --------------- --------------- -------------------------
CREDIT LYONNAIS NEW YORK $15,000,000 $2,500,000 DOMESTIC:
BRANCH --------
1301 AVENUE OF THE AMERICAS
NEW YORK, NY 10019
ATTENTION: LUCIE MERCADO
TEL. NO.: 212-261-7271
FAX NO.: 212-261-3401
ABA NO.: 026008073
VIA FED TRANSFER
ACCOUNT NO.: 01-008820-001-00
ACCOUNT NAME: LOAN SERVICING
ATTENTION: LUCY MERCADO
REFERENCE: MAFCO
EURODOLLAR:
----------
SAME
CREDIT SUISSE $25,500,000 $4,250,000 DOMESTIC:
--------
12 EAST 49TH STREET
NEW YORK, NY 10017
ATTENTION: ED SIDDONS
TEL. NO.: 212-238-5407
FAX NO.: 212-238-5439
ABA NO.: 026009179
VIA FED TRANSFER
ACCOUNT NO.: 904996-02
ACCOUNT NAME: LOAN DEPT.
ATTENTION: ED SIDDONS
REFERENCE: MARVEL IV HOLDINGS
EURODOLLAR:
----------
SAME
<PAGE>
4
TRANCHE A TRANCHE B
NAME OF BANK TERM COMMITMENT TERM COMMITMENT APPLICABLE LENDING OFFICE
------------ --------------- --------------- -------------------------
THE FIRST NATIONAL BANK $25,500,000 $4,250,000 DOMESTIC:
OF BOSTON --------
100 RUSTCRAFT ROAD
DEDHAM, MA 02026
ATTENTION: ANGELA MOORE
TEL. NO.: 617-467-2292
FAX NO.: 617-467-2276
ABA NO.: 01000390
ACCOUNT NO.: 0411214
VIA FED TRANSFER
ATTENTION: ANGELA MOORE
REFERENCE: MARVEL IV HOLDINGS
EURODOLLAR:
----------
SAME
THE FUJI BANK, LIMITED $25,500,000 $4,250,000 DOMESTIC:
--------
2 WORLD TRADE CENTER
NEW YORK, NY 10048
ATTENTION: GEMMA DIZON
TEL. NO.: 212-898-2069
FAX NO.: 212-488-8216
ABA NO.: 026009700
VIA FED TRANSFER
ACCOUNT NO.: 515011U3
ACCOUNT NAME: USCF III
ATTENTION: GEMMA DIZON
REFERENCE: MAFCO HOLDINGS
EURODOLLAR:
----------
SAME
<PAGE>
5
TRANCHE A TRANCHE B
NAME OF BANK TERM COMMITMENT TERM COMMITMENT APPLICABLE LENDING OFFICE
------------ --------------- --------------- -------------------------
THE LONG-TERM CREDIT BANK $15,000,000 $2,500,000 DOMESTIC:
OF JAPAN, LTD. --------
444 SOUTH FLOWER STREET
LOS ANGELES, CA 90071
ATTENTION: KEN NAKAGAWA
TEL. NO.: 213-689-6244
FAX NO.: 213-626-1067
ABA NO.: 122000218
VIA FED TRANSFER
ACCOUNT NO.: 220234834
ACCOUNT NAME: LONG-TERM CREDIT BANK
OF JAPAN
ATTENTION: KEN NAKAGAWA
REFERENCE: MAFCO HOLDINGS INC.
EURDOLLAR:
----------
SAME
NATIONSBANK, N.A. $25,500,000 $4,250,000 DOMESTIC:
--------
101 NO. TRYON STREET
CHARLOTTE, NC 28255
ATTENTION: CHARLIE FRANKLIN
TEL. NO.: 704-386-4199
FAX NO.: 704-386-8694
ABA NO.: 053000196
VIA FED TRANSFER
ACCOUNT NO.: 13662122506
ACCOUNT NAME: CORPORATE CREDIT
SERVICES SUPPORT
ATTENTION: CHARLIE FRANKLIN
REFERENCE: MARVEL IV HOLDINGS
EURODOLLAR:
----------
SAME
<PAGE>
6
TRANCHE A TRANCHE B
NAME OF BANK TERM COMMITMENT TERM COMMITMENT APPLICABLE LENDING OFFICE
------------ --------------- --------------- -------------------------
ING (U.S.) CAPITAL $25,500,000 $4,250,000 DOMESTIC:
CORPORATION --------
135 EAST 57TH STREET
NEW YORK, NY 10022
ATTENTION: KUNDUCK MOON
TEL. NO.: (212) 446-0911
FAX NO.: (212) 593-3362
ABA NO.: 021000238
VIA FED TRANSFER
ACCOUNT NO.: 60007116
ACCOUNT NAME: INTERNATIONALE
NEDERLANDEN (U.S.) CAPITAL
CORPORATION
REFERENCE: MARVEL IV HOLDINGS
EURODOLLAR:
----------
SAME
PILGRIM AMERICA PRIME RATE $15,000,000 $2,500,000 DOMESTIC:
TRUST --------
40 N. CENTRAL AVE.
SUITE 1200
PHOENIX, AZ 85004
ATTENTION:
TEL. NO.: (602) 417-8259
FAX. NO.: (602) 417-8327
ABA NO.: 011000028
VIA FED TRANSFER
ACCOUNT NO.: 37926342
ACCOUNT NAME: PL1F - PILGRIM PRIME
RATE TRUST
REFERENCE: MAFCO HOLDINGS
EURODOLLAR:
----------
SAME
SALOMON BROTHERS HOLDING $25,500,000 $4,250,000 DOMESTIC:
COMPANY INC --------
8800 HIDDEN RIVER PARKWAY
TAMPA, FL 33637
ATTENTION: ROBIN KIDD
TEL. NO.: (813) 558-7575
FAX. NO.: (813) 558-4142
ABA NO.: 0710000013
VIA FED TRANSFER
ACCOUNT NO.: 5143322
ACCOUNT NAME:
REFERENCE:
EURODOLLAR:
----------
SAME
</TABLE>
<PAGE>
TERM CREDIT AGREEMENT
SCHEDULE II
-----------
BORROWER
MARVEL IV HOLDINGS INC.
Jurisdiction of Incorporation: Delaware
Authorized Capital Stock: 1,000 shares of Common Stock
Shares Outstanding: 1,000 shares of Common Stock
Percentage Owned: 99.5% by Marvel V Holdings Inc.
Options, Warrants and Similar Rights: None
<PAGE>
TERM CREDIT AGREEMENT
SCHEDULE III
------------
DEBT
NONE
<PAGE>
TERM CREDIT AGREEMENT
SCHEDULE IV
-----------
INVESTMENTS
INVESTMENT
PERSON ISSUER TYPE AMOUNT
- ------ ------ ---- ----------
Marvel IV Holdings Inc. Marvel III Holdings Inc. Common 100%
Stock
Investment in Marvel Entertainment Group, Inc.
("Marvel") in respect of Marvel's reimbursement
obligations relating to a Letter of Credit (as
defined in the Revolving Credit Agreement) in a
face amount of $4,000,000 to be issued under the
Existing Agreement or the Revolving Credit
Agreement in favor of the landlord of a building
located in Las Vegas, Nevada leased to a joint
venture between a subsidiary of Marvel and Ebco
Management, Inc.
<PAGE>
TERM CREDIT AGREEMENT
SCHEDULE V
----------
LIENS
NONE
<PAGE>
SCHEDULE VI
Defeased Debt Calculations
The Defeased Debt Amount for each Designated Person listed below for
any date of determination shall be calculated as follows for each such
Designated Person:
Coleman
Guarantor: The Defeased Debt Amount for Coleman Guarantor shall be an
amount equal to the sum of:
(i) the lesser of (x) the amount, if on such date of
determination Coleman Holdings is permitted to optionally
redeem, pursuant to the terms of the Coleman Holdings
Indenture, the Debt outstanding thereunder, that Coleman
Holdings would be required to pay to redeem such Debt and
(y) the greater of (A) the "repurchase price" (assuming a
repurchase date 105 days after the date of determination) of
the aggregate amount of all Debt outstanding under the
Coleman Holdings Indenture as of the repurchase date plus
accrued and unpaid interest thereon through the repurchase
date, as determined pursuant to Section 4.08(a) of the
Coleman Holdings Indenture and (B) the aggregate amount
required as of the date of determination to be deposited
with the Trustee (as defined in the Coleman Holdings
Indenture) to effect the "legal defeasance option" or the
"covenant defeasance option" under the Coleman Holdings
Indenture (assuming a redemption date of July 15, 1996), as
provided for in Sections 8.02(1) and 8.02(2) of the Coleman
Holdings Indenture and Section 5 of Exhibit B to the Coleman
Holdings Indenture, plus
(ii) the "Redemption Price" as defined in Section 5 of
Exhibit A to the Coleman Worldwide Indenture (assuming a
redemption date of May 27, 1998) of the aggregate amount of
all Debt outstanding under the Coleman Worldwide Indenture
as of the redemption date.
New World
Guarantor: The Defeased Debt Amount for New World Guarantor shall be an
amount equal to the lesser of (x) the amount, if on such
date of determination NWCG Holdings is permitted to
optionally redeem, pursuant to the terms of the NWCG
Holdings Indenture, the Debt outstanding thereunder, that
NWCG Holdings would be required to pay to redeem such Debt
and (y) the greater of (A) the "repurchase price" (assuming
a repurchase date 105 days after the date of determination)
of the aggregate amount of all Debt outstanding under the
NWCG
<PAGE>
2
Holdings Indenture as of the repurchase date, as determined
pursuant to Section 4.07(a) of the NWCG Holdings Indenture
and (B) the aggregate amount required as of the date of
determination to be deposited with the Trustee (as defined
in the NWCG Holdings Indenture) to effect the "legal
defeasance option" or the "covenant defeasance option" under
the NWCG Holdings Indenture (assuming a maturity date of
June 15, 1999), as provided for in Sections 8.02(1) and
8.02(2) of the NWCG Holdings Indenture.
Revlon Guarantor: The Defeased Debt Amount for the Revlon Guarantor shall be
an amount equal to the lesser of (x) the amount, if on such
date of determination Revlon Worldwide is permitted to
optionally redeem, pursuant to the terms of the Revlon
Worldwide Indenture, the Debt outstanding thereunder, that
Revlon Worldwide would be required to pay to redeem such
Debt and (y)the greater of (A) the "purchase price"
(assuming a repurchase date 105 days after the date of
determination) of the aggregate amount of all Debt
outstanding under the Revlon Worldwide Indenture as of the
date of purchase plus accrued and unpaid interest thereon
through the date of purchase, as determined pursuant to
Section 4.09(a) of the Revlon Worldwide Indenture and (B)
the "redemption price" (assuming a redemption date 60 days
after the date of determination) for a "Change of Control"
(as defined in the Revlon Worldwide Indenture) of the
aggregate amount of all Debt outstanding under the Revlon
Worldwide Indenture as of the redemption date, as determined
pursuant to Section 5 of Exhibit B to the Revlon Worldwide
Indenture.
As used in this Schedule VI, the following terms shall have the
following meanings:
"Coleman Worldwide Indenture" means the Indenture, dated as of May 27,
1993, made by Coleman Worldwide in favor of Continental Bank, National
Association as trustee pursuant to which Coleman Worldwide issued its Liquid
Yield Option(TM) Notes due 2013.
"Coleman Holdings Indenture" means the Indenture, dated as of July 15,
1993 made by Coleman Holdings in favor of Continental Bank, National
Association as trustee pursuant to which Coleman Holdings issued its Senior
Secured Discount Notes due 1998 and its Series B Senior Secured Discount Notes
due 1998.
"NWCG Holdings Indenture" means the Indenture, dated as of June 30,
1994 made by NWCG Holdings in favor of Nationsbank of Georgia, National
Association as trustee
<PAGE>
3
pursuant to which NWCG Holdings issued its Senior Secured Discount Notes due
1999 and will issue its Series B Senior Secured Discount Notes due 1999.
"Revlon Worldwide Indenture" means the Indenture, dated as of March
15, 1993, made by Revlon Worldwide Corporation ("Revlon Worldwide") in favor of
The First National Bank of Boston as trustee pursuant to which Revlon Worldwide
issued its Senior Secured Discount Notes due 1998 and will issue its Series B
Senior Secured Discount Notes due 1998.
<PAGE>
Schedule VII
List of Debt for Definition of
Net Cash Proceeds
1. MacAndrews & Forbes Holdings Inc.
13% Subordinated Debentures due March 1, 1999 pursuant to the Indenture
dated as of March 1, 1984 between MacAndrews & Forbes Holdings Inc. and
the United States Trust Company of New York, as trustee.
2. Andrews Group Incorporated
10% Senior Subordinated Debentures due 1999 pursuant to the Indenture
dated as of June 4, 1990 between Andrews Group Incorporated and First
Trust of California, National Association, as trustee (as successor
trustee to Security Pacific National Trust Company (New York)).
3. Four Star Holdings Corp.
Senior Notes due June 7, 1999 issued by Four Star Holdings Corp. to
former shareholders (Lawrence L. Kuppin, Robert C. Rehme and Harry Evans
Sloan) in the aggregate principal amount of $46,154,500.
4. MacAndrews & Forbes Group Inc.
155/8% Senior Subordinated Notes due 1997 pursuant to the Indenture dated
October 22, 1982 between MacAndrews & Forbes Group Inc. and Security
Pacific National Bank, as trustee.
5. Revlon Group Incorporated
Redemption of Series B Cumulative Redeemable Exchangeable Preferred Stock
of Revlon Group Incorporated.
<PAGE>
EXHIBIT A-1
TO THE TERM
CREDIT AGREEMENT
FORM OF TRANCHE A TERM NOTE
$____________ Dated: December __, 1996
FOR VALUE RECEIVED, the undersigned, MARVEL IV HOLDINGS INC., a
Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
___________ (the "Lender") for the account of its Applicable Lending Office (as
defined in the Term Credit Agreement referred to below) the aggregate principal
amount of the Tranche A Term Advances (as defined below) owing to the Lender by
the Borrower pursuant to the Term Credit Agreement (as defined below) on the
dates and in the amounts specified in the Term Credit Agreement, but in no
event later than June 30, 1997.
The Borrower promises to pay interest on the unpaid principal amount
of each Tranche A Term Advance from the date of each Tranche A Term Advance
until such principal amount is paid in full, at such interest rates, and
payable at such times, as are specified in the Term Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Citibank, N.A., as Agent, at its offices at 399 Park
Avenue, New York, New York 10043, Account No. 3685-2248, in same day funds.
Each Tranche A Term Advance owing to the Lender by the Borrower and the
maturity thereof, and all payments made on account of principal thereof, shall
be recorded by the Lender and, prior to any transfer hereof, endorsed on the
grid attached hereto, which is part of this Promissory Note.
This Promissory Note is one of the Tranche A Term Notes referred to
in, and is entitled to the benefits of, the Term Credit Agreement dated as of
December 16, 1996 (such agreement, as it may hereafter be amended or modified,
being the "Term Credit Agreement") among the Borrower, the Lender, certain
other lenders parties thereto, the initial issuing bank thereunder, Citibank,
N.A., as Administrative Agent, NationsBanc Capital Markets, Inc., as
Documentation Agent, Credit Suisse, as Syndication Agent, Citibank, N.A., as
Collateral Agent and the managing agents party thereto. The Term Credit
Agreement, among other things, (i) provides for the making of Tranche A term
advances (the "Tranche A Term Advances") by the Lender to the Borrower from
time to
<PAGE>
2
time in an aggregate amount not to exceed at any time outstanding the U.S.
dollar amount first above mentioned, the indebtedness of the Borrower resulting
from such Tranche A Term Advances being evidenced by this Promissory Note, and
(ii) contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified.
This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York.
MARVEL IV HOLDINGS INC.
By:
--------------------------------
Title:
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
- -------------------------------------------------------------------------------
Amount of
Amount of Principal Paid Unpaid Principal Notation
Date Advance or Prepaid Balance Made by
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
EXHIBIT A-2 TO THE
TERM CREDIT
AGREEMENT
FORM OF TRANCHE B TERM NOTE
$____________ Dated: December__, 1996
FOR VALUE RECEIVED, the undersigned, MARVEL IV HOLDINGS INC., a
Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
___________ (the "Lender") for the account of its Applicable Lending Office (as
defined in the Term Credit Agreement referred to below) the aggregate principal
amount of the Tranche B Term Advances (as defined below) owing to the Lender by
the Borrower pursuant to the Term Credit Agreement (as defined below) on the
dates and in the amounts specified in the Term Credit Agreement, but in no
event later than June 30, 1997.
The Borrower promises to pay interest on the unpaid principal amount
of each Tranche B Term Advance from the date of each Tranche B Term Advance
until such principal amount is paid in full, at such interest rates, and
payable at such times, as are specified in the Term Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Citibank, N.A., as Agent, at its offices at 399 Park
Avenue, New York, New York 10043, Account No. 3685-2248, in same day funds.
Each Tranche B Term Advance owing to the Lender by the Borrower and the
maturity thereof, and all payments made on account of principal thereof, shall
be recorded by the Lender and, prior to any transfer hereof, endorsed on the
grid attached hereto, which is part of this Promissory Note.
This Promissory Note is one of the Tranche B Term Notes referred to
in, and is entitled to the benefits of, the Term Credit Agreement dated as of
December 16, 1996 (such agreement, as it may hereafter be amended or modified,
being the "Term Credit Agreement") among the Borrower, the Lender, certain
other lenders parties thereto, the initial issuing bank thereunder, Citibank,
N.A., as Administrative Agent, Credit Suisse, as Documentation Agent,
NationsBanc Capital Markets, Inc., as Syndication Agent, Citibank, N.A., as
Collateral Agent and the managing agents party
<PAGE>
2
thereto. The Term Credit Agreement, among other things, (i) provides for the
making of Tranche B term credit advances (the "Tranche B Term Advances") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed
at any time outstanding the U.S. dollar amount first above mentioned, the
indebtedness of the Borrower resulting from such Tranche B Term Advances being
evidenced by this Promissory Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and also for prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified.
This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York.
MARVEL IV HOLDINGS INC.
By:
--------------------------------
Title:
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
- -------------------------------------------------------------------------------
Amount of
Amount of Principal Paid Unpaid Principal Notation
Date Advance or Prepaid Balance Made by
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
EXHIBIT B
TO THE TERM
CREDIT AGREEMENT
FORM OF
ASSIGNMENT AND ACCEPTANCE
Dated _________, 199_
Reference is made to the Term Credit Agreement dated as of December
__, 1996 (as amended or otherwise modified from time to time, the "Term Credit
Agreement") among Marvel IV Holdings Inc., a Delaware corporation (the
"Borrower"), the Lender Parties (as defined in the Term Credit Agreement),
Citibank, N.A., as Administrative Agent (the "Administrative Agent"), Credit
Suisse, as Documentation Agent, NationsBanc Capital Markets, Inc., as
Syndication Agent, Citibank, N.A., as Collateral Agent and the managing agents
party thereto. Terms defined in the Term Credit Agreement are used herein with
the same meaning.
____________ (the "Assignor") and ___________ (the "Assignee") agree
as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, an interest in and to
the Assignor's rights and obligations under the Term Credit Agreement as of the
date hereof equal to the percentage interest specified on Annex 1 of all
outstanding rights and obligations under the Facility or Facilities specified
on Annex 1. After giving effect to such sale and assignment, the Assignee's
Commitment and the amount of the Advances owing to the Assignee will be as set
forth in Annex 1.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Loan Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of any Loan Document or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of its obligations under the
Loan Documents or any other instrument or document furnished pursuant thereto;
and (iv) attaches the Note or Notes held by the Assignor and requests that the
Administrative Agent exchange such Note or Notes for a new Note or Notes
payable to the order of the Assignee in an amount equal to
<PAGE>
2
the Commitments assumed by the Assignee pursuant hereto or new Notes payable to
the order of the Assignee in an amount equal to the Commitments assumed by the
Assignee pursuant hereto and the Assignor in an amount equal to the Commitment
retained by the Assignor under the Term Credit Agreement, respectively, as
specified on Annex 1.
3. The Assignee (i) confirms that it has received a copy of the Term
Credit Agreement, together with copies of the financial statements referred to
in Section 4.01 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Administrative Agent, any other Agent, the Assignor
or any other Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Term Credit Agreement; (iii) confirms
that it is an Eligible Assignee; (iv) appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under the Term Credit Agreement as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Term Credit
Agreement are required to be performed by it as a Lender; [and] (vi) specifies
as its Lending Office (and address for notices) the office set forth beneath
its name on the signature pages hereof [and (vii) attaches the forms prescribed
by the Internal Revenue Service of the United States certifying as to the
Assignee's status for purposes of determining exemption from United States
withholding taxes with respect to all payments to be made to the Assignee under
the Term Credit Agreement or such other documents as are necessary to indicate
that all such payments are subject to such rates at a rate reduced by an
applicable tax treaty].1
4. Following the execution of this Assignment and Acceptance by the
Assignor and the Assignee, it will be delivered to the Administrative Agent for
acceptance and recording by the Administrative Agent. The effective date of
this Assignment and Acceptance shall be the date of acceptance thereof by the
Administrative Agent, unless otherwise specified on Annex 1 hereto (the
"Effective Date").
5. Upon such acceptance and recording by the Administrative Agent, as
of the Effective Date, (i) the Assignee shall be a party to the Term Credit
Agreement and, to the extent provided in this Assignment and Acceptance, have
the rights and obligations of a Lender thereunder and (ii) the Assignor shall,
to the extent provided in this Assignment and
- --------
1 Include clause (vii) if the Assignee is organized under the laws of a
jurisdiction outside the United States.
<PAGE>
3
Acceptance, relinquish its rights and be released from its obligations under
the Term Credit Agreement.
6. Upon such acceptance and recording by the Administrative Agent,
from and after the Effective Date, the Administrative Agent shall make all
payments under the Term Credit Agreement and the Notes in respect of the
interest assigned hereby (including, without limitation, all payments of
principal, interest and commitment fees with respect thereto) to the Assignee.
The Assignor and Assignee shall make all appropriate adjustments in payments
under the Term Credit Agreement and the Notes for periods prior to the
Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Annex 1 to this Assignment and Acceptance by telecopier shall be
as effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
IN WITNESS WHEREOF, the parties hereto have caused Annex 1 to this
Assignment and Acceptance to be executed by their respective officers thereunto
duly authorized, as of the date first above written, such execution being made
on Annex 1 hereto.
<PAGE>
Annex 1
to
Assignment and Acceptance
Dated __, 199_
As to each Facility in respect of which an interest is being assigned.
Percentage Interest assigned: _________%
Assignee's Tranche A Term Commitment: $_________
Aggregate outstanding principal
amount of Tranche A Term Advances assigned: $_________
Principal amount of Tranche A Term
Note payable to Assignee: $_________
Principal amount of Tranche A Term
Note payable to Assignor: $_________
Assignee's Tranche B Term Commitment: _________%
Aggregate outstanding principal amount of
Tranche B Term Advances assigned: $_________
Principal amount of Tranche B
Note payable to Assignee: $_________
Principal amount of Tranche B Term
Note payable to Assignor: $_________
Effective Date**: ______________, 199_
[NAME OF ASSIGNOR, as Assignor]
By:
--------------------------------
Title:
[NAME OF ASSIGNOR, as Assignor]
By:
--------------------------------
Title:
Lending Office
(and address for notices):
[Address]
- ------------------------
** This date should be no earlier than the date of acceptance by the
Administrative Agent.
<PAGE>
Accepted this ___ day of _________________,
199_
CITIBANK, N.A.,
as Administrative Agent
By:
-----------------------------------------
Title:
<PAGE>
EXHIBIT C
TO THE TERM
CREDIT AGREEMENT
FORM OF
NOTICE OF BORROWING
Citibank, N.A.
as Administrative Agent for the Lenders parties
to the Term Credit Agreement [Date]
referred to below
399 Park Avenue
New York, New York 10043
Attention: _____________
Ladies and Gentlemen:
The undersigned, Marvel IV Holdings Inc., refers to the Term
Credit Agreement dated as of December 16, 1996 (as amended or otherwise
modified from time to time, the "Term Credit Agreement"; the terms defined
therein being used herein as therein defined), among the undersigned, certain
Lender Parties parties thereto, Citibank, N.A., as Administrative Agent, Credit
Suisse, as Documentation Agent, NationsBanc Capital Markets, Inc., as
Syndication Agent, Citibank, N.A., as Collateral Agent and the managing agents
party thereto and hereby gives you notice, irrevocably, pursuant to Section
2.02 of the Term Credit Agreement that the undersigned hereby requests a
Borrowing under the Term Credit Agreement, and in that connection sets forth
below the information relating to such Borrowing (the "Proposed Borrowing") as
required by Section 2.02(a) of the Term Credit Agreement:
(i) The Business Day of the Proposed Borrowing is ____________,
[199_].
(ii) The Facility under which the Proposed Borrowing is to be made
is the [Tranche A] [Tranche B] Term Facility.
(iii) The Type of Advances comprising the Proposed Borrowing is
[Base Rate Advances] [Eurodollar Rate Advances].
(iv) The aggregate amount of the Proposed Borrowing is $__________.
(v) The initial Interest Period for each Eurodollar Rate Advance
made as part of the Proposed Borrowing is _____ month[s].]
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Borrowing:
<PAGE>
2
(A) the representations and warranties contained in the Loan
Documents are correct in all material respects on and as of the date
of such Proposed Borrowing, before and after giving effect to the
Proposed Borrowing and to the application of the proceeds therefrom,
as though made on and as of such date, except to the extent such
representations and warranties specifically relate to an earlier date,
in which case such representations and warranties were true, correct
and complete in all material respects on and as of such earlier date;
and
(B) no Default has occurred and is continuing, or would result
from such Proposed Borrowing or from the application of the proceeds
therefrom.
Very truly yours,
MARVEL IV HOLDINGS INC.
By:
--------------------------------
Title:
<PAGE>
EXHIBIT I
TO THE TERM
CREDIT AGREEMENT
FORM OF CONFIDENTIALITY LETTER
[BANK LETTERHEAD]
[Date]
Citibank, N.A.
as Administrative Agent
399 Park Avenue
New York, NY 10043
[Name and address of Bank
selling a participation or
making an assignment under
the Term Credit Agreement
referred to below]
Dear Sirs:
We understand that Citibank, N.A. ("Citibank") is acting as
Administrative Agent under the Term Credit Agreement dated as of December 16,
1996 (as amended or otherwise modified from time to time, the "Term Credit
Agreement"; terms used herein and not otherwise defined are used as defined
therein) among Marvel IV Holdings Inc. (the "Borrower"), Citibank, as
Administrative Agent, the banks and financial institutions and other
institutional lenders party thereto (the "Lender Parties"), Credit Suisse, as
Documentation Agent, NationsBanc Capital Markets, Inc., as Syndication Agent,
Citibank, as Collateral Agent and the managing agents party thereto. In
connection with our evaluation of a proposed purchase of a participation in, or
acceptance of an assignment of, a portion of the Advances and Commitments,
Citibank and/or a Lender or an affiliate of Citibank or a Lender have
furnished, and will furnish, us with a copy of the Term Credit Agreement and
non-public information concerning the Borrower and the Bank (all such
non-public information, whether furnished before or after the date of this
letter, and including, without limitation, the financial model referred to
below, collectively the "Transaction Information").
We agree to keep confidential (and to cause our officers, directors,
employees, agents and representatives to keep confidential) all Transaction
Information and, in the event we do not participate or accept an assignment
under the Term Credit Agreement, at Citibank's, such Lender's or the Borrower's
request, to return (and to cause such other person to return)
<PAGE>
3
to Citibank, such Lender or the Borrower, as the case may be, all written
Transaction Information and all copies thereof, extracts therefrom and analyses
and other materials based thereon, except that we shall be permitted to
disclose details of the Transaction Information (i) to such of our officers,
directors, employees, agents and representatives (which agents and
representatives shall not include any financial institutions) and legal or
other advisors who need to know such information in connection with our
evaluation of a possible participation in, or possible acceptance of an
assignment of, Advances and Commitment thereunder and who agree to be bound by
the restrictions set forth herein; (ii) to the extent required by applicable
laws and regulations or by any subpoena or similar legal process (provided that
we will promptly notify the Borrower of such requirement as far in advance of
its disclosure as is practicable to enable the Borrower to seek a protective
order and, to the extent practicable, we will cooperate with the Borrower in
seeking any such order), or requested by any governmental agency or authority
having jurisdiction over us (provided that we will first inform the Borrower of
any such request other than those from bank regulatory authorities or examiners
and, in either case, we will inform any such agency or authority that such
information is subject to this letter agreement); (iii) to the extent Citibank
and the Borrower shall have consented to such disclosure in writing; and (iv)
to the extent that a public announcement or dissemination of such Transaction
Information shall have been made other than as a result of a breach of this
Confidentiality Letter.
We further agree that we will use the Transaction Information only in
connection with our evaluation of becoming a possible participant or Eligible
Assignee under the Term Credit Agreement.
The undertakings contained herein are for your benefit and the benefit
of the Borrower.
Upon its receipt of this confidentiality letter signed by us, we
understand that Citibank or a Lender may forward to us a financial model for
the periods through 1999 pertaining to the Borrower and the Bank. Such
information will subsequently form part of the Transaction Information for all
purposes hereunder.
We understand that the financial model was prepared in good faith by
Mafco's management based on assumptions believed to be reasonable when made.
However, because assumptions as to future results are inherently subject to
uncertainty and contingencies beyond Mafco's control, actual results of the
Borrower and the Bank may be higher or lower.
[Name of Lender]
By:
-------------------------------
Title:
<PAGE>
EXECUTION COPY
$250,000,000
FIFTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
Dated as of March 20, 1997
Among
MAFCO FINANCE CORP.
(formerly known as MARVEL IV HOLDINGS INC.),
as Borrower,
-----------
THE FINANCIAL INSTITUTIONS AND
THE INITIAL ISSUING BANK NAMED HEREIN,
as Financial Institutions and
-----------------------------
Initial Issuing Bank,
--------------------
CITIBANK, N.A.,
as Administrative Agent and Collateral Agent,
--------------------------------------------
THE BANK OF NEW YORK,
as Documentation Agent,
----------------------
and
THE FIRST NATIONAL BANK OF BOSTON,
as Syndication Agent
--------------------
<PAGE>
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms....................................... 3
SECTION 1.02. Computation of Time Periods................................. 40
SECTION 1.03. Accounting Terms............................................ 41
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances................................................ 41
SECTION 2.02. Making the Advances......................................... 42
SECTION 2.03. Issuance of and Drawings and Reimbursement Under Letters of
Credit..................................................... 44
SECTION 2.04. Repayment................................................... 46
SECTION 2.05. Termination or Reduction of the Commitments................. 47
SECTION 2.06. Prepayments................................................. 51
SECTION 2.07. Interest.................................................... 52
SECTION 2.08. Interest Rate Determination................................. 53
SECTION 2.09. Fees ...................................................... 54
SECTION 2.10. Increased Costs; Illegality................................. 54
SECTION 2.11. Conversion of Advances...................................... 56
SECTION 2.12. Payments and Computations................................... 57
SECTION 2.13. Taxes ...................................................... 58
SECTION 2.14. Sharing of Payments, Etc.................................... 61
SECTION 2.15. Removal of Lender........................................... 62
SECTION 2.16. Defaulting Lender........................................... 62
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Effective Date...................... 65
SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance......... 73
SECTION 3.03. Determinations Under Section 3.01........................... 75
<PAGE>
ii
Page
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower.............. 75
SECTION 4.02. Representations and Warranties Applicable to Marvel......... 80
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants....................................... 80
(a) Compliance with Laws, Etc............................... 80
(b) Compliance with Environmental Laws...................... 80
(c) Maintenance of Insurance................................ 81
(d) Preservation of Corporate Existence, Etc................ 81
(e) Visitation Rights....................................... 81
(f) Keeping of Books........................................ 81
(g) Maintenance of Properties, Etc.......................... 81
(h) Termination of Financing Statements..................... 82
(i) Collateral Account...................................... 82
(j) Reporting Requirements.................................. 82
(k) Look-Forward Certificate................................ 85
(l) Transactions with Affiliates............................ 86
(m) Use of Proceeds......................................... 86
(n) Mafco Tax Group......................................... 86
(o) Net Cash Proceeds....................................... 87
SECTION 5.02. Negative Covenants.......................................... 87
(a) Liens, Etc.............................................. 87
(b) Lease Obligations....................................... 87
(c) Mergers, Etc............................................ 87
(d) Sales, Etc. of Assets................................... 87
(e) Dividends, Repurchases, Etc............................. 88
(f) Investments............................................. 88
(g) Change in Nature of Business............................ 89
(h) Accounting Changes...................................... 89
(i) Debt.................................................... 89
(j) Charter Amendments...................................... 89
(k) Prepayments, Etc. of Debt............................... 89
(l) Negative Pledge......................................... 89
(m) Partnerships............................................ 89
<PAGE>
iii
Page
(n) Capital Expenditures.................................... 89
(o) ssuance of Capital Stock................................ 90
(p) Payment Restrictions.................................... 90
(q) Amendment, Etc. of Related Documents.................... 90
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default........................................... 90
SECTION 6.02. Actions in Respect of the Letters of Credit upon Event of
Default.................................................... 96
ARTICLE VII
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
SECTION 7.01. Authorization and Action.................................... 97
SECTION 7.02. Administrative Agent's and Collateral Agent's Reliance, Etc. 97
SECTION 7.03. Citibank and Affiliates..................................... 98
SECTION 7.04. Lender Party Credit Decision................................ 98
SECTION 7.05. Indemnification............................................. 98
SECTION 7.06. Successor Administrative Agent and Collateral Agent.........100
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc.............................................101
SECTION 8.02. Notices, Etc................................................102
SECTION 8.03. No Waiver; Remedies.........................................102
SECTION 8.04. Costs; Expenses.............................................102
SECTION 8.05. Right of Set-off............................................104
SECTION 8.06. Binding Effect..............................................104
SECTION 8.07. Assignments and Participations..............................105
SECTION 8.08. Governing Law; Submission to Jurisdiction...................108
SECTION 8.09. Execution in Counterparts...................................109
SECTION 8.10. No Liability of the Issuing Bank............................109
SECTION 8.11. WAIVER OF JURY TRIAL........................................109
<PAGE>
iv
Schedule I - List of Commitments and Lending Offices
Schedule II - Borrower Information
Schedule III - List of Existing Debt
Schedule IV - List of Investments
Schedule V - List of Existing Liens
Schedule VI - Calculation of Defeased Debt Amount
Schedule VII - List of Debt for the Definition of Net Cash Proceeds
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Assignment and Acceptance
Exhibit C - Form of Notice of Borrowing
Exhibit D - Form of Mafco Security Agreement
Exhibit E-1 - Form of Mafco Guaranty
Exhibit E-2 - Form of C&F Guaranty
Exhibit E-3 - Form of Cigar Guaranty
Exhibit E-4 - Form of Coleman Guaranty
Exhibit E-5 - Form of Flavors Guaranty
Exhibit E-6 - Form of New World Guaranty
Exhibit E-7 - Form of Revlon Guaranty
Exhibit E-8 - Form of Revlon Worldwide Holdings Guaranty
Exhibit F-1 - Form of C&F Pledge Agreement
Exhibit F-2 - Form of New World Pledge Agreement
Exhibit F-3 - Form of Revlon Pledge Agreement
<PAGE>
v
Exhibit F-4 - Form of Revlon Worldwide Holdings Pledge Agreement
Exhibit F-5 - Form of Revlon Worldwide Parent Pledge Agreement
Exhibit G - Form of Confidentiality Letter
<PAGE>
FIFTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
FIFTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT dated as of
March 20, 1997 among MAFCO FINANCE CORP., a Delaware corporation (formerly
known as MARVEL IV HOLDINGS INC.) (the "Borrower"), the banks, financial
institutions and other institutional lenders (the "Financial Institutions")
listed on the signature pages hereof, the Initial Issuing Bank (as hereinafter
defined), CITIBANK, N.A. ("Citibank"), as administrative agent (together with
any successor appointed pursuant to Article VII, the "Administrative Agent")
for the Lender Parties (as hereinafter defined) hereunder, THE BANK OF NEW
YORK, as documentation agent (the "Documentation Agent") for the Lender Parties
hereunder, THE FIRST NATIONAL BANK OF BOSTON, as syndication agent (the
"Syndication Agent"; together with the Administrative Agent and the
Documentation Agent, the "Agents") for the Lender Parties hereunder, and
Citibank, as collateral agent (together with any successor appointed pursuant
to Article VII, the "Collateral Agent") for the Lender Parties hereunder and
the Term Credit Agreement Lenders (as hereinafter defined).
PRELIMINARY STATEMENTS
(1) In connection with the purchase of certain assets and the
assumption of certain liabilities (the "Original Transaction") of First
Nationwide Bank, A Federal Savings Bank, by First Madison Bank, F.S.B. (now
known as California Federal Bank, A Federal Savings Bank), an indirect
Subsidiary (as hereinafter defined) of Mafco Holdings Inc., a Delaware
corporation ("Mafco"), the Borrower entered into a Credit Agreement dated as of
July 20, 1994, as amended by the First Amendment dated as of March 10, 1995
(said agreement, as so amended, being the "Original Credit Agreement"), with
the financial institutions and other institutional lenders party thereto (the
"Original Lenders") and Citibank, as agent for the Original Lenders.
(2) Pursuant to the Original Credit Agreement, the Borrower requested
that the Original Lenders make advances to it, in an aggregate principal amount
of up to $240,000,000, on the terms and conditions set forth therein.
(3) Subsequently, the Borrower entered into an Amended and Restated
Credit Agreement dated as of June 29, 1995, as amended by the First Amendment
dated as of October 27, 1995 (said agreement, as so amended, being the "Second
Credit Agreement"), with the financial institutions and other institutional
lenders thereto and Citibank, as agent for such financial institutions and
other institutional lenders.
(4) Pursuant to the Second Credit Agreement, the Borrower requested
that the financial institutions and other institutional lenders party thereto
make advances to it in an aggregate principal amount of up to $350,000,000, on
the terms and conditions set forth therein.
<PAGE>
2
(5) Subsequently, the Borrower entered into a Second Amended and
Restated Credit Agreement dated as of December 15, 1995, as amended by the
First Amendment dated as of January 9, 1996, the Second Amendment dated as of
January 24, 1996 and the Third Amendment dated as of April 9, 1996 (said
agreement, as so amended, being the "Third Credit Agreement"), with the
financial institutions and other institutional lenders party thereto (the
"Third Lenders") and Citibank, as agent for the Third Lenders.
(6) Pursuant to the Third Credit Agreement, the Borrower requested
that the Third Lenders make advances to it in an aggregate principal amount of
up to $430,000,000, on the terms and conditions set forth therein.
(7) Subsequently, the Borrower entered into a Third Amended and
Restated Credit Agreement dated as of June 3, 1996, as amended by the First
Amendment dated as of September 9, 1996 and the Second Amendment dated as of
October 9, 1996 (said agreement, as so amended, being the "Fourth Credit
Agreement"), with the financial institutions and other institutional lenders
party thereto (the "Fourth Lenders") and Citibank, as agent for the Existing
Lenders.
(8) Pursuant to the Fourth Credit Agreement, the Borrower requested
that the Fourth Lenders make advances to it in an aggregate principal amount of
up to $250,000,000, on the terms and conditions set forth therein.
(9) Subsequently, the Borrower entered into a Fourth Amended and
Restated Revolving Credit Agreement dated as of December 16, 1996, as amended
by the Waiver and Amendment dated as of December 23, 1996 and the Second
Amendment dated as of February 26, 1997 (said agreement, as so amended, being
the "Existing Credit Agreement"), with the financial institutions and other
institutional lenders party thereto (the "Existing Lenders"), Citibank, as
administrative agent for the Existing Lenders, The First National Bank of
Boston, as documentation agent for the Existing Lenders, Chase Securities Inc.,
as syndication agent for the Existing Lenders, the managing agents party
thereto and Citibank, as collateral agent for the Existing Lenders.
(10) Pursuant to the Existing Credit Agreement, the Borrower requested
that the Existing Lenders make advances to it in an aggregate principal amount
of up to $300,000,000 on the terms and conditions set forth therein.
(11) Concurrently with entering into the Existing Credit Agreement,
the Borrower entered into a Term Credit Agreement dated as of December 16,
1996, as amended by the Waiver and Amendment dated as of December 23, 1996 and
the Second Amendment dated as of February 26, 1997 (said agreement, as so
amended, being the "Existing Term
<PAGE>
3
Credit Agreement"), with the banks, financial institutions and other
institutional lenders party thereto (the "Existing Term Lenders"), Citibank, as
administrative agent, NationsBanc Capital Markets Inc., as documentation agent,
Credit Suisse First Boston, as syndication agent, the managing agents party
thereto and Citibank, as collateral agent. Pursuant to the Existing Term Credit
Agreement, the Borrower requested that the Existing Term Lenders make advances
to it in an aggregate principal amount of up to $350,000,000, on the terms and
conditions set forth therein.
(12) Concurrently with entering into this Agreement, the Borrower is
entering into an Amended and Restated Term Credit Agreement dated as of the
date hereof (as it may hereafter be amended or otherwise modified from time to
time, the "Term Credit Agreement") with the banks, financial institutions and
other institutional lenders party thereto (the "Term Credit Agreement
Lenders"), Citibank, as administrative agent (in such capacity, the "Term
Administrative Agent"), Credit Suisse First Boston, as documentation agent (in
such capacity, the "Term Documentation Agent"), Chase Securities Inc., as
syndication agent (in such capacity, the "Term Syndication Agent"; together
with the Term Administrative Agent and the Term Documentation Agent, the "Term
Agents") and the Collateral Agent.
(13) The Borrower has requested that the Financial Institutions
hereunder enter into this Agreement to amend and restate the Existing Credit
Agreement and to lend the Borrower and issue Letters of Credits for the benefit
of the Borrower from time to time in an aggregate principal amount of up to
$250,000,000. The Financial Institutions hereunder have indicated their
willingness to amend and restate the Existing Credit Agreement and to agree to
lend such amounts on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the parties hereto hereby agree
that, subject to the satisfaction of the conditions set forth in Section 3.01,
the Existing Credit Agreement is amended and restated in its entirety to read
as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
<PAGE>
4
"A Company" means each Loan Party, FN Parent, FN Holdings, Coleman
Holdings Inc., Coleman Worldwide, National Health Care Group Inc., Revlon
Holdings Inc. and Revlon Worldwide.
"Administrative Agent" has the meaning specified in the recital of
parties to this Agreement.
"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent with Citibank at
399 Park Avenue, New York, New York 10043, Account No. 3685-2248.
"ADR Collateral Account" has the meaning specified in the Mafco
Security Agreement.
"ADR Reserve Amount" means, as of any date, with respect to the
Revolving Credit Facility, an amount (not less than $0) equal to the excess of
(i) the aggregate amount released from the ADR Collateral Account on or prior
to such date (to the extent such amount has not been redeposited in the ADR
Collateral Account) in accordance with the provisions of Section 7(i) of the
Mafco Security Agreement over (ii) the aggregate amount of the proceeds of the
Revolving Credit Borrowings made pursuant to the proviso in Section 2.01(a).
"Advance" means a Revolving Credit Advance or a Letter of Credit
Advance.
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term "control" (including the terms "controlling", "controlled
by" and "under common control with") of a Person means the possession, direct
or indirect, of the power to vote 5% or more of the Voting Stock of such Person
or to direct or cause direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or otherwise.
"Agents" has the meaning specified in the recital of parties to this
Agreement.
"Andrews" means Andrews Group Incorporated, a Delaware corporation.
"Applicable Lending Office" means, with respect to each Lender Party,
such Lender Party's Domestic Lending Office in the case of a Base Rate Advance
and such Lender Party's Eurodollar Lending Office in the case of a Eurodollar
Rate Advance.
"Applicable Margin" means, at any time, 2.50% per annum for Base Rate
Advances and 4.50% per annum for Eurodollar Rate Advances.
<PAGE>
5
"Asset Sale" means the sale, lease, transfer or other disposition
(collectively, a "disposition") of assets of Mafco or any of its Subsidiaries
other than a disposition of any of the following:
(i) all or any portion of the capital stock of Laboratory
Corporation of America Holdings, or Meridian Sports Incorporated,
(ii) all or any portion of the capital stock or assets of the
Bank or any of its Subsidiaries,
(iii) any asset of Ropa Two Corporation so long as the Net Cash
Proceeds from any disposition of an asset of Ropa Two Corporation
shall be reinvested, within twelve months following the date of such
disposition, in the business of Ropa Two Corporation or any of its
Subsidiaries, and
(iv) all or any portion of the News Corp. Preferred ADRs;
provided, however, that
(a) a disposition of assets of (x) a Designated Operating Company
or any of its Subsidiaries, (y) Meridian Sports Incorporated or any of
its Subsidiaries or (z) Marvel or any of its Subsidiaries shall, in
each case, only be considered an Asset Sale for purposes of this
Agreement to the extent, and only to the extent, that all or a portion
of the proceeds of such disposition are received by any of Mafco or
any of its Subsidiaries (other than (i) a Designated Operating Company
or any of its Subsidiaries, (ii) Meridian Sports Incorporated or any
of its Subsidiaries or (iii) Marvel or any of its Subsidiaries)
through a dividend, distribution, loan, advance or other similar
payment,
(b) subject to the other clauses of this proviso, so long as the
Revlon Holdings Statement is true and correct both before and after
giving effect to such disposition, a disposition of assets of Revlon
Holdings Inc. or any of its Subsidiaries (other than Revlon Worldwide
Parent and Revlon Worldwide Holdings) shall only be considered an
Asset Sale for purposes of this Agreement to the extent, and only to
the extent, that all or a portion of the proceeds of such disposition
are received by any of Mafco or any of its Subsidiaries (other than
Revlon Holdings Inc. or any of its Subsidiaries (other than Revlon
Worldwide Parent and Revlon Worldwide Holdings)) through a dividend,
distribution, loan, advance or other similar payment,
<PAGE>
6
(c) notwithstanding clause (b) of this proviso, a disposition of
all or any portion of the capital stock of Revlon Worldwide, Revlon
Worldwide Parent, Revlon Worldwide Holdings, National Health Care
Group, Inc. or Charles of the Ritz Group Ltd. (but in the case of
Charles of the Ritz Group Ltd., only if it owns any of the capital
stock of Revlon Worldwide Corporation at the time of such disposition)
and a disposition of all or any portion of the capital stock of Revlon
pledged in favor of the Collateral Agent shall be considered an Asset
Sale for purposes of this Agreement, and
(d) notwithstanding clause (b) of this proviso, a disposition of
any asset (other than assets specifically excluded from this
definition of "Asset Sale") of National Health Care Group, Inc. or any
of its Subsidiaries (other than Revlon and its Subsidiaries) shall be
considered an Asset Sale for purposes of this Agreement.
"Asset Sale Threshold" means the receipt on and after the Effective
Date by Mafco and its Subsidiaries of aggregate Net Cash Proceeds from Asset
Sales in an amount equal to the excess of (x) $265 million over (y) the
aggregate Net Cash Proceeds from Asset Sales received by Mafco and its
Subsidiaries during the period from February 24, 1997 through the Effective
Date.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender Party and an assignee of such Lender Party, and accepted by
the Administrative Agent, in substantially the form of Exhibit B hereto.
"Available Amount" of any Letter of Credit means, at any time, the
maximum amount available to be drawn under such Letter of Credit at such time
(assuming compliance at such time with all conditions to drawing).
"Bank" means California Federal Bank, A Federal Savings Bank, and any
successor thereto.
"Bank Preferred Stock Document" means the Federal Stock Charter of
California Federal Bank, A Federal Savings Bank, as supplemented by the First
Supplemental Section to Section 5B of the Charter of California Federal Bank, A
Federal Savings Bank, the Second Supplemental Section to Section 5B of the
Charter of California Federal Bank, A Federal Savings Bank, the Third
Supplemental Section to Section 5B of the Charter of California Federal Bank, A
Federal Savings Bank, and the Fourth Supplemental Section to Section 5B of the
Charter of California Federal Bank, A Federal Savings Bank.
<PAGE>
7
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the highest
of:
(a) the rate of interest announced publicly by Citibank in New York,
New York, from time to time, as Citibank's base rate; 7
(b) the sum (adjusted to the nearest 1/4 of 1% or, if there is no
nearest 1/4 of 1%, to the next higher 1/4 of 1%) of (i) 1/2 of 1% per
annum, plus (ii) the rate obtained by dividing (A) the latest three-week
moving average of secondary market morning offering rates in the United
States for three-month certificates of deposit of major United States money
market banks, such three-week moving average (adjusted to the basis of a
year of 360 days) being determined weekly on each Monday (or, if such day
is not a Business Day, on the next succeeding Business Day) for the
three-week period ending on the previous Friday by Citibank on the basis of
such rates reported by certificate of deposit dealers to and published by
the Federal Reserve Bank of New York or, if such publication shall be
suspended or terminated, on the basis of quotations for such rates received
by Citibank from three New York certificate of deposit dealers of
recognized standing selected by Citibank, by (B) a percentage equal to 100%
minus the average of the daily percentages specified during such three-week
period by the Board of Governors of the Federal Reserve System (or any
successor thereto) for determining the maximum reserve requirement
(including, but not limited to, any emergency, supplemental or other
marginal reserve requirement) for Citibank with respect to liabilities
consisting of or including (among other liabilities) three-month U.S.
dollar non-personal time deposits in the United States, plus (iii) the
average during such three-week period of the annual assessment rates
estimated by Citibank for determining the then current annual assessment
payable by Citibank to the Federal Deposit Insurance Corporation (or any
successor thereto) for insuring U.S. dollar deposits of Citibank in the
United States; and
(c) 1/2 of 1% per annum above the Federal Funds Rate.
"Base Rate Advance" means an Advance that bears interest as provided
in Section 2.07(a)(i).
"Borrower" has the meaning specified in the recital of parties to this
Agreement.
"Borrower Collateral Account" has the meaning specified in the
Borrower Security Agreement.
<PAGE>
8
"Borrower Parent" means Mafco Guarantor Corp., a Delaware corporation
(formerly known as Marvel V Holdings Inc.).
"Borrower Parent Guaranty" means the Third Amended and Restated
Guaranty dated as of December 16, 1996 made by the Borrower Parent in favor of
the Lender Parties, the Term Credit Agreement Lenders, the Agents, the Term
Agents and the Collateral Agent, as such guaranty may be amended or otherwise
modified from time to time in accordance with its terms.
"Borrower Parent Security Agreement" means the Amended and Restated
Security Agreement dated as of December 16, 1996 made by the Borrower Parent
and The Bank of New York, in its capacity as voting trustee, to the Collateral
Agent, as such agreement may be amended or otherwise modified from time to time
in accordance with its terms.
"Borrower Security Agreement" means the Fourth Amended and Restated
Borrower Security Agreement dated as of December 16, 1996 made by the Borrower
to the Collateral Agent, as such agreement may be amended or otherwise modified
from time to time in accordance with its terms.
"Borrower's Account" means the account of the Borrower maintained by
the Borrower with Citibank, N.A., at its office at 399 Park Avenue, New York,
New York 10043, Account No. 40650489.
"Borrowing" means a Revolving Credit Borrowing.
"Business Day" means a day of the year on which banks are not required
or authorized by law to close in New York City and, if the applicable Business
Day relates to any Eurodollar Rate Advances, on which dealings are carried on
in the London interbank market and banks are open for business in London.
"C&F Guarantor" means Mafco Consolidated Holdings Inc., a Delaware
corporation (formerly known as C&F (Parent) Holdings Inc.).
"C&F Guaranty" means the Third Amended and Restated Guaranty dated as
of March 20, 1997 made by C&F Guarantor in favor of the Lender Parties, the
Term Credit Agreement Lenders, the Agents, the Term Agents and the Collateral
Agent, as such guaranty may be amended or otherwise modified from time to time
in accordance with its terms.
"C&F Pledge Agreement" means the Second Amended and Restated Pledge
Agreement dated as of March 20, 1997 made by C&F Guarantor to the Collateral
Agent, as
<PAGE>
9
such agreement may be amended or otherwise modified from time to time in
accordance with its terms.
"Calculation Period" means, for any date in respect of any common
stock, the immediately preceding five Business Days during which such common
stock traded on the relevant national stock exchange or the Nasdaq national
market system.
"Capital Expenditures" means, for any period, the sum of (a) all
expenditures during such period for equipment, fixed assets, real property or
improvements, or for replacements or substitutions therefor or additions
thereto, that have a useful life of more than one year plus (b) the aggregate
principal amount of all Debt (including obligations under Capitalized Leases)
assumed or incurred in connection with any such expenditures.
"Capitalized Leases" has the meaning specified in clause (e) of the
definition of "Debt".
"Cash Equivalents" means any of the following, to the extent owned by
the Borrower or its Subsidiaries free and clear of all Liens and having a
maturity not greater than 180 days from the date of issuance thereof: (a)
direct obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
faith and credit of the Government of the United States, (b) insured
certificates of deposit of or time deposits with any commercial bank that is a
Lender Party or a member of the Federal Reserve System, issues (or the parent
of which issues) commercial paper rated as described in clause (c), is
organized under the laws of the United States or any State thereof and has
combined capital and surplus of at least $1,000,000,000, (c) commercial paper
in an aggregate amount of not more than $10,000,000 per issuer outstanding at
any time, issued by any corporation organized under the laws of any State of
the United States and rated at least "Prime-1" (or the then equivalent grade)
by Moody's Investors Services, Inc. or "A-1" (or the then equivalent grade) by
Standard & Poor's Ratings Group or (d) shares of money market mutual or similar
funds having assets in excess of $100,000,000 and which invest exclusively in
assets satisfying the requirements of clauses (a) through (c) of this
definition.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980.
"Cigar Guarantor" means Consolidated Cigar II Holdings Inc., a
Delaware corporation.
"Cigar Guaranty" means the Fourth Amended and Restated Cigar Guaranty
dated as of March 20, 1997 made by Cigar Guarantor in favor of the Lender
Parties, the
<PAGE>
10
Term Credit Agreement Lenders, the Agents, the Term Agents and the Collateral
Agent, as such guaranty may be amended or otherwise modified from time to time
in accordance with its terms.
"Cigar Non-Operating Subsidiary" means C&F Guarantor.
"Cigar Pledge Agreement" means the Second Amended and Restated Cigar
Pledge Agreement dated as of December 16, 1996 made by Cigar Guarantor and The
Bank of New York, in its capacity as voting trustee, to the Collateral Agent,
as such agreement may be amended or otherwise modified from time to time in
accordance with its terms.
"Citibank" has the meaning specified in the recital of parties to this
Agreement.
"Clean-Down Period" means any period of 30 consecutive days during
which the aggregate principal amount of the Revolving Credit Advances and
Letter of Credit Advances outstanding does not exceed $0.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and the rulings issued thereunder.
"Coleman" means The Coleman Company, Inc., a Delaware corporation.
"Coleman Guarantor" means Coleman (Parent) Holdings Inc., a Delaware
corporation.
"Coleman Guaranty" means the Fourth Amended and Restated Coleman
Guaranty dated as of March 20, 1997 made by Coleman Guarantor in favor of the
Lender Parties, the Term Credit Agreement Lenders, the Agents, the Term Agents
and the Collateral Agent, as such guaranty may be amended or otherwise modified
from time to time in accordance with its terms.
"Coleman Holdings" means Coleman Holdings Inc., a Delaware
corporation.
"Coleman Non-Operating Subsidiaries" means Coleman Holdings and
Coleman Worldwide.
"Coleman Pledge Agreement" means the Second Amended and Restated
Pledge Agreement dated as of December 16, 1996 made by Coleman Guarantor to the
Collateral Agent, as such agreement may be amended or otherwise modified from
time to time in accordance with its terms.
<PAGE>
11
"Coleman Tax Agreements" means (i) the Tax Allocation Agreement dated
as of August 24, 1990, as amended through the date hereof, between Mafco and
New Coleman, (ii) the Tax Sharing Agreement dated as of February 26, 1992, as
amended through the date hereof, among Mafco, Coleman Finance Holdings Inc.,
Coleman and the Subsidiaries of Coleman party thereto, (iii) the Tax Sharing
Agreement dated as of February 26, 1992, as amended through the date hereof,
among Mafco, New Coleman, Coleman Finance Holdings Inc. and the Subsidiaries of
Coleman Finance Holdings Inc. party thereto, (iv) the Tax Equivalent Payment
Agreement dated as of March 4, 1992, as amended through the date hereof,
between Mafco and Coleman Finance Holdings Inc., (v) the Supplemental Tax
Sharing Agreement dated as of February 26, 1992, as amended through the date
hereof, between Coleman and M&F, (vi) the Tax Sharing Agreement dated as of May
27, 1993 among Mafco, Coleman Worldwide, Coleman and its Subsidiaries party
thereto, (vii) the Tax Sharing Agreement dated as of May 27, 1993 among Mafco,
Coleman Worldwide and the other Persons party thereto, (viii) the Tax Sharing
Agreement dated as of July 22, 1993 between Mafco and Coleman Holdings, and
(ix) the Tax Sharing Termination Agreement dated as of May 27, 1993 among
Mafco, New Coleman, Coleman and the other Persons party thereto.
"Coleman Worldwide" means Coleman Worldwide Corporation, a Delaware
corporation.
"Coleman Worldwide Indenture" has the meaning specified in Schedule
VI.
"Coleman Worldwide LYONS" means the Liquid Yield Option Notes Due 2013
issued by Coleman Worldwide.
"Coleman Worldwide Pledge Agreement" means the Amended and Restated
Non-Recourse Guaranty and Pledge Agreement dated as of December 16, 1996 made
by Coleman Worldwide to the Collateral Agent, as such agreement may be amended
or otherwise modified from time to time in accordance with its terms.
"Collateral" means all "Collateral" referred to in the Collateral
Documents and all other property that is or is intended to be subject to any
Lien in favor of the Collateral Agent, the Lender Parties, the Term Credit
Agreement Lenders, the Agents and the Term Agents.
"Collateral Accounts" means the ADR Collateral Account, the Borrower
Collateral Account, the Mafco Collateral Account, the Second Mafco Collateral
Account and the L/C Cash Collateral Account.
"Collateral Agent" has the meaning specified in the recital of the
parties hereto.
<PAGE>
12
"Collateral Documents" means each Security Agreement and each Pledge
Agreement.
"Commitment" means a Revolving Credit Commitment or a Letter of Credit
Commitment.
"Consolidated", for any Person, refers to the consolidation of the
financial statements of such Person and its Subsidiaries in accordance with
GAAP.
"Consolidated Cigar Holdings" means Consolidated Cigar Holdings Inc.,
a Delaware corporation.
"Consolidated Cigar Tax Agreement" means the Amended and Restated Tax
Sharing Agreement entered into as of June 15, 1995 among Mafco, MCG,
Consolidated Cigar Holdings, Consolidated Cigar Corporation and its
Subsidiaries party thereto.
"Conversion", "Convert" and "Converted" each refer to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section 2.11.
"Debt" of any Person means, without duplication, (a) all indebtedness
of such Person for borrowed money; (b) all Obligations of such Person for the
deferred purchase price of property or services (other than trade payables not
overdue by more than 60 days incurred in the ordinary course of such Person's
business); (c) all Obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments; (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property); (e) all Obligations of
such Person as lessee under leases that have been or should be, in accordance
with GAAP, recorded as capital leases ("Capitalized Leases"); (f) all
Obligations, contingent or otherwise, of such Person under acceptance, letter
of credit or similar facilities; (g) all Obligations of such Person to
purchase, redeem, retire, defease or otherwise acquire for value any capital
stock of such Person or any warrants, rights or options to acquire such capital
stock; (h) all Obligations of such Person in respect of Hedge Agreements; (i)
all Debt of others referred to in clauses (a) through (h) above guaranteed
directly or indirectly in any manner by such Person, or in effect guaranteed
directly or indirectly by such Person through an agreement (i) to pay or
purchase such Debt or to advance or supply funds for the payment or purchase of
such Debt, (ii) to purchase, sell or lease (as lessee or lessor) property, or
to purchase or sell services, primarily for the purpose of enabling the debtor
to make payment of such Debt or to assure the holder of such Debt against loss,
(iii) to supply funds to or in any other manner invest in the debtor (including
any agreement to pay for property or services irrespective of whether such
property is received or such services are rendered) or
<PAGE>
13
(iv) otherwise to assure a creditor against loss; and (j) all Debt referred to
in clauses (a) through (i) above secured by (or for which the holder of such
Debt has an existing right, contingent or otherwise, to be secured by) any Lien
on property (including, without limitation, accounts and contract rights) owned
by such Person, even though such Person has not assumed or become liable for
the payment of such Debt. For all purposes of this Agreement and the other Loan
Documents, "Debt" shall not include Obligations of any Designated Operating
Company, Revlon, Marvel or any of their respective Subsidiaries in respect of
Hedge Agreements.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given or
time elapse or both.
"Defaulted Advance" means, with respect to any Lender Party at any
time, the amount of any Advance required to be made by such Lender Party to the
Borrower pursuant to Section 2.01 at or prior to such time which has not been
so made as of such time; provided, however, that any Advance made by the
Administrative Agent for the account of such Lender Party pursuant to Section
2.02(c) shall not be considered a Defaulted Advance even if, at such time, such
Lender shall not have reimbursed the Administrative Agent therefor as provided
in Section 2.02(c). In the event that a portion of a Defaulted Advance shall be
deemed made pursuant to Section 2.16(a), the remaining portion of such
Defaulted Advance shall be considered a Defaulted Advance originally required
to be made pursuant to Section 2.01 on the same date as the Defaulted Advance
so deemed made in part.
"Defaulted Amount" means, with respect to any Lender Party at any
time, any amount required to be paid by such Lender Party to the Administrative
Agent, the Collateral Agent or any other Lender Party hereunder or under any
other Loan Document at or prior to such time which has not been so paid as of
such time, including, without limitation, any amount required to be paid by
such Lender to (a) the Issuing Bank pursuant to Section 2.03(c) to purchase a
portion of a Letter of Credit Advance made by the Issuing Bank, (b) the
Administrative Agent pursuant to Section 2.02(c) to reimburse the
Administrative Agent for the amount of any Advance made by the Administrative
Agent for the account of such Lender Party, (c) any other Lender Party pursuant
to Section 2.14 to purchase any interest or participating interest in Advances
owing to such other Lender Party and (d) the Administrative Agent, the
Collateral Agent or the Issuing Bank pursuant to Section 7.05 to reimburse the
Administrative Agent, the Collateral Agent or the Issuing Bank, as the case may
be, for such Lender Party's ratable share of any amount required to be paid by
the Lender Parties to the Administrative Agent, the Collateral Agent or the
Issuing Bank as provided therein. In the event that a portion of a Defaulted
Amount shall be deemed paid pursuant to Section 2.16(b), the remaining portion
of such Defaulted Amount shall be considered a Defaulted Amount originally
required to be made hereunder or under any other Loan Document on the same date
as the Defaulted Amount so deemed paid in part.
<PAGE>
14
"Defaulting Lender" means, at any time, any Lender Party that, at such
time, (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall take or
be the subject of any action or proceeding of a type described in Section
6.01(e).
"Defeased Debt Amount" means for any date of determination for any
Designated Person listed on Schedule VI an amount calculated in the manner set
forth on Schedule VI for such Designated Person or such other amount as may be
agreed by the Administrative Agent and the Borrower.
"Deposit Certificate" has the meaning specified in Section 5.01(k).
"Designated Coleman Subsidiaries" means Coleman Holdings, Coleman
Worldwide and Coleman.
"Designated Operating Companies" means Coleman, MCG and Revlon;
provided, however, that (x) on and after the Marvel Inclusion Date, Marvel
shall be a "Designated Operating Company", (y) on and after the MCG Inclusion
Date, Consolidated Cigar Holdings shall be a "Designated Operating Company" and
MCG shall cease to be a "Designated Operating Company" and (z) on and after the
PCT Inclusion Date, PCT shall be a "Designated Operating Company".
"Designated Persons" means Coleman Guarantor, Mafco, C&F Guarantor,
Revlon Worldwide Parent and the Bank; provided, however, that (x) on and after
the date of the sale, disposal or other transfer of all of the News Corp.
Preferred ADRs held by Mafco and its Subsidiaries, Mafco shall no longer be a
"Designated Person" and (y) on and after the PCT Inclusion Date, MCG shall be a
"Designated Person".
"Documentation Agent" has the meaning specified in the recital of
parties to this Agreement.
"Dollars" and the sign "$" each mean lawful money of the United
States.
"Domestic Lending Office" means, with respect to any Lender Party, the
office of such Lender Party specified as its "Domestic Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant to
which it became a Lender Party, as the case may be, or such other office of
such Lender Party as such Lender Party may from time to time specify to the
Borrower and the Administrative Agent.
"Effective Date" has the meaning specified in Section 3.01.
<PAGE>
15
"Eligible Assignee" means (a) any commercial bank organized under the
laws of the United States, or any State thereof, and having total assets in
excess of $1,000,000,000; (b) any savings and loan association or savings bank
organized under the laws of the United States, or any State thereof, and having
a net worth determined in accordance with GAAP in excess of $500,000,000; (c)
any commercial bank organized under the laws of any other country that is a
member of the Organization for Economic Cooperation and Development ("OECD") or
has concluded special lending arrangements with the International Monetary Fund
Associated with its General Arrangements to Borrow, or a political subdivision
of any such country, and having total assets in excess of $1,000,000,000, so
long as such bank is acting through a branch or agency located in the United
States, in the Cayman Islands or in the country in which it is organized or
another country that is described in this clause (c); (d) the central bank of
any country that is a member of the OECD; (e) any finance company, insurance
company or other financial institution or fund (whether a corporation,
partnership, trust or other entity) that (i) is not affiliated with the
Borrower, (ii) is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business and (iii) has total
assets in excess of $500,000,000; and (f) any other Person (other than an
Affiliate of the Borrower) approved by the Administrative Agent and the
Borrower, such approval not to be unreasonably withheld.
"Environmental Action" means any administrative, regulatory or
judicial action, suit, demand, demand letter, claim, notice of non-compliance
or violation, investigation, proceeding, consent order or consent agreement
based upon or arising out of any Environmental Law or any Environmental Permit,
including without limitation (a) any claim by any governmental or regulatory
authority for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any Environmental Law and (b) any claim by any
third party seeking damages, contribution, or injunctive relief arising from
alleged injury or threat of injury to health, safety or the environment.
"Environmental Law" means any federal, state or local law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
relating to the environment, health or safety including, without limitation,
CERCLA, the Resource Conservation and Recovery Act, the Hazardous Materials
Transportation Act, the Clean Water Act, the Toxic Substances Control Act, the
Clean Air Act, the Safe Drinking Water Act, the Atomic Energy Act, the Federal
Insecticide, Fungicide and Rodenticide Act and the Occupational Safety and
Health Act.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
"Equity Contribution Agreement" means the Amended and Restated Equity
Contribution Agreement dated as of December 16, 1996, between the Borrower and
the
<PAGE>
16
Borrower Parent, as such agreement may be amended or otherwise modified from
time to time in accordance with its terms.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" of any Person means any other Person that for
purposes of Title IV of ERISA is a member of such Person's controlled group, or
under common control with such Person, within the meaning of Section 414 of the
Code.
"ERISA Event", with respect to any Person, means (a) the occurrence of
a reportable event, within the meaning of Section 4043 of ERISA, with respect
to any Plan of such Person or any of its ERISA Affiliates unless the 30-day
notice requirement with respect to such event has been waived by the PBGC; (b)
the provision by the administrator of any Plan of such Person or any of its
ERISA Affiliates of a notice of intent to terminate such Plan, pursuant to
Section 4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (c) the cessation of
operations at a facility of such Person or any of its ERISA Affiliates in the
circumstances described in Section 4062(e) of ERISA; (d) the withdrawal by such
Person or any of its ERISA Affiliates from a Multiple Employer Plan during a
plan year for which it was a substantial employer, as defined in Section
4001(a)(2) of ERISA; (e) the failure by such Person or any of its ERISA
Affiliates to make a payment to a Plan described in Section 302(f)(1) of ERISA;
(f) the adoption of an amendment to a Plan of such Person or any of its ERISA
Affiliates requiring the provision of security to such Plan, pursuant to
Section 307 of ERISA; or (g) the institution by the PBGC of proceedings to
terminate a Plan of such Person or any of its ERISA Affiliates, pursuant to
Section 4042 of ERISA, or the occurrence of any event or condition described in
Section 4042 of ERISA that would constitute grounds for the termination of, or
the appointment of a trustee to administer, such Plan; provided, however, that
an event described in clause (a), (c) or (d) of this definition, or in clause
(b) of this definition solely with respect to a standard termination under
Section 4041(b) of ERISA, shall be an ERISA Event only if such event is
reasonably likely to result in a material liability of such Person or any of
its ERISA Affiliates.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender Party,
the office of such Lender Party specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender Party (or, if no such office is specified,
its Domestic Lending Office), or such other office of
<PAGE>
17
such Lender Party as such Lender Party may from time to time specify to the
Borrower and the Administrative Agent.
"Eurodollar Rate" means, for any Interest Period for each Eurodollar
Rate Advance comprising part of the same Borrowing, an interest rate per annum
equal to the rate per annum obtained by dividing (a) the average (rounded
upward to the nearest whole multiple of 1/100 of 1% per annum, if such average
is not such a multiple) of the rate per annum at which deposits in U.S. dollars
are offered by the principal office of Citibank in London, England to prime
banks in the London interbank market at 11:00 A.M. (London time) two Business
Days before the first day of such Interest Period for a period equal to such
Interest Period by (b) a percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage for such Interest Period. The Eurodollar Rate for each
Interest Period shall be determined by the Administrative Agent on the basis of
applicable rates furnished to and received by the Administrative Agent from
Citibank two Business Days before the first day of such Interest Period,
subject, however, to the provisions of Section 2.07.
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.07(a)(ii).
"Eurodollar Rate Reserve Percentage" of any Lender Party for any
Interest Period for any Advance means the reserve percentage applicable during
such Interest Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in such
Interest Period during which any such percentage shall be so applicable) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or
other marginal reserve requirement) for such Lender Party with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities
having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Agreement" means the Exchange Agreement dated as of October
3, 1994 among FN Parent, FN Holdings and Gerald J. Ford.
"Existing Credit Agreement" has the meaning specified in the
Preliminary Statements.
"Existing Lenders" has the meaning specified in the Preliminary
Statements.
<PAGE>
18
"Existing Term Credit Agreement" has the meaning specified in the
Preliminary Statements.
"Existing Term Lenders" has the meaning specified in the Preliminary
Statements.
"Facility" means the Revolving Credit Facility or the Letter of Credit
Facility.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"FG Guarantor" means First Gibraltar Guarantor Corp., a Delaware
corporation.
"Financial Institutions" has the meaning specified in the recital of
parties to this Agreement.
"First Gibraltar" means First Gibraltar Holdings Inc., a Delaware
corporation.
"First Gibraltar Charter Document" means the restated certificate of
incorporation of First Gibraltar.
"First Gibraltar Credit Agreement" means the $150,000,000 Credit
Agreement dated as of September 27, 1996, as heretofore amended, among First
Gibraltar, FG Guarantor, the banks and other financial institutions party
thereto, NationsBank, N.A., as administrative agent, NationsBanc Capital
Markets, Inc., as syndication agent and Citibank, as documentation agent, as
the same may hereafter be amended, modified or otherwise supplemented from time
to time in accordance with the Loan Documents.
"First Gibraltar Loan Agreement" means the Amended and Restated Loan
Agreement dated as of December 16, 1996 between the Borrower Parent and First
Gibraltar, as amended or otherwise modified from time to time in accordance
with its terms.
"Flavors Guarantor" means Flavors (Parent) Holdings Inc., a Delaware
corporation.
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19
"Flavors Guaranty" means the Fourth Amended and Restated Flavors
Guaranty dated as of March 20, 1997 made by Flavors Guarantor in favor of the
Lender Parties, the Term Credit Agreement Lenders, the Agents, the Term Agents
and the Collateral Agent, as such guaranty may be amended or otherwise modified
from time to time in accordance with its terms.
"Flavors Non-Operating Subsidiary" means C&F Guarantor.
"Flavors Pledge Agreement" means the Second Amended and Restated
Flavors Pledge Agreement dated as of December 16, 1996 made by Flavors
Guarantor and The Bank of New York, in its capacity as voting trustee, to the
Collateral Agent, as such agreement may be amended or otherwise modified from
time to time in accordance with its terms.
"FN Documents" means the FN Holdings Debt Document, the FN Holdings
New Debt Document, the Second New FN Holdings Debt Document, the FN Parent Debt
Document, the Exchange Agreement and the Stockholders Agreement.
"FN Escrow" means First Nationwide Escrow Corp., a Delaware
corporation.
"FN Holdings" means First Nationwide Holdings Inc., a Delaware
corporation.
"FN Holdings Debt" means the 12-1/4% Senior Notes due 2001 issued by
FN Holdings in an aggregate principal amount equal to $200,000,000.
"FN Holdings Debt Document" means the Indenture dated as of July 15,
1994 made by FN Holdings in favor of The First National Bank of Boston, as
trustee, in connection with the FN Holdings Debt and any other agreement or
instrument which governs the terms of the FN Holdings Debt.
"FN Holdings New Debt" means the 9-1/8% Senior Subordinated Notes Due
2003 issued by FN Holdings in an aggregate principal amount equal to
$140,000,000.
"FN Holdings New Debt Document" means the Indenture dated as of
January 31, 1996 made by FN Holdings in favor of The Bank of New York, as
trustee, in connection with the FN Holdings New Debt and any other agreement or
instrument which governs the terms of the FN Holdings New Debt.
"FN Holdings Preferred Stock" means the $150,000,000 liquidation value
of Cumulative Perpetual Preferred Stock issued by FN Holdings and any shares of
Cumulative
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20
Perpetual Preferred Stock to be issued in lieu of cash dividends payable on the
FN Holdings Preferred Stock.
"FN Management Incentive Plan" means the Management Incentive Plan for
Certain Employees of the Bank established by FN Holdings to provide long-term
incentives to certain key executives of the Bank.
"FN Parent" means First Nationwide (Parent) Holdings Inc., a Delaware
corporation.
"FN Parent Debt" means the 12-1/2% Senior Notes due 2003 issued by FN
Parent in an aggregate principal amount equal to $455,000,000.
"FN Parent Debt Document" means the Indenture dated as of April 15,
1996 made by FN Parent in favor of The Bank of New York, as trustee, in
connection with the FN Parent Debt and any other agreement or instrument which
governs the terms of the FN Parent Debt.
"FN Parties" means the Bank, FN Holdings and FN Parent.
"FN Tax Agreement" means the Tax Sharing Agreement dated as of January
1, 1994 among Mafco, FN Holdings, the Bank and certain Subsidiaries of FN
Holdings and the Bank.
"Four Star" means Four Star Holdings Corp., a Delaware corporation.
"Four Star Pledge Agreement" means the Amended and Restated
Non-Recourse Guaranty and Pledge Agreement dated as of December 16, 1996 made
by Four Star and The Bank of New York, in its capacity as voting trustee, to
the Collateral Agent, as such agreement may be amended or otherwise modified
from time to time in accordance with its terms.
"Fourth Credit Agreement" has the meaning specified in the Preliminary
Statements.
"Fourth Lenders" has the meaning specified in the Preliminary
Statements.
"Fully Satisfied" shall mean, with respect to the Payment Obligations
as of any date, that, on or before such date, (a) the principal of and interest
accrued to such date on all outstanding Advances shall have been paid in full
in cash, (b) the Commitments shall have been terminated in full, (c) all
outstanding Letters of Credit shall have been (i) terminated or
<PAGE>
21
(ii) cash collateralized by an amount sufficient in the reasonable judgment of
the Administrative Agent and the Required Lenders to secure any claims under
such outstanding Letters of Credit or (iii) secured by one or more letters of
credit on terms and conditions, and with one or more financial institutions,
reasonably satisfactory to the Administrative Agent and the Required Lenders
and (d) all fees, expenses and other amounts then due and payable which
constitute Payment Obligations shall have been paid in cash; provided, however,
that on such date none of the Administrative Agent and the Lender Parties shall
have made any claims in respect of Payment Obligations against the Borrower or
any other Loan Party under any provision of any of the Loan Documents that has
not been cash collateralized by an amount sufficient in the reasonable judgment
of the Administrative Agent, the Required Lenders and any such Lender Party (if
such Lender Party is not one of the Lenders constituting the Required Lenders)
to secure such claim.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the date of, and used in, the preparation
of the audited consolidated financial statements referred to in Section
4.01(f), except that with respect to (x) the preparation of any financial
statement required to be furnished pursuant to clause (i), (ii) or (iii) of
Section 5.01(j) and (y) changes to financial statement presentation and
accounting policies contemplated by Section 5.02(h), "GAAP" shall mean such
principles as in effect from time to time in the United States of America.
"Guarantor" means each of Mafco, Borrower Parent, Coleman Guarantor,
New World Guarantor, Flavors Guarantor, Cigar Guarantor, C&F Guarantor, Revlon
Worldwide Holdings, Revlon Guarantor, and, on and after the MCG Inclusion Date,
MCG.
"Guaranty" means each of the Mafco Guaranty, the Borrower Parent
Guaranty, the Coleman Guaranty, the New World Guaranty, the Flavors Guaranty,
the Cigar Guaranty, the C&F Guaranty, the Revlon Worldwide Holdings Guaranty,
the Revlon Guaranty and, on and after the MCG Inclusion Date, the MCG Guaranty.
"Hazardous Materials" means (a) petroleum or petroleum products,
natural or synthetic gas, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation and radon gas, (b) any substances defined as
or included in the definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "extremely hazardous wastes", "restricted hazardous
wastes", "toxic substances", "toxic pollutants", "contaminants" or
"pollutants", or words of similar import, under any Environmental Law and (c)
any other substance exposure to which is regulated under any Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other similar agreements.
<PAGE>
22
"Indemnified Party" has the meaning specified in Section 8.04(c).
"Initial Date" means, for purposes of Section 2.13, in the case of the
Administrative Agent and each Financial Institution, the date of its execution
and delivery of this Agreement and, in the case of each Lender other than a
Financial Institution, the date of the Assignment and Acceptance pursuant to
which it becomes a Lender.
"Initial Issuing Bank" means Citibank, N.A.
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such
Eurodollar Rate Advance or the date of the Conversion of any Base Rate Advance
into such Eurodollar Rate Advance, and ending on the last day of the period
selected by the Borrower pursuant to the provisions below and, thereafter, each
subsequent period commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period selected by the
Borrower pursuant to the provisions below. The duration of each such Interest
Period shall be one, two, three or six months, as the Borrower may, upon notice
received by the Administrative Agent not later than 11:00 A.M. (New York City
time) on the third Business Day prior to the first day of such Interest Period,
select; provided, however, that
(i) the Borrower may not select any Interest Period which ends after
the Termination Date;
(ii) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period shall be extended to occur on the next succeeding Business Day,
provided that, if such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day; and
(iii) whenever the first day of any Interest Period occurs on a day in
a calendar month for which there is no numerically corresponding day in the
calendar month that succeeds such initial calendar month by the number of
months equal to the number of months in such Interest Period, such Interest
Period shall end on the last Business Day of such succeeding calendar
month.
"Investment" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any capital stock, warrants, rights,
options, debt obligations or other securities of such Person, any capital
contribution to such Person or any other investment in such Person, including,
without limitation, any arrangement pursuant to which the investor
<PAGE>
23
incurs Debt of the types referred to in clauses (i) and (j) of the definition
of "Debt" in respect of such Person.
"Issuing Bank" means the Initial Issuing Bank and each Eligible
Assignee to which the Letter of Credit Commitment hereunder has been assigned
pursuant to Section 8.07.
"L/C Cash Collateral Account" has the meaning specified in the
Borrower Security Agreement.
"L/C Certificate" means a certificate of the Borrower delivered to the
Administrative Agent in respect of a Letter of Credit Advance (A) to the effect
that on the date of delivery (i) the representations and warranties contained
in the Loan Documents are correct in all material respects on and as of such
date, as though made on and as of such date (except to the extent such
representations and warranties specifically relate to an earlier date, in which
case such representations and warranties were true, correct and complete in all
material respects on and as of such earlier date and (ii) no event has occurred
and is continuing which constitutes a Default and (B) specifying the Type of
Advance such Letter of Credit Advance shall be and, if such Letter of Credit
Advance is to be a Eurodollar Rate Advance, the Interest Period for such Letter
of Credit Advance.
"L/C Related Documents" has the meaning specified in Section
2.04(b)(ii).
"Lender Party" means any Lender or the Issuing Bank.
"Lenders" means the Financial Institutions listed on the signature
pages hereof and each Eligible Assignee that shall become a party hereto
pursuant to Section 8.07.
"Letter of Credit" has the meaning specified in Section 2.01(b).
"Letter of Credit Advance" means an advance made by the Issuing Bank
or any Lender pursuant to Section 2.03(c).
"Letter of Credit Agreement" has the meaning specified in Section
2.03(a).
"Letter of Credit Commitment" means, with respect to the Issuing Bank
at any time, the amount set forth opposite the Issuing Bank's name on Schedule
I hereto under the caption "Letter of Credit Commitment" or, if the Issuing
Bank has entered into one or more Assignments and Acceptances, the amount set
forth for the Issuing Bank in the Register maintained by the Administrative
Agent pursuant to Section 8.07(c) as the Issuing Bank's "Letter of Credit
Commitment", as such amount may be reduced at or prior to such time pursuant to
Section 2.05.
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24
"Letter of Credit Facility" means, at any time, an amount equal to the
amount of the Issuing Bank's Letter of Credit Commitment at such time.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on title
to real property.
"Loan Documents" means this Agreement, the Notes, each Letter of
Credit Agreement, each Guaranty, each Collateral Document, the Equity
Contribution Agreement and the First Gibraltar Loan Agreement.
"Loan Party" means each of the Borrower, each Guarantor, M&F, Andrews,
Four Star, New Coleman, First Gibraltar and Revlon Worldwide Parent.
"Look-Forward Certificate" has the meaning specified in Section
5.01(k).
"M&F" means MacAndrews & Forbes Holdings Inc., a Delaware corporation.
"M&F Pledge Agreement" means the Amended and Restated Non-Recourse
Guaranty and Pledge Agreement dated as of December 16, 1996 made by M&F to the
Collateral Agent, as such agreement may be amended or otherwise modified from
time to time in accordance with its terms.
"Mafco" has the meaning specified in the Preliminary Statements.
"Mafco Collateral Account" has the meaning specified in the Mafco
Security Agreement.
"Mafco Finance Required Lenders" means, at any time, Lenders and Term
Credit Agreement Lenders owed or holding at least a majority in interest of the
sum of (a) the aggregate principal amount of the Advances outstanding at such
time, (b) the aggregate principal amount of the Debt outstanding at such time
under the Term Credit Agreement, (c) the aggregate Available Amount of all
Letters of Credit outstanding at such time, (d) the aggregate Unused Revolving
Credit Commitment at such time and (e) the aggregate unused "Commitments" under
the Term Credit Agreement (provided that, for purposes hereof, neither the
Borrower, nor any of its Affiliates, if a Lender or a Term Credit Agreement
Lender, shall be included in (x) the Lenders and the Term Credit Agreement
Lenders holding such amount of the Advances, the Debt or the Available Amount
of all Letters of Credit or having such amount of the Unused Revolving Credit
Commitment or the "Commitments" under the Term
<PAGE>
25
Credit Agreement or (y) determining the aggregate unpaid principal amount of
the Advances or such Debt, the total Unused Revolving Credit Commitment or the
total "Commitments" under the Term Credit Agreement); provided, however, that
if any Lender shall be a Defaulting Lender at such time or any Term Credit
Agreement Lender shall be a "Defaulting Lender" under the Term Credit Agreement
at such time, there shall be excluded from the determination of Mafco Finance
Required Lenders at such time (i) the aggregate principal amount of the
Advances owing to such Lender (in its capacity as Lender) and outstanding at
such time, (ii) the aggregate principal amount of Debt under the Term Credit
Agreement owing to such Term Credit Agreement Lender and outstanding at such
time, (iii) such Lender's Pro Rata Share of the aggregate Available Amount of
all Letters of Credit issued by such Lender as of such time, (iv) the aggregate
Unused Revolving Credit Commitment of such Lender at such time and (v) the
aggregate unused portion of the "Commitments" of such Term Credit Agreement
Lender under the Term Credit Agreement at such time; provided further that on
and after the Term Credit Agreement Termination Date, the Mafco Finance
Required Lenders shall be the Required Lenders hereunder. For purposes of this
definition, the aggregate principal amount of Letter of Credit Advances owing
to the Issuing Bank and the Available Amount of each Letter of Credit shall be
considered to be owed to the Lenders ratably in accordance with their
respective Revolving Credit Commitments.
"Mafco Guaranty" means the Fifth Amended and Restated Mafco Guaranty
dated as of March 20, 1997 made by Mafco in favor of the Lender Parties, the
Term Credit Agreement Lenders, the Agents, the Term Agents and the Collateral
Agent, as such guaranty may be amended or otherwise modified from time to time
in accordance with its terms.
"Mafco Pledge Agreement" means the Second Amended and Restated Pledge
Agreement dated as of December 16, 1996 made by Mafco and The Bank of New York,
in its capacity as voting trustee, to the Collateral Agent, as such agreement
may be amended or otherwise modified from time to time in accordance with its
terms.
"Mafco Security Agreement" means the Fifth Amended and Restated Mafco
Security Agreement dated as of March 20, 1997 made by Mafco to the Collateral
Agent, as such agreement may be amended or otherwise modified from time to time
in accordance with its terms.
"Mandatory Clean-Down Period" means (i) the 30-day period commencing
on March 31, 1998 and terminating on April 29, 1998, if a Clean-Down Period has
not commenced (after the date of this Agreement) prior to March 31, 1998 and
(ii) thereafter, for each 12-month period commencing on April 30 and ending on
April 29, the 30-day period commencing on March 31 and terminating on April 29
if a Clean-Down Period has not commenced prior to March 31 during such 12-month
period.
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26
"Margin Stock" has the meaning specified in Regulation U of the Board
of Governors of the Federal Reserve System and any successor regulations
thereto, as in effect from time to time.
"Marvel" means Marvel Entertainment Group, Inc., a Delaware
corporation.
"Marvel Inclusion Date" means the date on which Mafco or any of its
Affiliates acquires the New Marvel Shares.
"Marvel Tax Agreements" means (i) the Tax Sharing Agreement dated as
of April 22, 1993 between Mafco and Marvel Holdings Inc., (ii) the Tax Sharing
Agreement dated as of October 20, 1993 between Mafco and Marvel (Parent)
Holdings Inc. and (iii) the Amended and Restated Tax Sharing Agreement dated as
of January 1, 1994 among Mafco, Marvel III Holdings Inc., Marvel and certain
Subsidiaries of Marvel.
"Material Adverse Change" means, with respect to any Person, a
material adverse change in the condition (financial or otherwise), operations,
assets, business or prospects of such Person and its Subsidiaries, taken as a
whole.
"Material Adverse Effect" means, with respect to any Person, a
material adverse effect upon (a) the condition (financial or otherwise),
operations, assets, business or prospects of such Person and its Subsidiaries,
taken as a whole, or (b) the ability of a Loan Party to perform its obligations
under any Loan Document, or (c) the rights and remedies of the Administrative
Agent, the Collateral Agent or any Lender Party under any Loan Document.
"MCG" means Mafco Consolidated Group Inc., a Delaware corporation.
"MCG Guaranty" means the MCG Guaranty to be made, on the MCG Inclusion
Date, by MCG in favor of the Lender Parties, the Term Credit Agreement Lenders,
the Agents, the Term Agents and the Collateral Agent, in form and substance
satisfactory to the Mafco Finance Required Lenders, as such guaranty may be
amended or otherwise modified from time to time in accordance with its terms.
"MCG Inclusion Date" means the date on which (x) C&F Guarantor owns
all of the capital stock of MCG and (y) the Administrative Agent and the Term
Administrative Agent deliver a notice to the Borrower that the Administrative
Agent, the Term Administrative Agent or the Collateral Agent, as the case may
be, shall have received, in form and substance satisfactory to the
Administrative Agent and in sufficient copies for each Lender Party (or the
requirement that such document be delivered shall have been duly waived):
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27
(i) certified copies of the resolutions of the board of directors of
MCG approving the MCG Guaranty and the MCG Pledge Agreement, and of all
documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to the MCG Guaranty and the MCG Pledge
Agreement;
(ii) a certificate of the Secretary or an Assistant Secretary of MCG
certifying the names and true signatures of the officers of MCG authorized
to sign the MCG Guaranty and the MCG Pledge Agreement;
(iii) a copy of a certificate of the Secretary of State of the state
of incorporation of each of MCG, Consolidated Cigar Holdings and PCT, dated
reasonably near the MCG Inclusion Date, listing the charter of such Person
and each amendment thereto on file in his office and certifying that (A)
such amendments are the only amendments to such Person's charter on file in
his office, (B) such Person has paid all franchise taxes to the date of
such certificate and (C) such Person is duly incorporated or organized and
in good standing under the laws of such state;
(iv) (A) a certificate of MCG signed on behalf of MCG by its President
or a Vice President and its Secretary or any Assistant Secretary, dated as
of the MCG Inclusion Date (the statements made in such certificate shall be
true on and as of the MCG Inclusion Date), certifying as to (1) the absence
of any amendments to the charter of such Person since the date of the
Secretary of State's certificate referred to in clause (iii) above, (2) the
trueness and correctness of the bylaws of such Person attached to such
certificate, (3) the due incorporation and good standing of such Person as
a corporation under the laws of the relevant state of incorporation, and
the absence of any proceeding for the dissolution or liquidation of such
Person, (4) the truth in all material respects of the representations and
warranties made by such Person contained in the MCG Guaranty and the MCG
Pledge Agreement as though made on and as of the MCG Inclusion Date and (5)
the absence of any event occurring and continuing, or resulting from the
MCG Inclusion Date, that constitutes a Default and (B) a certificate of MCG
signed on behalf of MCG by its President or a Vice President and its
Secretary or any Assistant Secretary, dated as of the MCG Inclusion Date
(the statements made in such certificate shall be true on and as of the MCG
Inclusion Date), certifying as to (1) the absence of any amendments to the
charter of each of Consolidated Cigar Holdings and PCT since the date of
the Secretary of State's Certificate referred to in clause (iii) above, (2)
the trueness and correctness of the bylaws of each of Consolidated Cigar
Holdings and PCT attached to such certificate and (3) the due incorporation
and good standing of each of Consolidated Cigar Holdings and PCT as a
corporation organized under the laws of the State of Delaware, and the
absence of any proceeding for the dissolution or liquidation of either
Consolidated Cigar Holdings or PCT;
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28
(v) the MCG Guaranty in form and substance satisfactory to the Mafco
Finance Required Lenders, duly executed by MCG;
(vi) the MCG Pledge Agreement in substantially the form of the Second
Andrews Pledge Agreement and otherwise reasonably satisfactory to the
Administrative Agent, duly executed by MCG, together with (1) certificates
representing the Pledged Shares referred to in the MCG Pledge Agreement
accompanied by undated stock powers executed in blank, (2) acknowledgment
copies or stamped receipt copies of financing statements, duly filed on or
before such date under the Uniform Commercial Code of all jurisdictions
that the Administrative Agent may deem necessary or desirable in order to
perfect the Liens created by the MCG Pledge Agreement, covering the
Collateral described in the MCG Pledge Agreement, and (3) completed
requests for information, dated on or before such date, listing the
financing statements referred to in clause (2) above and all other
effective financing statements filed in the jurisdictions referred to in
clause (2) above that name MCG, as debtor, together with copies of such
other financing statements;
(vii) certified copies of (A) a voting trust agreement among C&F
Guarantor, MCG, the Collateral Agent and The Bank of New York, as voting
trustee, in substantially the form of the voting trust agreements delivered
pursuant to Section 3.01(h)(xiii)(A) of the Existing Credit Agreement and
(B) the charter of MCG, the terms and conditions of which shall be
substantially similar to those contained in the charter of Coleman
Guarantor; and
(viii) favorable opinions of counsel to Mafco reasonably satisfactory
to the Lenders, in form and substance reasonably satisfactory to the
Lenders.
"MCG Pledge Agreement" means the Pledge Agreement to be made, on the
MCG Inclusion Date, by MCG to the Collateral Agent, in substantially the form
of the Second Andrews Pledge Agreement and otherwise reasonably satisfactory to
the Administrative Agent, as such agreement may be amended or otherwise
modified from time to time in accordance with its terms.
"MCG Tax Agreement" means the Tax Sharing Agreement dated as of June
15, 1995 among Mafco, MCG and Subsidiaries of MCG party thereto.
"Multiemployer Plan" of any Person means a multiemployer plan, as
defined in Section 4001(a)(3) of ERISA, which is subject to Title IV of ERISA,
and to which such Person or any of its ERISA Affiliates is making or accruing
an obligation to make
<PAGE>
29
contributions, or has within any of the preceding five plan years made or
accrued an obligation to make contributions.
"Multiple Employer Plan" of any Person means a single employer plan,
as defined in Section 4001(a)(15) of ERISA, which is subject to Title IV of
ERISA, and (a) that is maintained for employees of such Person or any of its
ERISA Affiliates and at least one Person other than such Person and its ERISA
Affiliates or (b) that was so maintained and in respect of which such Person or
any of its ERISA Affiliates could have liability under Section 4064 or 4069 of
ERISA in the event such plan has been or were to be terminated.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer
or other disposition of any asset or the sale or issuance by any Person of any
Debt or capital stock, any securities convertible into or exchangeable for
capital stock or any warrants, rights or options to acquire capital stock, the
sum of (i) the aggregate amount of cash received from time to time by or on
behalf of such Person in connection with such transaction plus (ii) the
aggregate principal amount of any Debt listed on Schedule VII hereto that is
assumed, directly or indirectly, by any Person (other than Mafco or an
Affiliate of Mafco) in connection with, or as a result of, such transaction,
after deducting therefrom only (a) reasonable and customary brokerage
commissions, underwriting fees and discounts, legal fees and expenses, finder's
fees, accountants' fees and expenses and other similar fees, expenses and
commissions, (b) the amount of taxes payable or estimated in good faith to be
payable within 12 months following the date of the consummation of such
transaction in connection with or as a result of such transaction and (c) the
amount of any Debt that, by the terms of such Debt, is required to be repaid
upon such disposition, in each case to the extent, but only to the extent, that
the amounts so deducted are payable to a Person that is not an Affiliate (other
than such amounts that are payable by the Borrower and its Subsidiaries to an
Affiliate pursuant to a Related Document) and are properly attributable to such
transaction or to the asset that is the subject thereof.
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30
"Net Equity Value" means, for any day of determination for any
Designated Person:
(i) with respect to Coleman Guarantor, an amount (not less than $0)
equal to the excess of (A) the product of the number of shares of common
stock of Coleman owned directly or indirectly by Coleman Guarantor times
the average closing price during the Calculation Period relating to such
day of determination of such common stock on the New York Stock Exchange
over (B) the Defeased Debt Amount of Coleman Guarantor;
(ii) with respect to Mafco, an amount (not less than $0) equal to the
product of the number of News Corp. Preferred ADRs pledged in favor of the
Collateral Agent under the Collateral Documents times the average closing
price of the News Corp. Preferred ADRs during the Calculation Period
relating to such day of determination for such News Corp. Preferred ADRs on
either the New York Stock Exchange or the Nasdaq National Market System;
(iii) with respect to C&F Guarantor, (x) prior to the MCG Inclusion
Date, an amount (not less than $0) equal to the product of the number of
shares of common stock of MCG owned directly or indirectly by C&F Guarantor
times the average closing price during the Calculation Period relating to
such day of determination of such common stock on the New York Stock
Exchange and (y) on and after the MCG Inclusion Date, an amount (not less
than $0) equal to the product of the number of shares of common stock of
Consolidated Cigar Holdings owned directly or indirectly by C&F Guarantor
times the average closing price during the Calculation Period relating to
such day of determination of such common stock on the New York Stock
Exchange;
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31
(iv) with respect to Revlon Worldwide Parent, (x) prior to the Revlon
Defeasance Date, an amount (not less than $0) equal to the excess of (1)
the product of the number of shares of common stock of Revlon owned
directly or indirectly by Revlon Worldwide Parent times the average closing
price during the Calculation Period relating to such day of determination
of such common stock on the New York Stock Exchange over (B) the Defeased
Debt Amount of Revlon Worldwide Parent and (y) on and after the Revlon
Defeasance Date, an amount (not less than $0) equal to the sum of (1) the
product of the number of shares of common stock of Revlon pledged in favor
of the Collateral Agent under the Collateral Documents times the average
closing price during the Calculation Period relating to such day of
determination of such common stock on the New York Stock Exchange plus (2)
an amount equal to the excess of (I) the product of the number of shares of
common stock of Revlon pledged in favor of the holders of the Revlon
Worldwide Parent Debt times the average closing price during the
Calculation Period relating to such day of determination of such common
stock on the New York Stock Exchange over (II) the Defeased Debt Amount of
Revlon Worldwide Parent;
(v) with respect to MCG (on and after the PCT Inclusion Date), an
amount (not less than $0) equal to the product of the number of shares of
common stock of PCT owned directly or indirectly by MCG times the average
closing price during the Calculation Period relating to such day of
determination of such common stock on the New York Stock Exchange; and
(vi) with respect to the Bank, an amount equal to $500,000,000.
"Net Residual Value" means, for any day of determination, an amount
equal to the aggregate Net Equity Value of the Designated Persons on such day.
"New Coleman" means New Coleman Holdings Inc., a Kansas corporation.
"New Coleman Pledge Agreement" means the Amended and Restated
Non-Recourse Guaranty and Pledge Agreement dated as of December 16, 1996 made
by New Coleman and The Bank of New York, in its capacity as voting trustee, to
the Collateral Agent, as such agreement may be amended or otherwise modified
from time to time in accordance with its terms.
"New Marvel Shares" means all shares of capital stock of Marvel issued
after the date hereof and received by Andrews or any of its Affiliates.
"New World" means New World Communications Group Incorporated, a
Delaware corporation.
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"New World Guarantor" means NWCG (Parent) Holdings Corporation, a
Delaware corporation.
"New World Guaranty" means the Fifth Amended and Restated New World
Guaranty dated as of March 20, 1997 made by New World Guarantor in favor of the
Lender Parties, the Term Credit Agreement Lenders, the Agents, the Term Agents
and the Collateral Agent, as such guaranty may be amended or otherwise modified
from time to time in accordance with its terms.
"New World Pledge Agreement" means the Third Amended and Restated
Pledge and Assignment Agreement dated as of March 20, 1997 made by New World
Guarantor to the Collateral Agent, as such agreement may be amended or
otherwise modified from time to time in accordance with its terms.
"Newco" means DROF Holdings Inc., a Delaware corporation.
"Newco Loan" means the loan by First Gibraltar to Newco in an
aggregate principal amount of $150,000,000 for the sole purpose of purchasing
the FN Holdings Preferred Stock.
"News Corp." means The News Corporation Limited, a South Australia
corporation.
"News Corp. Contract" means the Stock Purchase Agreement dated as of
September 24, 1996 among New World Guarantor, News Corp. and Fox Television
Stations, Inc., as such agreement may be amended, modified or supplemented in
accordance with the terms of the Loan Documents.
"News Corp. Preferred ADRs" means the American Depositary Shares of
News Corp., each of which represents four fully paid and nonassessable
Preferred Limited Voting Ordinary Shares, of A $.50 each of News Corp., and the
related warrants received by New World Guarantor pursuant to the terms of the
News Corp. Contract.
"Notes" means the Revolving Credit Notes.
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
"Notice of Issuance" has the meaning specified in Section 2.03(a).
"Notice of Termination" has the meaning specified in Section 2.01(b).
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"NWCG Holdings" means NWCG Holdings Corporation, a Delaware
corporation.
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim, whether or not the right
of any creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 6.01(e). Without limiting the generality of the foregoing, the
Obligations of the Loan Parties under the Loan Documents include (a) the
obligation to pay principal, interest, Letter of Credit commissions, charges,
expenses, fees, attorneys' fees and disbursements, indemnities and other
amounts payable by any Loan Party under any Loan Document and (b) the
obligation to reimburse any amount in respect of any of the foregoing that any
Lender Party, in its sole discretion, may elect to pay or advance on behalf of
such Loan Party.
"Original Credit Agreement" has the meaning specified in the
Preliminary Statements.
"Original Lenders" has the meaning specified in the Preliminary
Statements.
"Original Transaction" has the meaning specified in the Preliminary
Statements.
"Other Taxes" has the meaning specified in Section 2.13(b).
"Payment Obligations" shall mean all principal, interest, fees, Letter
of Credit commissions, charges, expenses, attorneys' fees and expenses,
indemnities and any other amounts payable by the Loan Parties under the Loan
Documents.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor agency or entity performing substantially the same functions.
"PCT" means Power Control Technologies Inc., a Delaware corporation.
"PCT Inclusion Date" means the later of (x) the MCG Inclusion Date and
(y) the date on which the common stock of PCT held directly or indirectly by
Mafco shall be pledged in favor of the Collateral Agent.
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34
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture or other entity, or a government or any political subdivision or agency
thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Pledge Agreements" means the C&F Pledge Agreement, the Cigar Pledge
Agreement, the Coleman Pledge Agreement, the Coleman Worldwide Pledge
Agreement, the Flavors Pledge Agreement, the Four Star Pledge Agreement, the
Mafco Pledge Agreement, the M&F Pledge Agreement, the New Coleman Pledge
Agreement, the New World Pledge Agreement, the Second Andrews Pledge Agreement,
the Revlon Pledge Agreement, the Revlon Worldwide Holdings Pledge Agreement,
the Revlon Worldwide Parent Pledge Agreement and, on and after the MCG
Inclusion Date, the MCG Pledge Agreement.
"Pro Rata Share" of any amount means, with respect to any Lender at
any time, the product of such amount times a fraction the numerator of which is
the amount of such Lender's Revolving Credit Commitment at such time and the
denominator of which is the Revolving Credit Facility at such time.
"Register" has the meaning specified in Section 8.07(c).
"Related Documents" means the Coleman Tax Agreements, the FN Tax
Agreement, the MCG Tax Agreement, the Revlon Tax Agreements (so long as Revlon
continues to be a member of the affiliated group (within the meaning of Section
1504(a)(1) of the Code) of which Mafco is the common parent), the Consolidated
Cigar Tax Agreement (so long as Consolidated Cigar Holdings continues to be a
member of the affiliated group (within the meaning of Section 1504(a)(1) of the
Code) of which Mafco is the common parent) and the Marvel Tax Agreements (so
long as Marvel continues to be a member of the affiliated group (within the
meaning of Section 1504(a)(1) of the Code) of which Mafco is the common
parent).
"Required Lenders" means, at any time, Lenders owed or holding at
least a majority in interest of the sum of (a) the aggregate principal amount
of the Advances outstanding at such time, (b) the aggregate Available Amount of
all Letters of Credit outstanding at such time and (c) the aggregate Unused
Revolving Credit Commitments at such time (provided that, for purposes hereof,
neither the Borrower, nor any of its Affiliates, if a Lender, shall be included
in (x) the Lenders holding such amount of the Advances or the Available Amount
of all Letters of Credit or having such amount of the Unused Revolving Credit
Commitments or (y) determining the aggregate unpaid principal amount of the
Advances or the total Unused Revolving Credit Commitments; provided, however,
that if any Lender shall be a Defaulting Lender at such time, there shall be
excluded from the
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determination of Required Lenders at such time (i) the aggregate principal
amount of the Advances owing to such Lender (in its capacity as a Lender) and
outstanding at such time, (ii) such Lender's Pro Rata Share of the aggregate
Available Amount of all Letters of Credit issued by such Lender as of such time
and (iii) the Unused Revolving Credit Commitment of such Lender at such time.
For purposes of this definition, the aggregate principal amount of Letter of
Credit Advances owing to the Issuing Bank and the Available Amount of each
Letter of Credit shall be considered to be owed to the Lenders ratably in
accordance with their respective Revolving Credit Commitments.
"Revlon" means Revlon, Inc., a Delaware corporation.
"Revlon Defeasance Date" means the later of (x) the date on which
certain obligations under the Revlon Worldwide Indenture are terminated
pursuant to Section 8.01(b)(ii) thereof and (y) the date on which the shares of
Revlon not required to secure the Revlon Worldwide Parent Debt are pledged in
favor of the Collateral Agent.
"Revlon Entities" means Revlon Guarantor, Revlon Worldwide Holdings,
Revlon Worldwide Parent, Revlon Worldwide and National Health Care Group, Inc.
"Revlon Guarantor" means Revlon Guarantor Corp., a Delaware
corporation.
"Revlon Guaranty" means the Revlon Guaranty dated as of March 20, 1997
made by Revlon Guarantor in favor of the Lender Parties, the Term Credit
Agreement Lenders, the Agents, the Term Agents and the Collateral Agent, as
such guaranty may be amended or otherwise modified from time to time in
accordance with its terms.
"Revlon Holdings Statement" shall mean a statement that the sum of the
fair market value of Revlon Worldwide (or any successor thereto) plus the fair
market value of National Health Care Group, Inc. constitutes at least 95% of
the fair market value of Revlon Holdings Inc.
"Revlon Pledge Agreement" means the Pledge Agreement dated as of March
20, 1997 made by Revlon Guarantor to the Collateral Agent, as such agreement
may be amended or otherwise modified from time to time in accordance with its
terms.
"Revlon Tax Agreements" shall have the meaning specified in the Revlon
Guaranty.
"Revlon Worldwide" means Revlon Worldwide Corporation, a Delaware
corporation.
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36
"Revlon Worldwide Bonds" means theSenior Secured Discount Notes due
1998 and the Series B Senior Secured Discount Notes due 1998 issued by Revlon
Worldwide, in each case pursuant to the Revlon Worldwide Indenture.
"Revlon Worldwide Holdings" means Revlon Worldwide Holdings Inc., a
Delaware corporation.
"Revlon Worldwide Holdings Guaranty" means the Guaranty dated as of
March 20, 1997 made by Revlon Worldwide Holdings in favor of the Lender
Parties, the Term Credit Agreement Lenders, the Agents, the Term Agents and the
Collateral Agent, as such guaranty may be amended or otherwise modified from
time to time in accordance with its terms.
"Revlon Worldwide Holdings Pledge Agreement" means the Pledge
Agreement dated as of March 20, 1997 made by Revlon Worldwide Holdings to the
Collateral Agent, as such agreement may be amended or otherwise modified from
time to time in accordance with its terms.
"Revlon Worldwide Indenture" means the Indenture dated as of March 15,
1993 made by Revlon Worldwide in favor of The First National Bank of Boston, as
trustee.
"Revlon Worldwide Parent" means Revlon Worldwide (Parent) Corporation,
a Delaware corporation.
"Revlon Worldwide Parent Debt" means the Senior Secured Discount Notes
due 2001 issued by Revlon Worldwide Parent.
"Revlon Worldwide Parent Debt Document" means the Indenture dated as
of March 1, 1997 between Revlon Worldwide Parent and The Bank of New York, as
trustee, in connection with the Revlon Worldwide Parent Debt and any other
agreement or instrument which governs the terms of the Revlon Worldwide Parent
Debt.
"Revlon Worldwide Parent Pledge Agreement" means the Non-Recourse
Guaranty and Pledge Agreement dated as of March 20, 1997 made by Revlon
Worldwide Parent to the Collateral Agent, as such agreement may be amended or
otherwise modified from time to time in accordance with its terms.
"Revolving Credit Advance" has the meaning specified in Section
2.01(a).
"Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by the Lenders.
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37
"Revolving Credit Commitment" means, with respect to any Lender at any
time, the amount set forth opposite such Lender's name on Schedule I hereto
under the caption "Revolving Credit Commitment" or, if such Lender has entered
into one or more Assignments and Acceptances, set forth for such Lender in the
Register maintained by the Administrative Agent pursuant to Section 8.07(c) as
such Lender's "Revolving Credit Commitment", as such amount may be reduced at
or prior to such time pursuant to Section 2.05.
"Revolving Credit Facility" means, at any time, the aggregate amount
of the Lenders' Revolving Credit Commitments at such time.
"Revolving Credit Note" means a promissory note of the Borrower
payable to the order of any Lender, in substantially the form of Exhibit A
hereto, evidencing the aggregate indebtedness of the Borrower to such Lender
resulting from the Revolving Credit Advances made by such Lender.
"Second Andrews Pledge Agreement" means the Second Amended and
Restated Non-Recourse Guaranty and Pledge Agreement dated as of December 16,
1996 made by Andrews and The Bank of New York, in its capacity as voting
trustee, to the Collateral Agent, as such agreement may be amended or otherwise
modified from time to time in accordance with its terms.
"Second Credit Agreement" has the meaning specified in the Preliminary
Statements.
"Second Lenders" has the meaning specified in the Preliminary
Statements.
"Second Mafco Collateral Account" has the meaning specified in the
Mafco Security Agreement.
"Second New FN Holdings Debt" means the 10-5/8% Senior Subordinated
Notes due 2003 issued by FN Escrow in an aggregate principal amount equal to
$575,000,000, which will be assumed by FN Holdings upon the merger of FN Escrow
with and into FN Holdings.
"Second New FN Holdings Debt Document" means the Indenture dated as of
September 19, 1996 between FN Escrow and The Bank of New York, as trustee, in
connection with the Second New FN Holdings Debt and any other agreement or
instrument which governs the terms of the Second New FN Holdings Debt.
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38
"Security Agreements" means the Borrower Security Agreement, the
Borrower Parent Security Agreement and the Mafco Security Agreement.
"Single Employer Plan" of any Person means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, which is subject to Title IV of ERISA,
and (a) that is maintained for employees of such Person or any of its ERISA
Affiliates and no Person other than such Person and its ERISA Affiliates or (b)
in respect of which such Person or any of its ERISA Affiliates could have
liability under Section 4069 of ERISA in the event such plan has been or were
to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair
salable value of the assets of such Person is not less than the amount that
will be required to pay the probable liability of such Person on its debts as
they become absolute and matured, (c) such Person does not intend to, and does
not believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature and (d) such Person is not
engaged in business or a transaction, and is not about to engage in business or
a transaction, for which such Person's property would constitute an
unreasonably small capital. The amount of contingent liabilities at any time
shall be computed as the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
"Specified Holding Company Debt" means the 13% Subordinated Debentures
due March 1, 1999 issued by M&F pursuant to the Indenture dated as of March 1,
1984 between M&F and the United States Trust Company of New York and the 10%
Senior Subordinated Debentures due 1999 issued by Andrews pursuant to the
Indenture dated as of June 4, 1990 between Andrews and First Trust of
California, National Association (as successor trustee to Security Pacific
National Trust Company (New York)).
"Standby Letter of Credit" means any Letter of Credit issued under the
Letter of Credit Facility, other than a Trade Letter of Credit.
"Stockholders Agreement" means the Stockholders Agreement dated as of
October 3, 1994, among FN Parent, FN Holdings and Gerald J. Ford, as such
agreement may be amended, modified or otherwise supplemented from time to time
with the consent of the Required Lenders.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, trust or estate of which (or in which) more than 50% of (a) the Voting
Stock of such corporation, (b) the interest in the capital or profits of such
partnership or joint venture or
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39
(c) the beneficial interest in such trust or estate is at the time directly or
indirectly owned or controlled by such Person, by such Person and one or more
of its other Subsidiaries or by one or more of such Person's other
Subsidiaries; provided, however, that for all purposes of the Loan Documents,
Toy Biz, Inc. shall not be a Subsidiary of any of the Loan Parties.
"Supermajority Lenders" means at any time Lenders owed or holding at
least 67% of the sum of (a) the aggregate principal amount of the Advances
outstanding at such time, (b) the aggregate Available Amount of all Letters of
Credit outstanding at such time and (c) the aggregate Unused Revolving Credit
Commitments at such time (provided that, for purposes hereof, neither the
Borrower nor any of its Affiliates, if a Lender, shall be included in (x) the
Lenders holding such amount of the Advances or the Available Amount of all
Letters of Credit or having such amount of the Unused Revolving Credit
Commitments or (y) determining the aggregate unpaid principal amount of the
Advances or the total Unused Revolving Credit Commitments); provided, however,
that if any Lender shall be a Defaulting Lender at such time, there shall be
excluded from the determination of Supermajority Lenders at such time (i) the
aggregate principal amount of the Advances owing to such Lender (in its
capacity as a Lender) and outstanding at such time, (ii) such Lender's Pro Rata
Share of the aggregate Available Amount of all Letters of Credit issued by such
Lender at such time and (iii) the aggregate Unused Revolving Credit Commitment
of such Lender at such time. For purposes of this definition, the aggregate
principal amount of Letter of Credit Advances owing to the Issuing Bank and the
Available Amount of each Letter of Credit shall be considered to be owed to the
Lenders ratably in accordance with their respective Revolving Credit
Commitments.
"Syndication Agent" has the meaning specified in the recital of
parties to this Agreement.
"Tax Certificate" has the meaning specified in Section 5.01(j)(xiii).
"Taxes" has the meaning specified in Section 2.13(a).
"Term Administrative Agent" has the meaning specified in the
Preliminary Statements.
"Term Agents" has the meaning specified in the Preliminary Statements.
"Term Credit Agreement" has the meaning specified in the Preliminary
Statements.
"Term Credit Agreement Lenders" has the meaning specified in the
Preliminary Statement.
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"Term Credit Agreement Termination Date" means the date on which all
"Payment Obligations" (as defined in the Term Credit Agreement) shall have been
"Fully Satisfied" (as defined in the Term Credit Agreement).
"Term Documentation Agent" has the meaning specified in the
Preliminary Statements.
"Term Facility" means the "Term Facility" as defined in the Term
Credit Agreement.
"Term Syndication Agent" has the meaning specified in the Preliminary
Statements.
"Termination Date" means the earlier of (a) March 20, 1999 or (b) the
date of termination in whole of the Letter of Credit Commitments and the
Revolving Credit Commitments pursuant to Section 2.05 or 6.01.
"Third Credit Agreement" has the meaning specified in the Preliminary
Statements.
"Third Lenders" has the meaning specified in the Preliminary
Statements.
"Trade Letter of Credit" means any Letter of Credit that is issued
under the Letter of Credit Facility for the benefit of a supplier of inventory
to the Borrower or any of its Subsidiaries to effect payment for such
Inventory.
"Treasury Regulations" means the temporary and final regulations
promulgated under the Internal Revenue Code of 1986, as amended from time to
time.
"Type" refers to the distinction between Advances bearing interest at
the Base Rate and Advances bearing interest at the Eurodollar Rate.
"Unfunded Pension Liabilities" with respect to any Plan means the
excess, if any, of its accumulated benefit obligation ("ABO"), as determined in
accordance with Statement of Financial Accounting Standards No. 87 or any
successor thereto ("FAS 87") over the fair market value of its assets (as of
such date) (provided that in determining the ABO for this purpose, the
interest, mortality and other relevant actuarial assumptions used to fund such
Plan as of its most recent actuarial valuation) shall be used instead of the
interest, mortality and other relevant actuarial assumptions that would
otherwise be prescribed by FAS 87.
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"Unused Revolving Credit Commitment" means, with respect to any Lender
at any time, (a) such Lender's Revolving Credit Commitment at such time minus
(b) the sum of (i) the aggregate principal amount of all Revolving Credit
Advances and Letter of Credit Advances made by such Lender (in its capacity as
a Lender) pursuant to Sections 2.02(a) and 2.03(c), respectively, and
outstanding at such time, plus (ii) such Lender's Pro Rata Share of (A) the
aggregate Available Amount of all Letters of Credit outstanding at such time,
(B) the aggregate principal amount of all Letter of Credit Advances made by the
Issuing Bank pursuant to Section 2.03(c) and outstanding at such time and (C)
the ADR Reserve Amount at such time; provided, however, that, for purposes of
calculating the commitment fee payable pursuant to Section 2.09(a), the ADR
Reserve Amount shall always be deemed to be $0.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even though the right
so to vote has been suspended by the happening of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
ERISA.
"Withdrawal Liability" has the meaning specified in Part I of Subtitle
E of Part IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP.
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42
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances. (a) The Revolving Credit Advances. Each
Lender severally agrees, on the terms and conditions hereinafter set forth, to
make advances (each a "Revolving Credit Advance") to the Borrower from time to
time on any Business Day during the period from the date hereof until the
Termination Date in an aggregate amount not to exceed at any time outstanding
such Lender's Revolving Credit Commitment on such Business Day; provided,
however, that on each day, after giving effect to any Revolving Credit
Borrowing on such day, the sum of (i) the aggregate amount of the Revolving
Credit Advances outstanding on such day plus (ii) the aggregate amount of the
Letter of Credit Advances outstanding on such day plus (iii) the aggregate
Available Amount of all Letters of Credit outstanding on such day plus (iv) the
ADR Reserve Amount on such day, shall not exceed an amount equal to the
aggregate Revolving Credit Commitments of the Lenders on such day; provided
further that, notwithstanding anything to the contrary herein, the Borrower
may, upon delivery to the Administrative Agent of a certificate from an officer
of Mafco certifying that the proceeds from such Revolving Credit Borrowing
shall be used solely to finance a transaction in respect of which the amounts
on deposit in the ADR Collateral Account are permitted to be used in accordance
with the provisions of Section 7(h) of the Mafco Security Agreement, borrow
amounts that have been reserved in accordance with the provisions of this
Section 2.01 and the definition of "ADR Reserve Amount". Each Revolving Credit
Borrowing shall be in an aggregate amount not less than $5,000,000 or an
integral multiple of $1,000,000 in excess thereof (other than a Revolving
Credit Borrowing the proceeds of which shall be used solely to repay or prepay
in full outstanding Letter of Credit Advances) and shall consist of Revolving
Credit Advances made on the same day by the Lenders ratably according to their
Revolving Credit Commitments. Within the limits of each Lender's Unused
Revolving Credit Commitment in effect from time to time, the Borrower may
borrow under this Section 2.01(a), prepay pursuant to Section 2.06(a) and
reborrow under this Section 2.01(a).
(b) Letters of Credit. The Issuing Bank agrees, on the terms and
conditions hereinafter set forth, to issue letters of credit (the "Letters of
Credit") for the account of the Borrower from time to time on any Business Day
during the period from the date hereof until 60 days before the Termination
Date (i) in an aggregate Available Amount for all Letters of Credit not to
exceed at any time the Issuing Bank's Letter of Credit Commitment at such time
and (ii) in an Available Amount for each such Letter of Credit not to exceed
the least of (x) the Letter of Credit Facility at such time and (y) the Unused
Revolving Credit Commitments of the Lenders at such time. No Letter of Credit
shall have an expiration date (including all
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rights of the Borrower or the beneficiary to require renewal) later than the
earlier of 60 days before the Termination Date and (A) in the case of a Standby
Letter of Credit, one year after the date of issuance thereof, but may by its
terms be automatically renewable annually unless the Issuing Bank has notified
the Borrower (with a copy to the Administrative Agent) on or after the 60th
Business Day prior to the first anniversary (or any subsequent anniversary) of
the date of issuance thereof but in any event at least 30 Business Days prior
to the date of automatic renewal of its election not to renew such Standby
Letter of Credit (a "Notice of Termination") and (B) in the case of a Trade
Letter of Credit, 60 days after the date of issuance thereof; provided,
however, that the terms of each Standby Letter of Credit that is automatically
renewable annually shall (x) require the Issuing Bank to give the beneficiary
named in such Standby Letter of Credit notice of any Notice of Termination, (y)
permit such beneficiary, upon receipt of such notice, to draw under such
Standby Letter of Credit prior to the date such Standby Letter of Credit
otherwise would have been automatically renewed and (z) not permit the
expiration date (after giving effect to any renewal) of such Standby Letter of
Credit in any event to be extended to a date later than 60 days before the
Termination Date. If a Notice of Termination is given by the Issuing Bank
pursuant to the immediately preceding sentence, such Standby Letter of Credit
shall expire on the date on which it otherwise would have been automatically
renewed. All "Letters of Credit" under the Existing Credit Agreement that are
outstanding on the date hereof shall be deemed, for all purposes of the Loan
Documents and the "Loan Documents" under the Term Credit Agreement, to be
Letters of Credit hereunder. Within the limits of the Letter of Credit
Facility, and subject to the limits referred to above, the Borrower may request
the issuance of Letters of Credit under this Section 2.01(b), repay any Letter
of Credit Advances resulting from drawings thereunder pursuant to Section
2.03(b) and request the issuance of additional Letters of Credit under this
Section 2.01(b).
(c) Clean-Down. Notwithstanding the provisions of Sections 2.01(a) and
2.01(b), no Revolving Credit Borrowings may be made under Section 2.01(a)
during any Clean-Down Period.
SECTION 2.02. Making the Advances. (a) Except as otherwise provided in
Section 2.16, each Borrowing shall be made on notice given not later than 11:00
A.M. (New York City time) on the first Business Day prior to the date of a
proposed Borrowing consisting of Base Rate Advances or the third Business Day
prior to the date of a proposed Borrowing consisting of Eurodollar Rate
Advances, by the Borrower to the Administrative Agent, which shall give to each
Lender prompt notice thereof by telecopier, telex or cable. Each such notice of
a Borrowing (a "Notice of Borrowing") shall be by telecopier, telex or cable,
and, with respect to a Notice of Borrowing by telex or cable, confirmed
immediately thereafter in writing, in substantially the form of Exhibit C
hereto, specifying therein the requested (i) date of such Borrowing, (ii) Type
of Advances comprising such Borrowing, (iii) aggregate amount of such Borrowing
and (iv) Interest Period for each Eurodollar Rate Advance included in such
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Borrowing. In the case of a proposed Borrowing comprised of Eurodollar Rate
Advances, the Administrative Agent shall promptly notify the Borrower and each
Lender of the applicable interest rate under Section 2.07(a)(ii). Each Lender
shall, before 12:00 noon (New York City time) on the date of such Borrowing,
make available for the account of its Applicable Lending Office to the
Administrative Agent at the Administrative Agent's Account, in same day funds,
such Lender's ratable portion of such Borrowing in accordance with the
respective Revolving Credit Commitments of such Lender and the other Lenders.
After the Administrative Agent's receipt of such funds and upon fulfillment of
the applicable conditions set forth in Article III, the Administrative Agent
will make such funds available by crediting the Borrower's Account.
(b) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. In the case of any Borrowing that the related Notice of Borrowing
specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall
indemnify each Lender against any loss, cost or expense incurred by such Lender
as a result of any failure to fulfill on or before the date specified in such
Notice of Borrowing for such Borrowing the applicable conditions set forth in
Article III, including, without limitation, any loss, cost or expense incurred
by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the Advance to be made by such Lender as part
of such Borrowing when such Advance, as a result of such failure, is not made
on such date.
(c) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume, or at its option request
confirmation from such Lender, that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
subsection (a) of this Section 2.02 and the Administrative Agent may, in
reliance upon such assumption or confirmation (as the case may be), make
available to the Borrower on such date a corresponding amount. If and to the
extent that such Lender shall not have so made such ratable portion available
to the Administrative Agent, such Lender and the Borrower severally agree to
repay to the Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the
Administrative Agent, at (i) in the case of the Borrower, the interest rate
applicable at such time under Section 2.07 to Advances comprising such
Borrowing and (ii) in the case of such Lender, the cost (expressed as a rate
per annum) to the Administrative Agent of funding such Lender's ratable
portion; provided, however, that, upon the request of such Lender, the
Administrative Agent shall provide such Lender with a certificate as to the
calculation of such amount. If such Lender shall repay to the Administrative
Agent such corresponding amount, such amount so repaid shall constitute such
Lender's Advance as part of such Borrowing for purposes of this Agreement.
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(d) The failure of any Lender to make the Advance to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Advance on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Advance to
be made by such other Lender on the date of any Borrowing.
(e) The Borrower may not request a Borrowing comprised of Eurodollar
Rate Advances or, pursuant to Section 2.11, Convert Base Rate Advances into
Eurodollar Rate Advances or select a new Interest Period for existing
Eurodollar Rate Advances if, after the making or Conversion of such Advances or
the selection of such Interest Period, the number of outstanding Borrowings
comprised of Eurodollar Rate Advances having different Interest Periods
(whether of different duration or commencing on different dates) would exceed 6.
SECTION 2.03. Issuance of and Drawings and Reimbursement Under Letters
of Credit. (a) Request for Issuance. Each Letter of Credit shall be issued upon
notice, given not later than 11:00 A.M. (New York City time) on the seventh
Business Day prior to the date of the proposed issuance of such Letter of
Credit, by the Borrower to the Issuing Bank, which shall give to the
Administrative Agent and each Lender prompt notice thereof by telex or
telecopier. Each such notice of issuance of a Letter of Credit (a "Notice of
Issuance") shall be by telephone, confirmed immediately in writing, or telex or
telecopier, specifying therein the requested (A) date of such issuance (which
shall be a Business Day), (B) Available Amount of such Letter of Credit, (C)
expiration date of such Letter of Credit, (D) name and address of the
beneficiary of such Letter of Credit and (E) form of such Letter of Credit, and
shall be accompanied by such application and agreement for letter of credit as
such Issuing Bank may specify to the Borrower for use in connection with such
requested Letter of Credit (a "Letter of Credit Agreement"). If the requested
form of such Letter of Credit is acceptable to the Issuing Bank in its sole
discretion, the Issuing Bank will, upon fulfillment of the applicable
conditions set forth in Article III, make such Letter of Credit available to
the Borrower at its office referred to in Section 8.02 or as otherwise agreed
with the Borrower in connection with such issuance. In the event and to the
extent that the provisions of any Letter of Credit Agreement shall conflict
with this Agreement, the provisions of this Agreement shall govern.
(b) Letter of Credit Reports. The Issuing Bank shall furnish (A) to
the Administrative Agent and the Borrower on the first Business Day of each
week during which one or more Letters of Credit have been issued or drawn upon,
a written report summarizing issuance and expiration dates of Letters of Credit
issued during the previous week and drawings during such week under all Letters
of Credit issued, (B) to each Lender and the Borrower on the first Business Day
of each month a written report summarizing issuance and expiration dates of
Letters of Credit issued during the preceding month and drawings during such
month under all Letters of Credit and (C) to the Administrative Agent, each
Lender and the Borrower on the first Business Day of each calendar quarter a
written report setting forth
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46
the average daily aggregate Available Amount during the preceding calendar
quarter of all Letters of Credit.
(c) Drawing and Reimbursement. The payment by the Issuing Bank of a
draft drawn under any Letter of Credit shall constitute for all purposes of
this Agreement the making by the Issuing Bank of a Letter of Credit Advance, in
the amount of such draft, which shall be a Base Rate Advance until the third
Business Day after the date which the Borrower shall have delivered a L/C
Certificate in respect of such Letter of Credit Advance which specified that
such Advance shall be a Eurodollar Advance. Upon written demand by the Issuing
Bank, with a copy of such demand to the Administrative Agent, each Lender shall
purchase from the Issuing Bank, and the Issuing Bank shall sell and assign to
each such Lender, such Lender's Pro Rata Share of such outstanding Letter of
Credit Advance as of the date of such purchase, by making available for the
account of its Applicable Lending Office to the Administrative Agent for the
account of the Issuing Bank, by deposit to the Administrative Agent's Account,
in same day funds, an amount equal to the portion of the outstanding principal
amount of such Letter of Credit Advance to be purchased by such Lender.
Promptly after receipt thereof, the Administrative Agent shall transfer such
funds to the Issuing Bank. The Borrower hereby agrees to each such sale and
assignment. Each Lender irrevocably and unconditionally agrees to purchase its
Pro Rata Share of an outstanding Letter of Credit Advance on (i) the Business
Day on which demand therefor is made by the Issuing Bank, provided notice of
such demand is given not later than 11:00 A.M. (New York City time) on such
Business Day or (ii) the first Business Day next succeeding such demand if
notice of such demand is given after such time. Upon any such assignment by the
Issuing Bank to any other Lender of a portion of a Letter of Credit Advance,
the Issuing Bank represents and warrants to such other Lender that the Issuing
Bank is the legal and beneficial owner of such interest being assigned by it,
free and clear of any liens, but makes no other representation or warranty and
assumes no responsibility with respect to such Letter of Credit Advance, the
Loan Documents or any Loan Party. If and to the extent that any Lender shall
not have so made the amount of such Letter of Credit Advance available to the
Administrative Agent, such Lender agrees to pay to the Administrative Agent
forthwith on demand such amount together with interest thereon, for each day
from the date of demand by the Issuing Bank until the date such amount is paid
to the Administrative Agent, at the Federal Funds Rate for its account or the
account of the Issuing Bank, as applicable. If such Lender shall pay to the
Administrative Agent such amount for the account of the Issuing Bank on any
Business Day, such amount so paid in respect of principal shall constitute a
Letter of Credit Advance made by such Lender on such Business Day for purposes
of this Agreement, and the outstanding principal amount of the Letter of Credit
Advance made by the Issuing Bank shall be reduced by such amount on such
Business Day.
(d) Failure to Make Letter of Credit Advances. The failure of any
Lender to make the Letter of Credit Advance to be made by it on the date
specified in Section 2.03(c)
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47
shall not relieve any other Lender of its obligation hereunder to make its
Letter of Credit Advance on such date, but no Lender shall be responsible for
the failure of any other Lender to make the Letter of Credit Advance to be made
by such other Lender on such date.
SECTION 2.04. Repayment. (a) Revolving Credit Advances. The Borrower
shall repay to the Administrative Agent for the ratable account of the Lenders
on the Termination Date the aggregate principal amount of the Revolving Credit
Advances then outstanding.
(b) Letter of Credit Advances. (i) The Borrower shall repay to the
Administrative Agent for the account of the Issuing Bank and each other Lender
that has made a Letter of Credit Advance on the Termination Date the
outstanding principal amount of each Letter of Credit Advance made by each of
them; provided, however, that if the Borrower fails to deliver a L/C
Certificate in respect of such Letter of Credit Advance on the Business Day
following the date on which the Issuing Bank paid a draft drawn under a Letter
of Credit which resulted in such Letter of Credit Advance, the Borrower shall
repay such Letter of Credit Advance on demand.
(ii) The Obligations of the Borrower under this Agreement, any Letter
of Credit Agreement and any other agreement or instrument relating to any
Letter of Credit shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement, such Letter of Credit
Agreement and such other agreement or instrument under all circumstances,
including, without limitation, the following circumstances:
(A) any lack of validity or enforceability of any Loan Document, any
Letter of Credit Agreement, any Letter of Credit or any other agreement or
instrument relating thereto (all of the foregoing being, collectively, the
"L/C Related Documents");
(B) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of the Borrower in respect of
any L/C Related Document or any other amendment or waiver of or any consent
to departure from all or any of the L/C Related Documents;
(C) the existence of any claim, set-off, defense or other right that
the Borrower may have at any time against any beneficiary or any transferee
of a Letter of Credit (or any Persons for whom any such beneficiary or any
such transferee may be acting), the Issuing Bank or any other Person,
whether in connection with the transactions contemplated by the L/C Related
Documents or any unrelated transaction;
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48
(D) any statement or any other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
(E) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or certificate that does not strictly comply with
the terms of such Letter of Credit;
(F) any exchange, release or non-perfection of any Collateral or other
collateral, or any release or amendment or waiver of or consent to
departure from any Guaranty or any other guarantee, for all or any of the
Obligations of the Borrower in respect of the L/C Related Documents; or
(G) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including, without limitation, any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrower or a guarantor.
SECTION 2.05. Termination or Reduction of the Commitments. (a)
Optional. The Borrower shall have the right, upon at least three Business Days'
prior notice to the Administrative Agent, to terminate in whole or reduce
ratably in part the unused portion of the Letter of Credit Facility and the
Unused Revolving Credit Commitments; provided that each partial reduction (i)
shall be in an aggregate amount of $10,000,000 or an integral multiple of
$1,000,000 in excess thereof and (ii) shall be made ratably among the Lenders
in accordance with their Commitments.
(b) Mandatory. (i) On any date (A) on which a cash equity contribution
is deposited in the Borrower Collateral Account as a result of a loan made by
First Gibraltar to the Borrower Parent pursuant to the terms of the First
Gibraltar Loan Agreement or on which a deposit of amounts paid under or in
connection with any Related Documents is made to the Mafco Collateral Account
or on which a deposit of amounts constituting Net Cash Proceeds from an Asset
Sale is made to the Mafco Collateral Account and (B) either (I) a Default has
occurred and is continuing, (II) the Borrower fails to deliver a Look-Forward
Certificate or a Deposit Certificate with respect to such deposit in accordance
with the terms of section 5.01(k) or (III) the Mafco Finance Required Lenders
determine, in their reasonable discretion, within 15 Business Days following
the date of the receipt of the Look-Forward Certificate or within 2 Business
Days following the date of the receipt of Deposit Certificate, as the case may
be, referred to in clause (B)(II), that the pro forma amounts available to be
loaned by First Gibraltar
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49
to Borrower Parent, together with amounts received by Mafco pursuant to or in
connection with any Related Document, will be less than $15 million in any
calendar quarter (of which at least $10 million shall be from amounts available
to be loaned by First Gibraltar to the Borrower Parent) or will not be
sufficient to pay interest on the Advances then outstanding and interest on the
Debt then outstanding under the Term Credit Agreement, the Revolving Credit
Facility shall be automatically and permanently reduced by an amount equal to
the excess of (x) the amount of such cash equity contribution or the amount on
deposit in the Mafco Collateral Account, as the case may be, plus any interest
on Collateral Investments made with such contribution or deposit over (y) the
sum of the amount of interest and fees then due and payable in respect of the
Facilities plus the amount of expenses of the Administrative Agent (including
the reasonable fees and expenses of counsel to the Administrative Agent) then
due and payable plus the aggregate amount paid (including the aggregate amount
of interest, fees and expenses then due and payable in respect of the Term
Facility) from such cash equity contribution or such amount on deposit in the
Mafco Collateral Account, as the case may be, or from any interest on
Collateral Investments made with such contribution or deposit pursuant to the
terms of Section 2.05(b)(i) of the Term Credit Agreement. Each such reduction
shall be applied ratably to the Revolving Credit Facility and shall be made
ratably among the Lenders in accordance with their Revolving Credit
Commitments.
(ii) The Revolving Credit Facility shall be automatically and
permanently reduced:
(A) on the date of receipt by any A Company of the Net Cash Proceeds
of issuances, sales or liquidations of any capital stock (including any
securities convertible into or exchangeable for capital stock or any
warrants, rights or options to acquire capital stock) of any A Company
(other than any Net Cash Proceeds in respect of any Asset Sale),
(B) on the date of receipt by any A Company of any dividends, other
distributions or any loans or advances made in respect of the capital stock
of any other A Company (other than FN Holdings and FN Parent) or any
Designated Operating Company (provided that this clause (B) shall not apply
(1) to the dividend made by MCG in accordance with the public announcements
made prior to the date hereof and (2) to the receipt by any A Company of
any dividends, other distributions or any loans or advances made in respect
of all or any portion of the proceeds received by Mafco or any of its
Subsidiaries from any Asset Sale or any sale, lease, transfer or other
disposition specified in clauses (i) through (iv) of the definition of
"Asset Sale"),
(C) on the date of receipt by any A Company of the proceeds of
distributions, dividends or any loans or advances made on account of or as
a result of the issuance, sale or liquidation of any capital stock
(including any securities convertible into or exchangeable for capital
stock or any warrants, rights or options to acquire capital stock but
excluding any Asset Sale) of, or the sale, issuance or incurrence of any
Debt by, any Designated Operating Company, and
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(D) on the date of receipt by any A Company of the Net Cash Proceeds
from the sale, issuance or incurrence by any A Company of any Debt (other
than any sale, issuance or incurrence by Revlon Holdings Inc. of any Debt
to any of its Subsidiaries),
by an amount equal to the excess of (x) the amount so received (except, in each
case, to the extent (1) required pursuant to the terms of any agreement or
instruments relating to Debt existing on the date hereof or otherwise approved
by the Mafco Finance Required Lenders of any A Company or Designated Operating
Company to prepay or redeem or purchase such Debt or (2) prohibited to be so
applied by the terms of any agreement or instrument relating to Debt existing
on the date hereof or otherwise approved by the Mafco Finance Required Lenders
of any A Company or Designated Operating Company) over (y) the sum of the
amount of interest and fees then due and payable in respect of the Facilities
plus the amount of expenses of the Administrative Agent (including the
reasonable fees and expenses of counsel to the Administrative Agent) then due
and payable plus the aggregate amount paid (including the aggregate amount of
interest, fees and expenses then due and payable in respect of the Term
Facility) from the amounts so received pursuant to the terms of Section
2.05(b)(ii) of the Term Credit Agreement. Each such reduction shall be applied
ratably to the Revolving Credit Facility and shall be made ratably among the
Lenders in accordance with their Revolving Credit Commitments.
(iii) On the date of receipt by Mafco or any of its Subsidiaries
(other than the Bank and its Subsidiaries) of the Net Cash Proceeds from the
sale, transfer or other disposition of (x) all or any portion of the capital
stock of the Bank (other than any issuance by the Bank or any Subsidiary of the
Bank of capital stock) or (y) any asset of the Bank, the Revolving Credit
Facility shall be automatically and permanently reduced by an amount equal to
the excess of (A) such Net Cash Proceeds (other than the portion of such Net
Cash Proceeds required to be paid to the holders of the Class B common stock of
FN Holdings and the holders of the FN Holdings Preferred Stock) over (B) the
sum of the amount of interest and fees then due and payable in respect of the
Facilities plus the amount of expenses of the Administrative Agent (including
the reasonable fees and expenses of counsel to the Administrative Agent) then
due and payable plus the aggregate amount paid (including the aggregate amount
of interest, fees and expenses then due and payable in respect of the Term
Facility) from such Net Cash Proceeds pursuant to the terms of Section
2.05(b)(iii) of the Term Credit Agreement. Each such reduction shall be applied
ratably to the Revolving Credit Facility and shall be made ratably among the
Lenders in accordance with their Revolving Credit Commitments.
(iv) On and after the date on which Mafco and its Subsidiaries have
received Net Cash Proceeds in an amount equal to the Asset Sale Threshold from
Asset Sales, upon any Asset Sale in respect of which Mafco and its Subsidiaries
have received Net Cash Proceeds
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51
(which, together with the aggregate amount of Net Cash Proceeds from and after
the Effective Date from Asset Sales, exceeds the Asset Sale Threshold), the
Revolving Credit Facility shall be automatically and permanently reduced by an
amount equal to the excess of (x) the sum of (A) 50% of that portion of the Net
Cash Proceeds (up to $150 million) in excess of the Asset Sale Threshold (after
taking into account the aggregate amount of Net Cash Proceeds from and after
the Effective Date from Asset Sales) from such Asset Sale plus (B) 100% of that
portion of the Net Cash Proceeds from such Asset Sale in excess of the sum of
the Asset Sale Threshold plus $150 million (after taking into account the
aggregate amount of Net Cash Proceeds from and after the Effective Date from
Asset Sales) over (y) the sum of the amount of interest and fees then due and
payable in respect of the Facilities plus the amount of expenses of the
Administrative Agent (including the reasonable fees and expenses of counsel to
the Administrative Agent) then due and payable plus the aggregate amount paid
(including the aggregate amount of interest, fees and expenses then due and
payable in respect of the Term Facility) from such Net Cash Proceeds pursuant
to the terms of Section 2.05(b)(iv) of the Term Credit Agreement. Each such
reduction shall be applied ratably to the Revolving Credit Facility and shall
be made ratably among the Lenders in accordance with their Revolving Credit
Commitments.
(v) On each date that an Event of Default set forth in Section 6.01(a)
shall have occurred and be continuing, the Revolving Credit Facility shall be
automatically and permanently reduced by an amount equal to the excess of (x)
the amount on deposit in the Second Mafco Collateral Account over (y) the sum
of the amount of interest and fees then due and payable in respect of the
Facilities plus the amount of expenses of the Administrative Agent (including
the reasonable fees and expenses of counsel to the Administrative Agent) then
due and payable. Each such reduction shall be applied ratably to the Revolving
Credit Facility and shall be made ratably among the Lenders in accordance with
their Revolving Credit Commitments. Any amounts remaining on deposit in the
Second Mafco Collateral Account after the foregoing application shall be
applied as set forth in Section 2.05(b)(v) of the Term Credit Agreement. If an
Event of Default set forth in Section 6.01(a) shall occur and be continuing at
the same time as an "Event of Default" set forth in Section 6.01(a) of the Term
Credit Agreement shall occur and be continuing, such amount (less the sum of
(1) the amount of interest and fees then due and payable in respect of the Term
Facility plus (2) the amount of expenses of the "Administrative Agent" under
the Term Credit Agreement (including the reasonable fees and expenses of
counsel to such "Administrative Agent") then due and payable) shall be applied
pro rata to the Revolving Credit Facility and to the Debt under the Term Credit
Agreement and such pro rata amount shall be applied to the Revolving Credit
Facility as set forth in this Section 2.05(b)(v).
(vi) On each date that an "Event of Default" set forth in Section
6.01(a) of the Term Credit Agreement shall occur and be continuing, the
Revolving Credit Facility shall be automatically and permanently reduced by an
amount equal to the excess of (x) the amount
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52
on deposit in the Second Mafco Collateral Account over (y) the sum of (1) the
amount of interest and fees then due and payable in respect of the Facilities
plus (2) the amount of expenses of the Administrative Agent (including the
reasonable fees and expenses of counsel to the Administrative Agent) then due
and payable plus (3) the aggregate amount paid (including the aggregate amount
of interest, fees and expenses then due and payable in respect of the Term
Facility) from such amount on deposit pursuant to the terms of Section
2.05(b)(vi) of the Term Credit Agreement. Each such reduction shall be applied
ratably to the Revolving Credit Facility and shall be made ratably among the
Lenders in accordance with their Revolving Credit Commitments. If an "Event of
Default" set forth in Section 6.01(a) of the Term Credit Agreement shall occur
and be continuing at the same time as an Event of Default set forth in Section
6.01(a) shall occur and be continuing, such amount shall be applied pro rata to
the Revolving Credit Facility and to the Debt under the Term Credit Agreement
and such pro rata amount shall be applied to the Revolving Credit Facility as
set forth in this Section 2.05(b)(vi).
(vii) The Letter of Credit Facility shall be permanently reduced from
time to time on the date of each reduction in the Revolving Credit Facility by
the amount, if any, by which the Letter of Credit Facility exceeds the
Revolving Credit Facility after giving effect to such reduction of the
Revolving Credit Facility.
SECTION 2.06. Prepayments. (a) Optional. The Borrower may, upon at
least one Business Day's notice to the Administrative Agent, in the case of
Base Rate Advances, and three Business Days' notice to the Administrative
Agent, in the case of Eurodollar Rate Advances, stating the proposed date, and
the aggregate principal amount of the prepayment, and if such notice is given,
the Borrower shall, prepay the outstanding principal amounts of the Advances
comprising part of the same Borrowing in whole or ratably in part, together
with accrued interest to the date of such prepayment on the principal amount so
prepaid; provided, however, that, with respect to any prepayment made in
connection with the provisions of Section 7(o) of the Mafco Guaranty, no such
notice shall be required; provided further that (x) each partial prepayment
(other than a prepayment made in connection with the provisions of Section 7(o)
of the Mafco Guaranty) shall be in an aggregate principal amount not less than
$10,000,000 or an integral multiple of $1,000,000 in excess thereof (or, if the
aggregate principal amount of all Advances that constitute part of such
Borrowing is less, such aggregate principal amount) and (y) in the event any
such prepayment of Eurodollar Rate Advances is not made on the last day of an
Interest Period, the Borrower shall be obligated to reimburse the Lenders in
respect thereof pursuant to Section 8.04(b).
(b) Mandatory. (i) The Borrower shall, on each Business Day, prepay an
aggregate principal amount of the Revolving Credit Advances comprising part of
the same Revolving Credit Borrowing and the Letter of Credit Advances equal to
the amount by which (A) the sum of aggregate principal amount of (x) the
Revolving Credit Advances and (y) the Letter of Credit Advances then
outstanding plus the aggregate Available Amount of all Letters
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53
of Credit then outstanding plus the ADR Reserve Amount on such Business Day
exceeds (B) the Revolving Credit Facility on such Business Day.
(ii) The Borrower shall, on each Business Day, pay to the
Administrative Agent for deposit in the L/C Cash Collateral Account an amount
sufficient to cause the aggregate amount on deposit in such Collateral Account
to equal the amount by which the aggregate Available Amount of all Letters of
Credit then outstanding exceeds the Letter of Credit Facility on such Business
Day.
(iii) The Borrower shall, on the first day of each Mandatory
Clean-Down Period, prepay in full the Revolving Credit Advances and the Letter
of Credit Advances.
(iv) Prepayments of the Revolving Credit Facility made pursuant to
clause (i) or (iii) above shall be first, applied to prepay Letter of Credit
Advances then outstanding until such Advances are paid in full and second,
applied to prepay Revolving Credit Advances then outstanding comprising part of
the same Borrowings.
(v) If, as a result of the making of any prepayment required to be
made pursuant to this Section 2.06, the Borrower would incur costs pursuant to
Section 8.04(b), the Borrower may deposit the amount of such prepayment with
the Administrative Agent, for the benefit of the Lenders, in a cash collateral
account, until the end of the applicable Interest Period at which time such
payment shall be made. The Borrower hereby grants to the Administrative Agent,
for the benefit of the Lenders, a security interest in all amounts in which the
Borrower has any right, title or interest which are from time to time on
deposit in such cash collateral account and expressly waives all rights (which
rights the Borrower hereby acknowledges and agrees are vested exclusively in
the Administrative Agent) to exercise dominion or control over any such
amounts.
SECTION 2.07. Interest. (a) Ordinary Interest. The Borrower shall pay
interest on the unpaid principal amount of each Advance owing to each Lender
from the date of such Advance until such principal amount shall be paid in
full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance is a Base
Rate Advance, a rate per annum equal at all times to the sum of the Base
Rate in effect from time to time plus the Applicable Margin in effect from
time to time, payable in arrears quarterly on the first Business Day of
each March, June, September and December during such periods, commencing
June 2, 1997, and on the date such Base Rate Advance shall be Converted or
paid in full.
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54
(ii) Eurodollar Rate Advances. During such periods as such Advance is
a Eurodollar Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the sum of the Eurodollar Rate for such
Interest Period plus the Applicable Margin in effect from time to time,
payable in arrears on the last day of such Interest Period and, if such
Interest Period has a duration of more than three months, on each day that
occurs during such Interest Period every three months from the first day of
such Interest Period.
(b) Default Interest. The Borrower shall pay on demand interest on the
unpaid principal amount of each Advance that is not paid when due and on the
unpaid amount of all interest, fees and other amounts then due and payable
hereunder that is not paid when due from the due date thereof to the date paid,
at a rate per annum equal at such time to (i) in the case of any amount of
principal, 2% per annum above the rate of interest per annum required to be
paid on such Advance immediately prior to the date on which such amount became
due and payable and (ii) in the case of all other amounts, 2% per annum above
the rate per annum required to be paid on Base Rate Advances pursuant to
Section 2.07(a)(i) above.
SECTION 2.08. Interest Rate Determination. (a) The Administrative
Agent shall give prompt notice to the Borrower and each Lender of the
applicable interest rate determined by the Administrative Agent for purposes of
Section 2.07(a)(i) or (ii), and the applicable rate, if any, furnished by
Citibank for the purpose of determining the applicable interest rate under
Section 2.07(a)(i) or (ii).
(b) If Citibank cannot furnish timely information to the
Administrative Agent for determining the Eurodollar Rate, the Administrative
Agent shall forthwith notify the Borrower and each Lender that the interest
rate cannot be determined for such Eurodollar Rate Advances, whereupon (i) each
such Eurodollar Rate Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance and (ii)
the obligation of the Lenders to make, or to Convert Advances into, Eurodollar
Rate Advances shall be suspended until the Administrative Agent shall notify
the Borrower that Citibank has determined that the circumstances causing such
suspension no longer exist.
(c) If the Required Lenders notify the Administrative Agent that the
Eurodollar Rate for any Interest Period for such Eurodollar Rate Advances will
not adequately reflect the cost to such Required Lenders of making, funding or
maintaining their pro rata shares of such Eurodollar Rate Advances for such
Interest Period, the Administrative Agent shall forthwith so notify the
Borrower and the Lenders, whereupon (i) each such Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance and (ii) the obligation of the Lenders to
make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended
until the Administrative
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55
Agent shall notify the Borrower that such Required Lenders have determined that
the circumstances causing such suspension no longer exist.
(d) If the Borrower shall fail to select the duration of any Interest
Period for any Eurodollar Rate Advances in accordance with the provisions
contained in the definition of "Interest Period" in Section 1.01, the
Administrative Agent will forthwith notify the Borrower and the Lenders and the
Interest Period for such Eurodollar Rate Advances will be one month.
SECTION 2.09. Fees. (a) Commitment Fee. The Borrower agrees to pay to
the Administrative Agent for the account of the Lenders a commitment fee on the
average daily Unused Revolving Credit Commitment of such Lender, from the date
hereof, in the case of each Financial Institution, and from the effective date
specified in the Assignment and Acceptance pursuant to which it became a
Lender, in the case of each other Lender, until the Termination Date at a rate
equal to 1-1/4% per annum, payable in arrears on the date of the initial
Revolving Credit Borrowing, thereafter quarterly on the first Business Day of
each March, June, September and December commencing June 2, 1997 and on the
Termination Date.
(b) Letter of Credit Fees, Etc. (i) The Borrower shall pay to the
Administrative Agent for the account of each Lender a commission, payable in
arrears quarterly on the first Business Day of each March, June, September and
December, commencing June 2, 1997, and on the earliest to occur of the full
drawing, expiration, termination or cancellation of any such Letter of Credit
and on the Termination Date, on such Lender's Pro Rata Share of the average
daily aggregate Available Amount during such quarter of (A) all Standby Letters
of Credit outstanding from time to time at the rate of 4-1/2% per annum and
(B) all Trade Letters of Credit then outstanding at the rate of 4-1/2% per
annum.
(ii) The Borrower shall pay to each Issuing Bank, for its own account,
such commissions, issuance fees, fronting fees, transfer fees and other fees
and charges in connection with the issuance or administration of each Letter of
Credit as the Borrower and such Issuing Bank shall agree.
(c) Other Fees. The Borrower shall pay to the Administrative Agent for
its own account such fees as are set forth in the fee letter dated March 20,
1997 between Mafco and Citibank, as the same may be amended or otherwise
modified from time to time.
SECTION 2.10. Increased Costs; Illegality. (a) Except as to taxes,
levies, imposts, deductions, charges, withholdings or liabilities with respect
thereto (it being understood that the Borrower shall not have any liability for
any taxes, levies, imposts, deductions, charges, withholdings or liabilities
with respect thereto, except as provided in Section 2.13), if, due to either
(i) the introduction of or any change (other than any change by
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56
way of imposition or increase of reserve requirements included in the
Eurodollar Rate Reserve Percentage) in or in the interpretation of any law or
regulation or (ii) the compliance by any Lender Party with any guideline or
request from any central bank or other governmental authority in any case
introduced, changed, interpreted or requested after the date hereof (whether or
not having the force of law), there shall be (x) imposed, modified or deemed
applicable any reserve, special deposit or similar requirement against assets
held by, or letters of credit or guarantees issued by, or deposits in or for
the account of, any Lender Party or (y) imposed on any Lender Party any other
condition relating to this Agreement or the Advances made by it or the issuance
by it of Letters of Credit, and the result of any event referred to in clause
(x) or (y) shall be to increase the cost to such Lender Party of agreeing to
make or making, funding or maintaining Eurodollar Rate Advances or of agreeing
to issue or of issuing or maintaining Letters of Credit or of agreeing to make
or of making or maintaining Letter of Credit Advances, then the Borrower shall
from time to time, upon demand by such Lender Party (with a copy of such demand
to the Administrative Agent) made within 60 days after the first date on which
such Lender Party has actual knowledge that it is entitled to make demand for
payment under this Section 2.10(a), pay to the Administrative Agent for the
account of such Lender Party additional amounts sufficient to compensate such
Lender Party for such increased cost; provided, however, that if such Lender
Party fails to so notify the Borrower within such 60-day period, such increased
cost shall commence accruing on such later date on which the Lender Party
notifies the Borrower; provided further that, before making any such demand,
such Lender Party agrees to use its best efforts (consistent with its internal
policy and legal and regulatory restrictions) to designate a different
Applicable Lending Office if the making of such a designation would avoid the
need for, or reduce the amount of, such increased cost and would not, in the
reasonable judgment of such Lender Party, be otherwise disadvantageous to such
Lender Party. A certificate as to the amount of such increased cost, submitted
to the Borrower and the Administrative Agent by such Lender Party, shall be
conclusive and binding for all purposes, absent manifest error.
(b) If any Lender Party determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental or monetary authority in regard to capital adequacy (whether or
not having the force of law) including, without limitation, any guideline
contemplated by the report dated July 1988 entitled "International Convergence
of Capital Management and Capital Standards" issued by the Bank Committee on
Banking Regulations and Supervisory Practices, in any case in which such law,
regulation, guideline or request became effective or was made after the date
hereof, has or would have the effect of reducing the rate of return on the
capital of, or maintained by, such Lender Party or any corporation controlling
such Lender Party as a consequence of such Lender Party's Advances or
Commitments hereunder or the issuance by it of any Letter of Credit and other
commitments of this type, by increasing the amount of capital required or
expected to be maintained by such Lender Party or any corporation controlling
such Lender Party, to a level below that which such Lender Party or any
corporation controlling such
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57
Lender Party could have achieved but for such adoption, effectiveness, change
or compliance (taking into account such Lender Party's or such corporation's
policies with respect to capital adequacy), then the Borrower shall, from time
to time, pay such Lender Party, upon demand by such Lender Party (with a copy
of such demand to the Administrative Agent) made within 60 days after the first
date on which such Lender Party has actual knowledge that it is entitled to
make demand for payment under this Section 2.10(b) of such reduction in return,
such additional amount as may be specified by such Lender Party as being
sufficient to compensate such Lender Party for such reduction in return, to the
extent that such Lender Party reasonably determines such reduction to be
attributable to the existence of such Lender Party's commitment to lend or to
issue Letters of Credit hereunder or to the issuance or maintenance of any
Letters of Credit; provided, however, that if such Lender Party fails to so
notify the Borrower within such 60-day period, such amounts shall commence
accruing on such later date on which the Lender Party notifies the Borrower. A
certificate as to such amounts submitted to the Borrower and the Administrative
Agent by such Lender Party shall be conclusive and binding for all purposes,
absent manifest error.
(c) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for any Lender or its Eurodollar Lending
Office to perform its obligations hereunder to make Eurodollar Rate Advances or
to fund or maintain Eurodollar Rate Advances hereunder, then, upon written
notice by such Lender to the Borrower (with a copy to the Administrative
Agent), (i) each Eurodollar Rate Advance will automatically Convert into a Base
Rate Advance and (ii) the obligation to make, or to Convert Base Rate Advances
into, Eurodollar Rate Advances shall be suspended until the Administrative
Agent shall notify the Borrower and the Lenders that the circumstances causing
such suspension no longer exist; provided, however, that, before making any
such demand, such Lender shall designate a different Eurodollar Lending Office
if the making of such a designation would avoid the need for giving such notice
and demand, and would not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender. For purposes of this Section 2.10(c), a notice
to the Borrower by a Lender shall be effective with respect to any Eurodollar
Rate Advance on the last day of the then current Interest Period for such
Advance; provided, however, that, if it is not lawful for such Lender to
maintain such Advance until the end of the Interest Period applicable thereto,
then the notice to the Borrower shall be effective upon receipt by the
Borrower.
SECTION 2.11. Conversion of Advances. (a) Optional. The Borrower may
on any Business Day, upon notice given to the Administrative Agent not later
than noon (New York City time) on the third Business Day prior to the date of
the proposed Conversion and subject to the provisions of Sections 2.08 and
2.10, Convert all or any portion of the Advances of one Type comprising the
same Borrowing into Advances of the other Type; provided, however, that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall be
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58
made on, and only on, the last day of an Interest Period for such Eurodollar
Rate Advances, any Conversion of Base Rate Advances into Eurodollar Rate
Advances shall be subject to the limitation set forth in Section 2.02(e) and in
an amount not less than $5,000,000 and each Conversion of Advances comprising
part of the same Borrowing shall be made ratably among the Lenders in
accordance with their Revolving Credit Commitments. Each such notice of
Conversion shall, within the restrictions specified above, specify (i) the date
of such Conversion, (ii) the Advances to be Converted and (iii) if such
Conversion is into Eurodollar Rate Advances, the duration of the initial
Interest Period for such Advances.
(b) Mandatory. (i) On the date on which the aggregate unpaid principal
amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced,
by payment or prepayment or otherwise, to less than $5,000,000, such Advances
shall automatically Convert into Base Rate Advances.
(ii) Upon the occurrence and during the continuance of any Event of
Default (or, in the case of any involuntary proceeding described in Section
6.01(e), a Default), (A) each Eurodollar Rate Advance will automatically, on
the last day of the then existing Interest Period therefor, Convert into a Base
Rate Advance and (B) the obligation of the Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended.
SECTION 2.12. Payments and Computations. (a) The Borrower shall make
each payment hereunder and under the Notes not later than 11:00 A.M. (New York
City time) on the day when due in U.S. Dollars to the Administrative Agent at
the Administrative Agent's Account in same day funds. The Administrative Agent
will promptly thereafter cause to be distributed like funds relating to the
payment of principal or interest or commitment fees ratably (other than amounts
payable pursuant to Section 2.10 or 2.13) to the Lender Parties for the account
of their respective Applicable Lending Offices, and like funds relating to the
payment of any other amount payable to any Lender Party to such Lender Party
for the account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement. Upon its acceptance of an
Assignment and Acceptance and recording of the information contained therein in
the Register pursuant to Section 8.07(c), from and after the effective date
specified in such Assignment and Acceptance, the Administrative Agent shall
make all payments hereunder and under the Notes in respect of the interest
assigned thereby to the Lender Party assignee thereunder, and the parties to
such Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
(b) The Borrower hereby authorizes each Lender Party, if and to the
extent payment of principal, interest or fees owed to such Lender Party is not
made when due hereunder or, in the case of a Lender under the Note or Notes
held by such Lender, to charge
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59
from time to time against any or all of the Borrower's accounts with such
Lender Party any amount so due.
(c) All computations of interest based on the Eurodollar Rate, the
Base Rate or the Federal Funds Rate and of commitment fees and Letter of Credit
commissions shall be made by the Administrative Agent, on the basis of a year
of 360 days, in each case for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such interest
or commitment fees are payable. Each determination by the Administrative Agent
of an interest rate hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(d) Whenever any payment hereunder or under any Note shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fee, as the
case may be; provided, however, that, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(e) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to any Lender Party
hereunder or under any Note that the Borrower will not make such payment in
full, the Administrative Agent may assume, or at its option request
confirmation from the Borrower, that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender
Party on such due date an amount equal to the amount then due such Lender
Party. If and to the extent the Borrower shall not have so made such payment in
full to the Administrative Agent, each Lender Party shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
Party together with interest thereon, for each day from the date such amount is
distributed to such Lender Party until the date such Lender Party repays such
amount to the Administrative Agent, at the Federal Funds Rate.
(f) If the Administrative Agent receives funds for application to the
Obligations under the Loan Documents under circumstances for which the Loan
Documents do not specify the Advances to which, or the manner in which, such
funds are to be applied, the Administrative Agent may, but shall not be
obligated to, elect to distribute such funds to each Lender Party ratably in
accordance with such Lender Party's proportionate share of the principal amount
of all outstanding Advances, in repayment or prepayment of such of the
outstanding Advances or other Obligations owed to such Lender Party, and for
application to such principal installments, as the Administrative Agent shall
direct.
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SECTION 2.13. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.12,
free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender Party
and the Administrative Agent, (i) taxes imposed on its income, and franchise
taxes and backup withholding taxes imposed on it, by the United States or the
jurisdiction under the laws of which such Lender Party or the Administrative
Agent (as the case may be) is organized or any political subdivision or taxing
authority thereof or therein, (ii) taxes imposed on its income, and franchise
taxes imposed on it, by the jurisdiction of such Lender Party's or, in either
such case, the Administrative Agent's principal office or Applicable Lending
Office or any political subdivision or taxing authority thereof or therein and
(iii) United States withholding tax payable with respect to payments hereunder
under laws (including, without limitation any statute, treaty, ruling,
determination or regulation) in effect on the Initial Date with respect to such
Lender Party or the Administrative Agent, but not excluding any United States
withholding tax payable as a result of any change in such laws occurring after
the Initial Date (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as
"Taxes"). If the Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder or under any Note to any Lender Party
or the Administrative Agent, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions of Taxes (including
deductions of Taxes applicable to additional sums payable under this Section
2.13) such Lender Party or the Administrative Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions of Taxes been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law; provided,
however, that any such Lender Party shall designate a different Applicable
Lending Office if, in the judgment of such Lender Party, such designation would
avoid the need for, or reduce the amount of, any Taxes required to be deducted
from or in respect of any sum payable hereunder to such Lender Party or the
Administrative Agent and would not, in the judgment of such Lender Party, be
otherwise disadvantageous to such Lender Party.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or under the Notes or
from the execution, delivery or registration of, or otherwise with respect to,
this Agreement or the Notes (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender Party and the
Administrative Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.13) paid by such Lender Party or the
Administrative Agent (as the case may be) and any liability
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(including penalties, additions to tax, interest and expenses) arising
therefrom or with respect thereto; provided that, in the event such Lender
Party or the Administrative Agent, as the case may be, successfully contests
the assessment of such Taxes or Other Taxes or any liability arising therefrom
or with respect thereto, such Lender Party or the Administrative Agent shall
refund, to the extent of any refund thereof made to such Lender Party or the
Administrative Agent, any amounts paid by the Borrower under this Section
2.13(c) in respect of such Taxes, Other Taxes or liabilities arising therefrom
or with respect thereto. Each Lender Party and the Administrative Agent agree
that it will contest such Taxes, Other Taxes or liabilities if (i) the Borrower
furnishes to it an opinion of reputable tax counsel acceptable to such Lender
Party or the Administrative Agent to the effect that such Taxes or Other Taxes
were wrongfully or illegally imposed and (ii) such Lender Party or the
Administrative Agent determines, in its sole discretion, that it would not be
disadvantaged or prejudiced in any manner whatsoever as a result of such
contest. This indemnification shall be made within 30 days from the date such
Lender Party or the Administrative Agent (as the case may be) makes written
demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower will furnish to the Administrative Agent, at its address referred to
in Section 8.02, appropriate evidence of payment thereof. If no Taxes are
payable in respect of any payment hereunder or under the Notes by the Borrower
from an account or branch outside the United States or on behalf of the
Borrower by a payor that is not a United States person, the Borrower will
furnish to the Administrative Agent, at such address, a certificate from each
appropriate taxing authority, or an opinion of counsel acceptable to the
Administrative Agent, in either case stating that such payment is exempt from
or not subject to Taxes. For purposes of this Section 2.13, the terms "United
States" and "United States person" shall have the meanings specified in Section
7701 of the Code.
(e) Each Lender Party organized under the laws of a jurisdiction
outside the United States and the Administrative Agent, if organized under the
laws of a jurisdiction outside the United States, shall, on or prior to the
Initial Date and from time to time thereafter if requested in writing by the
Borrower or the Administrative Agent (but only so long thereafter as such
Lender Party or the Administrative Agent remains lawfully able to do so),
provide the Borrower and (in the case of any such Lender Party other than the
Administrative Agent) the Administrative Agent with two duly completed copies
of Internal Revenue Service form 1001 or 4224, as appropriate, or any successor
form prescribed by the Internal Revenue Service, certifying that such Lender
Party or the Administrative Agent is entitled to benefits under an income tax
treaty to which the United States is a party that reduces the rate of
withholding tax on payments under this Agreement or the Notes or certifying
that the income receivable pursuant to this Agreement or the Notes is
effectively connected with the conduct of a trade or business in the United
States.
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(f) For any period with respect to which the Administrative Agent or a
Lender Party has failed to provide the Borrower with the appropriate forms
described in subsection (e) above (other than if such failure is due to a
change in law occurring after the date on which such person was originally
required to provide such forms, or if such forms are otherwise not required
under subsection (e) above), the Administrative Agent or such Lender Party
shall not be entitled to increased payments or indemnification under subsection
(a) or (c) above with respect to Taxes imposed by the United States; provided,
however, that should the Administrative Agent or a Lender Party become subject
to Taxes because of its failure to deliver a form required hereunder, the
Borrower shall take such steps as the Administrative Agent or such Lender Party
shall reasonably request to assist the Lender Party to recover such Taxes if,
in the judgment of the Borrower such steps would avoid the need for, or reduce
the amount of, any Taxes required to be deducted from or in respect of any sum
payable hereunder to the Administrative Agent or such Lender Party and would
not, in the judgment of the Borrower, be disadvantageous to the Borrower.
(g) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.13 shall survive the payment in full of principal and interest
hereunder and under the Notes.
(h) If a Lender Party shall change its Applicable Lending Office other
than (i) at the request of the Borrower or (ii) at a time when such change
would not result in this Section 2.13 requiring the Borrower to make a greater
payment than if such change had not been made, such Lender Party shall not be
entitled to receive any greater payment under this Section 2.13 than such
Lender Party would have been entitled to receive had it not changed its
Applicable Lending Office.
SECTION 2.14. Sharing of Payments, Etc. If any Lender Party shall
obtain any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) on account of the Advances owing to it (other
than pursuant to Section 2.10 or 2.13) in excess of its ratable share of
payments on account of the Advances obtained by all the Lender Parties, such
Lender Party shall forthwith purchase from the other Lender Parties such
interests or participating interests in the Advances owing to them as shall be
necessary to cause such purchasing Lender Party to share the excess payment
ratably with each of them; provided, however, that, if all or any portion of
such excess payment is thereafter recovered from such purchasing Lender Party,
such purchase from each Lender Party shall be rescinded and such Lender Party
shall repay to the purchasing Lender Party the purchase price to the extent of
such recovery together with an amount equal to such Lender Party's ratable
share (according to the proportion of (i) the amount of such Lender Party's
required repayment to (ii) the total amount so recovered from the purchasing
Lender Party) of any interest or other amount paid or payable by the purchasing
Lender Party in respect of the total amount so
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63
recovered. The Borrower agrees that any Lender Party so purchasing an interest
or participating interest from another Lender Party pursuant to this Section
2.14 may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off) with respect to such interest or
participating interest, as the case may be, as fully as if such Lender Party
were the direct creditor of the Borrower in the amount of such interest or
participating interest, as the case may be.
SECTION 2.15. Removal of Lender. In the event that any Lender Party
demands payment of costs or additional amounts pursuant to Section 2.10 or
Section 2.13 or asserts pursuant to Section 2.10(c) that it is unlawful for
such Lender Party to make Eurodollar Rate Advances, then (subject to such
Lender Party's right to rescind such demand or assertion within 10 days after
the notice from the Borrower referred to below) the Borrower may, upon 20 days'
prior written notice to such Lender Party and the Administrative Agent, elect
to cause such Lender Party to assign its Advances and Commitments in full to an
assignee institution selected by the Borrower that meets the criteria of an
Eligible Assignee and is reasonably satisfactory to the Administrative Agent,
so long as such Lender Party receives payment in full in cash of the
outstanding principal amount of all Advances made by it and all accrued and
unpaid interest thereon and all other amounts due and payable to such Lender
Party as of the date of such assignment (including without limitation amounts
owing pursuant to Section 2.10 or 2.13), and in such case such Lender Party
agrees to make such assignment, and such assignee shall agree to accept such
assignment and assume all obligations of such Lender Party hereunder, in
accordance with Section 8.07.
SECTION 2.16. Defaulting Lender. (a) In the event that, at any one
time, (i) any Lender Party shall be a Defaulting Lender, (ii) such Defaulting
Lender shall owe a Defaulted Advance to the Borrower and (iii) the Borrower
shall be required to make any payment hereunder or under any other Loan
Document to or for the account of such Defaulting Lender, then the Borrower
may, so long as no Default shall occur or be continuing at such time and to the
fullest extent permitted by applicable law, set-off and otherwise apply the
Obligation of the Borrower to make such payment to or for the account of such
Defaulting Lender against the Obligation of such Defaulting Lender to make such
Defaulted Advance. In the event that the Borrower shall so set-off and
otherwise apply the Obligation of the Borrower to make any such payment against
the Obligation of such Defaulting Lender to make any such Defaulted Advance on
any date, the amount so set-off and otherwise applied by the Borrower shall
constitute for all purposes of this Agreement and the other Loan Documents an
Advance by such Defaulting Lender made on such date under the Facility pursuant
to which such Defaulted Advance was originally required to have been made
pursuant to Section 2.01. Such Advance shall be considered, for all purposes of
this Agreement, to comprise part of the Borrowing in connection with which such
Defaulted Advance was originally required to have been made pursuant to Section
2.01. The Borrower shall notify the Administrative Agent at any time the
Borrower reduces the amount of the Obligation of the Borrower to make any
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payment otherwise required to be made by it hereunder or under any other Loan
Document as a result of the exercise by the Borrower of its right set forth in
this subsection (a) and shall set forth in such notice (A) the name of the
Defaulting Lender and the Defaulted Advance required to be made by such
Defaulting Lender and (B) the amount set-off and otherwise applied in respect
of such Defaulted Advance pursuant to this subsection (a). Any portion of such
payment otherwise required to be made by the Borrower to or for the account of
such Defaulting Lender which is paid by the Borrower, after giving effect to
the amount set-off and otherwise applied by the Borrower pursuant to this
subsection (a), shall be applied by the Administrative Agent as specified in
subsection (b) or (c) of this Section 2.16.
(b) In the event that, at any one time, (i) any Lender Party shall be
a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount
to the Administrative Agent, the Collateral Agent or any of the other Lender
Parties and (iii) the Borrower shall make any payment hereunder or under any
other Loan Document to the Administrative Agent for the account of such
Defaulting Lender, then the Administrative Agent may, on its behalf or on
behalf of such other Lender Parties and to the fullest extent permitted by
applicable law, apply at such time the amount so paid by the Borrower to or for
the account of such Defaulting Lender to the payment of each such Defaulted
Amount up to the amount required to pay such Defaulted Amount. In the event
that the Administrative Agent shall so apply any such amount to the payment of
any such Defaulted Amount on any date, the amount so applied by the
Administrative Agent shall constitute for all purposes of this Agreement and
the other Loan Documents payment, to such extent, of such Defaulted Amount on
such date. Any such amount so applied by the Administrative Agent shall be
retained by the Administrative Agent or distributed by the Administrative Agent
to such other Lender Parties, ratably in accordance with the respective
portions of such Defaulted Amounts payable at such time to the Administrative
Agent and such other Lender Parties and, if the amount of such payment made by
the Borrower shall at such time be insufficient to pay all Defaulted Amounts
owing at such time to the Administrative Agent, the Collateral Agent and the
other Lender Parties, in the following order of priority:
(i) first, to the Administrative Agent and the Collateral Agent for
any Defaulted Amounts then owing to the Administrative Agent and the
Collateral Agent, ratably in accordance with such respective Defaulted
Amounts then owing to the Administrative Agent and the Collateral Agent;
and
(ii) second, to any other Lender Parties for any Defaulted Amounts
then owing to such other Lender Parties, ratably in accordance with such
respective Defaulted Amounts then owing to such other Lender Parties.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to
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this subsection (b), shall be applied by the Administrative Agent as specified
in subsection (c) of this Section 2.16.
(c) In the event that, at any one time, (i) any Lender Party shall be
Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted
Advance or a Defaulted Amount and (iii) the Borrower, the Administrative Agent,
the Collateral Agent or any other Lender Party shall be required to pay or
distribute any amount hereunder or under any other Loan Document to or for the
account of such Defaulting Lender, then the Borrower, the Collateral Agent or
such other Lender Party shall pay such amount to the Administrative Agent to be
held by the Administrative Agent, to the fullest extent permitted by applicable
law, in escrow or the Administrative Agent shall, to the fullest extent
permitted by applicable law, hold in escrow such amount otherwise held by it.
Any funds held by the Administrative Agent in escrow under this subsection (c)
shall be deposited by the Administrative Agent in an account with Citibank, in
the name and under the control of the Administrative Agent, but subject to the
provisions of this subsection (c). The terms applicable to such account,
including the rate of interest payable with respect to the credit balance of
such account from time to time, shall be Citibank's standard terms applicable
to escrow accounts maintained with it. Any interest credited to such account
from time to time shall be held by the Administrative Agent in escrow under,
and applied by the Administrative Agent from time to time in accordance with
the provisions of, this subsection (c). The Administrative Agent shall, to the
fullest extent permitted by applicable law, apply all funds so held in escrow
from time to time to the extent necessary to make any Advances required to be
made by such Defaulting Lender and to pay any amount payable by such Defaulting
Lender hereunder and under the other Loan Documents to the Administrative
Agent, the Collateral Agent or any other Lender Party, as and when such
Advances or amounts are required to be made or paid and, if the amount so held
in escrow shall at any time be insufficient to make and pay all such Advances
and amounts required to be made or paid at such time, in the following order of
priority:
(i) first, to the Administrative Agent and the Collateral Agent for
any amount then due and payable by such Defaulting Lender to the
Administrative Agent and the Collateral Agent hereunder, ratably in
accordance with such respective amounts then due and payable to the
Administrative Agent and the Collateral Agent;
(ii) second, to any other Lender Parties for any amount then due and
payable by such Defaulting Lender to such other Lender Parties hereunder,
ratably in accordance with such respective amounts then due and payable to
such other Lender Parties; and
(iii) third, to the Borrower for any Advance then required to be made
by such Defaulting Lender pursuant to the Commitment of such Defaulting
Lender.
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In the event that such Defaulting Lender shall, at any time, cease to be a
Defaulting Lender, any funds held by the Administrative Agent in escrow at such
time with respect to such Defaulting Lender shall be distributed by the
Administrative Agent to such Defaulting Lender and applied by such Defaulting
Lender to the Obligations owing to such Lender Party at such time under this
Agreement and the other Loan Documents ratably in accordance with the
respective amounts of such Obligations outstanding at such time.
(d) The rights and remedies against a Defaulting Lender under this
Section 2.16 are in addition to other rights and remedies which the Borrower
may have against such Defaulting Lender with respect to any Defaulted Advance
and which the Administrative Agent, the Collateral Agent or any Lender Party
may have against such Defaulting Lender with respect to any Defaulted Amount.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Effective Date. Article II
hereof shall be effective on and as of the date (the "Effective Date"), on
which each of the following conditions precedent shall have been satisfied or
duly waived:
(a) There shall have been no adverse change since December 16, 1996 in
the corporate and legal structure and capitalization of each A Company,
each Designated Operating Company and the Bank, including the terms and
conditions of the charter, bylaws and each class of capital stock of each
such Person and of each agreement or instrument relating to such structure
or capitalization, except as contemplated by existing consents, amendments
and waivers delivered in connection with the Existing Credit Agreement; the
Lenders shall be satisfied with the corporate and legal structure and
capitalization of each of Revlon Guarantor, Revlon Worldwide Parent, Revlon
Worldwide Holdings, Consolidated Cigar Holdings and PCT, including the
terms and conditions of the charter, by-laws and each class of capital
stock of each such Person and of each agreement or instrument relating to
such structure or capitalization.
(b) Before giving effect to the transactions contemplated by this
Agreement and the Term Credit Agreement, there shall have occurred no
Material Adverse Change since December 31, 1995 relating to any of the Loan
Parties, the FN Parties and the Designated Operating Companies.
(c) There shall exist no action, suit, investigation, litigation or
proceeding affecting any of the Loan Parties, the FN Parties and the
Designated Operating
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Companies pending or threatened before any court, governmental agency or
arbitrator that (i) would be reasonably likely to have a Material Adverse
Effect (in the case of clause (a) of the definition thereof, the term
"Person" shall refer to such Loan Party, such FN Party or such Designated
Operating Company, as the case may be) or (ii) purports to affect the
legality, validity or enforceability of this Agreement, the Term Credit
Agreement, any Note, any other Loan Document, any Related Document, any FN
Document or the consummation of the transactions contemplated hereby and
thereby.
(d) Nothing shall have come to the attention of the Lender Parties in
respect of any of the A Companies, the Designated Operating Companies or
the Bank that is inconsistent with or different from in any adverse respect
any of the results of the due diligence investigations of such Persons
conducted in connection with the Original Credit Agreement, the Second
Credit Agreement, the Third Credit Agreement, the Fourth Credit Agreement
or the Existing Credit Agreement; the Lenders shall be satisfied with the
results of their due diligence investigation of Revlon Guarantor, Revlon
Worldwide Parent, Revlon Worldwide Holdings, Consolidated Cigar Holdings
and PCT; and the Lender Parties shall have been given such access to the
management, records, books of account, contracts and properties of each A
Company, each Designated Operating Company, Consolidated Cigar Holdings,
PCT or the Bank as they shall have requested.
(e) The Borrower shall have paid all accrued fees of the
Administrative Agent and the Lender Parties and all accrued expenses of the
Administrative Agent (including the reasonable fees and expenses of counsel
to the Administrative Agent).
(f) The Lenders shall be satisfied that the Borrower has the ability
to service the interest payments in respect of the Revolving Credit
Facility and the Term Facility.
(g) Revlon Worldwide Parent shall have (i) issued the Revlon Worldwide
Parent Debt on terms and conditions satisfactory to the Lenders (including,
without limitation, permitting at least 22.5 million shares of Revlon to be
pledged in favor of the Collateral Agent) and (ii) received Net Cash
Proceeds from the issuance of the Revlon Worldwide Parent Debt in an amount
sufficient, in the reasonable judgment of the Lenders, when aggregated with
(A) the proceeds of any dividends or other distributions paid or payable by
MCG (directly or indirectly) to Mafco, (B) other funds available to Mafco
for such purposes and (C) the proceeds of the borrowings under the Term
Credit Agreement, to defease the Revlon Worldwide Bonds.
(h) Mafco and its Subsidiaries shall have provided for the defeasance
of the Revlon Worldwide Bonds on terms and conditions acceptable to the
Lenders and such
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defeasance shall be effective as promptly as practicable following the
123rd day after the initial borrowing under the Term Credit Agreement but
in any event not later than the Business Day immediately following the
130th day following such initial borrowing.
(i) All "Payment Obligations" under the Existing Credit Agreement
shall have been "Fully Satisfied" (as defined in the Existing Credit
Agreement).
(j) All "Payment Obligations" under the Existing Term Credit Agreement
shall have been "Fully Satisfied" (as defined in the Existing Term Credit
Agreement).
(k) The Administrative Agent or the Collateral Agent, as the case may
be, shall have received on or before the Effective Date the following, each
dated as of the Effective Date (unless otherwise specified), in form and
substance satisfactory to the Administrative Agent (unless otherwise
specified) and (except for the Notes) in sufficient copies for each Lender
Party:
(i) the Revolving Credit Notes to the order of the Lenders;
(ii) certified copies of the resolutions of the board of
directors of the Borrower and each other Loan Party approving this
Agreement, the Notes and each other Loan Document to which it is or is
to be a party, and of all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to
this Agreement, the Notes and each other Loan Document;
(iii) a certificate of the Secretary or an Assistant Secretary of
the Borrower and each other Loan Party certifying the names and true
signatures of the officers of the Borrower and such other Loan Party
authorized to sign this Agreement, the Notes and each other Loan
Document to which they are or are to be parties and the other
documents to be delivered hereunder and thereunder;
(iv) a copy of a certificate of the Secretary of State of the
state of incorporation of the Borrower, each other Loan Party, each
Designated Operating Company and each other A Company, dated
reasonably near the Effective Date, listing the charter of such Person
and each amendment thereto on file in his office and certifying that
(A) such amendments are the only amendments to such Person's charter
on file in his office, (B) such Person has paid all franchise taxes to
the date of such certificate and (C) such Person is duly incorporated
or organized and in good standing under the laws of such state, and a
copy of a certificate of corporate existence of the Bank, dated
reasonably near the Effective Date from the Office of Thrift
Supervision;
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69
(v) (A) a certificate of each A Company (other than the Revlon
Entities) signed on behalf of such Person by its President or a Vice
President and its Secretary or any Assistant Secretary, dated as of
the Effective Date (the statements made in such certificate shall be
true on and as of the Effective Date), certifying as to (1) the
absence of any amendments to the charter of such Person since the date
of the Secretary of State's certificate referred to in clause (iv)
above, (2) the absence of any amendments to the bylaws of such Person
since the date of the certificate in respect of such bylaws that was
delivered to the Administrative Agent pursuant to the terms of Section
3.01 or 3.02, as the case may be, of the Original Credit Agreement,
(3) the due incorporation and good standing of such Person as a
corporation under the laws of the relevant state of incorporation, and
the absence of any proceeding for the dissolution or liquidation of
such Person, (4) the truth in all material respects of the
representations and warranties made by such Person contained in the
Loan Documents as though made on and as of the Effective Date and (5)
the absence of any event occurring and continuing, or resulting from
the Effective Date, that constitutes a Default, (B) a certificate of
Coleman Guarantor signed on behalf of Coleman Guarantor by its
President or a Vice President and its Secretary or any Assistant
Secretary, dated as of the Effective Date (the statements made in such
certificate shall be true on and as of the Effective Date), certifying
as to (1) the absence of any amendments to the charter of Coleman
since the date of the Secretary of State's certificate referred to in
clause (iv) above, (2) the absence of any amendments to the bylaws of
Coleman since the date of the certificate in respect of such bylaws
that was delivered to the Administrative Agent pursuant to the terms
of Sections 3.01 and 3.02 of the Original Credit Agreement and (3) the
due incorporation and good standing of Coleman as a corporation
organized under the laws of the State of Delaware, and the absence of
any proceeding for the dissolution or liquidation of Coleman, (C) a
certificate of the Borrower signed on behalf of the Borrower by its
President or a Vice President and its Secretary or any Assistant
Secretary, dated as of the Effective Date (the statements made in such
certificate shall be true on and as of the Effective Date), certifying
as to (1) the absence of any amendments to the charter of Marvel since
the date of the Secretary of State's certificate referred to in clause
(iv) above, (2) the absence of any amendments to the bylaws of Marvel
since the date of the certificate in respect of such bylaws that was
delivered to the Administrative Agent pursuant to the terms of
Sections 3.01 and 3.02 of the Original Credit Agreement, and (3) the
due incorporation and good standing of Marvel as a corporation
organized under the laws of the State of Delaware, and the absence of
any proceeding for the dissolution or liquidation of Marvel, (D) a
certificate of New World Guarantor signed on behalf of New World
Guarantor
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70
by its President or a Vice President and its Secretary or any
Assistant Secretary, dated as of the Effective Date (the statements
made in such certificate shall be true on and as of the Effective
Date), certifying as to (1) the absence of any amendments to the
charter of New World since the date of the Secretary of State's
certificate referred to in clause (iv) above, (2) the absence of any
amendments to the bylaws of New World since the date of the
certificate in respect of such bylaws that was delivered to the
Administrative Agent pursuant to the terms of Section 3.02 of the
Original Credit Agreement and (3) the due incorporation and good
standing of New World as a corporation organized under the laws of the
state of Delaware, and the absence of any proceeding for the
dissolution or liquidation of New World, (E) a certificate of C&F
Guarantor signed on behalf of C&F Guarantor by its President or a Vice
President and its Secretary or any Assistant Secretary, dated as of
the Effective Date (the statements made in such certificate shall be
true on and as of the Effective Date), certifying as to (1) the
absence of any amendments to the charter of MCG since the date of the
Secretary of State's certificate referred to in clause (iv) above, (2)
the absence of any amendments to the bylaws of MCG since the date of
the certificate in respect of such bylaws that was delivered to the
Administrative Agent pursuant to the terms of Section 3.01 of the
Third Credit Agreement and (3) the due incorporation and good standing
of MCG as a corporation organized under the laws of the State of
Delaware, and the absence of any proceeding for the dissolution or
liquidation of MCG, and (F) a certificate of Revlon Guarantor signed
on behalf of Revlon Guarantor by its President or a Vice President and
its Secretary or any Assistant Secretary, dated as of the Effective
Date (the statements made in such certificate shall be true on and as
of the Effective Date), certifying as to (1) the absence of any
amendments to the charters of the Revlon Entities and Revlon since the
date of the relevant Secretary of State's certificate referred to in
clause (iv) above, (2) the trueness and correctness of the copies of
the bylaws of each Revlon Entity and Revlon attached to such
certificate, (3) the due incorporation and good standing of each
Revlon Entity and Revlon as a corporation under the laws of the
relevant state of incorporation, and the absence of any proceeding for
the dissolution or liquidation of any such Person, (4) the truth in
all material respects of the representations and warranties made by
such Person contained in the Loan Documents as though made on and as
of the Effective Date and (5) the absence of any event occurring and
continuing, or resulting from the Effective Date, that constitutes a
Default;
(vi) a certificate of Mafco to the effect (A) that no information
provided by Mafco or any Subsidiary of Mafco to the Administrative
Agent or any Lender in connection with the Original Credit Agreement,
the Second
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71
Credit Agreement, the Third Credit Agreement, the Fourth Credit
Agreement, the Existing Credit Agreement or this Agreement, as such
information has been amended, supplemented or superseded by any other
information delivered to the same parties receiving such information
contained or contains any material misstatement of fact or omitted or
omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading except that, as to any financial model included
therein, such certificate shall be limited to a statement that such
model was prepared in good faith by Mafco's or such Subsidiary's
management based on assumptions believed to be reasonable when made
and may be further qualified by a statement to the effect that because
assumptions as to future results are inherently subject to uncertainty
and contingencies beyond Mafco's or such Subsidiary's control, actual
results of Mafco or such Subsidiary may be higher or lower, (B) the
Mafco Guaranty is in full force and effect on the Effective Date, (C)
that other than the agreements referenced in Section 3.01(k)(x), the
charter documents of each A Company and each FN Party, the Loan
Documents and the Related Documents, there is no other agreement,
contract, loan agreement, indenture, mortgage, deed of trust, lease or
other instrument binding on or affecting any A Company or any FN Party
that imposes any material Obligation or any material restriction on
any A Company or any FN Party, (D) that the agreements referenced in
Section 3.01(k)(x) are the only agreements, contracts, loan
agreements, indentures, mortgages, deeds of trust, leases or other
instruments (1) evidencing Debt of any Designated Operating Company or
any of their Subsidiaries outstanding on the Effective Date, (2)
governing the terms of Debt of any Designated Operating Company or any
of their Subsidiaries outstanding on the Effective Date, or (3)
containing any commitment or other agreement by any Person to extend
credit that would constitute Debt to any Designated Operating Company
or any of their Subsidiaries, in each case that imposes or will impose
material Obligations or material restrictions on any Designated
Operating Company and its Subsidiaries taken as a whole and (E) that
there is no other agreement or contract binding on or affecting any
Designated Operating Company or any of their Subsidiaries that
contains provisions that would restrict any Loan Party from performing
or that would impair the ability of any Loan Party to perform, any of
the obligations of such Loan Party under the Loan Documents;
(vii) the Mafco Security Agreement in substantially the form of
Exhibit D duly executed by Mafco, together with:
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(1) acknowledgement copies or stamped receipt copies of
proper amendments to the financing statements previously filed in
connection with the Mafco Security Agreement; and
(2) evidence that all other action that the Administrative
Agent may deem necessary or desirable in order to perfect and
protect the Liens created by the Mafco Security Agreement;
(viii) the Mafco Guaranty in substantially the form of Exhibit
E-1, duly executed by Mafco, the C&F Guaranty in substantially the
form of Exhibit E-2, duly executed by the C&F Guarantor, the Cigar
Guaranty in substantially the form of Exhibit E-3, duly executed by
Cigar Guarantor, the Coleman Guaranty in substantially the form of
Exhibit E-4, duly executed by Coleman Guarantor, the Flavors Guaranty
in substantially the form of Exhibit E-5, duly executed by Flavors
Guarantor, the New World Guaranty in substantially the form of Exhibit
E-6, duly executed by New World Guarantor, the Revlon Guaranty in
substantially the form of Exhibit E-7, duly executed by Revlon
Guarantor and the Revlon Worldwide Holdings Guaranty in substantially
the form of Exhibit E-8, duly executed by Revlon Worldwide Holdings;
(ix) the C&F Pledge Agreement in substantially the form of
Exhibit F-1, duly executed by C&F Guarantor, the New World Pledge
Agreement in substantially the form of Exhibit F-2, duly executed by
New World Guarantor, the Revlon Pledge Agreement in substantially the
form of Exhibit F-3, duly executed by Revlon Guarantor, the Revlon
Worldwide Holdings Pledge Agreement in substantially the form of
Exhibit F-4, duly executed by Revlon Worldwide Holdings and the Revlon
Worldwide Parent Pledge Agreement in substantially the form of Exhibit
F-5, duly executed by Revlon Worldwide Parent, together with:
(1) acknowledgment copies or stamped receipt copies of (A)
proper financing statements in respect of the Revlon Pledge
Agreement, the Revlon Worldwide Holdings Pledge Agreement and the
Revlon Worldwide Parent Pledge Agreement, in form and substance
satisfactory to the Administrative Agent and (B) proper
amendments to the financing statements previously filed in
connection with each other Pledge Agreement referred to above, in
form and substance satisfactory to the Administrative Agent,
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(2) completed requests for information, dated on or before
the Effective Date, listing the financing statements referred to
in clause (1) above,
(3) in the case of the New World Pledge Agreement,
instruments evidencing the Pledged Debt referred to therein
indorsed in blank, and
(4) evidence that all other action that the Administrative
Agent may deem necessary or desirable in order to perfect and
protect the Liens created by the each such Pledge Agreement has
been taken;
(x) a certificate of Mafco to the effect that, other than the
agreements delivered to the Administrative Agent pursuant to Section
3.01(g)(xii)(B) and Section 3.02(i)(xi)(B) of the Original Credit
Agreement and other than as specified in and delivered pursuant to
such certificate and the certificate of Mafco delivered pursuant to
Section 3.01(f)(x) of the Second Credit Agreement, Section 3.01(f)(ix)
of the Third Credit Agreement, Section 3.01(f)(x) of the Fourth Credit
Agreement and Section 3.01(h)(xi) of the Existing Credit Agreement,
there is no other contract, loan agreement, indenture, mortgage, deed
of trust, lease or other instrument (1) evidencing Debt of any A
Company, (2) governing the terms of Debt of any A Company, or (3)
containing any commitment or other agreement by any Person to extend
credit that would constitute Debt to any A Company or any Designated
Operating Company or any of its Subsidiaries, in each case that
imposes any material obligation or any material restriction on any A
Company or any Designated Operating Company and its Subsidiaries,
taken as a whole;
(xi) such financial, business and other information regarding
each Loan Party and their Subsidiaries as the Lender Parties shall
have reasonably requested, including, without limitation, information
as to possible contingent liabilities, tax matters, environmental
matters, obligations under ERISA and Welfare Plans, collective
bargaining agreements and other arrangements with employees, annual
financial statements of the Bank dated December 31, 1995, interim
financial statements of the Bank dated the end of the most recent
fiscal quarter for which financial statements are available, pro forma
financial statements as to the Borrower, and forecasts prepared by
management of the Bank, in form and substance satisfactory to the
Lender Parties, of balance sheets, income statements and cash flow
statements of the Bank on a quarterly basis for the term of the
Revolving Credit Facility;
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(xii) certified copies of (A) a voting trust agreement (each in
form and substance satisfactory to the Lender Parties) relating to the
capital stock of Revlon Guarantor and Revlon Worldwide Holdings and
(B) the Term Credit Agreement;
(xiii) an assignment, in form and substance satisfactory to the
Lender Parties, of the rights of Mafco or one or more of its
Subsidiaries of a Registration Rights Agreement in respect of the
capital stock of Revlon owned by Mafco and its Subsidiaries;
(xiv) a letter, in form and substance satisfactory to the
Administrative Agent, from Mafco to Ernst & Young, independent
certified public accountants, advising such accountants that the
Administrative Agent and the Lender Parties have relied upon the
financial statements of Coleman, New World and MCG in determining
whether to enter into the Loan Documents and have been authorized to
exercise all rights of Mafco to require such accountants to disclose
any and all financial statements and any other information of any kind
that they may have with respect to such Persons and their Subsidiaries
and directing such accountants to comply with any reasonable request
of the Administrative Agent or any Lender Party for such information;
(xv) a letter, in form and substance satisfactory to the
Administrative Agent, from the Bank to KPMG Peat Marwick, independent
certified public accountants, advising such accountants that the
Administrative Agent and the Lender Parties have relied upon the
financial statements of Revlon and the Bank in determining whether to
enter into the Loan Documents and have been authorized to exercise all
rights of Revlon and the Bank to require such accountants to disclose
any and all financial statements and any other information of any kind
that they may have with respect to such Persons and their Subsidiaries
and directing such accountants to comply with any reasonable request
of the Administrative Agent or any Lender Party for such information;
(xvi) favorable opinions of counsel to Mafco reasonably
satisfactory to the Lender Parties, in form and substance reasonably
satisfactory to the Lender Parties;
(xvii) a favorable opinion of Shearman & Sterling, counsel for
the Administrative Agent, in form and substance reasonably
satisfactory to the Administrative Agent; and
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(xviii) such other information, approvals, opinions or other
documents as the Administrative Agent may reasonably request.
SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance. The
obligation of each Lender to make an Advance (other than a Letter of Credit
Advance made by the Issuing Bank or a Lender pursuant to Section 2.03(c)) on
the occasion of each Borrowing (including the initial Borrowing), and the
obligation of the Issuing Bank to issue a Letter of Credit (including the
initial issuance) or renew a Letter of Credit and the right of the Borrower to
request the issuance or renewal of a Letter of Credit, shall be subject to the
further conditions precedent that on the date of such Borrowing or issuance (a)
the following statements shall be true (and each of the giving of the
applicable Notice of Borrowing or Notice of Issuance and the acceptance by the
Borrower of the proceeds of such Borrowing or of such Letter of Credit or the
renewal of such Letter of Credit shall constitute a representation and warranty
by the Borrower that both on the date of such notice and on the date of such
Borrowing or issuance or renewal such statements are true):
(i) The representations and warranties contained in the Loan Documents
are correct in all material respects on and as of such date, before and
after giving effect to such Borrowing or issuance and to the application of
the proceeds therefrom, as though made on and as of such date, except to
the extent such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties were true,
correct and complete in all material respects on and as of such earlier
date; and
(ii) No event has occurred and is continuing, or would result from
such Borrowing or issuance or from the application of the proceeds
therefrom, which constitutes a Default,
(b) the Borrower shall, on the seventh Business Day prior to the date of such
Borrowing or issuance, deliver to the Administrative Agent either (1) a
Look-Forward Certificate or (2) a Deposit Certificate if a Look-Forward
Certificate has been delivered to the Administrative Agent within 90 days prior
to the date of such Borrowing or issuance, and the Required Lenders shall not
have determined, within 4 Business Days following the date of receipt of such
Look-Forward Certificate or Deposit Certificate, as the case may be, in their
reasonable discretion, that the pro forma amounts available to be loaned by
First Gibraltar to Borrower Parent, together with amounts received by Mafco
pursuant to or in connection with any Related Document, will be less than $15
million in any calendar quarter (of which at least $10 million shall be from
amounts available to be loaned by First Gibraltar to Borrower Parent) or will
not be sufficient to pay interest on the Advances then outstanding and interest
on the Debt then outstanding under the Term Credit Agreement, (c) in the case
of the first Borrowing after the New Marvel Shares have been pledged pursuant
to the Loan Documents and the "Loan
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Documents" under the Term Credit Agreement, the Borrower shall have delivered
to the Administrative Agent an appropriately completed Federal Reserve Form U-1
for each Lender and (d) the Administrative Agent shall have received such other
certificates, opinions and other documents as any Lender Party through the
Administrative Agent may reasonably request in order to confirm (x) the
accuracy of the Borrower's representations and warranties, (y) the Borrower's
timely compliance with the terms, covenants and agreements set forth in this
Agreement, and (z) the absence of any Default.
SECTION 3.03. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender Party shall be deemed to have consented to, approved or accepted or to
be satisfied with each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the Lender Parties
unless an officer of the Administrative Agent responsible for the transactions
contemplated by this Agreement shall have received notice from such Lender
Party prior to the earlier of the initial Borrowing or the initial issuance of
a Letter of Credit specifying its objection thereto and if such earlier event
consists of a Borrowing, such Lender Party shall not have made available to the
Administrative Agent such Lender Party's ratable portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) The Borrower (i) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property
or in which the conduct of its business requires it to so qualify or be
licensed except where the failure to so qualify or be licensed would not
have a Material Adverse Effect (with respect to clause (a) of the
definition thereof, the term "Person" shall refer to the Borrower) and
(iii) has all requisite corporate power and authority to own or lease and
operate its properties and to carry on its business as now conducted and as
proposed to be conducted. All of the outstanding capital stock of the
Borrower has been validly issued, is fully paid and non-assessable and is
owned by the Borrower Parent free and clear of all Liens except for the
Liens created by the Collateral Documents.
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77
(b) Set forth on Schedule II hereto is a complete and accurate list
relating to the Borrower, showing as of the date hereof the jurisdiction of
its incorporation, the number of shares of each class of capital stock
authorized, and the number outstanding, on the date hereof and the
percentage of the outstanding shares of each such class owned (directly or
indirectly) by Borrower Parent and the number of shares covered by all
outstanding options, warrants, rights of conversion or purchase and similar
rights at the date hereof.
(c) The execution, delivery and performance by the Borrower of this
Agreement, the Notes, each Loan Document and each Related Document to which
it is or is to be a party and the consummation by the Borrower of the
transactions contemplated hereby, are within the Borrower's corporate
powers, have been duly authorized by all necessary corporate action, and do
not (i) contravene the Borrower's charter or by-laws, (ii) violate any law
(including, without limitation, the Exchange Act), rule, regulation
(including, without limitation, Regulation X of the Board of Governors of
the Federal Reserve System), order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the breach of, or
constitute a default under, any loan agreement, contract, indenture,
mortgage, deed of trust, lease or other instrument binding on or affecting
any Loan Party, any of its Subsidiaries (other than any Subsidiaries of the
Borrower) or any of its or their properties, the effect of which conflict,
breach or default is reasonably likely to have a Material Adverse Effect
(with respect to clause (a) of the definition thereof, the term "Person"
shall refer to the Borrower) or (iv) except for the liens created by the
Collateral Documents, the voting trust agreements (other than the voting
trust agreements relating to the capital stock of FN Holdings and FN
Parent) referred to in Sections 3.01(g)(xvi) and 3.02(i)(xv) of the
Original Credit Agreement, the Amended and Restated Voting Trust Agreement
dated as of December 16, 1996 among The Bank of New York, the Cigar
Guarantor, C&F Guarantor and the Collateral Agent, the Amended and Restated
Voting Trust Agreement dated as of December 16, 1996 among The Bank of New
York, the Flavors Guarantor, C&F Guarantor and the Collateral Agent, the
Amended and Restated Voting Trust Agreement dated as of December 16 , 1996
among Trans Network Insurance Services Inc., FG Guarantor, The Bank of New
York and the Collateral Agent, the Second Amended and Restated Voting Trust
Agreement dated as of December 16, 1996 among FG Guarantor, First
Gibraltar, The Bank of New York and the Collateral Agent and the voting
trust agreements referred to in Section 3.01(k)(xii)(A) result in or
require the creation or imposition of any Lien upon or with respect to any
of the properties of any Loan Party or any of its Subsidiaries (other than
the Subsidiaries of the Borrower). The Borrower is not in violation of any
such law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or in breach of any such contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument, the
violation or breach of which would be reasonably likely
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to have a Material Adverse Effect (with respect to clause (a) of the
definition thereof, the term "Person" shall refer to the Borrower).
(d) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required
for (i) the due execution, delivery and performance by the Borrower of this
Agreement or the Notes or any other Loan Document or any Related Document
to which it is or is to be a party or for the consummation of the
transactions contemplated hereby, (ii) the grant by the Borrower of the
Liens granted by it pursuant to the Collateral Documents, (iii) the
perfection or maintenance of the Liens created by the Collateral Documents
(including the first priority nature thereof) or (iv) the exercise by the
Administrative Agent or any Lender Party of its rights under the Loan
Documents or the remedies in respect of the Collateral pursuant to the
Collateral Documents, except for the filing of financing statements in
accordance with Sections 3.01 and 3.02 of the Original Credit Agreement,
Section 3.01(f)(vii) and (viii) of the Second Credit Agreement, Section
3.01(f)(vii) of the Third Credit Agreement, Section 3.01(f)(ix) of the
Fourth Credit Agreement, the filing of financing statements and amendments
to financing statements in accordance with Section 3.01(h)(viii) and (x) of
the Existing Credit Agreement, and the filing of financing statements and
amendments to financing statements in accordance with Section 3.01 and
except as may be required in connection with the disposition of any portion
of the Collateral by laws affecting the offering and sale of securities
generally; provided, however, that no representation or warranty is made as
to any consent of, authorization, approval or other action by, or notice to
or filing with, any banking agency or regulatory body applicable to the
Administrative Agent, the Collateral Agent, the Syndication Agent or the
Documentation Agent.
(e) This Agreement has been, and each of the Notes, each other Loan
Document to which the Borrower is a party when delivered hereunder will
have been, duly executed and delivered by the Borrower. This Agreement is,
and each of the Notes and each other Loan Document to which the Borrower is
a party when delivered hereunder will be, the legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance
with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforceability of
creditor's rights generally.
(f) The Consolidated and consolidating balance sheets of Marvel III
and its Subsidiaries as at December 31, 1995, and the related Consolidated
and consolidating statements of income and cash flows of Marvel III and its
Subsidiaries for the fiscal year then ended, accompanied, in the case of
the aforementioned Consolidated balance sheets and related Consolidated
statements of income and cash flows, by an opinion of Ernst & Young,
independent public accountants, and the Consolidated and
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79
consolidating balance sheets of Marvel III and its Subsidiaries as at
September 30, 1996, and the related Consolidated and consolidating
statements of income and cash flows of Marvel III and its Subsidiaries for
the nine months then ended, duly certified by the chief financial officer
of Marvel III, copies of which have been furnished to each Lender Party,
fairly present, subject, in the case of said balance sheets as at September
30, 1996, and said statements of income and cash flows for the nine months
then ended, to year-end audit adjustments, the Consolidated and
consolidating financial condition of Marvel III and its Subsidiaries as at
such dates and the Consolidated and consolidating results of the operations
of Marvel III and its Subsidiaries for the periods ended on such dates, all
in accordance with generally accepted accounting principles applied on a
consistent basis.
(g) There is no pending or threatened action, proceeding, governmental
investigation or arbitration affecting any Loan Party, the Bank or any of
their Subsidiaries (other than any Subsidiary of the Borrower ) before any
court, governmental agency or arbitrator, which is reasonably likely to
have a Material Adverse Effect (with respect to clause (a) of the
definition thereof, the term "Person" shall refer to such Loan Party or the
Bank, as the case may be) or that purports to affect the legality, validity
or enforceability of this Agreement, any Note, any other Loan Document or
any Related Document or the consummation of the transactions contemplated
hereby or thereby.
(h) The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying Margin Stock and no proceeds of
any Advance or drawings under any Letter of Credit will be used to purchase
or carry any Margin Stock (other than the Coleman Worldwide LYONS, common
stock of Coleman or the New Marvel Shares), or to extend credit to others
for the purpose of purchasing or carrying any Margin Stock.
(i) No proceeds of any Advance or drawings under any Letter of Credit
will be used to acquire any equity security of a class that is registered
pursuant to Section 12 of the Exchange Act (other than the Coleman
Worldwide LYONS, common stock of Coleman and the New Marvel Shares).
(j) The Borrower and its ERISA Affiliates are in compliance in all
material respects with the applicable provisions of ERISA and the Code with
respect to each Plan thereof. No ERISA Event has occurred or is reasonably
expected to occur with respect to any Plan of the Borrower or any of its
ERISA Affiliates. The amount of all Unfunded Pension Liabilities under all
Plans of the Borrower and its ERISA Affiliates does not exceed $60,000,000.
None of the Borrower or any of its ERISA Affiliates has made contributions
or incurred any Withdrawal Liability to any Multiemployer
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80
Plan within the past five years, and it is not reasonably expected that
such contributions shall be made or required or that such liability shall
be incurred in any such case in amounts or under circumstances that would
be reasonably likely to result in a material liability to the Borrower or
any of its ERISA Affiliates. Schedule B (Actuarial Information) to the 1995
annual report (Form 5500 Series) for each Plan of the Borrower and each of
its ERISA Affiliates, copies of which have been filed with the Internal
Revenue Service and furnished or made available to the Lender Parties, is
complete and accurate in all material respects and fairly presents the
funding status of such Plan, and since the date of such Schedule B there
has been no material adverse change in such funding status. The obligations
of the Borrower and its Subsidiaries for post-retirement benefits to be
provided under Plans which are welfare benefit plans (as defined in Section
3(1) of ERISA) are not reasonably likely to have a Material Adverse Effect
(in the case of clause (a) of the definition thereof, the term "Person"
shall refer to the Borrower).
(k) The operations and properties of the Borrower are in substantial
compliance with all Environmental Laws, all necessary Environmental Permits
have been obtained and are in effect for the operations and properties of
the Borrower and the Borrower is in compliance with all such Environmental
Permits, except, as to all of the above, where the failure to do so would
not be reasonably likely to have a Material Adverse Effect (in the case of
clause (a) of the definition thereof, the term "Person" shall refer to the
Borrower); and no circumstances exist that are reasonably likely to (i)
form the basis of an Environmental Action against the Borrower or any of
its properties or (ii) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law that would, in the case of either (i) or (ii) above, be
reasonably likely to have a Material Adverse Effect (in the case of clause
(a) of the definition thereof, the term "Person" shall refer to the
Borrower).
(l) The Borrower has filed, has caused to be filed or has been
included in all tax returns (Federal, state, local and foreign) required to
be filed and has paid all taxes shown thereon to be due, together with
applicable interest and penalties.
(m) The Borrower is not an "investment company," or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company", as such terms are defined in the Investment Company Act of 1940,
as amended. Neither the making of any Advances, nor the issuance of any
Letters of Credit, nor the application of the proceeds or repayment thereof
by the Borrower, nor the consummation of the other transactions
contemplated hereby, will violate any provision of such Act or any rule,
regulation or order of the Securities and Exchange Commission thereunder.
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81
(n) The Borrower is Solvent.
(o) Set forth on Schedule III hereto is a complete and accurate list
of all Debt (other than intercompany Debt, Debt under the Loan Documents
and Debt under the Term Credit Agreement and the "Loan Documents" referred
to therein) of the Borrower as of the date hereof, showing as of the date
hereof the principal amount outstanding thereunder; and there is no other
agreement, contract, loan agreement, indenture, mortgage, deed of trust,
lease or other instrument binding on or affecting the Borrower that imposes
any material Obligation or material restriction on the Borrower.
(p) Set forth on Schedule IV hereto is a complete and accurate list of
all Investments held by the Borrower as of the date hereof, showing as of
the date hereof the amount, obligor or issuer and maturity, if any,
thereof.
SECTION 4.02. Representations and Warranties Applicable to Marvel. On
and after the Marvel Inclusion Date, the representations and warranties
contained in Section 4.01(g), (k), (l) and (m) and in the last sentence of
Section 4.01(c) shall be deemed to also cover Marvel and its Subsidiaries as if
such Persons were explicitly referred to in such Sections.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, the Borrower will:
(a) Compliance with Laws, Etc. Comply, and, on and after the Marvel
Inclusion Date, cause Marvel and each of its Subsidiaries to comply, in all
material respects with all applicable laws, rules, regulations and orders
(such compliance to include, without limitation, paying before the same
become delinquent all taxes, assessments and governmental charges imposed
upon it or upon its property except to the extent contested in good faith),
the failure to comply with which would, individually or in the aggregate,
be reasonably likely to have a Material Adverse Effect (with respect to
clause (a) of the definition thereof, the term "Person" shall refer to the
Borrower).
(b) Compliance with Environmental Laws. Comply and, on and after the
Marvel Inclusion Date, cause Marvel and each of its Subsidiaries and all
lessees and all other Persons occupying its properties to comply, in all
material respects, with all
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82
Environmental Laws and Environmental Permits applicable to its operations
and properties; obtain and renew all Environmental Permits necessary for
its operations and properties; and conduct, and cause, on and after the
Marvel Inclusion Date, Marvel and each of its Subsidiaries to conduct, any
investigation, study, sampling and testing, and undertake any cleanup,
removal, remedial or other action necessary to remove and clean up all
Hazardous Materials from any of its properties, in accordance with the
requirements of all Environmental Laws; provided, however, that the
Borrower and, on and after the Marvel Inclusion Date, Marvel and its
Subsidiaries shall not be required to undertake any such cleanup, removal,
remedial or other action to the extent that its obligation to do so is
being contested in good faith and by proper proceedings and appropriate
reserves are being maintained with respect to such circumstances.
(c) Maintenance of Insurance. Maintain, and, on and after the Marvel
Inclusion Date, cause Marvel and each of its Subsidiaries to maintain,
insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is usually carried
by companies engaged in similar businesses and owning similar properties in
the same general areas in which the Borrower, Marvel or such Subsidiary
operates.
(d) Preservation of Corporate Existence, Etc. Preserve and maintain,
and, on and after the Marvel Inclusion Date, cause Marvel to preserve and
maintain, its corporate existence, rights (charter and statutory) and
franchises; provided, however, that neither the Borrower nor Marvel shall
be required to preserve any of its rights or franchises if the Board of
Directors of the Borrower (or, in the case of Marvel, the executive
committee of the Board of Directors of Marvel) shall determine that the
preservation thereof is no longer desirable in the conduct of the business
of the Borrower or Marvel, as the case may be, and that the loss thereof is
not disadvantageous in any material respect to the Borrower, Marvel or the
Lender Parties.
(e) Visitation Rights. At any reasonable time and from time to time,
upon reasonable prior notice, permit the Administrative Agent or any of the
Lender Parties or any agents or representatives thereof, to the extent
reasonably requested to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, the Borrower
and, on and after the Marvel Inclusion Date, Marvel and its Subsidiaries,
and to discuss the affairs, finances and accounts of the Borrower and, on
and after the Marvel Inclusion Date, Marvel and its Subsidiaries with any
of their officers or directors and with their independent certified public
accountants.
(f) Keeping of Books. Keep, and cause, on and after the Marvel
Inclusion Date, Marvel and each of its Subsidiaries to keep, proper books
of record and account, in which full and correct entries shall be made of
all financial transactions and the
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83
assets and business of the Borrower, Marvel and each such Subsidiary to the
extent necessary to permit the preparation of the financial statements
required to be delivered hereunder.
(g) Maintenance of Properties, Etc. Maintain and preserve, and cause,
on and after the Marvel Inclusion Date, Marvel and each of its Subsidiaries
to maintain and preserve, all of its properties that are used or useful in
the conduct of its business in good working order and condition, ordinary
wear and tear excepted.
(h) Termination of Financing Statements. Upon the request of the
Administrative Agent, and at the expense of the Borrower, within 10 days
after such request, furnish to the Administrative Agent proper termination
statements on Form UCC-3 covering such financing statements as the
Administrative Agent may reasonably request that were listed in the
completed requests for information referred to in Section 3.01(k)(ix)(2).
(i) Collateral Account. Maintain the Borrower Collateral Account and
the L/C Cash Collateral Account with Citibank pursuant to the terms of the
Borrower Security Agreement.
(j) Reporting Requirements. Furnish to the Lender Parties through the
Administrative Agent:
(i) as soon as available and in any event within 50 days after
the end of each of the first three quarters of each fiscal year of the
Borrower, Consolidated balance sheets of the Borrower and its
Subsidiaries as of the end of such quarter and Consolidated statements
of earnings, cash flows and stockholders' equity of the Borrower and
its Subsidiaries for the period commencing at the end of the previous
fiscal year and ending with the end of such quarter, certified
(subject to normal year-end audit adjustment and the absence of
footnotes) on behalf of the Borrower by the chief financial officer of
the Borrower;
(ii) as soon as available and in any event within 105 days after
the end of each fiscal year of the Borrower, a copy of the annual
audit report for such year for the Borrower and its Subsidiaries,
containing financial statements for such year certified in a manner
reasonably acceptable to the Mafco Finance Required Lenders by Ernst &
Young or other independent public accountants reasonably acceptable to
the Mafco Finance Required Lenders;
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84
(iii) together with each delivery of financial statements
pursuant to clauses (i) and (ii) above, a certificate executed on
behalf of the Borrower by a senior officer of the Borrower stating
that no Default has occurred and is continuing or, if a Default has
occurred and is continuing, a statement as to the nature thereof and
the action that the Borrower has taken and proposes to take with
respect thereto;
(iv) as soon as possible and in any event within five days after
knowledge of the occurrence of each Default continuing on the date of
such statement, a statement executed on behalf of the Borrower by the
chief financial officer of the Borrower setting forth details of such
Default and the action which the Borrower has taken and proposes to
take with respect thereto;
(v) as soon as available and in any event no later than February
1 of each fiscal year of the Bank, forecasts prepared by management of
the Bank, in form satisfactory to the Administrative Agent, of balance
sheets and income statements on a quarterly basis for the term of the
Facilities;
(vi) promptly after the sending or filing thereof, copies of any
filings and statements that the Borrower or any Subsidiary of the
Borrower files with the Securities and Exchange Commission or any
national securities exchange;
(vii) promptly and in any event within (A) thirty days after the
Borrower knows or has reason to know that any ERISA Event with respect
to the Borrower or any of its ERISA Affiliates has occurred, a
statement describing such ERISA Event and the action, if any, that the
Borrower or such ERISA Affiliate proposes to take with respect
thereto, (B) thirty days either after receipt thereof by the Borrower
or after the Borrower knows or has reason to know of the receipt
thereof by any of its ERISA Affiliates from the sponsor of a
Multiemployer Plan of the Borrower or any of its ERISA Affiliates, a
copy of each notice received by any such Person concerning the
imposition of Withdrawal Liability upon such Person, the
reorganization or termination of such Multiemployer Plan, or the
amount of the liability incurred, or that may be incurred, by the
Borrower or any of its ERISA Affiliates in connection with any such
event and (C) ten Business Days either after receipt thereof by the
Borrower or after the Borrower knows or has reason to know of the
receipt thereof by any of its ERISA Affiliates, copies of each notice
from the PBGC stating its intention to terminate any Plan of the
Borrower or any of its ERISA Affiliates or to have a trustee appointed
to administer any such Plan, provided that in the case of any event
described in clauses (A), (B) or (C) hereof, such
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85
event shall have a Material Adverse Effect (with respect to clause (a)
of the definition thereof, the term "Person" shall refer to the
Borrower);
(viii) in the event of any change in GAAP from the date of the
annual financial statements referred to in Section 4.01(f) and upon
delivery of any financial statement required to be furnished under
clauses (i) or (ii) of this Section 5.01(j), a statement of
reconciliation conforming any information contained in such financial
statement with GAAP as in effect on the date of the annual financial
statements referred to in Section 4.01(f);
(ix) promptly upon any officer of the Borrower obtaining
knowledge thereof, written notice of (A) the institution or
non-frivolous threat of any action, suit, proceeding, governmental
investigation or arbitration against or affecting the Borrower or any
of its Subsidiaries or any property of the Borrower or any of its
Subsidiaries (any such action, suit, proceeding, investigation or
arbitration being a "Proceeding") or (B) any material development in
any Proceeding that is already pending, where such Proceeding or
development has not previously been disclosed by the Borrower
hereunder and would be reasonably likely to have a Material Adverse
Effect (in the case of clause (a) of the definition of Material
Adverse Effect, the term "Person" shall refer to the Borrower);
together in each case with such other information as any Lender
through the Administrative Agent may reasonably request to enable the
Lenders and their counsel to evaluate such matters;
(x) promptly after the furnishing thereof, copies of any material
statement or material report furnished to any other holder of the
securities of the Borrower or, on and after the Marvel Inclusion Date,
of Marvel or of any Subsidiary of Marvel pursuant to the terms of any
indenture, loan or credit or similar agreement and not otherwise
required to be furnished to the Lenders pursuant to any other clause
of this Section 5.01(j);
(xi) promptly upon receipt thereof, copies of all notices,
requests and other documents received by any Loan Party or any
Subsidiary of any Loan Party under or pursuant to any Related Document
and, from time to time upon request by the Administrative Agent, such
information and reports regarding the Related Documents as the
Administrative Agent may reasonably request;
(xii) within 10 days after receipt, copies of all Revenue Agent
Reports (Internal Revenue Service Form 886), or other written
proposals of the Internal Revenue Service, that propose, determine or
otherwise set forth positive adjustments to the Federal income tax
liability of the affiliated group (within the
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meaning of Section 1504(a)(1) of the Internal Revenue Code) of which
the Borrower is a member aggregating $5,000,000 or more;
(xiii) promptly, and in any event within five Business Days after
the due date (with extensions) for filing the final Federal income tax
return in respect of each taxable year, a certificate of the Borrower
(a "Tax Certificate"), signed on behalf of the Borrower by the
President or the chief financial officer of the Borrower, stating that
the common parent of the affiliated group (within the meaning of
Section 1504(a)(1) of the Internal Revenue Code) of which the Borrower
is a member has paid to the Internal Revenue Service or other taxing
authority the full amount that such affiliated group is required to
pay in respect of Federal income tax for such year;
(xiv) promptly after the occurrence thereof, notice of any
condition or occurrence on any property of the Borrower or, on and
after the Marvel Inclusion Date, Marvel or any Subsidiary of Marvel
that results in a material noncompliance by the Borrower, Marvel or
any of Marvel's Subsidiaries with any Environmental Law or
Environmental Permit or would be reasonably likely to (i) form the
basis of an Environmental Action against the Borrower, Marvel or any
of Marvel's Subsidiaries or any such property that would be reasonably
likely to have a Material Adverse Effect (in the case of clause (a) of
the definition of Material Adverse Effect, the term "Person" shall
refer to the Borrower) or (ii) cause any such property to be subject
to any restrictions on ownership, occupancy, use or transferability
under any Environmental Law or Environmental Permit or would be
reasonably likely to (i) form the basis of an Environmental Action
against the Borrower, Marvel or any of Marvel's Subsidiaries or such
property that could have a Material Adverse Effect (in the case of
clause (a) of the definition of Material Adverse Effect, the term
"Person" shall refer to the Borrower);
(xv) promptly after any deposit in the Borrower Collateral
Account, a certificate signed on behalf of the Borrower by the
president or chief financial officer of the Borrower, stating the
amount of such deposit and the source of the funds of such deposit,
together with a schedule in form and substance reasonably satisfactory
to the Administrative Agent setting forth in reasonable detail the
computations and other information on which the amount and source of
such deposit were determined; and
(xvi) such other information respecting the condition (financial
or otherwise), operations, assets or business of the Borrower or any
of its
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Subsidiaries as any Lender Party through the Administrative Agent may
from time to time reasonably request.
(k) Look-Forward Certificate. With respect to each deposit (other than
of income or proceeds of Collateral Investments) to the Collateral Accounts
(other than the Second Mafco Collateral Account and the L/C Cash Collateral
Account), the Borrower shall, within 15 Business Days prior to the date of
such deposit or within five Business Days after the date of such deposit,
deliver a certificate (the "Look-Forward Certificate") to the
Administrative Agent stating that the pro forma amounts available to be
loaned by First Gibraltar to Borrower Parent, together with amounts
received by Mafco pursuant to or in connection with any Related Document,
will not be less than $15 million in any calendar quarter (of which at
least $10 million shall be from amounts available to be loaned by First
Gibraltar to Borrower Parent) and will not be insufficient to pay interest
on the Advances then outstanding, together with a schedule in form
reasonably satisfactory to the Administrative Agent setting forth in
reasonable detail the computations, assumptions and other information on
which such certification is based) (taking into account, among other
things, the Bank's performance to date, the quality of the Bank's assets
and the presence of any agreement with the Bank's regulators including, but
not limited to, an agreement relating to capital, asset quality, dividends
or management); provided, however, that, notwithstanding the foregoing, if
a Look-Forward Certificate has been delivered to the Administrative Agent
within 90 days prior to a deposit in the Mafco Collateral Account of
amounts paid under or in connection with any Related Document or Asset
Sale, the Borrower may, instead of delivering a Look-Forward Certificate to
the Administrative Agent, deliver a certificate (a "Deposit Certificate")
to the Administrative Agent, within 15 Business Days prior to the date of
such deposit or within five Business Days after the date of such deposit,
stating that (x) there has been no adverse change in (1) the financial
condition of each of the Bank and Mafco and its Subsidiaries, taken as a
whole, since the date of the last Look-Forward Certificate that was
delivered to the Administrative Agent or (2) the projections contained in
such Look-Forward Certificate and (y) no event has occurred and is
continuing which constitutes an Event of Default or would constitute an
Event of Default but for the requirement that notice be given or time
elapse or both.
(l) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the
Loan Documents with any of their Affiliates (other than the Borrower or any
of its Subsidiaries) on terms that are fair and reasonable and no less
favorable to the Borrower or such Subsidiary than it would obtain in a
comparable arm's-length transaction with a Person that is not an Affiliate;
provided, however, that for purposes of this Section 5.01(l), the term
"Affiliate" shall not include any officer or director of the Borrower or
such Subsidiary, as the case may be, who does not possess directly or
indirectly the power to vote 5% or
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more of the Voting Stock of the Borrower or its Subsidiaries; provided
further that nothing in this Section 5.01(l) shall restrict the performance
by the parties to the Marvel Tax Sharing Agreements of their respective
obligations thereunder.
(m) Use of Proceeds. Use the proceeds of the Advances for general
corporate purposes of Mafco and its Subsidiaries.
(n) Mafco Tax Group. Maintain its status as a member of the affiliated
group (within the meaning of Section 1504(a)(1) of the Code) of which Mafco
is the common parent.
(o) Net Cash Proceeds. Deposit all of the Net Cash Proceeds received
by the Borrower from and after the Effective Date from Asset Sales (other
than Net Cash Proceeds required to be applied to prepay or repay the
Facilities or the Debt outstanding under the Term Credit Agreement) in the
Mafco Collateral Account.
SECTION 5.02. Negative Covenants. So long as any Advance shall remain
unpaid, any Letter of Credit shall be outstanding or any Lender Party shall
have any Commitment hereunder, the Borrower will not:
(a) Liens, Etc. Create or suffer to exist any Lien, upon or with
respect to any of its properties, whether now owned or hereafter acquired,
or sign or file under the Uniform Commercial Code of any jurisdiction, a
financing statement that names the Borrower as debtor or sign any security
agreement authorizing any secured party thereunder to file such financing
statement, or assign any right to receive income, other than the following
Liens: (i) Liens created by the Loan Documents or the "Loan Documents"
referred to in the Term Credit Agreement; (ii) the Liens described on
Schedule V provided that in the event any property subject to any such Lien
is released from such Lien, such released property may not thereafter be
subjected to any Lien other than Liens created by the Loan Documents or the
"Loan Documents" referred to in the Term Credit Agreement; (iii)
mechanics', materialmen's, carriers' and similar Liens arising in the
ordinary course of business securing obligations that are not overdue for a
period of more than 30 days or which are being contested in good faith and
by proper proceedings and as to which appropriate reserves are being
maintained; (iv) Liens for taxes, assessments and governmental charges or
levies not yet due and payable or which are being contested in good faith
and by proper proceedings and as to which appropriate reserves are being
maintained; and (v) judgment or other similar Liens, provided that there
shall be no period of more than 10 consecutive days during which a stay of
enforcement of the related judgment shall not be in effect.
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(b) Lease Obligations. Create, incur, assume or suffer to exist any
obligations as lessee (i) for the rental or hire of real or personal
property in connection with any sale and leaseback transaction, or (ii) for
the rental or hire of other real or personal property of any kind under
leases or agreements to lease having an original term of one year or more.
(c) Mergers, Etc. Merge into or consolidate with any Person or permit
any Person to merge into it.
(d) Sales, Etc. of Assets. Sell, lease, transfer or otherwise dispose
of any assets or grant any option or other right to purchase, lease or
otherwise acquire any assets except (i) dispositions of obsolete, worn out
or surplus property disposed of in the ordinary course of business, (ii) a
transfer of any Coleman Worldwide LYONS held by the Borrower to Coleman
Worldwide and (iii) sales, leases, transfers or other dispositions of
assets for cash and for no less than fair market value, provided that, in
the case of an Asset Sale, the Borrower complies with the provisions of
Section 5.01(o) in respect of the Net Cash Proceeds of such Asset Sale.
(e) Dividends, Repurchases, Etc. Declare or pay any dividends,
purchase, redeem, retire, defease or otherwise acquire for value any of its
capital stock or any warrants, rights or options to acquire such capital
stock, now or hereafter outstanding, return any capital to its stockholders
as such, make any distribution of assets, capital stock, warrants, rights,
options, obligations or securities to its stockholders as such, except that
the Borrower may (i) declare and deliver dividends and distributions
payable only in common stock or warrants, rights or options to acquire
common stock, (ii) declare and pay cash dividends to its stockholders in an
amount not to exceed the amount released by the Collateral Agent from the
Borrower Collateral Account pursuant to the provisions of Section 7 of the
Borrower Security Agreement or the proceeds of the Advances and the
proceeds of borrowings under the Term Credit Agreement and (iii) declare
and pay cash dividends to its stockholders in an amount not to exceed the
Net Cash Proceeds received by Mafco and its Subsidiaries from Asset Sales
on and after the Effective Date solely to permit the compliance by Mafco
and its Subsidiaries with the requirements of Section 5.01(o) and Section
7(q) of the Mafco Guaranty.
(f) Investments. Make or hold any Investment in any Person, other than
(i) Investments by the Borrower and its Subsidiaries in Cash Equivalents,
(ii) a loan by the Borrower to Mafco of up to $650,000,000 out of the
proceeds of the Advances and the proceeds of borrowings under the Term
Credit Agreement, (iii) Investments by the Borrower in Mafco or any of its
Subsidiaries in an amount not to exceed the sum of the amount released by
the Collateral Agent from the Borrower Collateral Account
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pursuant to the provisions of Section 7 of the Borrower Security Agreement
plus the aggregate amount of any Investments in the Borrower made by Mafco
or any of its Subsidiaries out of the proceeds from the amount released by
the Collateral Agent from the Mafco Collateral Accounts pursuant to Section
7 of the Mafco Security Agreement, (iv) Investments existing on the date
hereof, (v) contributions by the Borrower of common stock of Marvel to
Marvel III Holdings Inc., Marvel Holdings Inc. or Marvel (Parent) Holdings
Inc., (vi) Investments by the Borrower in the Coleman Worldwide LYONS,
(vii) Investments by the Borrower in the New Marvel Shares and (viii)
Investments in Mafco in an amount not to exceed the Net Cash Proceeds
received by Mafco and its Subsidiaries from Asset Sales on and after the
Effective Date solely to permit the compliance by Mafco and its
Subsidiaries with the requirements of Section 5.01(o) and Section 7(q) of
the Mafco Guaranty.
(g) Change in Nature of Business. Engage in any business other than
the ownership of the capital stock of Marvel III Holdings Inc.
(h) Accounting Changes. Make or permit any change in accounting
policies affecting (i) the presentation of financial statements or (ii)
reporting practices, except in either case as required or permitted by
GAAP.
(i) Debt. Create, incur, assume or suffer to exist any Debt other
than: (i) Debt under the Loan Documents and under the Term Credit Agreement
and the "Loan Documents" referred to therein, (ii) endorsement of
negotiable instruments for deposit or collection or similar transactions in
the ordinary course of business and (iii) Debt evidenced by the promissory
note dated March __, 1997 made by the Borrower in favor of C&F Guarantor in
an aggregate principal amount up to $200,000,000.
(j) Charter Amendments. Amend its certificate of incorporation or
bylaws.
(k) Prepayments, Etc. of Debt. Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner, or
make any payment in violation of any subordination terms of, any Debt,
other than the prepayment of the Advances in accordance with the terms of
this Agreement, or amend, modify or change in any manner any term or
condition of any Debt or any agreement relating to such Debt other than (i)
to make mandatory or optional prepayments of the Debt under the Term Credit
Agreement pursuant to the terms thereof or any other Debt permitted
pursuant to the terms of Section 5.02(i), (ii) prepayments of Debt required
by Section 7(q) of the Mafco Guaranty and (iii) amendments, modifications
and changes to the terms and conditions of the Term Credit Agreement
pursuant to its terms.
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(l) Negative Pledge. Enter into or suffer to exist any agreement
prohibiting or conditioning the creation or assumption of any Lien upon any
of its property or assets other than (i) in favor of the Administrative
Agent and the Lender Parties, (ii) any prohibition or condition existing on
the date hereof or (iii) any prohibition or condition contained in the Term
Credit Agreement or the "Loan Documents" referred to therein.
(m) Partnerships. Become a general partner in any general or limited
partnership.
(n) Capital Expenditures. Make any Capital Expenditures.
(o) Issuance of Capital Stock. Issue any capital stock or warrants,
rights or options to acquire such capital stock.
(p) Payment Restrictions. Create or otherwise cause or suffer to exist
or become effective any consensual encumbrance or restriction of any kind
on the ability of the Borrower to (i) pay dividends or make any other
distributions on any of the Borrower's capital stock, (ii) make loans or
advances to Mafco or any subsidiary of Mafco or (iii) repay or prepay any
Debt owed by the Borrower other than any (x) consensual encumbrances or
restrictions existing on the date hereof and (y) other consensual
encumbrances or restrictions that are no more onerous than those
encumbrances and restrictions in existence on the date hereof with respect
to the Borrower.
(q) Amendment, Etc. of Related Documents. During such time as Marvel
is a member of the affiliated group (within the meaning of Section
1504(a)(1) of the Code) of which Mafco is the common parent, cancel or
terminate any Related Document to which it is a party or consent to or
accept any cancellation or termination thereof, amend, modify or change in
any manner any term or condition of or give any consent, waiver or approval
thereunder, waive any default under or any breach of any term or condition
of any such Related Document, agree in any manner to any other amendment,
modification or change of any term or condition of any Related Document, or
take any other action in connection with any such Related Document that
would impair the value of the interest or rights of Mafco thereunder or
that would impair the interest or rights of any Agent, the Collateral Agent
or any Lender Party thereunder or permit any of its Subsidiaries to do any
of the foregoing; provided, however, that anything to the contrary in this
sentence notwithstanding, any provision of any Marvel Tax Agreement may be
cancelled, terminated, amended, modified or changed in any manner, or any
consent, waiver or approval thereunder may be given, or any default or
breach thereunder may be waived, in each case, to the extent required
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by or otherwise agreed to with, any governmental agency having regulatory
authority or supervision over any Subsidiary of the Borrower.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of, or interest on,
any Advance or any fees payable to the Administrative Agent or any Lender
hereunder, in each case when the same becomes due and payable, or any Loan
Party shall fail to make any other payment hereunder within five Business
Days after the same becomes due and payable; or
(b) Any representation or warranty made by any Loan Party or any FN
Party or under or in connection with any Loan Document or FN Document shall
prove to have been incorrect in any material respect when made or
confirmed; or
(c) (i) The Borrower shall fail to perform or observe any term,
covenant or agreement contained in Section 5.01(h), 5.01(i), 5.01(j),
5.01(k), 5.01(m), 5.01(n), 5.01(o) or 5.02, (ii) Mafco shall fail to
perform or observe any term, covenant or agreement contained in Section
7(i), 7(j), 7(l), 7(o), 7(p), 7(q) or 8 of the Mafco Guaranty, (iii)
Coleman Guarantor shall fail to perform or observe any term, covenant or
agreement contained in certain Section 7(i), 7(k), 7(m) or 8 of the Coleman
Guaranty, (iv) Borrower Parent shall fail to perform or observe any term,
covenant or agreement contained in Section 7(j) or 8 of the Borrower Parent
Guaranty, (v) New World Guarantor shall fail to perform or observe any
term, covenant or agreement contained in Section 7(h), 7(j), 7(k) or 8 of
the New World Guaranty, (vii) C&F Guarantor shall fail to perform or
observe any term, covenant or agreement contained in Section 7(h), 7(j),
7(k) or 8 of the C&F Guaranty, (vii) Cigar Guarantor shall fail to perform
or observe any term, covenant or agreement contained in Section 7(h), 7(j),
7(k) or 8 of the Cigar Guaranty, (viii) Flavors Guaranty shall fail to
perform or observe any term, covenant or agreement contained in Section
7(h), 7(j), 7(k) or 8 of the Flavors Guaranty, (ix) Revlon Guarantor shall
fail to perform or observe any term, covenant or agreement contained in
Section 7(h), 7(j) or 8 of the Revlon Guaranty, (x) Revlon Worldwide
Holdings shall fail to perform or observe any term, covenant or agreement
contained in Section ___, ___ or ___ of the Revlon Worldwide Holdings
Guaranty, (xi) on and after the MCG Inclusion Date, MCG shall fail to
perform or
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observe any term, covenant or agreement contained in certain Sections of
the MCG Guaranty substantially identical to the Sections of the Revlon
Worldwide Holdings Guaranty set forth in clause (x) above or (xii) any Loan
Party shall fail to perform or observe any other term, covenant or
agreement contained in any Loan Document on its part to be performed or
observed if such failure shall remain unremedied for 30 days after written
notice thereof shall have been given to the Borrower by the Administrative
Agent or any Lender Party; or
(d) (i) Any A Company, any Designated Operating Company or the Bank
shall fail to pay any principal of or premium or interest on any Debt which
is outstanding in a principal amount of at least $10,000,000 in the
aggregate (but excluding Debt outstanding hereunder) of such A Company,
such Designated Operating Company or the Bank (as the case may be), when
the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Debt; or (ii) any other event
shall occur or condition shall exist (other than (x) during the period from
the date hereof through June 30, 1997, the breach by Marvel of certain
financial covenants for the fiscal quarter ended September 30, 1996, for
the fiscal quarter ended December 31, 1996, for the fiscal quarter ending
March 31, 1997 and for the fiscal quarter ending June 30, 1997 under its
senior bank credit agreements and (y) in the case of the Specified Holding
Company Debt, any event or condition relating to Marvel, Marvel III
Holdings Inc., Marvel (Parent) Holdings Inc. or Marvel Holdings Inc.) under
any agreement or instrument relating to any such Debt and shall continue
after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate, or
to permit the acceleration of, the maturity of such Debt; or (iii) any such
Debt shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), redeemed,
purchased or defeased, or an offer to prepay, redeem, purchase or defease
such Debt shall be required to be made, in each case prior to the stated
maturity thereof; or (iv) in the case of any Specified Holding Company
Debt, any event or condition relating to Marvel, Marvel III Holdings Inc.,
Marvel (Parent) Holdings Inc. or Marvel Holdings Inc. shall occur and shall
continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is to
accelerate the maturity of such Debt; or
(e) Any A Company, any Designated Operating Company (other than
Marvel) or the Bank shall generally not pay its debts as such debts become
due, or shall admit in writing its inability to pay its debts generally, or
shall make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against any A Company, any Designated
Operating Company (other than Marvel) or
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any FN Party seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors,
or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for it or for any
substantial part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it), either such proceeding
shall remain undismissed or unstayed for a period of 45 days, or any of the
actions sought in such proceeding (including, without limitation, the entry
of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or for any substantial part of
its property) shall occur; or any A Company, any Designated Operating
Company (other than Marvel) or the Bank shall take any corporate action to
authorize any of the actions set forth above in this Section 6.01(e); or
(f) Any judgment or order for the payment of money in excess of
$10,000,000 shall be rendered against any A Company, any Designated
Operating Company or the Bank and there shall be any period of 10
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect
unless such judgment or order shall have been vacated, satisfied or
dismissed or bonded pending appeal; provided, however, that any such
judgment or order shall not be an Event of Default under this Section
6.01(f) if and for so long as (i) the entire amount of such judgment or
order is covered by a valid and binding policy of insurance between the
defendant and the insurer covering payment thereof and (ii) such insurer,
which shall be rated at least "A" by A.M. Best Company, has been notified
of, and has not disputed the claim made for payment of the amount of such
judgment or order; or
(g) Any non-monetary judgment or order shall be rendered against any A
Company, any Designated Operating Company or the Bank that is reasonably
likely to have a Material Adverse Effect (in the case of clause (a) of the
definition thereof, the term "Person" shall refer to the Borrower) and
there shall be any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect unless such judgment or order shall have
been vacated, satisfied, discharged or bonded pending appeal; or
(h) Ronald O. Perelman (or in the event of his incompetence or death,
his estate, heirs, executor, administrator, committee or other personal
representative) shall cease to beneficially own (i) at least 80% of the
Voting Stock of any A Company, any Designated Operating Company (other than
Marvel, Consolidated Cigar Holdings, PCT and Revlon) or the Bank, (ii) on
and after the Marvel Inclusion Date, at least a majority of the voting
power of the Voting Stock of Marvel, (iii) at least a majority of the
voting
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power of the Voting Stock of Revlon and (iv) on and after the MCG Inclusion
Date, at least a majority of the voting power of the Voting Stock of
Consolidated Cigar Holdings, in each case other than as a result of an
Asset Sale pursuant to which all of the common stock held by Mafco and its
Subsidiaries in any A Company, any Designated Operating Company or the Bank
(or, in any such case, in such Person's direct or indirect parent) is sold
and the Net Cash Proceeds of such Asset Sale is applied in accordance with
the terms of the Loan Documents and the "Loan Documents" referred to in the
Term Credit Agreement; or
(i) Any ERISA Event shall have occurred with respect to Mafco or any
of its ERISA Affiliates and such ERISA Event, together with any and all
other ERISA Events that shall have occurred with respect to Mafco or any of
its ERISA Affiliates, is reasonably likely to have a Material Adverse
Effect (with respect to clause (a) of the definition thereof, the term
"Person" shall refer to Mafco); or
(j) Mafco or any of its ERISA Affiliates shall have been notified by
the sponsor of a Multiemployer Plan of the Borrower or any of its ERISA
Affiliates that it has incurred Withdrawal Liability to such Multiemployer
Plan in an amount that, when aggregated with all other amounts required to
be paid to Multiemployer Plans by Mafco and its ERISA Affiliates as
Withdrawal Liability (determined as of the date of such notification),
exceeds $10,000,000 or requires payments exceeding $10,000,000 per annum;
or
(k) Mafco or any of its ERISA Affiliates shall have been notified by
the sponsor of a Multiemployer Plan of the Borrower or any of its ERISA
Affiliates that such Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, and as a result of
such reorganization or termination the aggregate annual contributions of
Mafco and its ERISA Affiliates to all Multiemployer Plans that are then in
reorganization or being terminated have been or will be increased over the
amounts contributed to such Multiemployer Plans for the plan years of such
Multiemployer Plans immediately preceding the plan year in which such
reorganization or termination occurs by an amount exceeding $10,000,000; or
(l) Any provision of any Loan Document, Related Document or FN
Document after delivery thereof pursuant to the Original Credit Agreement,
the Second Credit Agreement, the Third Credit Agreement, the Fourth Credit
Agreement, the Existing Credit Agreement, Section 3.01 hereof or pursuant
to the definition of "MCG Inclusion Date" shall for any reason (other than
pursuant to the terms thereof or, in the case of the Marvel Tax Agreements,
in accordance with the terms of this Agreement and the Term Credit
Agreement) cease to be valid and binding on or enforceable against any
party to it, or any party to any such document shall so state in writing;
or
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(m) Any Collateral Document after delivery thereof pursuant to the
Original Credit Agreement, the Second Credit Agreement, the Third Credit
Agreement, the Fourth Credit Agreement, the Existing Credit Agreement,
Section 3.01 hereof or the definition of "MCG Inclusion Date" shall for any
reason (other than pursuant to the terms thereof) cease to create a valid
and perfected first priority Lien on the Collateral purported to be covered
thereby; or
(n) Any provision of the FN Holdings Debt Document, the FN Holdings
New Debt Document, the Second New FN Holdings Debt Document, the FN
Holdings Preferred Stock or the FN Parent Debt Document shall be
terminated, amended, waived or otherwise modified without the consent of
the Mafco Finance Required Lenders or any provision of the First Gibraltar
Charter Document shall be amended or modified without the consent of the
Mafco Finance Required Lenders (other than as permitted by the terms of the
Mafco Guaranty); or
(o) The Bank fails to maintain the minimum capital and leverage ratios
required as of the Effective Date for the Bank to be considered as a "well
capitalized" "savings association" pursuant to 12 U.S.C. Section 1831o and
12 C.F.R. Section 565, as such Sections may be amended, reenacted or
redesignated from time to time; or
(p) (i) The common stock of any Designated Operating Company (other
than Marvel, Consolidated Cigar Holdings and PCT) trading on the date
hereof shall cease to be publicly traded on the New York Stock Exchange;
(ii) at any time prior to the receipt by Mafco and its Subsidiaries after
the Effective Date of Net Cash Proceeds in an amount at least equal to $365
million from the sale, monetization or other disposal of News Corp.
Preferred ADRs, News Corp. Preferred ADRs shall cease to be publicly
traded; (iii) on and after the Marvel Inclusion Date, the common stock of
Marvel shall cease to be publicly traded on the New York Stock Exchange or
the Nasdaq National Market System; or (iv) on and after the MCG Inclusion
Date, the common stock of Consolidated Cigar Holdings shall cease to be
publicly traded on the New York Stock Exchange; or
(q) Gerald J. Ford shall beneficially or legally own shares of the
common stock of FN Holdings other than shares of the Class B Common Stock;
or
(r) Any Person party to the Related Documents shall fail to directly
deposit in the Mafco Collateral Account (i) a payment to Mafco under any
Related Document (which payment is required to be made and is permitted
under each indenture and credit agreement to which such Person is a party)
or (ii) a loan to Mafco of the proceeds of any payment received by such
Person under any Related Document (which loan is
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required to be made and is permitted under each indenture and credit
agreement to which such Person is a party) and such failure shall remain
unremedied for three Business Days other than any such failure which
results from a termination or amendment of any Related Document in
accordance with the terms of this Agreement and the Term Credit Agreement;
or
(s) (i) Mafco shall fail to furnish to the Administrative Agent and
the Lender Parties on or prior to December 1, 1997, a business plan setting
forth, in respect of all of the Debt of Mafco and its Subsidiaries (other
than Debt of the Designated Operating Companies, the Bank, Marvel, Marvel
III Holdings Inc., Marvel (Parent) Holdings Inc., Marvel Holdings Inc.,
Meridian Sports Incorporated and their respective Subsidiaries) that is
scheduled to come due during calendar year 1998 and 1999, the method by
which all such Debt shall be repaid, prepaid, redeemed or refinanced on a
timely basis, including without limitation, through Asset Sales, issuances
of Debt, issuances of equity or contributions to capital, in each case in
reasonable detail as to the identity of the assets to be sold, the issuer
of the Debt or equity and such other details as the Mafco Finance Required
Lenders shall request or (ii) the Mafco Finance Required Lenders shall not
have approved the form and substance of such business plan on or prior to
December 31, 1997; or
(t) the MCG Inclusion Date shall fail to occur within six months
following the Effective Date;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Commitment of each Lender to make Advances (other than Letter of
Credit Advances by the Issuing Bank or a Lender pursuant to Section 2.03(c))
and of the Issuing Bank to issue Letters of Credit to be terminated, whereupon
the same shall forthwith terminate, and (ii) shall at the request, or may with
the consent, of the Required Lenders, by notice to the Borrower, declare the
Notes, all interest thereon and all other amounts payable under this Agreement
to be forthwith due and payable, whereupon the Notes, all such interest and all
such amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower; provided, however, that, in the event
of an actual or deemed entry of an order for relief with respect to the
Borrower under the Federal Bankruptcy Code, (A) the obligation of each Lender
to make Advances (other than Letter of Credit Advances by an Issuing Bank or a
Lender pursuant to Section 2.03(c)) and of each Issuing Bank to issue Letters
of Credit shall automatically be terminated and (B) the Notes, all such
interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.
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SECTION 6.02. Actions in Respect of the Letters of Credit upon Event
of Default. If any Event of Default shall have occurred and be continuing, the
Administrative Agent may, or shall at the request of the Required Lenders,
irrespective of whether it is taking any of the actions described in Section
6.01 or otherwise, make demand upon the Borrower to, and forthwith upon such
demand the Borrower will, pay to the Administrative Agent on behalf of the
Lender Parties in same day funds at the Administrative Agent's office
designated in such demand, for deposit in the L/C Cash Collateral Account, an
amount equal to the aggregate Available Amount of all Letters of Credit then
outstanding. If at any time the Administrative Agent determines that any funds
held in the L/C Cash Collateral Account are subject to any right or claim of
any Person other than the Administrative Agent and the Lender Parties or that
the total amount of such funds is less than the aggregate Available Amount of
all Letters of Credit then outstanding, the Borrower will, forthwith upon
demand by the Administrative Agent, pay to the Administrative Agent, as
additional funds to be deposited and held in the L/C Cash Collateral Account,
an amount equal to the excess of (a) such aggregate Available Amount over (b)
the total amount of funds, if any, then held in the L/C Cash Collateral Account
that the Administrative Agent determines to be free and clear of any such right
and claim.
ARTICLE VII
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
SECTION 7.01. Authorization and Action. Each Lender Party (in its
capacities as a Lender and the Issuing Bank (if applicable)) hereby appoints
and authorizes each of the Administrative Agent and the Collateral Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to the Administrative
Agent and the Collateral Agent, as the case may be, by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto. As to
any matters not expressly provided for by the Loan Documents (including,
without limitation, enforcement or collection of the Notes), each of the
Administrative Agent and the Collateral Agent shall not be required to exercise
any discretion or take any action, but shall be required to act or to refrain
from acting (and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Required Lenders, and such instructions
shall be binding upon all Lender Parties and all holders of Notes; provided,
however, that neither the Administrative Agent nor the Collateral Agent shall
be required to take any action which exposes the Administrative Agent or the
Collateral Agent, as the case may be, to personal liability or which is
contrary to this Agreement or applicable law. Each of the Administrative Agent
and the Collateral Agent agrees to give to each Lender Party prompt notice of
each notice and other report given to it by the Borrower pursuant to the terms
of this Agreement.
SECTION 7.02. Administrative Agent's and Collateral Agent's Reliance,
Etc. Neither the Administrative Agent nor the Collateral Agent nor any of their
respective directors, officers, agents or employees, shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
the Loan Documents, except for its or their
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own gross negligence or willful misconduct. Without limitation of the
generality of the foregoing, each of the Administrative Agent and the
Collateral Agent: (i) may treat the payee of any Note as the holder thereof
until the Administrative Agent receives and accepts an Assignment and
Acceptance entered into by the Lender that is the payee of such Note, as
assignor, and an Eligible Assignee, as assignee, as provided in Section 8.07;
(ii) may consult with legal counsel (including counsel for the Borrower),
independent public accountants and other experts selected by it and shall not
be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (iii) makes
no warranty or representation to any Lender Party and shall not be responsible
to any Lender Party for any statements, warranties or representations (whether
written or oral) made in or in connection with the Loan Documents; (iv) shall
not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of the Loan Documents
on the part of the Borrower or to inspect the property (including the books and
records) of the Borrower; (v) shall not be responsible to any Lender Party for
the due execution, legality, validity, enforceability, genuineness, sufficiency
or value of, or the perfection or priority of any lien or security interest
created or purported to be created under or in connection with the Loan
Documents or any other instrument or document furnished pursuant hereto; and
(vi) shall incur no liability under or in respect of the Loan Documents by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by telecopier, telegram, cable or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
SECTION 7.03. Citibank and Affiliates. With respect to its
Commitments, the Advances made by it and the Note issued to it, Citibank shall
have the same rights and powers under the Loan Documents as any other Lender
Party and may exercise the same as though it were not the Administrative Agent
or the Collateral Agent and the term "Lender Party" or "Lender Parties" shall,
unless otherwise expressly indicated, include Citibank hereunder in its
individual capacity. Citibank and its affiliates may accept deposits from, lend
money to, act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business with, the
Borrower, any of its Subsidiaries and any Person who may do business with or
own securities of the Borrower or any such Subsidiary, all as if Citibank were
not the Administrative Agent or the Collateral Agent and without any duty to
account therefor to the Lender Parties.
SECTION 7.04. Lender Party Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon either the
Administrative Agent or the Collateral Agent or any other Lender Party and
based on the financial statements referred to in Section 4.01(f) and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender Party also
acknowledges that it will, independently and without reliance upon the
Administrative Agent, the Collateral Agent or any other Lender Party and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement.
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SECTION 7.05. Indemnification. (a) Each Lender Party severally agrees
to indemnify each of the Administrative Agent and the Collateral Agent (in each
case to the extent not promptly reimbursed by the Borrower) from and against
such Lender Party's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever that
may be imposed on, incurred by, or asserted against the Administrative Agent or
the Collateral Agent, as the case may be, in any way relating to or arising out
of the Loan Documents or any action taken or omitted by the Administrative
Agent or the Collateral Agent, as the case may be, under the Loan Documents;
provided, however, that no Lender Party shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Administrative
Agent's or the Collateral Agent's gross negligence or willful misconduct.
Without limitation of the foregoing, each Lender Party agrees to reimburse the
Administrative Agent and the Collateral Agent promptly upon demand for its
ratable share of any costs and expenses (including, without limitation, fees
and expenses of counsel) payable by the Borrower under Section 8.04, to the
extent that the Administrative Agent or the Collateral Agent, as the case may
be, is not promptly reimbursed for such costs and expenses by the Borrower. For
purposes of this Section 7.05(a), the Lender Parties' respective ratable shares
of any amount shall be determined, at any time, according to the sum of (a) the
aggregate principal amount of the Advances outstanding at such time and owing
to the respective Lender Parties, (b) their respective Pro Rata Shares of the
aggregate Available Amount of all Letters of Credit outstanding at such time
and (c) their respective Unused Revolving Credit Commitments at such time;
provided that the aggregate principal amount of Letter of Credit Advances owing
to the Issuing Bank shall be considered to be owed to the Lenders ratably in
accordance with their respective Revolving Credit Commitments. In the event
that any Defaulted Advance shall be owing by any Defaulting Lender at any time,
such Lender Party's Commitment with respect to the Facility under which such
Defaulted Advance was required to have been made shall be considered to be
unused for purposes of this Section 7.05(a) to the extent of the amount of such
Defaulted Advance. The failure of any Lender Party to reimburse the
Administrative Agent or the Collateral Agent promptly upon demand for its
ratable share of any amount required to be paid by the Lender Party to the
Administrative Agent or the Collateral Agent, as the case may be, as provided
herein shall not relieve any other Lender Party of its obligation hereunder to
reimburse the Administrative Agent or the Collateral Agent, as the case may be,
for its ratable share of such amount, but no Lender Party shall be responsible
for the failure of any other Lender Party to reimburse the Administrative Agent
or the Collateral Agent, as the case may be, for such other Lender Party's
ratable share of such amount. Without prejudice to the survival of any other
agreement of any Lender Party hereunder, the agreement and obligations of each
Lender Party contained in this Section 7.05(a) shall survive the payment in
full of principal, interest and all other amounts payable hereunder and under
the other Loan Documents.
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(b) Each Lender Party severally agrees to indemnify the Issuing Bank
(to the extent not promptly reimbursed by the Borrower) from and against such
Lender Party's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever that
may be imposed on, incurred by, or asserted against the Issuing Bank in any way
relating to or arising out of the Loan Documents or any action taken or omitted
by the Issuing Bank under the Loan Documents; provided, however, that no Lender
Party shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Issuing Bank's gross negligence or willful misconduct.
Without limitation of the foregoing, each Lender Party agrees to reimburse the
Issuing Bank promptly upon demand for its ratable share of any costs and
expenses (including, without limitation, fees and expenses of counsel) payable
by the Borrower under Section 8.04, to the extent that the Issuing Bank is not
promptly reimbursed for such costs and expenses by the Borrower. For purposes
of this Section 7.05(b), the Lender Party's respective ratable shares of any
amount shall be determined, at any time, according to the sum of (a) the
aggregate principal amount of the Advances outstanding at such time and owing
to the respective Lender Parties, (b) their respective Pro Rata Shares of the
aggregate Available Amount of all Letters of Credit outstanding at such time
plus (c) their respective Unused Revolving Credit Commitments at such time;
provided that the aggregate principal amount of Letter of Credit Advances owing
to the Issuing Bank shall be considered to be owed to the Lenders ratably in
accordance with their respective Revolving Credit Commitments. In the event
that any Defaulted Advance shall be owing by any Defaulting Lender at any time,
such Lender Party's Commitment with respect to the Facility under which such
Defaulted Advance was required to have been made shall be considered to be
unused for purposes of this Section 7.05(b) to the extent of the amount of such
Defaulted Advance. The failure of any Lender Party to reimburse the Issuing
Bank promptly upon demand for its ratable share of any amount required to be
paid by the Lender Parties to the Issuing Bank as provided herein shall not
relieve any other Lender Party of its obligation hereunder to reimburse the
Issuing Bank for its ratable share of such amount, but no Lender Party shall be
responsible for the failure of any other Lender Party to reimburse the Issuing
Bank for such other Lender Party's ratable share of such amount. Without
prejudice to the survival of any other agreement of any Lender Party hereunder,
the agreement and obligations of each Lender contained in this Section 7.05(b)
shall survive the payment in full of principal, interest and all other amounts
payable hereunder and under the other Loan Documents.
SECTION 7.06. Successor Administrative Agent and Collateral Agent.
Each of the Administrative Agent and the Collateral Agent may resign at any
time by giving written notice thereof to the Lender Parties and the Borrower
and may be removed at any time with or without cause by, in the case of the
Administrative Agent, the Required Lenders and, in the case of the Collateral
Agent, the Mafco Finance Required Lenders. Upon any such resignation or
removal, the Required Lenders or the Mafco Finance Required Lenders shall have
the right
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to appoint, with the consent of the Borrower, a successor Administrative Agent
or Collateral Agent, respectively, which shall be a Lender, or if no Lender
consents to act as Administrative Agent or Collateral Agent, as the case may
be, hereunder, an institution that would be permitted to be an Eligible
Assignee hereunder. If no successor Administrative Agent or Collateral Agent,
as the case may be, shall have been so appointed by the Required Lenders or the
Mafco Finance Required Lenders, as the case may be, and shall have accepted
such appointment, within 30 days after the retiring Administrative Agent's or
Collateral Agent's giving of notice of resignation or the Required Lenders' or
the Mafco Finance Required Lenders' removal of the retiring Administrative
Agent or Collateral Agent, then the retiring Administrative Agent, or
Collateral Agent, as the case may be, may, on behalf of the Lender Parties,
appoint a successor Administrative Agent or Collateral Agent, as the case may
be, which shall be a commercial bank that is acceptable to the Borrower (which
shall not unreasonably withhold its approval). Upon the acceptance of any
appointment as Administrative Agent or Collateral Agent, as the case may be,
thereunder by a successor Administrative Agent or Collateral Agent, as the case
may be, such successor Administrative Agent or Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent or Collateral Agent, as the case may be,
and the retiring Administrative Agent or Collateral Agent, as the case may be,
shall be discharged from its duties and obligations under the Loan Documents.
After any retiring Administrative Agent's or Collateral Agent's resignation or
removal hereunder as Administrative Agent or Collateral Agent, the provisions
of this Article VII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent or Collateral
Agent, as the case may be.
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ARTICLE VIII
MISCELLANEOUS
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SECTION 8.01. Amendments, Etc. No amendment or waiver of any provision
of this Agreement or the Notes, nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Mafco Finance Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or
consent shall, unless in writing and signed by each of the Lender Parties
(other than any Lender Party which is, at such time, a Defaulting Lender) and
the Term Credit Agreement Lenders (other than any Term Credit Agreement Lender
which is, at such time, a "Defaulting Lender" under the Term Credit Agreement),
do any of the following: (i) waive any of the conditions specified in Section
3.01 or 3.02, (ii) change the definition of the term "Mafco Finance Required
Lenders", (iii) release any material portion of the Collateral or permit the
creation, incurrence, assumption or existence of any Lien on any material
portion of the Collateral other than (A) releases of any material portion of
the Collateral or the creation, incurrence, assumption or existence of any such
Lien in connection with Asset Sales (which shall include, for purposes of this
Section 8.01, sales, monetizations or other disposals of the News Corp.
Preferred ADRs) the Net Cash Proceeds of which are applied as contemplated by
the Loan Documents and the "Loan Documents" referred to in the Term Credit
Agreement, (B) releases of the News Corp. Preferred ADRs pursuant to the terms
of the Loan Documents and the "Loan Documents" under the Term Credit Agreement
and (C) the Liens created by the Collateral Documents and the Liens permitted
by Section 5.02(a), Section 8(a) of the Borrower Parent Guaranty, Section 8(a)
of the Coleman Guaranty, Section 8(a) of the Mafco Guaranty, Section 8(a) of
the C&F Guaranty, Section 8(a) of the Cigar Guaranty, Section 8(a) of the
Flavors Guaranty, Section 8(a) of the New World Guaranty, Section 8(a) of the
Revlon Guaranty, Section 8(a) of the Revlon Worldwide Holdings Guaranty and, on
and after the MCG Inclusion Date, the comparable provision of the MCG Guaranty,
(iv) amend this Section 8.01, (v) increase the Commitments of the Lenders or
subject the Lenders to any additional obligations, (vi) reduce the principal
of, or interest on, the Notes or any fees or other amounts payable hereunder or
(vii) postpone any date fixed for any mandatory reduction in the Commitments or
for any payment of principal of, or interest on, the Notes or any fees or other
amounts payable hereunder or amend Section 2.04, 2.05(b) or 2.06(b) (other than
2.06(b)(v)); provided further that, notwithstanding the foregoing, Section
2.05(b)(ii) may be amended by the Supermajority Lenders and the "Supermajority
Lenders" under the Term Credit Agreement in connection with the issuance of
preferred stock by FN Parent and/or FN Holdings if all of the proceeds of such
issuance are used to prepay or repay in full the Debt outstanding under the
First Gibraltar Credit Agreement; provided further that no change may be made
to the definition of the term "Required Lenders" unless such change is in
writing and signed by all of the Lender Parties (other than any Lender Party
which is, at such time, a Defaulting Lender); provided further that no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders and Term Credit Agreement
Lenders required above to take such action, affect the rights or duties of the
Administrative Agent under this Agreement or any Note; provided further that no
amendment, waiver or consent
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shall, unless in writing and signed by the Collateral Agent in addition to the
Lenders and Term Credit Agreement Lenders required above to take such action,
affect the rights or duties of the Collateral Agent under this Agreement;
provided further that no amendment, waiver or consent shall, unless in writing
and signed by the Issuing Bank, in addition to the Lenders required above to
take such action, affect the rights or obligations of the Issuing Bank under
this Agreement.
SECTION 8.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic,
telex or cable communication) and mailed, telecopied, telegraphed, telexed,
cabled or delivered, if to the Borrower, at its address at c/o MacAndrews and
Forbes Holdings Inc., 35 East 62nd Street, New York, New York 10021, Attention:
General Counsel, if to any Financial Institution at its Domestic Lending Office
on Schedule I hereto; if to any other Lender Party, at the address specified in
the Assignment and Acceptance pursuant to which it became a Lender Party; and
if to the Administrative Agent or the Collateral Agent, at its address at 399
Park Avenue, New York, New York 10043, Attention: James Buchanan, or, as to the
Borrower, the Administrative Agent or the Collateral Agent, at such other
address as shall be designated by such party in a written notice to the other
parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower, the
Administrative Agent and the Collateral Agent. All such notices and
communications shall be effective (i) when received, if mailed or delivered or
telecopied (including machine acknowledgment), or (ii) when delivered to the
telegraph company, confirmed by telex answerback or delivered to the cable
company, respectively, except that notices and communications to the
Administrative Agent pursuant to Article II or VII shall not be effective until
received by the Administrative Agent.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any
Lender Party or the Administrative Agent or the Collateral Agent to exercise,
and no delay in exercising, any right hereunder or under any Note shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 8.04. Costs; Expenses. (a) The Borrower agrees to pay on
demand all reasonable out-of-pocket costs and expenses of the Administrative
Agent and the Collateral Agent in connection with the preparation, execution,
delivery, administration, modification and amendment of the Loan Documents and
the other documents to be delivered hereunder (including, without limitation,
(A) all due diligence, transportation, computer, duplication, appraisal, audit
and insurance expenses and fees and expenses of consultants engaged with the
prior consent of the Borrower (which consent shall not be unreasonably
withheld) and (B) the reasonable fees and out-of-pocket expenses of counsel for
the Administrative Agent with
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respect thereto, with respect to advising the Administrative Agent and the
Collateral Agent as to their respective rights and responsibilities, or the
protection or preservation of rights or interests, under the Loan Documents,
with respect to negotiations with the Borrower or with other creditors of the
Borrower arising out of any Default or any events or circumstances that may
give rise to a Default and with respect to presenting claims in, monitoring or
otherwise participating in any bankruptcy, insolvency or other similar
proceeding affecting creditors' rights generally and any proceeding ancillary
thereto). The Borrower further agrees to pay on demand all reasonable
out-of-pocket costs and expenses of the Administrative Agent, the Collateral
Agent and the Lender Parties in connection with the enforcement of the Loan
Documents and the other documents to be delivered hereunder, whether in action,
suit, litigation, any bankruptcy, insolvency or other similar proceeding
affecting creditors' rights generally or otherwise (including, without
limitation, the reasonable fees (including the allocated costs of internal
counsel) and reasonable expenses of counsel for the Administrative Agent, the
Collateral Agent and each Lender Party with respect thereto) and expenses in
connection with the enforcement of rights under this Section 8.04(a).
(b) If any payment of principal of any Eurodollar Rate Advance is made
by the Borrower to or for the account of a Lender Party other than on the last
day of the Interest Period for such Advance, as a result of a payment or
Conversion pursuant to Section 2.10(c) or 2.11, acceleration of the maturity of
the Notes pursuant to Section 6.01 or for any other reason, the Borrower shall,
upon demand by such Lender Party (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender Party any amounts required to compensate such Lender Party for any
additional losses, costs or expenses which it may reasonably incur as a result
of such payment, including, without limitation, any loss, cost or expense
incurred by reason of the liquidation or reemployment of deposits or other
funds acquired by any Lender Party to fund or maintain such Advance.
(c) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, the Collateral Agent, the Documentation Agent, the
Syndication Agent and each Lender Party and each of their affiliates and their
officers, directors, trustees, employees, agents and advisors (each, an
"Indemnified Party") from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of (or in connection with the preparation for a defense of) any
investigation, litigation or proceeding arising out of, related to or in
connection with this Agreement and the transactions contemplated hereby,
whether or not an Indemnified Party is a party thereto, whether or not the
transactions contemplated hereby are consummated, whether or not any such
claim, investigation, litigation or proceeding is brought by the Borrower or
any other person and whether or not such Indemnified Party is a Lender Party at
such time) except (i) to the extent such claim, damage, loss, liability or
expense (x) is found in a final, non-appealable judgment by a court of
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competent jurisdiction (a "Final Judgment") to have resulted from such
Indemnified Party's gross negligence or willful misconduct or (y) arises from
any legal proceedings commenced against any Lender Party by any other Lender
Party (in its capacity as such and not as Administrative Agent, Collateral
Agent, Documentation Agent or Syndication Agent), and (ii) in the case of any
litigation brought by the Borrower (A) seeking a judgment against any
Indemnified Party for any wrongful act or omission of such Indemnified Party
and (B) in which a Final Judgment is rendered in the Borrower's favor against
such Indemnified Party, the provisions of this paragraph will not be available
to provide indemnification for any damage, loss, liability or expense incurred
by such Indemnified Party in connection with such litigation described in
clause (i) or in connection with any claim for which Final Judgment is rendered
in the Borrower's favor in a litigation described in clause (ii) of this
Section 8.04(c).
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Lender Party is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set-off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
Party to or for the credit or the account of the Borrower against any and all
of the obligations of the Borrower to such Lender Party now or hereafter
existing under this Agreement and the Note or Notes held by such Lender Party,
whether or not such Lender Party shall have made any demand under this
Agreement or such Note or Notes and although such obligations may be unmatured.
Each Lender Party agrees promptly to notify the Borrower after any such set-off
and application shall be made by such Lender Party, provided that the failure
to give such notice shall not affect the validity of such set-off and
application; provided further that no Lender Party shall exercise any such
right of set-off or any other right of set-off without the prior consent of the
Administrative Agent. The rights of each Lender Party under this Section 8.05
are in addition to other rights and remedies (including, without limitation,
other rights of set-off) which such Lender Party may have.
SECTION 8.06. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower and the Administrative Agent
and when the Administrative Agent shall have been notified by each Financial
Institution that such Financial Institution has executed it and thereafter
shall be binding upon and inure to the benefit of the Borrower, the
Administrative Agent and each Lender Party and their respective successors and
assigns, except that the Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of the
Administrative Agent and the Required Lenders.
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SECTION 8.07. Assignments and Participations. (a) Each Lender may and,
if demanded by the Borrower pursuant to Section 2.15, will assign to one or
more banks or other entities all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Commitment, the Advances owing to it and the Note or Notes held by it);
provided, however, that (i) each such assignment shall be of a uniform, and not
a varying, percentage of all rights and obligations under and in respect of the
Facilities; (ii) the amount of the Commitment of the assigning Lender being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than $10,000,000 and shall be an integral multiple of $1,000,000 in excess
thereof, or shall be an assignment to another Lender or an assignment of all of
the assigning Lender's rights and obligations hereunder and under the Notes,
(iii) each such assignment shall be to another Lender, an Affiliate of the
assigning Lender or to an Eligible Assignee, (iv) each such assignment made as
a result of a demand by the Borrower pursuant to Section 2.15 shall be arranged
by the Borrower after consultation with the Administrative Agent and shall be
either an assignment of all of the rights and obligations of the assigning
Lender under this Agreement or an assignment of a portion of such rights and
obligations made concurrently with another such assignment or other such
assignments that together cover all of the rights and obligations of the
assigning Lender under this Agreement, (v) no Lender shall be obligated to make
any such assignment as a result of a demand by the Borrower pursuant to Section
2.15 unless and until such Lender shall have received one or more payments from
either the Borrower or one or more Eligible Assignees in an aggregate amount at
least equal to the aggregate outstanding principal amount of the Advances owing
to such Lender, together with accrued interest thereon to the date of payment
of such principal amount and all other amounts payable to such Lender under
this Agreement, (vi) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note or Notes subject
to such assignment and a processing and recordation fee of $3,000 from the
assignee and (vii) no such assignments shall be permitted without the consent
of the Administrative Agent and the Borrower (such consent not to be
unreasonably withheld). Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, (x) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and (y) the Lender assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the
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other parties hereto as follows: (i) other than as provided in such Assignment
and Acceptance, such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other instrument or document furnished pursuant hereto; (ii)
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under this
Agreement or any other instrument or document furnished pursuant hereto; (iii)
such assignee confirms that it has received a copy of this Agreement, together
with copies of the financial statements referred to in Section 4.01(f) and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon the Administrative
Agent, the Collateral Agent, such assigning Lender or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes each of the Administrative
Agent and the Collateral Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement as are delegated to the
Administrative Agent or the Collateral Agent, as the case may be, by the terms
hereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of this Agreement are required to be
performed by it as a Lender.
(c) The Administrative Agent shall maintain at its address referred to
in Section 8.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitment of, and principal amount of the Advances owing
under each Facility to, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrower, the Administrative Agent, and the
Lenders may treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
together with any Note or Notes subject to such assignment, the Administrative
Agent shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower. Within five Business Days
after its receipt of such notice, the Borrower, at its own expense, shall
execute and deliver to the
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Administrative Agent in exchange for the surrendered Note or Notes a new Note
or Notes to the order of such Eligible Assignee in an amount equal to the
Commitment assumed by it under a Facility pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a Commitment hereunder
under such Facility, a new Note to the order of the assigning Lender in an
amount equal to such Commitment retained by it hereunder. Such new Note or
Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Note or Notes, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of Exhibit A.
(e) The Issuing Bank may assign to an Eligible Assignee all of its
rights and obligations under the undrawn portion of its Letter of Credit
Commitment at any time; provided, however, that (i) except in the case of an
assignment to a Person that immediately prior to such assignment was an Issuing
Bank or an assignment of all of an Issuing Bank's rights and obligations under
this Agreement, the amount of the Letter of Credit Commitment of the assigning
Issuing Bank being assigned pursuant to each such assignment (determined as of
the date of the Assignment and Acceptance with respect to such assignment)
shall in no event be less than $3,000,000 and shall be in an integral multiple
of $1,000,000 in excess thereof, (ii) each such assignment shall be to an
Eligible Assignee, (iii) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with a processing and
recordation fee of $3000 and (iv) no such assignments shall be permitted
without the consent of the Administrative Agent and the Borrower (such consent
not to be unreasonably withheld).
(f) Each Lender may sell participations to one or more banks or other
entities in or to all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment,
the Advances owing to it and the Note or Notes held by it); provided, however,
that (i) such Lender's obligations under this Agreement (including, without
limitation, its Commitment to the Borrower hereunder) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations, (iii) such Lender shall remain the
holder of any such Note for all purposes of this Agreement, (iv) the Borrower,
the Administrative Agent, the Collateral Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and (v) no participant
under any such participation shall have any right to approve any amendment or
waiver of any provision of any Loan Document, or any consent to any departure
by the Borrower therefrom, except to the extent that such amendment, waiver or
consent would reduce or postpone any date fixed for payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation.
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(g) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 8.07, disclose
to the assignee or participant or proposed assignee or participant, any
information relating to the Borrower furnished to such Lender by or on behalf
of the Borrower; provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree pursuant to an
agreement substantially in the form of Exhibit G to preserve the
confidentiality of any confidential information relating to the Borrower
received by it from such Lender.
(h) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Advances
owing to it and the Note or Notes held by it) in favor of any Federal Reserve
Bank in accordance with Regulation A of the Board of Governors of the Federal
Reserve System.
SECTION 8.08. Governing Law; Submission to Jurisdiction. (a) This
Agreement and the Notes shall be governed by, and construed in accordance with,
the laws of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or Federal court of the United States of America sitting in New York
City, and any appellate court thereof, in any action or proceeding arising out
of or relating to this Agreement, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Subject to the foregoing and to paragraph (c) below, nothing in this Agreement
shall affect any right that any party hereto may otherwise have to bring any
action or proceeding relating to this Agreement against any other party hereto
in the courts of any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any New York State or Federal
court and the defense of an inconvenient forum to the maintenance of such
action or proceeding in any such court.
(d) The Borrower agrees that service of process may be made on the
Borrower by personal service of a copy of the summons and complaint or other
legal process in any such suit, action or proceeding, or by registered or
certified mail (postage prepaid) to
<PAGE>
112
the address of the Borrower specified in Section 8.02, or by any other method
of service provided for under the applicable laws in effect in the State of New
York.
SECTION 8.09. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.10. No Liability of the Issuing Bank. The Borrower assumes
all risks of the acts or omissions of any beneficiary or transferee of any
Letter of Credit with respect to its use of such Letter of Credit. Neither the
Issuing Bank nor any of its officers or directors shall be liable or
responsible for: (a) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith; (b)
the validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by the Issuing Bank
against presentation of documents that do not comply with the terms of a Letter
of Credit, including failure of any documents to bear any reference or adequate
reference to the Letter of Credit; or (d) any other circumstances whatsoever in
making or failing to make payment under any Letter of Credit, except that the
Borrower shall have a claim against the Issuing Bank, and the Issuing Bank
shall be liable to the Borrower, to the extent of any direct, but not
consequential, damages suffered by the Borrower that the Borrower proves were
caused by (i) the Issuing Bank's willful misconduct or gross negligence in
determining whether documents presented under any Letter of Credit comply with
the terms of the Letter of Credit or (ii) the Issuing Bank's willful failure to
make lawful payment under a Letter of Credit after the presentation to it of a
draft and certificates strictly complying with the terms and conditions of the
Letter of Credit. In furtherance and not in limitation of the foregoing, the
Issuing Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary.
SECTION 8.11. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE DOCUMENTATION AGENT, THE
SYNDICATION AGENT AND THE LENDER PARTIES IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
ADVANCES OR THE ACTIONS OF THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE
DOCUMENTATION AGENT, THE
<PAGE>
113
SYNDICATION AGENT OR ANY LENDER PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
MAFCO FINANCE CORP.
By
----------------------------------
Name:
Title:
CITIBANK, N.A.,
as Administrative Agent and Collateral Agent
By
----------------------------------
Name:
Title:
<PAGE>
$400,000,000
AMENDED AND RESTATED TERM CREDIT AGREEMENT
Dated as of March 20, 1997
Among
MAFCO FINANCE CORP.
(formerly known as MARVEL IV HOLDINGS INC.),
as Borrower,
-----------
THE FINANCIAL INSTITUTIONS AND
THE INITIAL ISSUING BANK NAMED HEREIN,
as Financial Institutions and
-----------------------------
Initial Issuing Bank,
--------------------
CITIBANK, N.A.,
as Administrative Agent and Collateral Agent,
--------------------------------------------
CREDIT SUISSE FIRST BOSTON,
as Documentation Agent,
----------------------
and
CHASE SECURITIES INC.,
as Syndication Agent
--------------------
<PAGE>
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms....................................... 2
SECTION 1.02. Computation of Time Periods................................. 36
SECTION 1.03. Accounting Terms............................................ 36
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Term Advances........................................... 36
SECTION 2.02. Making the Advances......................................... 36
SECTION 2.03. Repayment................................................... 38
SECTION 2.04. Optional Termination or Reduction of the Commitments........ 38
SECTION 2.05. Prepayments................................................. 38
SECTION 2.06. Interest.................................................... 42
SECTION 2.07. Interest Rate Determination................................. 43
SECTION 2.08. Fees .................................................... 44
SECTION 2.09. Increased Costs; Illegality................................. 44
SECTION 2.10. Conversion of Advances...................................... 46
SECTION 2.11. Payments and Computations................................... 47
SECTION 2.12. Taxes .................................................... 48
SECTION 2.13. Sharing of Payments, Etc.................................... 51
SECTION 2.14. Removal of Lender........................................... 51
SECTION 2.15. Defaulting Lender........................................... 51
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Effective Date...................... 54
SECTION 3.02. Conditions Precedent to Each Borrowing...................... 63
SECTION 3.03. Determinations Under Section 3.01........................... 64
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
<PAGE>
ii
Page
SECTION 4.01. Representations and Warranties of the Borrower.............. 64
SECTION 4.02. Representations and Warranties Applicable to Marvel......... 69
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants....................................... 69
(a) Compliance with Laws, Etc............................ 69
(b) Compliance with Environmental Laws................... 69
(c) Maintenance of Insurance............................. 70
(d) Preservation of Corporate Existence, Etc............. 70
(e) Visitation Rights.................................... 70
(f) Keeping of Books..................................... 70
(g) Maintenance of Properties, Etc....................... 70
(h) Termination of Financing Statements.................. 71
(i) Collateral Account................................... 71
(j) Reporting Requirements............................... 71
(k) Look-Forward Certificate............................. 74
(l) Transactions with Affiliates......................... 75
(m) Mafco Tax Group...................................... 75
(n) Net Cash Proceeds.................................... 75
SECTION 5.02. Negative Covenants.......................................... 76
(a) Liens, Etc........................................... 76
(b) Lease Obligations.................................... 76
(c) Mergers, Etc......................................... 76
(d) Sales, Etc., of Assets............................... 76
(e) Dividends, Repurchases, Etc.......................... 77
(f) Investments.......................................... 77
(g) Change in Nature of Business......................... 77
(h) Accounting Changes................................... 78
(i) Debt................................................. 78
(j) Charter Amendments................................... 78
(k) Prepayments, Etc., of Debt........................... 78
(l) Negative Pledge...................................... 78
(m) Partnerships......................................... 78
(n) Capital Expenditures................................. 78
(o) Issuance of Capital Stock............................ 78
(p) Payment Restrictions................................. 79
(q) Amendment, Etc., of Related Documents................ 79
<PAGE>
iii
Page
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default........................................... 79
ARTICLE VII
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
SECTION 7.01. Authorization and Action.................................... 85
SECTION 7.02. Administrative Agent's and Collateral Agent's Reliance, Etc. 86
SECTION 7.03. Citibank and Affiliates..................................... 86
SECTION 7.04. Lender Credit Decision...................................... 86
SECTION 7.05. Indemnification............................................. 87
SECTION 7.06. Successor Administrative Agent and Collateral Agent......... 88
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc............................................. 88
SECTION 8.02. Notices, Etc................................................ 89
SECTION 8.03. No Waiver; Remedies......................................... 90
SECTION 8.04. Costs; Expenses............................................. 90
SECTION 8.05. Right of Set-off............................................ 91
SECTION 8.06. Binding Effect.............................................. 92
SECTION 8.07. Assignments and Participations.............................. 92
SECTION 8.08. Governing Law; Submission to Jurisdiction................... 95
SECTION 8.09. Execution in Counterparts................................... 96
SECTION 8.10. WAIVER OF JURY TRIAL........................................ 96
<PAGE>
iv
Schedule I - List of Commitments and Lending Offices
Schedule II - Borrower Information
Schedule III - List of Existing Debt
Schedule IV - List of Investments
Schedule V - List of Existing Liens
Schedule VI - Calculation of Defeased Debt Amount
Schedule VII - List of Debt for the Definition of Net Cash Proceeds
Exhibit A - Form of Term Note
Exhibit B - Form of Assignment and Acceptance
Exhibit C - Form of Notice of Borrowing
Exhibit D - Form of Mafco Security Agreement
Exhibit E-1 - Form of Mafco Guaranty
Exhibit E-2 - Form of C&F Guaranty
Exhibit E-3 - Form of Cigar Guaranty
Exhibit E-4 - Form of Coleman Guaranty
Exhibit E-5 - Form of Flavors Guaranty
Exhibit E-6 - Form of New World Guaranty
Exhibit E-7 - Form of Revlon Guaranty
Exhibit E-8 - Form of Revlon Worldwide Holdings Guaranty
Exhibit F-1 - Form of C&F Pledge Agreement
Exhibit F-2 - Form of New World Pledge Agreement
Exhibit F-3 - Form of Revlon Pledge Agreement
<PAGE>
v
Exhibit F-4 - Form of Revlon Worldwide Holdings Pledge Agreement
Exhibit F-5 - Form of Revlon Worldwide Parent Pledge Agreement
Exhibit G - Form of Confidentiality Letter
<PAGE>
AMENDED AND RESTATED TERM CREDIT AGREEMENT
AMENDED AND RESTATED TERM CREDIT AGREEMENT dated as of March 20, 1997
among MAFCO FINANCE CORP., a Delaware corporation (formerly known as MARVEL IV
HOLDINGS INC.) (the "Borrower"), the banks, financial institutions and other
institutional lenders (the "Financial Institutions") listed on the signature
pages hereof, CITIBANK, N.A. ("Citibank"), as administrative agent (together
with any successor appointed pursuant to Article VII, the "Administrative
Agent") for the Lenders (as hereinafter defined) hereunder, CREDIT SUISSE FIRST
BOSTON, as documentation agent (the "Documentation Agent") for the Lenders
hereunder, CHASE SECURITIES INC., as syndication agent (the "Syndication
Agent"; together with the Administrative Agent and the Documentation Agent, the
"Agents") for the Lenders hereunder and Citibank, as collateral agent (together
with any successor appointed pursuant to Article VII, the "Collateral Agent")
for the Lenders hereunder and the Revolving Credit Agreement Lenders (as
hereinafter defined).
PRELIMINARY STATEMENTS
(1) The Borrower, an indirect Subsidiary (as hereinafter defined) of
Mafco Holdings Inc., a Delaware corporation ("Mafco"), entered into a Term
Credit Agreement dated as of December 16, 1996, as amended by the Waiver and
Amendment dated as of December 23, 1996 and the Second Amendment dated as of
February 26, 1997 (said agreement, as so amended, being the "Existing Term
Credit Agreement"), with the banks, financial institutions and other
institutional lenders party thereto (the "Existing Term Lenders"), Citibank, as
administrative agent, NationsBank Capital Markets, Inc., as documentation
agent, Credit Suisse First Boston, as syndication agent, the managing agents
party thereto and Citibank, as collateral agent.
(2) Pursuant to the Existing Term Credit Agreement, the Borrower
requested that the Existing Term Lenders make advances to it in an aggregate
principal amount of up to $350,000,000, on the terms and conditions set forth
therein.
(3) Concurrently with entering into the Existing Term Credit
Agreement, the Borrower entered into a Fourth Amended and Restated Revolving
Credit Agreement dated as of December 16, 1996, as amended by the Waiver and
Amendment dated as of December 23, 1996 and the Second Amendment dated as of
February 26, 1997 (said agreement, as so amended, being the "Existing Credit
Agreement"), with the financial institutions and other institutional lenders
party thereto (the "Existing Lenders"), Citibank, as administrative agent for
the Existing Lenders, The First National Bank of Boston, as documentation agent
for the Existing Lenders, Chase Securities Inc., as syndication agent for the
Existing Lenders, the managing agents party thereto and Citibank, as collateral
agent for the Existing Lenders.
<PAGE>
2
(4) The Borrower has requested that the Financial Institutions
hereunder enter into this Agreement to amend and restate the Existing Term
Credit Agreement and to lend to the Borrower an aggregate principal amount of
up to $400,000,000. The Financial Institutions hereunder have indicated their
willingness to amend and restate the Existing Term Credit Agreement and to
agree to lend such amounts on the terms and conditions of this Agreement.
(5) Concurrently with entering into this Agreement, the Borrower is
entering into a Fifth Amended and Restated Revolving Credit Agreement dated as
of the date hereof (as it may hereafter be amended or otherwise modified from
time to time, the "Revolving Credit Agreement") with the banks, financial
institutions and other institutional lenders party thereto (the "Revolving
Credit Agreement Lenders"), Citibank, as initial issuing bank, Citibank, as
administrative agent (in such capacity, the "Revolving Administrative Agent"),
The Bank of New York, as documentation agent (in such capacity, the "Revolving
Documentation Agent"), The First National Bank of Boston, as syndication agent
(in such capacity, the "Revolving Syndication Agent"; together with the
Revolving Administrative Agent and the Revolving Documentation Agent, the
"Revolving Agents"), and the Collateral Agent.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the parties hereto hereby agree
that, subject to the satisfaction of the conditions set forth in Section 3.01,
the Existing Term Credit Agreement is amended and restated in its entirety to
read as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"A Company" means each Loan Party, FN Parent, FN Holdings, Coleman
Holdings Inc., Coleman Worldwide, National Health Care Group Inc., Revlon
Holdings Inc., and Revlon Worldwide.
"Administrative Agent" has the meaning specified in the recital of
parties to this Agreement.
<PAGE>
3
"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent with Citibank at
399 Park Avenue, New York, New York 10043, Account No. 3685-2248.
"ADR Collateral Account" has the meaning specified in the Mafco
Security Agreement.
"Advance" means a Term Advance.
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term "control" (including the terms "controlling", "controlled
by" and "under common control with") of a Person means the possession, direct
or indirect, of the power to vote 5% or more of the Voting Stock of such Person
or to direct or cause direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or otherwise.
"Agents" has the meaning specified in the recital of parties to this
Agreement.
"Andrews" means Andrews Group Incorporated, a Delaware corporation.
"Applicable Lending Office" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of a Base Rate Advance and such
Lender's Eurodollar Lending Office in the case of a Eurodollar Rate Advance.
"Applicable Margin" means, at any time, 2.50% per annum for Base Rate
Advances and 4.50% per annum for Eurodollar Rate Advances.
"Asset Sale" means the sale, lease, transfer or other disposition
(collectively, a "disposition") of assets of Mafco or any of its Subsidiaries
other than a disposition of any of the following:
(i) all or any portion of the capital stock of Laboratory Corporation
of America Holdings, or Meridian Sports Incorporated,
(ii) all or any portion of the capital stock or assets of the Bank or
any of its Subsidiaries,
(iii) any asset of Ropa Two Corporation so long as the Net Cash
Proceeds from any disposition of an asset of Ropa Two Corporation shall be
reinvested, within
<PAGE>
4
twelve months following the date of such disposition, in the business of
Ropa Two Corporation or any of its Subsidiaries, and
(iv) all or any portion of the News Corp. Preferred ADRs; provided,
however, that
(a) a disposition of assets of (x) a Designated Operating Company or
any of its Subsidiaries, (y) Meridian Sports Incorporated or any of its
Subsidiaries or (z) Marvel or any of its Subsidiaries shall, in each case,
only be considered an Asset Sale for purposes of this Agreement to the
extent, and only to the extent, that all or a portion of the proceeds of
such disposition are received by any of Mafco or any of its Subsidiaries
(other than (i) a Designated Operating Company or any of its Subsidiaries,
(ii) Meridian Sports Incorporated or any of its Subsidiaries or (iii)
Marvel or any of its Subsidiaries) through a dividend, distribution, loan,
advance or other similar payment,
(b) subject to the other clauses of this proviso, so long as the
Revlon Holdings Statement is true and correct both before and after giving
effect to such disposition, a disposition of assets of Revlon Holdings Inc.
or any of its Subsidiaries (other than Revlon Worldwide Parent and Revlon
Worldwide Holdings) shall only be considered an Asset Sale for purposes of
this Agreement to the extent, and only to the extent, that all or a portion
of the proceeds of such disposition are received by any of Mafco or any of
its Subsidiaries (other than Revlon Holdings Inc. or any of its
Subsidiaries (other than Revlon Worldwide Parent and Revlon Worldwide
Holdings)) through a dividend, distribution, loan, advance or other similar
payment,
(c) notwithstanding clause (b) of this proviso, a disposition of all
or any portion of the capital stock of Revlon Worldwide, Revlon Worldwide
Parent, Revlon Worldwide Holdings, National Health Care Group, Inc. or
Charles of the Ritz Group Ltd. (but in the case of Charles of the Ritz
Group Ltd., only if it owns any of the capital stock of Revlon Worldwide
Holdings at the time of such disposition) shall be considered an Asset Sale
for purposes of this Agreement, and
(d) notwithstanding clause (b) of this proviso, a disposition of any
asset (other than assets specifically excluded from this definition of
"Asset Sale") of National Health Care Group, Inc. or any of its
Subsidiaries (other than Revlon and its Subsidiaries) shall be considered
an Asset Sale for purposes of this Agreement.
"Asset Sale Threshold" means the receipt on and after the Effective
Date by Mafco and its Subsidiaries of the aggregate Net Cash Proceeds from
Asset Sales in an amount equal to the excess of (x) $265 million over (y) the
aggregate Net Cash Proceeds from Asset
<PAGE>
5
Sales received by Mafco and its Subsidiaries during the period from February
24, 1997 through the Effective Date.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an assignee of such Lender, and accepted by the
Administrative Agent, in substantially the form of Exhibit B hereto.
"Bank" means California Federal Bank, A Federal Savings Bank, and any
successor thereto.
"Bank Preferred Stock Document" means the Federal Stock Charter of
California Federal Bank, A Federal Savings Bank, as supplemented by the First
Supplemental Section to Section 5B of the Charter of California Federal Bank, A
Federal Savings Bank, the Second Supplemental Section to Section 5B of the
Charter of California Federal Bank, A Federal Savings Bank, the Third
Supplemental Section to Section 5B of the Charter of California Federal Bank, A
Federal Savings Bank, and the Fourth Supplemental Section to Section 5B of the
Charter of California Federal Bank, A Federal Savings Bank.
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the highest
of:
(a) the rate of interest announced publicly by Citibank in New York,
New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearest 1/4 of 1% or, if there is no
nearest 1/4 of 1%, to the next higher 1/4 of 1%) of (i) 1/2 of 1% per
annum, plus (ii) the rate obtained by dividing (A) the latest three-week
moving average of secondary market morning offering rates in the United
States for three-month certificates of deposit of major United States money
market banks, such three-week moving average (adjusted to the basis of a
year of 360 days) being determined weekly on each Monday (or, if such day
is not a Business Day, on the next succeeding Business Day) for the
three-week period ending on the previous Friday by Citibank on the basis of
such rates reported by certificate of deposit dealers to and published by
the Federal Reserve Bank of New York or, if such publication shall be
suspended or terminated, on the basis of quotations for such rates received
by Citibank from three New York certificate of deposit dealers of
recognized standing selected by Citibank, by (B) a percentage equal to 100%
minus the average of the daily percentages specified during such three-week
period by the Board of Governors of the Federal Reserve System (or any
successor thereto) for determining the maximum reserve requirement
(including, but not limited to, any emergency, supplemental or other
marginal reserve requirement) for Citibank
<PAGE>
6
with respect to liabilities consisting of or including (among other
liabilities) three-month U.S. dollar non-personal time deposits in the
United States, plus (iii) the average during such three-week period of the
annual assessment rates estimated by Citibank for determining the then
current annual assessment payable by Citibank to the Federal Deposit
Insurance Corporation (or any successor thereto) for insuring U.S. dollar
deposits of Citibank in the United States; and
(c) 1/2 of 1% per annum above the Federal Funds Rate.
"Base Rate Advance" means an Advance that bears interest as provided
in Section 2.06(a)(i).
"Borrower" has the meaning specified in the recital of parties to this
Agreement.
"Borrower Collateral Account" has the meaning specified in the
Borrower Security Agreement.
"Borrower Parent" means Mafco Guarantor Corp., a Delaware corporation
(formerly known as Marvel V Holdings Inc.).
"Borrower Parent Guaranty" means the Third Amended and Restated
Guaranty dated as of December 16, 1996 made by the Borrower Parent in favor of
the Lenders, the Revolving Credit Agreement Lenders, the Agents, the Revolving
Agents and the Collateral Agent, as such guaranty may be amended or otherwise
modified from time to time in accordance with its terms.
"Borrower Parent Security Agreement" means the Amended and Restated
Security Agreement dated as of December 16, 1996 made by the Borrower Parent
and The Bank of New York, in its capacity as voting trustee, to the Collateral
Agent, as such agreement may be amended or otherwise modified from time to time
in accordance with its terms.
"Borrower Security Agreement" means the Fourth Amended and Restated
Borrower Security Agreement dated as of December 16, 1996 made by the Borrower
to the Collateral Agent, as such agreement may be amended or otherwise modified
from time to time in accordance with its terms.
"Borrower's Account" means the account of the Borrower maintained by
the Borrower with Citibank, N.A., at its office at 399 Park Avenue, New York,
New York 10043, Account No. 40650489.
<PAGE>
7
"Borrowing" means a Term Borrowing.
"Business Day" means a day of the year on which banks are not required
or authorized by law to close in New York City and, if the applicable Business
Day relates to any Eurodollar Rate Advances, on which dealings are carried on
in the London interbank market and banks are open for business in London.
"C&F Guarantor" means Mafco Consolidated Holdings Inc., a Delaware
corporation (formerly known as C&F (Parent) Holdings Inc.).
"C&F Guaranty" means the Third Amended and Restated Guaranty dated as
of March 20, 1997 made by C&F Guarantor in favor of the Lenders, the Revolving
Credit Agreement Lenders, the Agents, the Revolving Agents and the Collateral
Agent, as such guaranty may be amended or otherwise modified from time to time
in accordance with its terms.
"C&F Pledge Agreement" means the Second Amended and Restated Pledge
Agreement dated as of March 20, 1997 made by C&F Guarantor to the Collateral
Agent, as such agreement may be amended or otherwise modified from time to time
in accordance with its terms.
"Calculation Period" means, for any date in respect of any common
stock, the immediately preceding five Business Days during which such common
stock traded on the relevant national stock exchange or the Nasdaq national
market system.
"Capital Expenditures" means, for any period, the sum of (a) all
expenditures during such period for equipment, fixed assets, real property or
improvements, or for replacements or substitutions therefor or additions
thereto, that have a useful life of more than one year plus (b) the aggregate
principal amount of all Debt (including obligations under Capitalized Leases)
assumed or incurred in connection with any such expenditures.
"Capitalized Leases" has the meaning specified in clause (e) of the
definition of "Debt".
"Cash Equivalents" means any of the following, to the extent owned by
the Borrower or its Subsidiaries free and clear of all Liens and having a
maturity not greater than 180 days from the date of issuance thereof: (a)
direct obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
faith and credit of the Government of the United States, (b) insured
certificates of deposit of or time deposits with any commercial bank that is a
Lender or a
<PAGE>
8
member of the Federal Reserve System, issues (or the parent of which issues)
commercial paper rated as described in clause (c), is organized under the laws
of the United States or any State thereof and has combined capital and surplus
of at least $1,000,000,000, (c) commercial paper in an aggregate amount of not
more than $10,000,000 per issuer outstanding at any time, issued by any
corporation organized under the laws of any State of the United States and
rated at least "Prime-1" (or the then equivalent grade) by Moody's Investors
Services, Inc. or "A-1" (or the then equivalent grade) by Standard & Poor's
Ratings Group or (d) shares of money market mutual or similar funds having
assets in excess of $100,000,000 and which invest exclusively in assets
satisfying the requirements of clauses (a) through (c) of this definition.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980.
"Cigar Guarantor" means Consolidated Cigar II Holdings Inc., a
Delaware corporation.
"Cigar Guaranty" means the Fourth Amended and Restated Cigar Guaranty
dated as of March 20, 1997 made by Cigar Guarantor in favor of the Lenders, the
Revolving Credit Agreement Lenders, the Agents, the Revolving Agents and the
Collateral Agent, as such guaranty may be amended or otherwise modified from
time to time in accordance with its terms.
"Cigar Non-Operating Subsidiary" means C&F Guarantor.
"Cigar Pledge Agreement" means the Second Amended and Restated Cigar
Pledge Agreement dated as of December 16, 1996 made by Cigar Guarantor and The
Bank of New York, in its capacity as voting trustee, to the Collateral Agent,
as such agreement may be amended or otherwise modified from time to time in
accordance with its terms.
"Citibank" has the meaning specified in the recital of parties to this
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and the rulings issued thereunder.
"Coleman" means The Coleman Company, Inc., a Delaware corporation.
"Coleman Guarantor" means Coleman (Parent) Holdings Inc., a Delaware
corporation.
<PAGE>
9
"Coleman Guaranty" means the Fourth Amended and Restated Coleman
Guaranty dated as of March 20, 1997 made by Coleman Guarantor in favor of the
Lenders, the Revolving Credit Agreement Lenders, the Agents, the Revolving
Agents and the Collateral Agent, as such guaranty may be amended or otherwise
modified from time to time in accordance with its terms.
"Coleman Holdings" means Coleman Holdings Inc., a Delaware
corporation.
"Coleman Non-Operating Subsidiaries" means Coleman Holdings and
Coleman Worldwide.
"Coleman Pledge Agreement" means the Second Amended and Restated
Pledge Agreement dated as of December 16, 1996 made by Coleman Guarantor to the
Collateral Agent, as such agreement may be amended or otherwise modified from
time to time in accordance with its terms.
"Coleman Tax Agreements" means (i) the Tax Allocation Agreement dated
as of August 24, 1990, as amended through the date hereof, between Mafco and
New Coleman, (ii) the Tax Sharing Agreement dated as of February 26, 1992, as
amended through the date hereof, among Mafco, Coleman Finance Holdings Inc.,
Coleman and the Subsidiaries of Coleman party thereto, (iii) the Tax Sharing
Agreement dated as of February 26, 1992, as amended through the date hereof,
among Mafco, New Coleman, Coleman Finance Holdings Inc. and the Subsidiaries of
Coleman Finance Holdings Inc. party thereto, (iv) the Tax Equivalent Payment
Agreement dated as of March 4, 1992, as amended through the date hereof,
between Mafco and Coleman Finance Holdings Inc., (v) the Supplemental Tax
Sharing Agreement dated as of February 26, 1992, as amended through the date
hereof, between Coleman and M&F, (vi) the Tax Sharing Agreement dated as of May
27, 1993 among Mafco, Coleman Worldwide, Coleman and its Subsidiaries party
thereto, (vii) the Tax Sharing Agreement dated as of May 27, 1993 among Mafco,
Coleman Worldwide and the other Persons party thereto, (viii) the Tax Sharing
Agreement dated as of July 22, 1993 between Mafco and Coleman Holdings, and
(ix) the Tax Sharing Termination Agreement dated as of May 27, 1993 among
Mafco, New Coleman, Coleman and the other Persons party thereto.
"Coleman Worldwide" means Coleman Worldwide Corporation, a Delaware
corporation.
"Coleman Worldwide Indenture" has the meaning specified in Schedule
VI.
"Coleman Worldwide LYONS" means the Liquid Yield Option Notes Due 2013
issued by Coleman Worldwide.
<PAGE>
10
"Coleman Worldwide Pledge Agreement" means the Amended and Restated
Non-Recourse Guaranty and Pledge Agreement dated as of December 16, 1996 made
by Coleman Worldwide to the Collateral Agent, as such agreement may be amended
or otherwise modified from time to time in accordance with its terms.
"Collateral" means all "Collateral" referred to in the Collateral
Documents and all other property that is or is intended to be subject to any
Lien in favor of the Collateral Agent, the Lenders, the Revolving Credit
Agreement Lenders, the Agents and the Revolving Agents.
"Collateral Accounts" means the ADR Collateral Account, the Borrower
Collateral Account, the Mafco Collateral Account, the Second Mafco Collateral
Account and the L/C Cash Collateral Account.
"Collateral Agent" has the meaning specified in the recital of the
parties hereto.
"Collateral Documents" means each Security Agreement and each Pledge
Agreement.
"Commitment" means a Term Commitment.
"Consolidated", for any Person, refers to the consolidation of the
financial statements of such Person and its Subsidiaries in accordance with
GAAP.
"Consolidated Cigar Holdings" means Consolidated Cigar Holdings Inc.,
a Delaware corporation.
"Consolidated Cigar Tax Agreement" means the Amended and Restated Tax
Sharing Agreement entered into as of June 15, 1995 among Mafco, MCG,
Consolidated Cigar Holdings, Consolidated Cigar Corporation and its
Subsidiaries party thereto.
"Conversion", "Convert" and "Converted" each refer to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section 2.10.
"Debt" of any Person means, without duplication, (a) all indebtedness
of such Person for borrowed money; (b) all Obligations of such Person for the
deferred purchase price of property or services (other than trade payables not
overdue by more than 60 days incurred in the ordinary course of such Person's
business); (c) all Obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments; (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such
<PAGE>
11
agreement in the event of default are limited to repossession or sale of such
property); (e) all Obligations of such Person as lessee under leases that have
been or should be, in accordance with GAAP, recorded as capital leases
("Capitalized Leases"); (f) all Obligations, contingent or otherwise, of such
Person under acceptance, letter of credit or similar facilities; (g) all
Obligations of such Person to purchase, redeem, retire, defease or otherwise
acquire for value any capital stock of such Person or any warrants, rights or
options to acquire such capital stock; (h) all Obligations of such Person in
respect of Hedge Agreements; (i) all Debt of others referred to in clauses (a)
through (h) above guaranteed directly or indirectly in any manner by such
Person, or in effect guaranteed directly or indirectly by such Person through
an agreement (i) to pay or purchase such Debt or to advance or supply funds for
the payment or purchase of such Debt, (ii) to purchase, sell or lease (as
lessee or lessor) property, or to purchase or sell services, primarily for the
purpose of enabling the debtor to make payment of such Debt or to assure the
holder of such Debt against loss, (iii) to supply funds to or in any other
manner invest in the debtor (including any agreement to pay for property or
services irrespective of whether such property is received or such services are
rendered) or (iv) otherwise to assure a creditor against loss; and (j) all Debt
referred to in clauses (a) through (i) above secured by (or for which the
holder of such Debt has an existing right, contingent or otherwise, to be
secured by) any Lien on property (including, without limitation, accounts and
contract rights) owned by such Person, even though such Person has not assumed
or become liable for the payment of such Debt. For all purposes of this
Agreement and the other Loan Documents, "Debt" shall not include Obligations of
any Designated Operating Company, Marvel or any of their respective
Subsidiaries in respect of Hedge Agreements.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given or
time elapse or both.
"Defaulted Advance" means, with respect to any Lender at any time, the
amount of any Advance required to be made by such Lender to the Borrower
pursuant to Section 2.01 at or prior to such time which has not been so made as
of such time; provided, however, that any Advance made by the Administrative
Agent for the account of such Lender pursuant to Section 2.02(c) shall not be
considered a Defaulted Advance even if, at such time, such Lender shall not
have reimbursed the Administrative Agent therefor as provided in Section
2.02(c). In the event that a portion of a Defaulted Advance shall be deemed
made pursuant to Section 2.15(a), the remaining portion of such Defaulted
Advance shall be considered a Defaulted Advance originally required to be made
pursuant to Section 2.01 on the same date as the Defaulted Advance so deemed
made in part.
"Defaulted Amount" means, with respect to any Lender at any time, any
amount required to be paid by such Lender to the Administrative Agent, the
Collateral Agent or any other Lender hereunder or under any other Loan Document
at or prior to such time which has not been so paid as of such time, including,
without limitation, any amount required
<PAGE>
12
to be paid by such Lender to (a) the Administrative Agent pursuant to Section
2.02(c) to reimburse the Administrative Agent for the amount of any Advance
made by the Administrative Agent for the account of such Lender, (b) any other
Lender pursuant to Section 2.13 to purchase any interest or participating
interest in Advances owing to such other Lender and (c) the Administrative
Agent or the Collateral Agent pursuant to Section 7.05 to reimburse the
Administrative Agent or the Collateral Agent, as the case may be, for such
Lender's ratable share of any amount required to be paid by the Lenders to the
Administrative Agent or the Collateral Agent as provided therein. In the event
that a portion of a Defaulted Amount shall be deemed paid pursuant to Section
2.15(b), the remaining portion of such Defaulted Amount shall be considered a
Defaulted Amount originally required to be made hereunder or under any other
Loan Document on the same date as the Defaulted Amount so deemed paid in part.
"Defaulting Lender" means, at any time, any Lender that, at such time,
(a) owes a Defaulted Advance or a Defaulted Amount or (b) shall take or be the
subject of any action or proceeding of a type described in Section 6.01(e).
"Defeased Debt Amount" means for any date of determination for any
Designated Person listed on Schedule VI an amount calculated in the manner set
forth on Schedule VI for such Designated Person or such other amount as may be
agreed by the Administrative Agent and the Borrower.
"Deposit Certificate" has the meaning specified in Section 5.01(k).
"Designated Coleman Subsidiaries" means Coleman Holdings, Coleman
Worldwide and Coleman.
"Designated New World Subsidiary" means New World Guarantor.
"Designated Operating Companies" means Coleman, MCG and Revlon;
provided, however, that (x) on and after the Marvel Inclusion Date, Marvel
shall be a "Designated Operating Company", (y) on and after the MCG Inclusion
Date, Consolidated Cigar Holdings shall be a "Designated Operating Company" and
(z) on and after the PCT Inclusion Date, PCT shall be a "Designated Operating
Company".
"Designated Persons" means Coleman Guarantor, Mafco, C&F Guarantor,
Revlon Guarantor and the Bank; provided, however, that (x) on and after the
date of the sale, monetization or other disposal of all of the News Corp.
Preferred ADRs held by Mafco and its Subsidiaries, Mafco shall no longer be a
"Designated Person" and (y) on and after the PCT Inclusion Date, MCG shall be a
"Designated Person".
<PAGE>
13
"Documentation Agent" has the meaning specified in the recital of
parties to this Agreement.
"Dollars" and the sign "$" each mean lawful money of the United
States.
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite its
name on Schedule I hereto or in the Assignment and Acceptance pursuant to which
it became a Lender, as the case may be, or such other office of such Lender as
such Lender may from time to time specify to the Borrower and the
Administrative Agent.
"Effective Date" has the meaning specified in Section 3.01.
"Eligible Assignee" means (a) any commercial bank organized under the
laws of the United States, or any State thereof, and having total assets in
excess of $1,000,000,000; (b) any savings and loan association or savings bank
organized under the laws of the United States, or any State thereof, and having
a net worth determined in accordance with GAAP in excess of $500,000,000; (c)
any commercial bank organized under the laws of any other country that is a
member of the Organization for Economic Cooperation and Development ("OECD") or
has concluded special lending arrangements with the International Monetary Fund
Associated with its General Arrangements to Borrow, or a political subdivision
of any such country, and having total assets in excess of $1,000,000,000, so
long as such bank is acting through a branch or agency located in the United
States, in the Cayman Islands or in the country in which it is organized or
another country that is described in this clause (c); (d) the central bank of
any country that is a member of the OECD; (e) any finance company, insurance
company or other financial institution or fund (whether a corporation,
partnership, trust or other entity) that (i) is not affiliated with the
Borrower, (ii) is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business and (iii) has total
assets in excess of $500,000,000; and (f) any other Person (other than an
Affiliate of the Borrower) approved by the Administrative Agent and the
Borrower, such approval not to be unreasonably withheld.
"Environmental Action" means any administrative, regulatory or
judicial action, suit, demand, demand letter, claim, notice of non-compliance
or violation, investigation, proceeding, consent order or consent agreement
based upon or arising out of any Environmental Law or any Environmental Permit,
including without limitation (a) any claim by any governmental or regulatory
authority for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any Environmental Law and (b) any claim by any
third party seeking damages, contribution, or injunctive relief arising from
alleged injury or threat of injury to health, safety or the environment.
<PAGE>
14
"Environmental Law" means any federal, state or local law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
relating to the environment, health or safety including, without limitation,
CERCLA, the Resource Conservation and Recovery Act, the Hazardous Materials
Transportation Act, the Clean Water Act, the Toxic Substances Control Act, the
Clean Air Act, the Safe Drinking Water Act, the Atomic Energy Act, the Federal
Insecticide, Fungicide and Rodenticide Act and the Occupational Safety and
Health Act.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
"Equity Contribution Agreement" means the Amended and Restated Equity
Contribution Agreement dated as of December 16, 1996, between the Borrower and
the Borrower Parent, as such agreement may be amended or otherwise modified
from time to time in accordance with its terms.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" of any Person means any other Person that for
purposes of Title IV of ERISA is a member of such Person's controlled group, or
under common control with such Person, within the meaning of Section 414 of the
Code.
"ERISA Event" with respect to any Person means (a) the occurrence of a
reportable event, within the meaning of Section 4043 of ERISA, with respect to
any Plan of such Person or any of its ERISA Affiliates unless the 30-day notice
requirement with respect to such event has been waived by the PBGC; (b) the
provision by the administrator of any Plan of such Person or any of its ERISA
Affiliates of a notice of intent to terminate such Plan, pursuant to Section
4041(a)(2) of ERISA (including any such notice with respect to a plan amendment
referred to in Section 4041(e) of ERISA); (c) the cessation of operations at a
facility of such Person or any of its ERISA Affiliates in the circumstances
described in Section 4062(e) of ERISA; (d) the withdrawal by such Person or any
of its ERISA Affiliates from a Multiple Employer Plan during a plan year for
which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA;
(e) the failure by such Person or any of its ERISA Affiliates to make a payment
to a Plan described in Section 302(f)(1) of ERISA; (f) the adoption of an
amendment to a Plan of such Person or any of its ERISA Affiliates requiring the
provision of security to such Plan, pursuant to Section 307 of ERISA; or (g)
the institution by the PBGC of proceedings to terminate a Plan of such Person
or any of its ERISA Affiliates, pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA that
would constitute grounds for the termination of, or the appointment of a
trustee to administer, such Plan; provided, however, that an event described in
clause (a), (c) or (d) of
<PAGE>
15
this definition, or in clause (b) of this definition solely with respect to a
standard termination under Section 4041(b) of ERISA, shall be an ERISA Event
only if such event is reasonably likely to result in a material liability of
such Person or any of its ERISA Affiliates.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite its
name on Schedule I hereto or in the Assignment and Acceptance pursuant to which
it became a Lender (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Administrative Agent.
"Eurodollar Rate" means, for any Interest Period for each Eurodollar
Rate Advance comprising part of the same Borrowing, an interest rate per annum
equal to the rate per annum obtained by dividing (a) the average (rounded
upward to the nearest whole multiple of 1/100 of 1% per annum, if such average
is not such a multiple) of the rate per annum at which deposits in U.S. dollars
are offered by the principal office of Citibank in London, England to prime
banks in the London interbank market at 11:00 A.M. (London time) two Business
Days before the first day of such Interest Period for a period equal to such
Interest Period by (b) a percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage for such Interest Period. The Eurodollar Rate for each
Interest Period shall be determined by the Administrative Agent on the basis of
applicable rates furnished to and received by the Administrative Agent from
Citibank two Business Days before the first day of such Interest Period,
subject, however, to the provisions of Section 2.06.
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.06(a)(ii).
"Eurodollar Rate Reserve Percentage" of any Lender for any Interest
Period for any Advance means the reserve percentage applicable during such
Interest Period (or if more than one such percentage shall be so applicable,
the daily average of such percentages for those days in such Interest Period
during which any such percentage shall be so applicable) under regulations
issued from time to time by the Board of Governors of the Federal Reserve
System (or any successor) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other marginal
reserve requirement) for such Lender with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities having a term equal to such
Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
<PAGE>
16
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Agreement" means the Exchange Agreement dated as of October
3, 1994 among FN Parent, FN Holdings and Gerald J. Ford.
"Existing Credit Agreement" has the meaning specified in the
Preliminary Statements.
"Existing Lenders" has the meaning specified in the Preliminary
Statements.
"Existing Term Credit Agreement" has the meaning specified in the
Preliminary Statements.
"Existing Term Lenders" has the meaning specified in the Preliminary
Statements.
"Facility" means the Term Facility.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"FG Guarantor" means First Gibraltar Guarantor Corp., a Delaware
corporation.
"Financial Institutions" has the meaning specified in the recital of
parties to this Agreement.
"First Gibraltar" means First Gibraltar Holdings Inc., a Delaware
corporation.
"First Gibraltar Charter Document" means the restated certificate of
incorporation of First Gibraltar.
"First Gibraltar Credit Agreement" means the $150,000,000 Credit
Agreement dated as of September 27, 1996, as heretofore amended, among First
Gibraltar, FG Guarantor,
<PAGE>
17
the banks and other financial institutions party thereto, NationsBank, N.A., as
administrative agent, NationsBanc Capital Markets, Inc., as syndication agent
and Citibank, as documentation agent, as the same may hereafter be amended,
modified or otherwise supplemented from time to time in accordance with the
Loan Documents.
"First Gibraltar Loan Agreement" means the Amended and Restated Loan
Agreement dated as of December 16, 1996 between the Borrower Parent and First
Gibraltar, as amended or otherwise modified from time to time in accordance
with its terms.
"Flavors Guarantor" means Flavors (Parent) Holdings Inc., a Delaware
corporation.
"Flavors Guaranty" means the Fourth Amended and Restated Flavors
Guaranty dated as of March 20, 1997 made by Flavors Guarantor in favor of the
Lenders, the Revolving Credit Agreement Lenders, the Agents, the Revolving
Agents and the Collateral Agent, as such guaranty may be amended or otherwise
modified from time to time in accordance with its terms.
"Flavors Non-Operating Subsidiary" means C&F Guarantor.
"Flavors Pledge Agreement" means the Second Amended and Restated
Flavors Pledge Agreement dated as of December 16, 1996 made by Flavors
Guarantor and The Bank of New York, in its capacity as voting trustee, to the
Collateral Agent, as such agreement may be amended or otherwise modified from
time to time in accordance with its terms.
"FN Documents" means the FN Holdings Debt Document, the FN Holdings
New Debt Document, the Second New FN Holdings Debt Document, the FN Parent Debt
Document, the Exchange Agreement and the Stockholders Agreement.
"FN Escrow" means First Nationwide Escrow Corp., a Delaware
corporation.
"FN Holdings" means First Nationwide Holdings Inc., a Delaware
corporation.
"FN Holdings Debt" means the 12-1/4% Senior Notes due 2001 issued by
FN Holdings in an aggregate principal amount equal to $200,000,000.
"FN Holdings Debt Document" means the Indenture dated as of July 15,
1994 made by FN Holdings in favor of The First National Bank of Boston, as
trustee, in connection with the FN Holdings Debt and any other agreement or
instrument which governs the terms of the FN Holdings Debt.
<PAGE>
18
"FN Holdings New Debt" means the 9-1/8% Senior Subordinated Notes Due
2003 issued by FN Holdings in an aggregate principal amount equal to
$140,000,000.
"FN Holdings New Debt Document" means the Indenture dated as of
January 31, 1996 made by FN Holdings in favor of The Bank of New York, as
trustee, in connection with the FN Holdings New Debt and any other agreement or
instrument which governs the terms of the FN Holdings New Debt.
"FN Holdings Preferred Stock" means the $150,000,000 liquidation value
of Cumulative Perpetual Preferred Stock issued by FN Holdings and any shares of
Cumulative Perpetual Preferred Stock to be issued in lieu of cash dividends
payable on the FN Holdings Preferred Stock.
"FN Management Incentive Plan" means the Management Incentive Plan for
Certain Employees of the Bank established by FN Holdings to provide long-term
incentives to certain key executives of the Bank.
"FN Parent" means First Nationwide (Parent) Holdings Inc., a Delaware
corporation.
"FN Parent Debt" means the 12-1/2% Senior Notes due 2003 issued by FN
Parent in an aggregate principal amount equal to $455,000,000.
"FN Parent Debt Document" means the Indenture dated as of April 15,
1996 made by FN Parent in favor of The Bank of New York, as trustee, in
connection with the FN Parent Debt and any other agreement or instrument which
governs the terms of the FN Parent Debt.
"FN Parties" means the Bank, FN Holdings and FN Parent.
"FN Tax Agreement" means the Tax Sharing Agreement dated as of January
1, 1994 among Mafco, FN Holdings, the Bank and certain Subsidiaries of FN
Holdings and the Bank.
"Four Star" means Four Star Holdings Corp., a Delaware corporation.
"Four Star Pledge Agreement" means the Amended and Restated
Non-Recourse Guaranty and Pledge Agreement dated as of December 16, 1996 made
by Four Star and The Bank of New York, in its capacity as voting trustee, to
the Collateral Agent, as such agreement may be amended or otherwise modified
from time to time in accordance with its terms.
<PAGE>
19
"Fourth Credit Agreement" has the meaning specified in the Revolving
Credit Agreement.
"Fully Satisfied" shall mean, with respect to the Payment Obligations
as of any date, that, on or before such date, (a) the principal of and interest
accrued to such date on all outstanding Advances shall have been paid in full
in cash, (b) the Commitments shall have been terminated in full and (c) all
fees, expenses and other amounts then due and payable which constitute Payment
Obligations shall have been paid in cash; provided, however, that on such date
none of the Administrative Agent and the Lenders shall have made any claims in
respect of Payment Obligations against the Borrower or any other Loan Party
under any provision of any of the Loan Documents that has not been cash
collateralized by an amount sufficient in the reasonable judgment of the
Administrative Agent, the Required Lenders and any such Lender (if such Lender
is not one of the Lenders constituting the Required Lenders) to secure such
claim.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the date of, and used in, the preparation
of the audited consolidated financial statements referred to in Section
4.01(f), except that with respect to (x) the preparation of any financial
statement required to be furnished pursuant to clause (i), (ii) or (iii) of
Section 5.01(j) and (y) changes to financial statement presentation and
accounting policies contemplated by Section 5.02(h), "GAAP" shall mean such
principles as in effect from time to time in the United States of America.
"Guarantor" means each of Mafco, Borrower Parent, Coleman Guarantor,
New World Guarantor, Flavors Guarantor, Cigar Guarantor, C&F Guarantor, Revlon
Worldwide Holdings, Revlon Guarantor and, on and after the MCG Inclusion Date,
MCG.
"Guaranty" means each of the Mafco Guaranty, the Borrower Parent
Guaranty, the Coleman Guaranty, the New World Guaranty, the Flavors Guaranty,
the Cigar Guaranty, the C&F Guaranty, the Revlon Worldwide Holdings Guaranty,
the Revlon Guaranty and, on and after the MCG Inclusion Date, the MCG Guaranty.
"Hazardous Materials" means (a) petroleum or petroleum products,
natural or synthetic gas, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation and radon gas, (b) any substances defined as
or included in the definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "extremely hazardous wastes", "restricted hazardous
wastes", "toxic substances", "toxic pollutants", "contaminants" or
"pollutants", or words of similar import, under any Environmental Law and (c)
any other substance exposure to which is regulated under any Environmental Law.
<PAGE>
20
"Hedge Agreements" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other similar agreements.
"Indemnified Party" has the meaning specified in Section 8.04(c).
"Initial Date" means, for purposes of Section 2.12, in the case of the
Administrative Agent and each Financial Institution, the date of its execution
and delivery of this Agreement and, in the case of each Lender other than a
Financial Institution, the date of the Assignment and Acceptance pursuant to
which it becomes a Lender.
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such
Eurodollar Rate Advance or the date of the Conversion of any Base Rate Advance
into such Eurodollar Rate Advance, and ending on the last day of the period
selected by the Borrower pursuant to the provisions below and, thereafter, each
subsequent period commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period selected by the
Borrower pursuant to the provisions below. The duration of each such Interest
Period shall be one, two, three or six months, as the Borrower may, upon notice
received by the Administrative Agent not later than 11:00 A.M. (New York City
time) on the third Business Day prior to the first day of such Interest Period,
select; provided, however, that
(i) the Borrower may not select any Interest Period with respect to
any Eurodollar Rate Advance which ends after the Termination Date;
(ii) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period shall be extended to occur on the next succeeding Business Day,
provided that, if such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day; and
(iii) whenever the first day of any Interest Period occurs on a day in
a calendar month for which there is no numerically corresponding day in the
calendar month that succeeds such initial calendar month by the number of
months equal to the number of months in such Interest Period, such Interest
Period shall end on the last Business Day of such succeeding calendar
month.
"Investment" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any capital stock, warrants, rights,
options, debt obligations or other securities of such Person, any capital
contribution to such Person or any other investment
<PAGE>
21
in such Person, including, without limitation, any arrangement pursuant to
which the investor incurs Debt of the types referred to in clauses (i) and (j)
of the definition of "Debt" in respect of such Person.
"L/C Cash Collateral Account" has the meaning specified in the
Borrower Security Agreement.
"Lenders" means the Financial Institutions listed on the signature
pages hereof and each Eligible Assignee that shall become a party hereto
pursuant to Section 8.07.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on title
to real property.
"Loan Documents" means this Agreement, the Notes, each Guaranty, each
Collateral Document, the Equity Contribution Agreement and the First Gibraltar
Loan Agreement.
"Loan Party" means each of the Borrower, each Guarantor, M&F, Andrews,
Four Star, New Coleman, First Gibraltar and Revlon Worldwide Parent.
"Look-Forward Certificate" has the meaning specified in Section
5.01(k).
"M&F" means MacAndrews & Forbes Holdings Inc., a Delaware corporation.
"M&F Pledge Agreement" means the Amended and Restated Non-Recourse
Guaranty and Pledge Agreement dated as of December 16, 1996 made by M&F to the
Collateral Agent, as such agreement may be amended or otherwise modified from
time to time in accordance with its terms.
"Mafco" has the meaning specified in the Preliminary Statements.
"Mafco Collateral Account" has the meaning specified in the Mafco
Security Agreement.
"Mafco Finance Required Lenders" means at any time Lenders and
Revolving Credit Agreement Lenders owed or holding at least a majority in
interest of the sum of (a) the aggregate principal amount of the Advances
outstanding at such time, (b) the aggregate principal amount of the Debt
outstanding at such time under the Revolving Credit Agreement, (c) the
aggregate Available Amount (as defined in the Revolving Credit Agreement) of
all
<PAGE>
22
Letters of Credit (as defined in the Revolving Credit Agreement) outstanding at
such time, (d) the aggregate unused Commitments at such time, and (e) the
aggregate "Unused Revolving Credit Commitment" under the Revolving Credit
Agreement at such time (provided that, for purposes hereof, neither the
Borrower, nor any of its Affiliates, if a Lender or a Revolving Credit
Agreement Lender, shall be included in (x) the Lenders and the Revolving Credit
Agreement Lenders holding such amount of the Advances, the Debt or the
Available Amount of all Letters of Credit or having such amount of the
Commitments or the "Unused Revolving Credit Commitment" or (y) determining the
aggregate unpaid principal amount of the Advances or such Debt, the total
Commitments or the total "Unused Revolving Credit Commitments" under the
Revolving Credit Agreement); provided, however, that if any Lender shall be a
Defaulting Lender at such time or any Revolving Credit Agreement Lender shall
be a "Defaulting Lender" under the Revolving Credit Agreement at such time,
there shall be excluded from the determination of Mafco Finance Required
Lenders at such time (i) the aggregate principal amount of the Advances owing
to such Lender (in its capacity as Lender) and outstanding at such time, (ii)
the aggregate principal amount of Debt under the Revolving Credit Agreement
owing to such Revolving Credit Agreement Lender and outstanding at such time,
(iii) such Lender's Pro Rata Share (as defined in the Revolving Credit
Agreement) of the aggregate Available Amount of all Letters of Credit issued by
such Revolving Credit Agreement Lender as of such time, (iv) the aggregate
unused portion of the Commitments of such Lender at such time and (v) the
aggregate "Unused Revolving Credit Commitment" of such Revolving Credit
Agreement Lender under the Revolving Credit Agreement at such time; provided
further that on and after the Revolving Credit Agreement Termination Date, the
Mafco Finance Required Lenders shall be the Required Lenders hereunder. For
purposes of this definition, the aggregate principal amount of Letter of Credit
Advances owing to the Issuing Bank (as defined in the Revolving Credit
Agreement) and the Available Amount of each Letter of Credit shall be
considered to be owed to the Revolving Credit Agreement Lenders ratably in
accordance with their respective Revolving Credit Commitment (as defined in the
Revolving Credit Agreement).
"Mafco Guaranty" means the Fifth Amended and Restated Mafco Guaranty
dated as of March 20, 1997 made by Mafco in favor of the Lenders, the Revolving
Credit Agreement Lenders, the Agents, the Revolving Agents and the Collateral
Agent, as such guaranty may be amended or otherwise modified from time to time
in accordance with its terms.
"Mafco Pledge Agreement" means the Second Amended and Restated Pledge
Agreement dated as of December 16, 1996 made by Mafco and The Bank of New York,
in its capacity as voting trustee, to the Collateral Agent, as such agreement
may be amended or otherwise modified from time to time in accordance with its
terms.
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23
"Mafco Security Agreement" means the Fifth Amended and Restated Mafco
Security Agreement dated as of March 20, 1997 made by Mafco to the Collateral
Agent, as such agreement may be amended or otherwise modified from time to time
in accordance with its terms.
"Margin Stock" has the meaning specified in Regulation U of the Board
of Governors of the Federal Reserve System and any successor regulations
thereto, as in effect from time to time.
"Marvel" means Marvel Entertainment Group, Inc., a Delaware
corporation.
"Marvel Inclusion Date" means the date on which Mafco or any of its
Affiliates acquires the New Marvel Shares.
"Marvel Tax Agreements" means (i) the Tax Sharing Agreement dated as
of April 22, 1993 between Mafco and Marvel Holdings Inc., (ii) the Tax Sharing
Agreement dated as of October 20, 1993 between Mafco and Marvel (Parent)
Holdings Inc. and (iii) the Amended and Restated Tax Sharing Agreement dated as
of January 1, 1994 among Mafco, Marvel III Holdings Inc., Marvel and certain
Subsidiaries of Marvel.
"Material Adverse Change" means, with respect to any Person, a
material adverse change in the condition (financial or otherwise), operations,
assets, business or prospects of such Person and its Subsidiaries, taken as a
whole.
"Material Adverse Effect" means, with respect to any Person, a
material adverse effect upon (a) the condition (financial or otherwise),
operations, assets, business or prospects of such Person and its Subsidiaries,
taken as a whole, or (b) the ability of a Loan Party to perform its obligations
under any Loan Document, or (c) the rights and remedies of the Administrative
Agent, the Collateral Agent or any Lender under any Loan Document.
"MCG" means Mafco Consolidated Group Inc., a Delaware corporation.
"MCG Guaranty" means the MCG Guaranty to be made, on the MCG Inclusion
Date, by MCG in favor of the Lenders, the Revolving Credit Agreement Lenders,
the Agents, the Revolving Agents and the Collateral Agent, in form and
substance reasonably satisfactory to the Mafco Finance Required Lenders, as
such guaranty may be amended or otherwise modified from time to time in
accordance with its terms.
"MCG Inclusion Date" means the date on which (x) C&F Guarantor owns
all of the capital stock of MCG and (y) the Administrative Agent and the
Revolving
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24
Administrative Agent deliver a notice to the Borrower that the Administrative
Agent, the Revolving Administrative Agent or the Collateral Agent, as the case
may be, shall have received, in form and substance satisfactory to the
Administrative Agent and in sufficient copies for each Lender (or the
requirement that such document be delivered shall have been duly waived):
(i) certified copies of the resolutions of the board of directors of
MCG approving the MCG Guaranty and the MCG Pledge Agreement, and of all
documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to the MCG Guaranty and the MCG Pledge
Agreement;
(ii) a certificate of the Secretary or an Assistant Secretary of MCG
certifying the names and true signatures of the officers of MCG authorized
to sign the MCG Guaranty and the MCG Pledge Agreement;
(iii) a copy of a certificate of the Secretary of State of the state
of incorporation of each of MCG, Consolidated Cigar Holdings and PCT, dated
reasonably near the MCG Inclusion Date, listing the charter of such Person
and each amendment thereto on file in his office and certifying that (A)
such amendments are the only amendments to such Person's charter on file in
his office, (B) such Person has paid all franchise taxes to the date of
such certificate and (C) such Person is duly incorporated or organized and
in good standing under the laws of such state;
(iv) (A) a certificate of MCG signed on behalf of MCG by its President
or a Vice President and its Secretary or any Assistant Secretary, dated as
of the MCG Inclusion Date (the statements made in such certificate shall be
true on and as of the MCG Inclusion Date), certifying as to (1) the absence
of any amendments to the charter of such Person since the date of the
Secretary of State's certificate referred to in clause (iii) above, (2) the
trueness and correctness of the bylaws of such Person attached to such
certificate, (3) the due incorporation and good standing of such Person as
a corporation under the laws of the relevant state of incorporation, and
the absence of any proceeding for the dissolution or liquidation of such
Person, (4) the truth in all material respects of the representations and
warranties made by such Person contained in the MCG Guaranty and the MCG
Pledge Agreement as though made on and as of the MCG Inclusion Date and (5)
the absence of any event occurring and continuing, or resulting from the
MCG Inclusion Date, that constitutes a Default and (B) a certificate of MCG
signed on behalf of MCG by its President or a Vice President and its
Secretary or any Assistant Secretary, dated as of the MCG Inclusion Date
(the statements made in such certificate shall be true on and as of the MCG
Inclusion Date), certifying as to (1) the absence of any amendments to the
charter of each of Consolidated Cigar Holdings and PCT since the date of
the Secretary of State's Certificate referred to in clause (iii) above, (2)
the trueness and correctness of the bylaws of each of Consolidated Cigar
Holdings and PCT attached to such certificate and (3) the due incorporation
and good
<PAGE>
25
standing of each of Consolidated Cigar Holdings and PCT as a corporation
organized under the laws of the State of Delaware, and the absence of any
proceeding for the dissolution or liquidation of either Consolidated Cigar
Holdings or PCT;
(v) the MCG Guaranty in form and substance reasonably satisfactory to
the Mafco Finance Required Lenders;
(vi) the MCG Pledge Agreement in substantially the form of the Second
Andrews Pledge Agreement and otherwise reasonably satisfactory to the
Administrative Agent, duly executed by MCG, together with (1) certificates
representing the Pledged Shares referred to in the MCG Pledge Agreement
accompanied by undated stock powers executed in blank, (2) acknowledgment
copies or stamped receipt copies of financing statements, duly filed on or
before such date under the Uniform Commercial Code of all jurisdictions
that the Administrative Agent may deem necessary or desirable in order to
perfect the Liens created by the MCG Pledge Agreement, covering the
Collateral described in the MCG Pledge Agreement, and (3) completed
requests for information, dated on or before such date, listing the
financing statements referred to in clause (2) above and all other
effective financing statements filed in the jurisdictions referred to in
clause (2) above that name MCG, as debtor, together with copies of such
other financing statements;
(vii) certified copies of (A) a voting trust agreement among C&F
Guarantor, MCG, the Collateral Agent and The Bank of New York, as voting
trustee, in substantially the form of the voting trust agreements delivered
pursuant to Section 3.01(h)(xiii)(A) of the Existing Credit Agreement and
(B) the charter of MCG, the terms and conditions of which shall be
substantially similar to those contained in the charter of Coleman
Guarantor; and
(viii) favorable opinions of counsel to Mafco reasonably satisfactory
to the Lenders, in form and substance reasonably satisfactory to the
Lenders.
"MCG Pledge Agreement" means the Pledge Agreement to be made, on the
MCG Inclusion Date, by MCG to the Collateral Agent, in substantially the form
of the Second Andrews Pledge Agreement and otherwise reasonably satisfactory to
the Administrative Agent, as such agreement may be amended or otherwise
modified from time to time in accordance with its terms.
"MCG Tax Agreement" means the Tax Sharing Agreement dated as of June
15, 1995 among Mafco, MCG and Subsidiaries of MCG party thereto.
<PAGE>
26
"Multiemployer Plan" of any Person means a multiemployer plan, as
defined in Section 4001(a)(3) of ERISA, which is subject to Title IV of ERISA,
and to which such Person or any of its ERISA Affiliates is making or accruing
an obligation to make contributions, or has within any of the preceding five
plan years made or accrued an obligation to make contributions.
"Multiple Employer Plan" of any Person means a single employer plan,
as defined in Section 4001(a)(15) of ERISA, which is subject to Title IV of
ERISA, and (a) that is maintained for employees of such Person or any of its
ERISA Affiliates and at least one Person other than such Person and its ERISA
Affiliates or (b) that was so maintained and in respect of which such Person or
any of its ERISA Affiliates could have liability under Section 4064 or 4069 of
ERISA in the event such plan has been or were to be terminated.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer
or other disposition of any asset or the sale or issuance by any Person of any
Debt or capital stock, any securities convertible into or exchangeable for
capital stock or any warrants, rights or options to acquire capital stock, the
sum of (i) the aggregate amount of cash received from time to time by or on
behalf of such Person in connection with such transaction plus (ii) the
aggregate principal amount of any Debt listed on Schedule VII hereto that is
assumed, directly or indirectly, by any Person (other than Mafco or an
Affiliate of Mafco) in connection with, or as a result of, such transaction,
after deducting therefrom only (a) reasonable and customary brokerage
commissions, underwriting fees and discounts, legal fees and expenses, finder's
fees, accountants' fees and expenses and other similar fees, expenses and
commissions, (b) the amount of taxes payable or estimated in good faith to be
payable within 12 months following the date of the consummation of such
transaction in connection with or as a result of such transaction and (c) the
amount of any Debt that, by the terms of such Debt, is required to be repaid
upon such disposition, in each case to the extent, but only to the extent, that
the amounts so deducted are payable to a Person that is not an Affiliate (other
than such amounts that are payable by the Borrower and its Subsidiaries to an
Affiliate pursuant to a Related Document) and are properly attributable to such
transaction or to the asset that is the subject thereof.
"Net Equity Value" means for any day of determination for any
Designated Person:
(i) with respect to Coleman Guarantor, an amount (not less than $0)
equal to the excess of (A) the product of the number of shares of common
stock of Coleman owned directly or indirectly by Coleman Guarantor times
the average closing price during the Calculation Period relating to such
day of determination of such common stock on the New York Stock Exchange
over (B) the Defeased Debt Amount of Coleman Guarantor;
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27
(ii) with respect to Mafco, an amount (not less than $0) equal to the
product of the number of News Corp. Preferred ADRs pledged in favor of the
Collateral Agent under the Collateral Documents times the average closing
price of the News Corp. Preferred ADRs during the Calculation Period
relating to such day of determination for such News Corp. Preferred ADRs on
either the New York Stock Exchange or the Nasdaq National Market System;
(iii) with respect to C&F Guarantor, (x) prior to the MCG Inclusion
Date, an amount (not less than $0) equal to the product of the number of
shares of common stock of MCG owned directly or indirectly by C&F Guarantor
times the average closing price during the Calculation Period relating to
such day of determination of such common stock on the New York Stock
Exchange and (y) on and after the MCG Inclusion Date, an amount (not less
than $0) equal to the product of the number of shares of common stock of
Consolidated Cigar Holdings owned directly or indirectly by C&F Guarantor
times the average closing price during the Calculation Period relating to
such day of determination of such common stock on the New York Stock
Exchange;
(iv) with respect to Revlon Worldwide Parent, (x) an amount (not less
than $0) equal to the excess of (A) the product of the number of shares of
common stock of Revlon owned directly or indirectly by Revlon Worldwide
Parent times the average closing price during the Calculation Period
relating to such day of determination of such common stock on the New York
Stock Exchange over (B) the Defeased Debt Amount of Revlon Worldwide Parent
and (y) on and after the Revlon Defeasance Date, an amount (not less than
$0) equal to the sum of (1) the product of the number of shares of common
stock of Revlon pledged in favor of the Collateral Agent under the
Collateral Documents times the average closing price during the Calculation
Period relating to such day of determination of such common stock on the
New York Stock Exchange plus (2) an amount equal to the excess of (I) the
product of the number of shares of common stock of Revlon pledged in favor
of the holders of the Revlon Worldwide Parent Debt times the average
closing price during the Calculation Period relating to such day of
determination of such common stock on the New York Stock Exchange over (II)
the Defeased Debt Amount of Revlon Worldwide Parent;
(v) with respect to MCG (on and after the PCT Inclusion Date), an
amount (not less than $0) equal to the product of the number of shares of
common stock of PCT owned directly or indirectly by MCG times the average
closing price during the Calculation Period relating to such day of
determination of such common stock on the New York Stock Exchange; and
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28
(vi) with respect to the Bank, an amount equal to $500,000,000.
"Net Residual Value" means for any day of determination an amount
equal to the aggregate Net Equity Value of the Designated Persons on such day.
"New Coleman" means New Coleman Holdings Inc., a Kansas corporation.
"New Coleman Pledge Agreement" means the Amended and Restated
Non-Recourse Guaranty and Pledge Agreement dated as of December 16, 1996 made
by New Coleman and The Bank of New York, in its capacity as voting trustee, to
the Collateral Agent, as such agreement may be amended or otherwise modified
from time to time in accordance with its terms.
"New Marvel Shares" means all shares of capital stock of Marvel issued
after the date hereof and received by Andrews or any of its Affiliates.
"New World" means New World Communications Group Incorporated, a
Delaware corporation.
"New World Guarantor" means NWCG (Parent) Holdings Corporation, a
Delaware corporation.
"New World Guaranty" means the Fifth Amended and Restated New World
Guaranty dated as of March 20, 1997 made by New World Guarantor in favor of the
Lenders, the Revolving Credit Agreement Lenders, the Agents, the Revolving
Agents and the Collateral Agent, as such guaranty may be amended or otherwise
modified from time to time in accordance with its terms.
"New World Pledge Agreement" means the Third Amended and Restated
Pledge and Assignment Agreement dated as of March 20, 1997 made by New World
Guarantor to the Collateral Agent, as such agreement may be amended or
otherwise modified from time to time in accordance with its terms.
"Newco" means DROF Holdings Inc., a Delaware corporation.
"Newco Loan" means the loan by First Gibraltar to Newco in an
aggregate principal amount of $150,000,000 for the sole purpose of purchasing
the FN Holdings Preferred Stock.
"News Corp." means The News Corporation Limited, a South Australia
corporation.
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29
"News Corp. Contract" means the Stock Purchase Agreement dated as of
September 24, 1996 among New World Guarantor, News Corp. and Fox Television
Stations, Inc., as such agreement may be amended, modified or supplemented in
accordance with the terms of the Loan Documents.
"News Corp. Preferred ADRs" means the American Depositary Shares of
News Corp., each of which represents four fully paid and nonassessable
Preferred Limited Voting Ordinary Shares, of A $.50 each of News Corp. and the
related warrants, received by New World Guarantor pursuant to the terms of the
News Corp. Contract.
"Notes" means the Term Notes.
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim, whether or not the right
of any creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 6.01(e). Without limiting the generality of the foregoing, the
Obligations of the Loan Parties under the Loan Documents include (a) the
obligation to pay principal, interest, charges, expenses, fees, attorneys' fees
and disbursements, indemnities and other amounts payable by any Loan Party
under any Loan Document and (b) the obligation to reimburse any amount in
respect of any of the foregoing that any Lender, in its sole discretion, may
elect to pay or advance on behalf of such Loan Party.
"Original Credit Agreement" has the meaning given such term in the
Revolving Credit Agreement.
"Other Taxes" has the meaning specified in Section 2.13(b).
"Payment Obligations" shall mean all principal, interest, fees,
charges, expenses, attorneys' fees and expenses, indemnities and any other
amounts payable by the Loan Parties under the Loan Documents.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor agency or entity performing substantially the same functions.
"PCT" means Power Control Technologies, a Delaware corporation.
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30
"PCT Inclusion Date" means the later of (x) the MCG Inclusion Date and
(y) the date on which the common stock of PCT held directly or indirectly by
Mafco shall be pledged in favor of the Collateral Agent.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture or other entity, or a government or any political subdivision or agency
thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Pledge Agreements" means the C&F Pledge Agreement, the Cigar Pledge
Agreement, the Coleman Pledge Agreement, the Coleman Worldwide Pledge
Agreement, the Flavors Pledge Agreement, the Four Star Pledge Agreement, the
Mafco Pledge Agreement, the M&F Pledge Agreement, the New Coleman Pledge
Agreement, the New World Pledge Agreement, the Second Andrews Pledge Agreement,
the Revlon Pledge Agreement, the Revlon Worldwide Holdings Pledge Agreement,
the Revlon Worldwide Parent Pledge Agreement and, on and after the MCG
Inclusion Date, the MCG Pledge Agreement.
"Register" has the meaning specified in Section 8.07(c).
"Related Documents" means the Coleman Tax Agreements, the FN Tax
Agreement, the MCG Tax Agreement, the Revlon Tax Agreements (so long as Revlon
continues to be a member of the affiliated group (within the meaning of Section
1504(a)(1) of the Code) of which Mafco is the common parent), the Consolidated
Cigar Tax Agreement (so long as Consolidated Cigar Holdings continues to be a
member of the affiliated group (within the meaning of Section 1504(a)(1) of the
Code) of which Mafco is the common parent) and the Marvel Tax Agreements (so
long as Marvel continues to be a member of the affiliated group (within the
meaning of Section 1504(a)(1) of the Code) of which Mafco is the common
parent).
"Required Lenders" means, at any time, Lenders owed or holding at
least a majority in interest of the sum of the aggregate principal amount of
the Advances outstanding at such time, or, if no such principal amount is
outstanding at such time, Lenders holding at least a majority in interest of
the aggregate of the Commitments (provided that, for purposes hereof, neither
the Borrower, nor any of its Affiliates, if a Lender, shall be included in (x)
the Lenders holding such amount of the Advances or having such amount of the
Commitments or (y) determining the aggregate unpaid principal amount of the
Advances or the total Commitments); provided, however, that if any Lender shall
be a Defaulting Lender at such time, there shall be excluded from the
determination of Required Lenders at such time (i) the aggregate principal
amount of the Advances owing to such Lender (in its capacity as a Lender)
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31
and outstanding at such time and (ii) the aggregate unused portion of the
Commitments of such Lender at such time.
"Revlon" means Revlon, Inc., a Delaware corporation.
"Revlon Defeasance Date" means the later of (x) the date on which
certain obligations under the Revlon Worldwide Indenture are terminated
pursuant to Section 8.01(b)(ii) thereof and (y) the date on which the shares of
Revlon not required to secure the Revlon Worldwide Parent Debt are pledged in
favor of the Collateral Agent.
"Revlon Entities" means Revlon Guarantor, Revlon Worldwide Holdings,
Revlon Worldwide Parent, Revlon Worldwide and National Health Care Group, Inc.
"Revlon Guarantor" means Revlon Guarantor Corp., a Delaware
corporation.
"Revlon Guaranty" means the Revlon Guaranty dated as of March 20, 1997
made by Revlon Guarantor in favor of the Lenders, the Revolving Credit
Agreement Lenders, the Agents, the Revolving Agents and the Collateral Agent,
as such guaranty may be amended or otherwise modified from time to time in
accordance with its terms.
"Revlon Holdings Statement" shall mean a statement that the sum of the
fair market value of Revlon Worldwide (or any successor thereto) plus the fair
market value of National Health Care Group, Inc. constitutes at least 95% of
the fair market value of Revlon Holdings Inc.
"Revlon Pledge Agreement" means the Pledge Agreement dated as of March
20, 1997 made by Revlon Guarantor to the Collateral Agent, as such agreement
may be amended or otherwise modified from time to time in accordance with its
terms.
"Revlon Tax Agreements" shall have the meaning specified in the Revlon
Guaranty.
"Revlon Worldwide" means Revlon Worldwide Corporation, a Delaware
corporation.
"Revlon Worldwide Bonds" means the Senior Secured Discount Notes due
1998 and the Series B Senior Secured Discount Notes due 1998 issued by Revlon
Worldwide pursuant to the Revlon Worldwide Indenture.
"Revlon Worldwide Holdings" means Revlon Worldwide Holdings Inc., a
Delaware corporation.
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32
"Revlon Worldwide Holdings Guaranty" means the Guaranty dated as of
March 20, 1997 made by Revlon Worldwide Parent in favor of the Lenders, the
Revolving Credit Agreement Lenders, the Agents, the Revolving Agents and the
Collateral Agent, as such guaranty may be amended or otherwise modified from
time to time in accordance with its terms.
"Revlon Worldwide Holdings Pledge Agreement" means the Pledge
Agreement dated as of March 20, 1997 made by Revlon Worldwide Holdings to the
Collateral Agent, as such agreement may be amended or otherwise modified from
time to time in accordance with its terms.
"Revlon Worldwide Indenture" means the Indenture dated as of March 15,
1993 made by Revlon Worldwide in favor of The First National Bank of Boston, as
trustee.
"Revlon Worldwide Parent" means Revlon Worldwide (Parent) Corporation,
a Delaware corporation.
"Revlon Worldwide Parent Debt" means the Senior Secured Discount Notes
due 2001 issued by Revlon Worldwide Parent.
"Revlon Worldwide Parent Debt Document" means the Indenture dated as
of March 1, 1997 between Revlon Worldwide Parent and The Bank of New York, as
trustee, in connection with the Revlon Worldwide Parent Debt and any other
agreement or instrument which governs the terms of the Revlon Worldwide Parent
Debt.
"Revlon Worldwide Parent Pledge Agreement" means the Non-Recourse
Guaranty and Pledge Agreement dated as of March 20, 1997 made by Revlon
Worldwide Parent to the Collateral Agent, as such agreement may be amended or
otherwise modified from time to time in accordance with its terms.
"Revolving Agents" has the meaning specified in the Preliminary
Statements.
"Revolving Administrative Agent" has the meaning specified in the
Preliminary Statements.
"Revolving Credit Agreement" has the meaning specified in the
Preliminary Statements.
"Revolving Credit Agreement Lenders" has the meaning specified in the
Preliminary Statement.
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33
"Revolving Credit Agreement Termination Date" means the date on which
the "Payment Obligations" (as defined in the Revolving Credit Agreement) shall
be "Fully Satisfied" (as defined in the Revolving Credit Agreement).
"Revolving Credit Facility" has the meaning given such term in the
Revolving Credit Agreement.
"Revolving Documentation Agent" has the meaning specified in the
Preliminary Statements.
"Revolving Syndication Agent" has the meaning specified in the
Preliminary Statements.
"Second Andrews Pledge Agreement" means the Second Amended and
Restated Non-Recourse Guaranty and Pledge Agreement dated as of December 16,
1996 made by Andrews and The Bank of New York, in its capacity as voting
trustee, to the Collateral Agent, as such agreement may be amended or otherwise
modified from time to time in accordance with its terms.
"Second Credit Agreement" has the meaning given such term in the
Revolving Credit Agreement.
"Second Mafco Collateral Account" has the meaning specified in the
Mafco Security Agreement.
"Second New FN Holdings Debt" means the 10-5/8% Senior Subordinated
Notes due 2003 issued by FN Escrow in an aggregate principal amount equal to
$575,000,000, which will be assumed by FN Holdings upon the merger of FN Escrow
with and into FN Holdings.
"Second New FN Holdings Debt Document" means the Indenture dated as of
September 19, 1996 between FN Escrow and The Bank of New York, as trustee, in
connection with the Second New FN Holdings Debt and any other agreement or
instrument which governs the terms of the Second New FN Holdings Debt.
"Security Agreements" means the Borrower Security Agreement, the
Borrower Parent Security Agreement and the Mafco Security Agreement.
"Single Employer Plan" of any Person means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, which is subject to Title IV of ERISA,
and (a) that is
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34
maintained for employees of such Person or any of its ERISA Affiliates and no
Person other than such Person and its ERISA Affiliates or (b) in respect of
which such Person or any of its ERISA Affiliates could have liability under
Section 4069 of ERISA in the event such plan has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair
salable value of the assets of such Person is not less than the amount that
will be required to pay the probable liability of such Person on its debts as
they become absolute and matured, (c) such Person does not intend to, and does
not believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature and (d) such Person is not
engaged in business or a transaction, and is not about to engage in business or
a transaction, for which such Person's property would constitute an
unreasonably small capital. The amount of contingent liabilities at any time
shall be computed as the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
"Specified Holding Company Debt" means the 13% Subordinated Debentures
due March 1, 1999 issued by M&F pursuant to the Indenture dated as of March 1,
1984 between M&F and the United States Trust Company of New York and the 10%
Senior Subordinated Debentures due 1999 issued by Andrews pursuant to the
Indenture dated as of June 4, 1990 between Andrews and First Trust of
California, National Association (as successor trustee to Security Pacific
National Trust Company (New York)).
"Stockholders Agreement" means the Stockholders Agreement dated as of
October 3, 1994, among FN Parent, FN Holdings and Gerald J. Ford, as such
agreement may be amended, modified or otherwise supplemented from time to time
with the consent of the Required Lenders.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, trust or estate of which (or in which) more than 50% of (a) the Voting
Stock of such corporation, (b) the interest in the capital or profits of such
partnership or joint venture or (c) the beneficial interest in such trust or
estate is at the time directly or indirectly owned or controlled by such
Person, by such Person and one or more of its other Subsidiaries or by one or
more of such Person's other Subsidiaries; provided, however, that for all
purposes of the Loan Documents, Toy Biz, Inc. shall not be a Subsidiary of any
of the Loan Parties.
"Supermajority Lenders" means at any time Lenders owed or holding at
least 67% of the sum of the aggregate principal amount of the Advances
outstanding at such time or, if no such principal amount is outstanding at such
time, Lenders holding at least a majority
<PAGE>
35
in interest of the aggregate of the Commitments (provided that, for purposes
hereof, neither the Borrower nor any of its Affiliates, if a Lender, shall be
included in (x) the Lenders holding such amount of the Advances or having such
amount of the Commitments or (y) determining the aggregate unpaid principal
amount of the Advances or the total Commitments); provided, however, that if
any Lender shall be a Defaulting Lender at such time, there shall be excluded
from the determination of Supermajority Lenders at such time (i) the aggregate
principal amount of the Advances owing to such Lender (in its capacity as a
Lender) and outstanding at such time and (ii) the aggregate unused portions of
the Commitments of such Lender at such time.
"Syndication Agent" has the meaning specified in the recital of
parties to this Agreement.
"Tax Certificate" has the meaning specified in Section 5.01(j)(xiii).
"Taxes" has the meaning specified in Section 2.12(a).
"Term Advance" has the meaning specified in Section 2.01(a).
"Term Borrowing" means a borrowing consisting of simultaneous Term
Advances of the same Type made by the Lenders.
"Term Commitment" means, with respect to any Lender at any time, the
amount set forth opposite such Lender's name on Schedule I hereto under the
caption "Term Commitment" or, if such Lender has entered into one or more
Assignments and Acceptances, set forth for such Lender in the Register
maintained by the Administrative Agent pursuant to Section 8.07(c) as such
Lender's "Term Commitment", as such amount may be reduced at or prior to such
time pursuant to Section 2.04.
"Term Credit Agreement Termination Date" means the date on which the
Payment Obligations have been Fully Satisfied.
"Term Facility" means, at any time, the aggregate amount of the
Lenders' Term Commitments at such time.
"Termination Date" means the earlier of (a) March 20, 1999 or (b) the
date of termination in whole of the Term Commitments pursuant to Section 2.04
or 6.01.
"Term Note" means a promissory note of the Borrower payable to the
order of any Lender, in substantially the form of Exhibit A hereto, evidencing
the aggregate
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36
indebtedness of the Borrower to such Lender resulting from the Term Advances
made by such Lender.
"Third Credit Agreement" has the meaning specified in the Revolving
Credit Agreement.
"Treasury Regulations" means the temporary and final regulations
promulgated under the Internal Revenue Code of 1986, as amended from time to
time.
"Type" refers to the distinction between Advances bearing interest at
the Base Rate and Advances bearing interest at the Eurodollar Rate.
"Unfunded Pension Liabilities" with respect to any Plan means the
excess, if any, of its accumulated benefit obligation ("ABO"), as determined in
accordance with Statement of Financial Accounting Standards No. 87 or any
successor thereto ("FAS 87") over the fair market value of its assets (as of
such date) (provided that in determining the ABO for this purpose, the
interest, mortality and other relevant actuarial assumptions used to fund such
Plan as of its most recent actuarial valuation) shall be used instead of the
interest, mortality and other relevant actuarial assumptions that would
otherwise be prescribed by FAS 87.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even though the right
so to vote has been suspended by the happening of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
ERISA.
"Withdrawal Liability" has the meaning specified in Part I of Subtitle
E of Part IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP.
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37
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Term Advances. Each Lender severally agrees, on the
terms and conditions hereinafter set forth, to make a single advance (a "Term
Advance") to the Borrower at any time on or after the Effective Date but in any
event on or prior to April 1, 1997 in an amount not to exceed such Lender's
Term Commitment at such time. The Term Borrowing shall consist of Term Advances
made simultaneously by the Lenders ratably according to their Term Commitments.
Amounts borrowed under this Section 2.01 and repaid or prepaid may not be
reborrowed.
SECTION 2.02. Making the Advances. (a) Except as otherwise provided in
Section 2.15, each Borrowing shall be made on notice given not later than 11:00
A.M. (New York City time) on the first Business Day prior to the date of a
proposed Borrowing consisting of Base Rate Advances or the third Business Day
prior to the date of a proposed Borrowing consisting of Eurodollar Rate
Advances, by the Borrower to the Administrative Agent, which shall give to each
Lender prompt notice thereof by telecopier, telex or cable. Each such notice of
a Borrowing (a "Notice of Borrowing") shall be by telecopier, telex or cable,
and, with respect to a Notice of Borrowing by telex or cable, confirmed
immediately thereafter in writing, in substantially the form of Exhibit C
hereto, specifying therein the requested (i) date of such Borrowing, (ii) Type
of Advances comprising such Borrowing, (iii) aggregate amount of such Borrowing
and (iv) Interest Period for each Eurodollar Rate Advance included in such
Borrowing. In the case of a proposed Borrowing comprised of Eurodollar Rate
Advances, the Administrative Agent shall promptly notify the Borrower and each
Lender of the applicable interest rate under Section 2.06(a)(ii). Each Lender
shall, before 12:00 noon (New York City time) on the date of such Borrowing,
make available for the account of its Applicable Lending Office to the
Administrative Agent at the Administrative Agent's Account, in same day funds,
such Lender's ratable portion of such Borrowing. After the Administrative
Agent's receipt of such funds and upon fulfillment of the applicable conditions
set forth in Article III, the Administrative Agent will make such funds
available by crediting the Borrower's Account.
(b) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. In the case of any Borrowing that the related Notice of Borrowing
specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall
indemnify each Lender against any loss, cost or expense incurred by such Lender
as a result of any failure to fulfill on or before the date specified in such
Notice of Borrowing for such Borrowing the applicable conditions set forth in
Article III, including, without limitation, any loss, cost or expense incurred
by reason of the liquidation or reemployment of deposits or other funds
acquired by
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38
such Lender to fund the Advance to be made by such Lender as part of such
Borrowing when such Advance, as a result of such failure, is not made on such
date.
(c) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume, or at its option request
confirmation from such Lender, that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
subsection (a) of this Section 2.02 and the Administrative Agent may, in
reliance upon such assumption or confirmation (as the case may be), make
available to the Borrower on such date a corresponding amount. If and to the
extent that such Lender shall not have so made such ratable portion available
to the Administrative Agent, such Lender and the Borrower severally agree to
repay to the Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the
Administrative Agent, at (i) in the case of the Borrower, the interest rate
applicable at such time under Section 2.06 to Advances comprising such
Borrowing and (ii) in the case of such Lender, the cost (expressed as a rate
per annum) to the Administrative Agent of funding such Lender's ratable
portion; provided, however, that, upon the request of such Lender, the
Administrative Agent shall provide such Lender with a certificate as to the
calculation of such amount. If such Lender shall repay to the Administrative
Agent such corresponding amount, such amount so repaid shall constitute such
Lender's Advance as part of such Borrowing for purposes of this Agreement.
(d) The failure of any Lender to make the Advance to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Advance on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Advance to
be made by such other Lender on the date of any Borrowing.
(e) The Borrower may not request a Borrowing comprised of Eurodollar
Rate Advances or, pursuant to Section 2.10, Convert Base Rate Advances into
Eurodollar Rate Advances or select a new Interest Period for existing
Eurodollar Rate Advances if, after the making or Conversion of such Advances or
the selection of such Interest Period, the number of outstanding Borrowings
comprised of Eurodollar Rate Advances having different Interest Periods
(whether of different duration or commencing on different dates) would exceed 6.
SECTION 2.03. Repayment. The Borrower shall repay to the
Administrative Agent for the ratable account of the Lenders on the Termination
Date the aggregate principal amount of the Term Advances then outstanding.
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39
SECTION 2.04. Optional Termination or Reduction of the Commitments.
The Borrower shall have the right, upon at least three Business Days' prior
notice to the Administrative Agent, to terminate in whole or reduce ratably in
part the unused portions of the Term Commitments; provided that each partial
reduction (i) shall be in an aggregate amount of $10,000,000 or an integral
multiple of $1,000,000 in excess thereof and (ii) shall be made ratably among
the Lenders in accordance with their Commitments.
SECTION 2.05. Prepayments. (a) Optional. The Borrower may, upon at
least one Business Day's notice to the Administrative Agent, in the case of
Base Rate Advances, and three Business Days' notice to the Administrative
Agent, in the case of Eurodollar Rate Advances, stating the proposed date, and
the aggregate principal amount of the prepayment, and if such notice is given,
the Borrower shall, prepay the outstanding principal amounts of the Advances
comprising part of the same Borrowing in whole or ratably in part, together
with accrued interest to the date of such prepayment on the principal amount so
prepaid; provided, however, that, with respect to any prepayment made in
connection with the provisions of Section 7(o) of the Mafco Guaranty, no such
notice shall be required; provided further that (x) each partial prepayment
(other than a prepayment made in connection with the provisions of Section 7(o)
of the Mafco Guaranty) shall be in an aggregate principal amount not less than
$10,000,000 or an integral multiple of $1,000,000 in excess thereof (or, if the
aggregate principal amount of all Advances that constitute part of such
Borrowing is less, such aggregate principal amount) and (y) in the event any
such prepayment of Eurodollar Rate Advances is not made on the last day of an
Interest Period, the Borrower shall be obligated to reimburse the Lenders in
respect thereof pursuant to Section 8.04(b).
(b) Mandatory. (i) The Borrower shall, on any date (A) on which a cash
equity contribution is deposited in the Borrower Collateral Account as a result
of a loan made by First Gibraltar to the Borrower Parent pursuant to the terms
of the First Gibraltar Loan Agreement or on which a deposit of amounts paid
under or in connection with any Related Documents is made to the Mafco
Collateral Account or on which a deposit of amounts constituting Net Cash
Proceeds from an Asset Sale is made to the Mafco Collateral Account and (B)
either (I) a Default has occurred and is continuing, (II) the Borrower fails to
deliver a Look-Forward Certificate or a Deposit Certificate with respect to
such deposit in accordance with the terms of Section 5.01(k) or (III) the Mafco
Finance Required Lenders determine, in their reasonable discretion, within 15
Business Days following the date of the receipt of the Look-Forward Certificate
or within 2 Business Days following the date of the receipt of Deposit
Certificate, as the case may be, referred to in clause (B)(II), that the pro
forma amounts available to be loaned by First Gibraltar to Borrower Parent,
together with amounts received by Mafco pursuant to or in connection with any
Related Document, will be less than $15 million in any calendar quarter (of
which at least $10 million shall be from amounts available to be loaned by
First Gibraltar to Borrower Parent) or will not be sufficient to pay interest
on the Advances then outstanding and interest on the Debt then outstanding
under the
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40
Revolving Credit Agreement, prepay an aggregate principal amount of the
Advances comprising part of the same Borrowings equal to an amount equal to the
excess of (x) the amount of such cash equity contribution or the amount on
deposit in the Mafco Collateral Account, as the case may be, plus any interest
on Collateral Investments made with such contribution or deposit over (y) the
sum of (1) the amount of interest and fees then due and payable in respect of
the Term Facility plus (2) the amount of expenses of the Administrative Agent
(including the reasonable fees and expenses of counsel to the Administrative
Agent) then due and payable. Each such prepayment shall be applied ratably to
the Term Facility and shall be made ratably among the Lenders in accordance
with their Commitments. Any such amounts remaining after the foregoing
application shall be applied as set forth in Section 2.05(b)(i) of the
Revolving Credit Agreement.
(ii) The Borrower shall:
(A) on the date of receipt by any A Company of the Net Cash Proceeds
of issuances, sales or liquidations of any capital stock (including any
securities convertible into or exchangeable for capital stock or any
warrants, rights or options to acquire capital stock) of any A Company
(other than any Net Cash Proceeds in respect of any Asset Sale),
(B) on the date of receipt by any A Company of any dividends, other
distributions or any loans or advances made in respect of the capital stock
of any other A Company (other than FN Holdings and FN Parent) or any
Designated Operating Company (provided that this clause (B) shall not apply
(1) the dividend made by MCG in accordance with the public announcements
made prior to the date hereof and (2) to the receipt by any A Company of
any dividends, other distributions or any loans or advances made in respect
of all or any portion of the proceeds received by Mafco or any of its
Subsidiaries from any Asset Sale or any sale, lease, transfer or other
disposition specified in clauses (i) through (iv) of the definition of
"Asset Sale"),
(C) on the date of receipt by any A Company of the proceeds of
distributions, dividends or any loans or advances made on account of or as
a result of the issuance, sale or liquidation of any capital stock
(including any securities convertible into or exchangeable for capital
stock or any warrants, rights or options to acquire capital stock but
excluding any Asset Sale) of, or the sale, issuance or incurrence of any
Debt by, any Designated Operating Company, and
(D) on the date of receipt by any A Company of the Net Cash Proceeds
from the sale, issuance or incurrence by any A Company of any Debt (other
than any sale, issuance or incurrence by Revlon Holdings Inc. of any Debt
to any of its Subsidiaries),
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41
prepay an aggregate principal amount of the Advances comprising part of the
same Borrowings equal to an amount equal to the excess of (x) the amount so
received (except, in each case, to the extent (1) required pursuant to the
terms of any agreement or instruments relating to Debt existing on the date
hereof or otherwise approved by the Mafco Finance Required Lenders of any A
Company or Designated Operating Company to prepay or redeem or purchase such
Debt or (2) prohibited to be so applied by the terms of any agreement or
instrument relating to Debt existing on the date hereof or otherwise approved
by the Mafco Finance Required Lenders of any A Company or Designated Operating
Company) over (y) the sum of (1) the amount of interest and fees then due and
payable in respect of the Term Facility plus (2) the amount of expenses of the
Administrative Agent (including the reasonable fees and expenses of counsel to
the Administrative Agent) then due and payable. Each such prepayment shall be
applied ratably to the Term Facility and shall be made ratably among the
Lenders in accordance with their Commitments. Any such amounts remaining after
the foregoing application shall be applied as set forth in Section 2.05(b)(ii)
of the Revolving Credit Agreement.
(iii) The Borrower shall, on the date of receipt by Mafco or any of
its Subsidiaries (other than the Bank and its Subsidiaries) of the Net Cash
Proceeds from the sale, transfer or other disposition of (x) all or any portion
of the capital stock of the Bank (other than any issuance of capital stock by
the Bank or any Subsidiary of the Bank) or (y) any asset of the Bank, prepay an
aggregate principal amount of the Advances comprising part of the same
Borrowings equal to an amount equal to the excess of (A) such Net Cash Proceeds
(other than the portion of such Net Cash Proceeds required to be paid to the
holders of the Class B common stock of FN Holdings and the holders of the FN
Holdings Preferred Stock) over (B) the sum of (1) the amount of interest and
fees then due and payable in respect of the Term Facility plus (2) the amount
of expenses of the Administrative Agent (including the reasonable fees and
expenses of counsel to the Administrative Agent) then due and payable. Each
such prepayment shall be applied ratably to the Term Facility and shall be made
ratably among the Lenders in accordance with their Commitments. Any such
amounts remaining after the foregoing application shall be applied as set forth
in Section 2.05(b)(iii) of the Revolving Credit Agreement.
(iv) On and after the date on which Mafco and its Subsidiaries have
received Net Cash Proceeds in an amount equal to the Asset Sale Threshold from
Asset Sales, upon any Asset Sale in respect of which Mafco and its Subsidiaries
have received Net Cash Proceeds (which, together with the aggregate amount of
Net Cash Proceeds from and after the Effective Date from Asset Sales, exceeds
the Asset Sale Threshold), the Borrower shall prepay an aggregate principal
amount of the Advances comprising part of the same Borrowings in an amount
equal to the excess of (x) the sum of (A) 50% of that portion of the Net Cash
Proceeds (up to $150 million) in excess of the Asset Sale Threshold (after
taking into account the aggregate amount of Net Cash Proceeds from and after
the Effective Date from Asset Sales)
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from such Asset Sale plus (B) 100% of that portion of the Net Cash Proceeds
from such Asset Sale in excess of the sum of the Asset Sale Threshold plus $150
million (after taking into account the aggregate amount of Net Cash Proceeds
from and after the Effective Date from Asset Sales) over (y) the sum of (1) the
amount of interest and fees then due and payable in respect of the Term
Facility plus (2) the amount of expenses of the Administrative Agent (including
the reasonable fees and expenses of counsel to the Administrative Agent) then
due and payable. Each such prepayment shall be applied ratably to the Term
Facility and shall be made ratably among the Lenders in accordance with their
Commitments. Any such amounts remaining after the foregoing application shall
be applied as set forth in Section 2.05(b)(iv) of the Revolving Credit
Agreement.
(v) The Borrower shall, on each date that an "Event of Default" set
forth in Section 6.01(a) of the Revolving Credit Agreement shall have occurred
and be continuing, prepay an aggregate principal amount of the Advances
comprising part of the same Borrowings equal to an amount equal to the excess
of (x) the amount on deposit in the Second Mafco Collateral Account over (y)
the sum of (1) the amount of interest and fees then due and payable in respect
of the Term Facility plus (2) the amount of expenses of the Administrative
Agent (including the reasonable fees and expenses of counsel to the
Administrative Agent) then due and payable plus (3) the aggregate amount paid
(including the aggregate amount of interest, fees and expenses then due and
payable in respect of the "Facilities" under the Revolving Credit Agreement)
from such amount on deposit pursuant to the terms of Section 2.05(b)(v) and/or
2.06(b)(i) of the Revolving Credit Agreement. Each such prepayment of the Term
Facility shall be applied ratably to the Term Facility and shall be made
ratably among the Lenders in accordance with their Commitments. If an "Event of
Default" set forth in Section 6.01(a) of the Revolving Credit Agreement shall
occur and be continuing at the same time as an Event of Default set forth in
Section 6.01(a) shall occur and be continuing, such amount shall be applied pro
rata to the Term Facility and the "Facilities" under the Revolving Credit
Agreement and such pro rata amount shall be applied to the Term Facility as set
forth in this Section 2.05(b)(v).
(vi) The Borrower shall, on each date that an Event of Default set
forth in Section 6.01(a) shall have occurred and be continuing, prepay an
aggregate principal amount of the Advances comprising part of the same
Borrowings equal to an amount equal to the excess of (x) the amount on deposit
in the Second Mafco Collateral Account over (y) the sum of (1) the amount of
interest then due and payable in respect of the Term Facility plus (2) the
amount of expenses of the Administrative Agent (including the reasonable fees
and expenses of counsel to the Administrative Agent) then due and payable. Each
such prepayment of the Term Facility shall be applied ratably to the Term
Facility and shall be made ratably among the Lenders in accordance with their
Commitments. Any amounts remaining on deposit in the Second Mafco Account after
the foregoing application shall be applied as set forth in
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Section 2.05(b)(vi) of the Revolving Credit Agreement. If an Event of Default
set forth in Section 6.01(a) shall occur and be continuing at the same time as
an "Event of Default" set forth in Section 6.01(a) of the Revolving Credit
Agreement shall occur and be continuing, such amount (less the sum of (1) the
amount of interest then due and payable in respect of the "Facilities" under
the Revolving Credit Agreement plus (2) the amount of expenses of the
"Administrative Agent" under the Revolving Credit Agreement (including the
reasonable fees and expenses of counsel to such Administrative Agent) then due
and payable) shall be applied pro rata to the Term Facility and to the
"Facilities" under the Revolving Credit Agreement and such pro rata amount
shall be applied to the Term Facility as set forth in this Section 2.05(b)(vi).
(vii) If, as a result of the making of any prepayment required to be
made pursuant to this Section 2.05, the Borrower would incur costs pursuant to
Section 8.04(b), the Borrower may deposit the amount of such prepayment with
the Administrative Agent, for the benefit of the Lenders, in a cash collateral
account, until the end of the applicable Interest Period at which time such
payment shall be made. The Borrower hereby grants to the Administrative Agent,
for the benefit of the Lenders, a security interest in all amounts in which the
Borrower has any right, title or interest which are from time to time on
deposit in such cash collateral account and expressly waives all rights (which
rights the Borrower hereby acknowledges and agrees are vested exclusively in
the Administrative Agent) to exercise dominion or control over any such
amounts.
SECTION 2.06. Interest. (a) Ordinary Interest. The Borrower shall pay
interest on the unpaid principal amount of each Advance owing to each Lender
from the date of such Advance until such principal amount shall be paid in
full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance is a Base
Rate Advance, a rate per annum equal at all times to the sum of the Base
Rate in effect from time to time plus the Applicable Margin in effect from
time to time, payable in arrears quarterly on the first Business Day of
each March, June, September and December during such periods, commencing
June 2, 1997, and on the date such Base Rate Advance shall be Converted or
paid in full.
(ii) Eurodollar Rate Advances. During such periods as such Advance is
a Eurodollar Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the sum of the Eurodollar Rate for such
Interest Period plus the Applicable Margin in effect from time to time,
payable in arrears on the last day of such Interest Period and, if such
Interest Period has a duration of more than three months, on each day that
occurs during such Interest Period every three months from the first day of
such Interest Period.
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(b) Default Interest. The Borrower shall pay on demand interest on the
unpaid principal amount of each Advance that is not paid when due and on the
unpaid amount of all interest, fees and other amounts then due and payable
hereunder that is not paid when due from the due date thereof to the date paid,
at a rate per annum equal at such time to (i) in the case of any amount of
principal, 2% per annum above the rate of interest per annum required to be
paid on such Advance immediately prior to the date on which such amount became
due and payable and (ii) in the case of all other amounts, 2% per annum above
the rate per annum required to be paid on Base Rate Advances pursuant to
Section 2.06(a)(i) above.
SECTION 2.07. Interest Rate Determination. (a) The Administrative
Agent shall give prompt notice to the Borrower and each Lender of the
applicable interest rate determined by the Administrative Agent for purposes of
Section 2.06(a)(i) or (ii), and the applicable rate, if any, furnished by
Citibank for the purpose of determining the applicable interest rate under
Section 2.06(a)(i) or (ii).
(b) If Citibank cannot furnish timely information to the
Administrative Agent for determining the Eurodollar Rate, the Administrative
Agent shall forthwith notify the Borrower and each Lender that the interest
rate cannot be determined for such Eurodollar Rate Advances, whereupon (i) each
such Eurodollar Rate Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance and (ii)
the obligation of the Lenders to make, or to Convert Advances into, Eurodollar
Rate Advances shall be suspended until the Administrative Agent shall notify
the Borrower that Citibank has determined that the circumstances causing such
suspension no longer exist.
(c) If the Required Lenders notify the Administrative Agent that the
Eurodollar Rate for any Interest Period for such Eurodollar Rate Advances will
not adequately reflect the cost to such Required Lenders of making, funding or
maintaining their pro rata shares of such Eurodollar Rate Advances for such
Interest Period, the Administrative Agent shall forthwith so notify the
Borrower and the Lenders, whereupon (i) each such Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance and (ii) the obligation of the Lenders to
make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended
until the Administrative Agent shall notify the Borrower that such Required
Lenders have determined that the circumstances causing such suspension no
longer exist.
(d) If the Borrower shall fail to select the duration of any Interest
Period for any Eurodollar Rate Advances in accordance with the provisions
contained in the definition of "Interest Period" in Section 1.01, the
Administrative Agent will forthwith notify the Borrower and the Lenders and the
Interest Period for such Eurodollar Rate Advances will be one month.
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SECTION 2.08. Fees. (a) Commitment Fee. The Borrower agrees to pay to
the Administrative Agent for the account of the Lenders a commitment fee on the
average daily unused Term Commitment of such Lender, from the date hereof, in
the case of each Financial Institution, and from the effective date specified
in the Assignment and Acceptance pursuant to which it became a Lender, in the
case of each other Lender, until the Termination Date at a rate equal to 1/2 of
1% per annum, payable in arrears on the date of the Term Borrowing and on the
Termination Date.
(b) Other Fees. The Borrower shall pay to the Administrative Agent for
its own account such fees as are set forth in the fee letter dated March 20,
1997 between Mafco and Citibank, as the same may be amended or otherwise
modified from time to time.
SECTION 2.09. Increased Costs; Illegality. (a) Except as to taxes,
levies, imposts, deductions, charges, withholdings or liabilities with respect
thereto (it being understood that the Borrower shall not have any liability for
any taxes, levies, imposts, deductions, charges, withholdings or liabilities
with respect thereto, except as provided in Section 2.12), if, due to either
(i) the introduction of or any change (other than any change by way of
imposition or increase of reserve requirements included in the Eurodollar Rate
Reserve Percentage) in or in the interpretation of any law or regulation or
(ii) the compliance by any Lender with any guideline or request from any
central bank or other governmental authority in any case introduced, changed,
interpreted or requested after the date hereof (whether or not having the force
of law), there shall be (x) imposed, modified or deemed applicable any reserve,
special deposit or similar requirement against assets held by, or letters of
credit or guarantees issued by, or deposits in or for the account of, any
Lender or (y) imposed on any Lender any other condition relating to this
Agreement or the Advances made by it, and the result of any event referred to
in clause (x) or (y) shall be to increase the cost to such Lender of agreeing
to make or making, funding or maintaining Eurodollar Rate Advances, then the
Borrower shall from time to time, upon demand by such Lender (with a copy of
such demand to the Administrative Agent) made within 60 days after the first
date on which such Lender has actual knowledge that it is entitled to make
demand for payment under this Section 2.09(a), pay to the Administrative Agent
for the account of such Lender additional amounts sufficient to compensate such
Lender for such increased cost; provided, however, that if such Lender fails to
so notify the Borrower within such 60-day period, such increased cost shall
commence accruing on such later date on which the Lender notifies the Borrower;
provided further that, before making any such demand, such Lender agrees to use
its best efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different Applicable Lending Office if the making
of such a designation would avoid the need for, or reduce the amount of, such
increased cost and would not, in the reasonable judgment of such Lender, be
otherwise disadvantageous to such Lender. A certificate as to the amount of
such increased cost, submitted to the Borrower and the Administrative Agent by
such Lender, shall be conclusive and binding for all purposes, absent manifest
error.
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46
(b) If any Lender determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental or monetary authority in regard to capital adequacy (whether or
not having the force of law) including, without limitation, any guideline
contemplated by the report dated July 1988 entitled "International Convergence
of Capital Management and Capital Standards" issued by the Bank Committee on
Banking Regulations and Supervisory Practices, in any case in which such law,
regulation, guideline or request became effective or was made after the date
hereof, has or would have the effect of reducing the rate of return on the
capital of, or maintained by, such Lender or any corporation controlling such
Lender as a consequence of such Lender's Advances or Commitments hereunder and
other commitments of this type, by increasing the amount of capital required or
expected to be maintained by such Lender or any corporation controlling such
Lender, to a level below that which such Lender or any corporation controlling
such Lender could have achieved but for such adoption, effectiveness, change or
compliance (taking into account such Lender's or such corporation's policies
with respect to capital adequacy), then the Borrower shall, from time to time,
pay such Lender, upon demand by such Lender (with a copy of such demand to the
Administrative Agent) made within 60 days after the first date on which such
Lender has actual knowledge that it is entitled to make demand for payment
under this Section 2.09(b) of such reduction in return, such additional amount
as may be specified by such Lender as being sufficient to compensate such
Lender for such reduction in return, to the extent that such Lender reasonably
determines such reduction to be attributable to the existence of such Lender's
commitment to lend hereunder; provided, however, that if such Lender fails to
so notify the Borrower within such 60-day period, such amounts shall commence
accruing on such later date on which the Lender notifies the Borrower. A
certificate as to such amounts submitted to the Borrower and the Administrative
Agent by such Lender shall be conclusive and binding for all purposes, absent
manifest error.
(c) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for any Lender or its Eurodollar Lending
Office to perform its obligations hereunder to make Eurodollar Rate Advances or
to fund or maintain Eurodollar Rate Advances hereunder, then, upon written
notice by such Lender to the Borrower (with a copy to the Administrative
Agent), (i) each Eurodollar Rate Advance of such Lender will automatically
Convert into a Base Rate Advance and (ii) the obligation under each Facility
under which such Lender has a Commitment to make, or to Convert Base Rate
Advances into, Eurodollar Rate Advances shall be suspended until the
Administrative Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist; provided, however, that,
before making any such demand, such Lender shall designate a different
Eurodollar Lending Office if the making of such a designation would avoid the
need for giving such notice and demand, and would not, in the judgment of such
Lender, be otherwise disadvantageous to such Lender. For
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47
purposes of this Section 2.09(c), a notice to the Borrower by a Lender shall be
effective with respect to any Eurodollar Rate Advance on the last day of the
then current Interest Period for such Advance; provided, however, that, if it
is not lawful for such Lender to maintain such Advance until the end of the
Interest Period applicable thereto, then the notice to the Borrower shall be
effective upon receipt by the Borrower.
SECTION 2.10. Conversion of Advances. (a) Optional. The Borrower may
on any Business Day, upon notice given to the Administrative Agent not later
than noon (New York City time) on the third Business Day prior to the date of
the proposed Conversion and subject to the provisions of Sections 2.07 and
2.09, Convert all or any portion of the Advances of one Type comprising the
same Borrowing into Advances of the other Type; provided, however, that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made
on, and only on, the last day of an Interest Period for such Eurodollar Rate
Advances, and any Conversion of Base Rate Advances into Eurodollar Rate
Advances shall be subject to the limitation set forth in Section 2.02(e) and in
an amount not less than $5,000,000. Each such notice of Conversion shall,
within the restrictions specified above, specify (i) the date of such
Conversion, (ii) the Advances to be Converted and (iii) if such Conversion is
into Eurodollar Rate Advances, the duration of the initial Interest Period for
such Advances.
(b) Mandatory. (i) On the date on which the aggregate unpaid principal
amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced,
by payment or prepayment or otherwise, to less than $5,000,000, such Advances
shall automatically Convert into Base Rate Advances.
(ii) Upon the occurrence and during the continuance of any Event of
Default (or, in the case of any involuntary proceeding described in Section
6.01(e), a Default), (A) each Eurodollar Rate Advance will automatically, on
the last day of the then existing Interest Period therefor, Convert into a Base
Rate Advance and (B) the obligation of the Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended.
SECTION 2.11. Payments and Computations. (a) The Borrower shall make
each payment hereunder and under the Notes not later than 11:00 A.M. (New York
City time) on the day when due in U.S. Dollars to the Administrative Agent at
the Administrative Agent's Account in same day funds. The Administrative Agent
will promptly thereafter cause to be distributed like funds relating to the
payment of principal or interest or commitment fees ratably (other than amounts
payable pursuant to Section 2.09 or 2.12) to the Lenders for the account of
their respective Applicable Lending Offices, and like funds relating to the
payment of any other amount payable to any Lender to such Lender for the
account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement. Upon its acceptance of an
Assignment and Acceptance and recording of the information contained therein in
the Register pursuant to Section 8.07(c), from and after the effective date
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48
specified in such Assignment and Acceptance, the Administrative Agent shall
make all payments hereunder and under the Notes in respect of the interest
assigned thereby to the Lender assignee thereunder, and the parties to such
Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
(b) The Borrower hereby authorizes each Lender, if and to the extent
payment of principal, interest or fees owed to such Lender is not made when due
hereunder or, in the case of a Lender under the Note or Notes held by such
Lender, to charge from time to time against any or all of the Borrower's
accounts with such Lender any amount so due.
(c) All computations of interest based on the Eurodollar Rate, the
Base Rate or the Federal Funds Rate and of commitment fees shall be made by the
Administrative Agent, on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or commitment fees are payable.
Each determination by the Administrative Agent of an interest rate hereunder
shall be conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under any Note shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fee, as the
case may be; provided, however, that, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(e) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to any Lender
hereunder or under any Note that the Borrower will not make such payment in
full, the Administrative Agent may assume, or at its option request
confirmation from the Borrower, that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender on
such due date an amount equal to the amount then due such Lender. If and to the
extent the Borrower shall not have so made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate.
(f) If the Administrative Agent receives funds for application to the
Obligations under the Loan Documents under circumstances for which the Loan
Documents do
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49
not specify the Advances to which, or the manner in which, such funds are to be
applied, the Administrative Agent may, but shall not be obligated to, elect to
distribute such funds to each Lender ratably in accordance with such Lender's
proportionate share of the principal amount of all outstanding Advances, in
repayment or prepayment of the outstanding Advances or other Obligations owed
to such Lender, and for application to such principal installments, as the
Administrative Agent shall direct.
SECTION 2.12. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.11,
free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender and the
Administrative Agent, (i) taxes imposed on its income, and franchise taxes and
backup withholding taxes imposed on it, by the United States or the
jurisdiction under the laws of which such Lender or the Administrative Agent
(as the case may be) is organized or any political subdivision or taxing
authority thereof or therein, (ii) taxes imposed on its income, and franchise
taxes imposed on it, by the jurisdiction of such Lender's or, in either such
case, the Administrative Agent's principal office or Applicable Lending Office
or any political subdivision or taxing authority thereof or therein and (iii)
United States withholding tax payable with respect to payments hereunder under
laws (including, without limitation any statute, treaty, ruling, determination
or regulation) in effect on the Initial Date with respect to such Lender or the
Administrative Agent, but not excluding any United States withholding tax
payable as a result of any change in such laws occurring after the Initial Date
(all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"). If the
Borrower shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder or under any Note to any Lender or the Administrative
Agent, (i) the sum payable shall be increased as may be necessary so that after
making all required deductions of Taxes (including deductions of Taxes
applicable to additional sums payable under this Section 2.12) such Lender or
the Administrative Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions of Taxes been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law; provided, however, that any such Lender shall
designate a different Applicable Lending Office if, in the judgment of such
Lender, such designation would avoid the need for, or reduce the amount of, any
Taxes required to be deducted from or in respect of any sum payable hereunder
to such Lender or the Administrative Agent and would not, in the judgment of
such Lender, be otherwise disadvantageous to such Lender.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or under the Notes or
from the execution, delivery or
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50
registration of, or otherwise with respect to, this Agreement or the Notes
(hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender and the Administrative
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.12) paid by such Lender or the Administrative
Agent (as the case may be) and any liability (including penalties, additions to
tax, interest and expenses) arising therefrom or with respect thereto; provided
that, in the event such Lender or the Administrative Agent, as the case may be,
successfully contests the assessment of such Taxes or Other Taxes or any
liability arising therefrom or with respect thereto, such Lender or the
Administrative Agent shall refund, to the extent of any refund thereof made to
such Lender or the Administrative Agent, any amounts paid by the Borrower under
this Section 2.12(c) in respect of such Taxes, Other Taxes or liabilities
arising therefrom or with respect thereto. Each Lender and the Administrative
Agent agree that it will contest such Taxes, Other Taxes or liabilities if (i)
the Borrower furnishes to it an opinion of reputable tax counsel acceptable to
such Lender or the Administrative Agent to the effect that such Taxes or Other
Taxes were wrongfully or illegally imposed and (ii) such Lender or the
Administrative Agent determines, in its sole discretion, that it would not be
disadvantaged or prejudiced in any manner whatsoever as a result of such
contest. This indemnification shall be made within 30 days from the date such
Lender or the Administrative Agent (as the case may be) makes written demand
therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower will furnish to the Administrative Agent, at its address referred to
in Section 8.02, appropriate evidence of payment thereof. If no Taxes are
payable in respect of any payment hereunder or under the Notes by the Borrower
from an account or branch outside the United States or on behalf of the
Borrower by a payor that is not a United States person, the Borrower will
furnish to the Administrative Agent, at such address, a certificate from each
appropriate taxing authority, or an opinion of counsel acceptable to the
Administrative Agent, in either case stating that such payment is exempt from
or not subject to Taxes. For purposes of this Section 2.12, the terms "United
States" and "United States person" shall have the meanings specified in Section
7701 of the Code.
(e) Each Lender organized under the laws of a jurisdiction outside the
United States and the Administrative Agent, if organized under the laws of a
jurisdiction outside the United States, shall, on or prior to the Initial Date
and from time to time thereafter if requested in writing by the Borrower or the
Administrative Agent (but only so long thereafter as such Lender or the
Administrative Agent remains lawfully able to do so), provide the Borrower and
(in the case of any such Lender other than the Administrative Agent) the
Administrative Agent with two duly completed copies of Internal Revenue Service
form 1001 or 4224, as appropriate, or any successor form prescribed by the
Internal Revenue Service,
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51
certifying that such Lender or the Administrative Agent is entitled to benefits
under an income tax treaty to which the United States is a party that reduces
the rate of withholding tax on payments under this Agreement or the Notes or
certifying that the income receivable pursuant to this Agreement or the Notes
is effectively connected with the conduct of a trade or business in the United
States.
(f) For any period with respect to which the Administrative Agent or a
Lender has failed to provide the Borrower with the appropriate forms described
in subsection (e) above (other than if such failure is due to a change in law
occurring after the date on which such person was originally required to
provide such forms, or if such forms are otherwise not required under
subsection (e) above), the Administrative Agent or such Lender shall not be
entitled to increased payments or indemnification under subsection (a) or (c)
above with respect to Taxes imposed by the United States; provided, however,
that should the Administrative Agent or a Lender become subject to Taxes
because of its failure to deliver a form required hereunder, the Borrower shall
take such steps as the Administrative Agent or such Lender shall reasonably
request to assist the Lender to recover such Taxes if, in the judgment of the
Borrower such steps would avoid the need for, or reduce the amount of, any
Taxes required to be deducted from or in respect of any sum payable hereunder
to the Administrative Agent or such Lender and would not, in the judgment of
the Borrower, be disadvantageous to the Borrower.
(g) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.12 shall survive the payment in full of principal and interest
hereunder and under the Notes.
(h) If a Lender shall change its Applicable Lending Office other than
(i) at the request of the Borrower or (ii) at a time when such change would not
result in this Section 2.12 requiring the Borrower to make a greater payment
than if such change had not been made, such Lender shall not be entitled to
receive any greater payment under this Section 2.12 than such Lender would have
been entitled to receive had it not changed its Applicable Lending Office.
SECTION 2.13. Sharing of Payments, Etc. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Advances owing to it (other than
pursuant to Section 2.09 or 2.12) in excess of its ratable share of payments on
account of the Advances obtained by all the Lenders, such Lender shall
forthwith purchase from the other Lenders such interests or participating
interests in the Advances owing to them as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them;
provided, however, that, if all or any portion of such excess payment is
thereafter recovered from such purchasing
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52
Lender, such purchase from each Lender shall be rescinded and such Lender shall
repay to the purchasing Lender the purchase price to the extent of such
recovery together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. The Borrower agrees that any Lender
so purchasing an interest or participating interest from another Lender
pursuant to this Section 2.13 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with
respect to such interest or participating interest, as the case may be, as
fully as if such Lender were the direct creditor of the Borrower in the amount
of such interest or participating interest, as the case may be.
SECTION 2.14. Removal of Lender. In the event that any Lender demands
payment of costs or additional amounts pursuant to Section 2.09 or Section 2.12
or asserts pursuant to Section 2.09(c) that it is unlawful for such Lender to
make Eurodollar Rate Advances, then (subject to such Lender's right to rescind
such demand or assertion within 10 days after the notice from the Borrower
referred to below) the Borrower may, upon 20 days' prior written notice to such
Lender and the Administrative Agent, elect to cause such Lender to assign its
Advances and Commitments in full to an assignee institution selected by the
Borrower that meets the criteria of an Eligible Assignee and is reasonably
satisfactory to the Administrative Agent, so long as such Lender receives
payment in full in cash of the outstanding principal amount of all Advances
made by it and all accrued and unpaid interest thereon and all other amounts
due and payable to such Lender as of the date of such assignment (including
without limitation amounts owing pursuant to Section 2.09 or 2.12), and in such
case such Lender agrees to make such assignment, and such assignee shall agree
to accept such assignment and assume all obligations of such Lender hereunder,
in accordance with Section 8.07.
SECTION 2.15. Defaulting Lender. (a) In the event that, at any one
time, (i) any Lender shall be a Defaulting Lender, (ii) such Defaulting Lender
shall owe a Defaulted Advance to the Borrower and (iii) the Borrower shall be
required to make any payment hereunder or under any other Loan Document to or
for the account of such Defaulting Lender, then the Borrower may, so long as no
Default shall occur or be continuing at such time and to the fullest extent
permitted by applicable law, set-off and otherwise apply the Obligation of the
Borrower to make such payment to or for the account of such Defaulting Lender
against the Obligation of such Defaulting Lender to make such Defaulted
Advance. In the event that the Borrower shall so set-off and otherwise apply
the Obligation of the Borrower to make any such payment against the Obligation
of such Defaulting Lender to make any such Defaulted Advance on any date, the
amount so set-off and otherwise applied by the Borrower shall constitute for
all purposes of this Agreement and the other Loan Documents an Advance by such
Defaulting Lender made on such date under the Facility pursuant to which such
Defaulted
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53
Advance was originally required to have been made pursuant to Section 2.01.
Such Advance shall be considered, for all purposes of this Agreement, to
comprise part of the Borrowing in connection with which such Defaulted Advance
was originally required to have been made pursuant to Section 2.01. The
Borrower shall notify the Administrative Agent at any time the Borrower reduces
the amount of the Obligation of the Borrower to make any payment otherwise
required to be made by it hereunder or under any other Loan Document as a
result of the exercise by the Borrower of its right set forth in this
subsection (a) and shall set forth in such notice (A) the name of the
Defaulting Lender and the Defaulted Advance required to be made by such
Defaulting Lender and (B) the amount set-off and otherwise applied in respect
of such Defaulted Advance pursuant to this subsection (a). Any portion of such
payment otherwise required to be made by the Borrower to or for the account of
such Defaulting Lender which is paid by the Borrower, after giving effect to
the amount set-off and otherwise applied by the Borrower pursuant to this
subsection (a), shall be applied by the Administrative Agent as specified in
subsection (b) or (c) of this Section 2.15.
(b) In the event that, at any one time, (i) any Lender shall be a
Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount to
the Administrative Agent, the Collateral Agent or any of the other Lenders and
(iii) the Borrower shall make any payment hereunder or under any other Loan
Document to the Administrative Agent for the account of such Defaulting Lender,
then the Administrative Agent may, on its behalf or on behalf of such other
Lenders and to the fullest extent permitted by applicable law, apply at such
time the amount so paid by the Borrower to or for the account of such
Defaulting Lender to the payment of each such Defaulted Amount up to the amount
required to pay such Defaulted Amount. In the event that the Administrative
Agent shall so apply any such amount to the payment of any such Defaulted
Amount on any date, the amount so applied by the Administrative Agent shall
constitute for all purposes of this Agreement and the other Loan Documents
payment, to such extent, of such Defaulted Amount on such date. Any such amount
so applied by the Administrative Agent shall be retained by the Administrative
Agent or distributed by the Administrative Agent to such other Lenders, ratably
in accordance with the respective portions of such Defaulted Amounts payable at
such time to the Administrative Agent and such other Lenders and, if the amount
of such payment made by the Borrower shall at such time be insufficient to pay
all Defaulted Amounts owing at such time to the Administrative Agent, the
Collateral Agent and the other Lenders, in the following order of priority:
(i) first, to the Administrative Agent and the Collateral Agent for
any Defaulted Amounts then owing to the Administrative Agent and the
Collateral Agent, ratably in accordance with such respective Defaulted
Amounts then owing to the Administrative Agent and the Collateral Agent;
and
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54
(ii) second, to any other Lenders for any Defaulted Amounts then owing
to such other Lenders, ratably in accordance with such respective Defaulted
Amounts then owing to such other Lenders.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.15.
(c) In the event that, at any one time, (i) any Lender shall be
Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted
Advance or a Defaulted Amount and (iii) the Borrower, the Administrative Agent
the Collateral Agent or any other Lender shall be required to pay or distribute
any amount hereunder or under any other Loan Document to or for the account of
such Defaulting Lender, then the Borrower, the Collateral Agent or such other
Lender shall pay such amount to the Administrative Agent to be held by the
Administrative Agent, to the fullest extent permitted by applicable law, in
escrow or the Administrative Agent shall, to the fullest extent permitted by
applicable law, hold in escrow such amount otherwise held by it. Any funds held
by the Administrative Agent in escrow under this subsection (c) shall be
deposited by the Administrative Agent in an account with Citibank, in the name
and under the control of the Administrative Agent, but subject to the
provisions of this subsection (c). The terms applicable to such account,
including the rate of interest payable with respect to the credit balance of
such account from time to time, shall be Citibank's standard terms applicable
to escrow accounts maintained with it. Any interest credited to such account
from time to time shall be held by the Administrative Agent in escrow under,
and applied by the Administrative Agent from time to time in accordance with
the provisions of, this subsection (c). The Administrative Agent shall, to the
fullest extent permitted by applicable law, apply all funds so held in escrow
from time to time to the extent necessary to make any Advances required to be
made by such Defaulting Lender and to pay any amount payable by such Defaulting
Lender hereunder and under the other Loan Documents to the Administrative
Agent, the Collateral Agent or any other Lender, as and when such Advances or
amounts are required to be made or paid and, if the amount so held in escrow
shall at any time be insufficient to make and pay all such Advances and amounts
required to be made or paid at such time, in the following order of priority:
(i) first, to the Administrative Agent and the Collateral Agent for
any amount then due and payable by such Defaulting Lender to the
Administrative Agent and the Collateral Agent hereunder, ratably in
accordance with such respective amounts then due and payable to the
Administrative Agent and the Collateral Agent;
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55
(ii) second, to any other Lenders for any amount then due and payable
by such Defaulting Lender to such other Lenders hereunder, ratably in
accordance with such respective amounts then due and payable to such other
Lenders; and
(iii) third, to the Borrower for any Advance then required to be made
by such Defaulting Lender pursuant to the Commitment of such Defaulting
Lender.
In the event that such Defaulting Lender shall, at any time, cease to be a
Defaulting Lender, any funds held by the Administrative Agent in escrow at such
time with respect to such Defaulting Lender shall be distributed by the
Administrative Agent to such Defaulting Lender and applied by such Defaulting
Lender to the Obligations owing to such Lender at such time under this
Agreement and the other Loan Documents ratably in accordance with the
respective amounts of such Obligations outstanding at such time.
(d) The rights and remedies against a Defaulting Lender under this
Section 2.15 are in addition to other rights and remedies which the Borrower
may have against such Defaulting Lender with respect to any Defaulted Advance
and which the Administrative Agent, the Collateral Agent or any Lender may have
against such Defaulting Lender with respect to any Defaulted Amount.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Effective Date. Article II
hereof shall be effective on and as of the date (the "Effective Date"), on
which each of the following conditions precedent shall have been satisfied or
duly waived:
(a) There shall have been no adverse change since December 16, 1996 in
the corporate and legal structure and capitalization of each A Company,
each Designated Operating Company and the Bank, including the terms and
conditions of the charter, bylaws and each class of capital stock of each
such Person and of each agreement or instrument relating to such structure
or capitalization, except as contemplated by existing consents, amendments
and waivers delivered in connection with the Existing Term Credit
Agreement; the Lenders shall be satisfied with the corporate and legal
structure and capitalization of each of Revlon Guarantor, Revlon Worldwide
Parent, Revlon Worldwide Holdings, Consolidated Cigar Holdings and PCT,
including the terms and conditions of the charter, by-laws and each class
of capital stock of each such Person and of each agreement or instrument
relating to such structure or capitalization.
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56
(b) Before giving effect to the transactions contemplated by this
Agreement and the Revolving Credit Agreement, there shall have occurred no
Material Adverse Change since December 31, 1995 relating to any of the Loan
Parties, the FN Parties and the Designated Operating Companies.
(c) There shall exist no action, suit, investigation, litigation or
proceeding affecting any of the Loan Parties, the FN Parties and the
Designated Operating Companies pending or threatened before any court,
governmental agency or arbitrator that (i) would be reasonably likely to
have a Material Adverse Effect (in the case of clause (a) of the definition
thereof, the term "Person" shall refer to such Loan Party, such FN Party or
such Designated Operating Company, as the case may be) or (ii) purports to
affect the legality, validity or enforceability of this Agreement, the
Revolving Credit Agreement, any Note, any other Loan Document, any Related
Document, any FN Document or the consummation of the transactions
contemplated hereby and thereby.
(d) Nothing shall have come to the attention of the Lenders in respect
of any of the A Companies, the Designated Operating Companies or the Bank
that is inconsistent with or different from in any adverse respect any of
the results of the due diligence investigations of such Persons conducted
in connection with the Original Credit Agreement, the Second Credit
Agreement, the Third Credit Agreement, the Fourth Credit Agreement or the
Existing Term Credit Agreement; the Lenders shall be satisfied with the
results of their due diligence investigation of Revlon Guarantor, Revlon
Worldwide Parent, Revlon Worldwide Holdings, Consolidated Cigar Holdings
and PCT; and the Lenders shall have been given such access to the
management, records, books of account, contracts and properties of each A
Company, each Designated Operating Company, Consolidated Cigar Holdings,
PCT or the Bank as they shall have requested.
(e) The Borrower shall have paid all accrued fees of the
Administrative Agent and the Lenders and all accrued expenses of the
Administrative Agent (including the reasonable fees and expenses of counsel
to the Administrative Agent).
(f) The Lenders shall be satisfied that the Borrower has the ability
to service the interest payments in respect of the Term Facility and the
Revolving Credit Facility.
(g) Revlon Worldwide Parent shall have (i) issued the Revlon Worldwide
Parent Debt on terms and conditions satisfactory to the Lenders (including,
without limitation, permitting at least 22.5 million shares of Revlon to be
pledged in favor of the Collateral Agent) and (ii) received Net Cash
Proceeds from the issuance of the Revlon Worldwide Parent Debt in an amount
sufficient, in the reasonable judgment of
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57
the Lenders,when aggregated with (A) the proceeds of any dividends or other
distributions paid or payable by MCG (directly or indirectly) to Mafco, (B)
other funds available to Mafco for such purposes and (C) the proceeds of
the Term Advances, to defease the Revlon Worldwide Bonds.
(h) Mafco and its Subsidiaries shall have provided for the defeasance
of the Revlon Worldwide Bonds on terms and conditions acceptable to the
Lenders and such defeasance shall be effective as promptly as practicable
following the 123rd day after the Term Borrowing but in any event not later
than the Business Day immediately following the 130th day after such Term
Borrowing.
(i) All "Payment Obligations" under the Existing Credit Agreement
shall have been "Fully Satisfied" (as defined in the Existing Credit
Agreement).
(j) All "Payment Obligations" under the Existing Term Credit Agreement
shall have been "Fully Satisfied" (as defined in the Existing Term Credit
Agreement).
(k) The Administrative Agent or the Collateral Agent, as the case may
be, shall have received on or before the Effective Date the following, each
dated as of the Effective Date (unless otherwise specified), in form and
substance satisfactory to the Administrative Agent (unless otherwise
specified) and (except for the Notes) in sufficient copies for each Lender:
(i) the Term Credit Notes to the order of the Lenders;
(ii) certified copies of the resolutions of the board of
directors of the Borrower and each other Loan Party approving this
Agreement, the Notes and each other Loan Document to which it is or is
to be a party, and of all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to
this Agreement, the Notes and each other Loan Document;
(iii) a certificate of the Secretary or an Assistant Secretary of
the Borrower and each other Loan Party certifying the names and true
signatures of the officers of the Borrower and such other Loan Party
authorized to sign this Agreement, the Notes and each other Loan
Document to which they are or are to be parties and the other
documents to be delivered hereunder and thereunder;
(iv) a copy of a certificate of the Secretary of State of the
state of incorporation of the Borrower, each other Loan Party, each
Designated Operating Company and each other A Company, dated
reasonably near the
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58
Effective Date, listing the charter of such Person and each amendment
thereto on file in his office and certifying that (A) such amendments
are the only amendments to such Person's charter on file in his
office, (B) such Person has paid all franchise taxes to the date of
such certificate and (C) such Person is duly incorporated or organized
and in good standing under the laws of such state, and a copy of a
certificate of corporate existence of the Bank, dated reasonably near
the Effective Date from the Office of Thrift Supervision;
(v) (A) a certificate of each A Company (other than the Revlon
Entities) signed on behalf of such Person by its President or a Vice
President and its Secretary or any Assistant Secretary, dated as of
the Effective Date (the statements made in such certificate shall be
true on and as of the Effective Date), certifying as to (1) the
absence of any amendments to the charter of such Person since the date
of the Secretary of State's certificate referred to in clause (iv)
above, (2) the absence of any amendments to the bylaws of such Person
since the date of the certificate in respect of such bylaws that was
delivered to the Administrative Agent pursuant to the terms of Section
3.01 or 3.02, as the case may be, of the Original Credit Agreement,
(3) the due incorporation and good standing of such Person as a
corporation under the laws of the relevant state of incorporation, and
the absence of any proceeding for the dissolution or liquidation of
such Person, (4) the truth in all material respects of the
representations and warranties made by such Person contained in the
Loan Documents as though made on and as of the Effective Date and (5)
the absence of any event occurring and continuing, or resulting from
the Effective Date, that constitutes a Default, (B) a certificate of
Coleman Guarantor signed on behalf of Coleman Guarantor by its
President or a Vice President and its Secretary or any Assistant
Secretary, dated as of the Effective Date (the statements made in such
certificate shall be true on and as of the Effective Date), certifying
as to (1) the absence of any amendments to the charter of Coleman
since the date of the Secretary of State's certificate referred to in
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59
clause (iv) above, (2) the absence of any amendments to the bylaws of
Coleman since the date of the certificate in respect of such bylaws
that was delivered to the Administrative Agent pursuant to the terms
of Sections 3.01 and 3.02 of the Original Credit Agreement and (3) the
due incorporation and good standing of Coleman as a corporation
organized under the laws of the State of Delaware, and the absence of
any proceeding for the dissolution or liquidation of Coleman, (C) a
certificate of the Borrower signed on behalf of the Borrower by its
President or a Vice President and its Secretary or any Assistant
Secretary, dated as of the Effective Date (the statements made in such
certificate shall be true on and as of the Effective Date), certifying
as to (1) the absence of any amendments to the charter of Marvel since
the date of the Secretary of State's certificate referred to in clause
(iv) above, (2) the absence of any amendments to the bylaws of Marvel
since the date of the certificate in respect of such bylaws that was
delivered to the Administrative Agent pursuant to the terms of
Sections 3.01 and 3.02 of the Original Credit Agreement, and (3) the
due incorporation and good standing of Marvel as a corporation
organized under the laws of the State of Delaware, and the absence of
any proceeding for the dissolution or liquidation of Marvel, (D) a
certificate of New World Guarantor signed on behalf of New World
Guarantor by its President or a Vice President and its Secretary or
any Assistant Secretary, dated as of the Effective Date (the
statements made in such certificate shall be true on and as of the
Effective Date), certifying as to (1) the absence of any amendments to
the charter of New World since the date of the Secretary of State's
certificate referred to in clause (iv) above, (2) the absence of any
amendments to the bylaws of New World since the date of the
certificate in respect of such bylaws that was delivered to the
Administrative Agent pursuant to the terms of Section 3.02 of the
Original Credit Agreement and (3) the due incorporation and good
standing of New World as a corporation organized under the laws of the
State of Delaware, and the absence of any proceeding for the
dissolution or liquidation of New World, (E) a certificate of C&F
Guarantor signed on behalf of C&F Guarantor by its President or a Vice
President and its Secretary or any Assistant Secretary, dated as of
the Effective Date (the statements made in such certificate shall be
true on and as of the Effective Date), certifying as to (1) the
absence of any amendments to the charter of MCG since the date of the
Secretary of State's certificate referred to in clause (iv) above, (2)
the absence of any amendments to the bylaws of MCG since the date of
the certificate in respect of such bylaws that was delivered to the
Administrative Agent pursuant to the terms of Section 3.01 of the
Third Credit Agreement and (3) the due incorporation and good standing
of MCG as a corporation organized under the laws of the State of
Delaware, and the absence of any proceeding for the dissolution or
liquidation of MCG and (F) a certificate of Revlon Guarantor signed on
behalf of Revlon Guarantor by its President or a Vice President and
its Secretary or any Assistant Secretary, dated as of the Effective
Date (the statements made in such certificate shall be true on and as
of the Effective Date), certifying as to (1) the absence of any
amendments to the charters of the Revlon Entities and Revlon since the
date of the relevant Secretary of State's certificate referred to in
clause (iv) above, (2) the trueness and correctness of the copies of
the bylaws of each Revlon Entity and Revlon attached to such
certificate, (3) the due incorporation and good standing of each
Revlon Entity and Revlon as a corporation under the laws of the
relevant state of incorporation, and the absence of any proceeding for
the dissolution or liquidation of any such Person, (4) the truth in
all material respects of the representations and warranties made by
such Person contained in the Loan
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60
Documents as though made on and as of the Effective Date and (5) the
absence of any event occurring and continuing, or resulting from the
Effective Date, that constitutes a Default;
(vi) a certificate of Mafco to the effect (A) that no information
provided by Mafco or any Subsidiary of Mafco to the Administrative
Agent or any Lender in connection with the Existing Term Credit
Agreement or this Agreement, as such information has been amended,
supplemented or superseded by any other information delivered to the
same parties receiving such information contained or contains any
material misstatement of fact or omitted or omits to state any
material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading except
that, as to any financial model included therein, such certificate
shall be limited to a statement that such model was prepared in good
faith by Mafco's or such Subsidiary's management based on assumptions
believed to be reasonable when made and may be further qualified by a
statement to the effect that because assumptions as to future results
are inherently subject to uncertainty and contingencies beyond Mafco's
or such Subsidiary's control, actual results of Mafco or such
Subsidiary may be higher or lower, (B) the Mafco Guaranty is in full
force and effect on the Effective Date, (C) that other than the
agreements referenced in Section 3.01(k)(x), the charter documents of
each A Company and each FN Party, the Loan Documents and the Related
Documents, there is no other agreement, contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument binding
on or affecting any A Company or any FN Party that imposes any
material Obligation or any material restriction on any A Company or
any FN Party, (D) that the agreements referenced in Section
3.01(h)(xi) are the only agreements, contracts, loan agreements,
indentures, mortgages, deeds of trust, leases or other instruments (1)
evidencing Debt of any Designated Operating Company or any of their
Subsidiaries outstanding on the Effective Date, (2) governing the
terms of Debt of any Designated Operating Company or any of their
Subsidiaries outstanding on the Effective Date, or (3) containing any
commitment or other agreement by any Person to extend credit that
would constitute Debt to any Designated Operating Company or any of
their Subsidiaries, in each case that imposes or will impose material
Obligations or material restrictions on any Designated Operating
Company and its Subsidiaries taken as a whole and (E) that there is no
other agreement or contract binding on or affecting any Designated
Operating Company or any of their Subsidiaries that contains
provisions that would restrict any Loan Party from performing or that
would impair the ability of any Loan Party to perform, any of the
obligations of such Loan Party under the Loan Documents;
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61
(vii) the Mafco Security Agreement in substantially the form of
Exhibit D duly executed by Mafco, together with evidence that all
other action that the Administrative Agent may deem necessary or
desirable in order to perfect and protect the Liens created by such
Security Agreement have been taken, together with:
(1) acknowledgement copies or stamped receipt copies of
proper amendments to the financing statements previously filed in
connection with the Mafco Security Agreement; and
(2) evidence that all other action that the Administrative
Agent may deem necessary or desirable in order to perfect and
protect the Liens created by Mafco Security Agreement;
(viii) the Mafco Guaranty in substantially the form of Exhibit
E-1, duly executed by Mafco, the C&F Guaranty in substantially the
form of Exhibit E-2, duly executed by the C&F Guarantor, the Cigar
Guaranty in substantially the form of Exhibit E-3, duly executed by
Cigar Guarantor, the Coleman Guaranty in substantially the form of
Exhibit E-4, duly executed by Coleman Guarantor, the Flavors Guaranty
in substantially the form of Exhibit E-5, duly executed by Flavors
Guarantor, the New World Guaranty in substantially the form of Exhibit
E-6, duly executed by New World Guarantor, the Revlon Guaranty in
substantially the form of Exhibit E-7, duly executed by Revlon
Guarantor, and the Revlon Worldwide Holdings Guaranty in substantially
the form of Exhibit E-8, duly executed by Revlon Worldwide Holdings.
(ix) the C&F Pledge Agreement in substantially the form of
Exhibit F-1, duly executed by C&F Guarantor, the New World Pledge
Agreement in substantially the form of Exhibit F-2, duly executed by
New World Guarantor, the Revlon Pledge Agreement in substantially the
form of Exhibit F-3, duly executed by Revlon Guarantor, the Revlon
Worldwide Holdings Pledge Agreement in substantially the form of
Exhibit F-4, duly executed by Revlon Worldwide Holdings and the Revlon
Worldwide Parent Pledge Agreement in substantially the form of Exhibit
F-5, duly executed by Revlon Worldwide Parent, together with:
(1) acknowledgment copies or stamped receipt copies of (A)
proper financing statements in respect of the Revlon Pledge
Agreement, the Revlon Worldwide Holdings Pledge Agreement and the
Revlon Worldwide Parent Pledge Agreement, in form and substance
satisfactory to the Administrative Agent and (B) proper
amendments to
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62
the financing statements previously filed in connection with each
other Pledge Agreement referred to above, in form and substance
satisfactory to the Administrative Agent,
(2) completed requests for information, dated on or before
the Effective Date, listing the financing statements referred to
in clause (1) above,
(3) in the case of the New World Pledge Agreement,
instruments evidencing the Pledged Debt referred to therein
endorsed in blank, and
(4) evidence that all other action that the Administrative
Agent may deem necessary or desirable in order to perfect and
protect the Liens created by the each such Pledge Agreement has
been taken;
(x) a certificate of Mafco to the effect that, other than the
agreements delivered to the Administrative Agent pursuant to Section
3.01(g)(xii)(B) and Section 3.02(i)(xi)(B) of the Original Credit
Agreement and other than as specified in and delivered pursuant to
such certificate and the certificate of Mafco delivered pursuant to
Section 3.01(f)(x) of the Second Credit Agreement, Section 3.01(f)(ix)
of the Third Credit Agreement and Section 3.01(f)(x) of the Fourth
Credit Agreement and Section 3.01(h)(xi) of the Existing Credit
Agreement, there is no other contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument (1) evidencing Debt
of any A Company, (2) governing the terms of Debt of any A Company, or
(3) containing any commitment or other agreement by any Person to
extend credit that would constitute Debt to any A Company or any
Designated Operating Company or any of its Subsidiaries, in each case
that imposes any material obligation or any material restriction on
any A Company or any Designated Operating Company and its
Subsidiaries, taken as a whole;
(xi) such financial, business and other information regarding
each Loan Party and their Subsidiaries as the Lenders shall have
reasonably requested, including, without limitation, information as to
possible contingent liabilities, tax matters, environmental matters,
obligations under ERISA and Welfare Plans, collective bargaining
agreements and other arrangements with employees, annual financial
statements of the Bank dated December 31, 1995, interim financial
statements of the Bank dated the end of the most recent fiscal quarter
for which financial statements are available, pro forma financial
statements as to the Borrower, and forecasts prepared by management of
the
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63
Bank, in form and substance satisfactory to the Lenders, of balance
sheets, income statements and cash flow statements of the Bank on a
quarterly basis for the term of the Revolving Credit Facility;
(xii) certified copies of (A) a voting trust agreement (each in
form and substance satisfactory to the Lenders) relating to the
capital stock of Revlon Guarantor and Revlon Worldwide Holdings and
(B) the Revolving Credit Agreement;
(xiii) an assignment, in form and substance satisfactory to the
Lenders, of the rights of Mafco or one or more of its Subsidiaries of
a Registration Rights Agreement in respect of the capital stock of
Revlon owned by Mafco and its Subsidiaries;
(xiv) a letter, in form and substance satisfactory to the
Administrative Agent, from Mafco to Ernst & Young, independent
certified public accountants, advising such accountants that the
Administrative Agent and the Lenders have relied upon the financial
statements of Coleman, New World and MCG in determining whether to
enter into the Loan Documents and have been authorized to exercise all
rights of Mafco to require such accountants to disclose any and all
financial statements and any other information of any kind that they
may have with respect to such Persons and their Subsidiaries and
directing such accountants to comply with any reasonable request of
the Administrative Agent or any Lender for such information;
(xv) a letter, in form and substance satisfactory to the
Administrative Agent, from the Bank to KPMG Peat Marwick, independent
certified public accountants, advising such accountants that the
Administrative Agent and the Lenders have relied upon the financial
statements of Revlon and the Bank in determining whether to enter into
the Loan Documents and have been authorized to exercise all rights of
Revlon and the Bank to require such accountants to disclose any and
all financial statements and any other information of any kind that
they may have with respect to such Persons and their Subsidiaries and
directing such accountants to comply with any reasonable request of
the Administrative Agent or any Lender for such information;
(xvi) favorable opinions of counsel to Mafco reasonably
satisfactory to the Lenders, in form and substance reasonably
satisfactory to the Lenders;
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64
(xvii) a favorable opinion of Shearman & Sterling, counsel for
the Administrative Agent, in form and substance reasonably
satisfactory to the Administrative Agent; and
(xviii) such other information, approvals, opinions or other
documents as the Administrative Agent may reasonably request.
SECTION 3.02. Conditions Precedent to Each Borrowing. The obligation
of each Lender to make an Advance on the occasion of each Borrowing (including
the initial Borrowing), shall be subject to the further conditions precedent
that on the date of such Borrowing (a) the following statements shall be true
(and each of the giving of the applicable Notice of Borrowing and the
acceptance by the Borrower of the proceeds of such Borrowing shall constitute a
representation and warranty by the Borrower that both on the date of such
notice and on the date of such Borrowing such statements are true):
(i) The representations and warranties contained in the Loan Documents
are correct in all material respects on and as of such date, before and
after giving effect to such Borrowing and to the application of the
proceeds therefrom, as though made on and as of such date, except to the
extent such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties were true,
correct and complete in all material respects on and as of such earlier
date; and
(ii) No event has occurred and is continuing, or would result from
such Borrowing or issuance or from the application of the proceeds
therefrom, which constitutes a Default,
and (b) the Administrative Agent shall have received such other certificates,
opinions and other documents as any Lender through the Administrative Agent may
reasonably request in order to confirm (i) the accuracy of the Borrower's
representations and warranties, (ii) the Borrower's timely compliance with the
terms, covenants and agreements set forth in this Agreement, and (iii) the
absence of any Default.
SECTION 3.03. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the Lenders unless
an officer of the Administrative Agent responsible for the transactions
contemplated by this Agreement shall have received notice from such Lender
prior to the initial Borrowing specifying its objection thereto and such Lender
shall not have made available to the Administrative Agent such Lender's ratable
portion of such Borrowing.
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65
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) The Borrower (i) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property
or in which the conduct of its business requires it to so qualify or be
licensed except where the failure to so qualify or be licensed would not
have a Material Adverse Effect (with respect to clause (a) of the
definition thereof, the term "Person" shall refer to the Borrower) and
(iii) has all requisite corporate power and authority to own or lease and
operate its properties and to carry on its business as now conducted and as
proposed to be conducted. All of the outstanding capital stock of the
Borrower has been validly issued, is fully paid and non-assessable and is
owned by the Borrower Parent free and clear of all Liens except for the
Liens created by the Collateral Documents.
(b) Set forth on Schedule II hereto is a complete and accurate list
relating to the Borrower, showing as of the date hereof the jurisdiction of
its incorporation, the number of shares of each class of capital stock
authorized, and the number outstanding, on the date hereof and the
percentage of the outstanding shares of each such class owned (directly or
indirectly) by Borrower Parent and the number of shares covered by all
outstanding options, warrants, rights of conversion or purchase and similar
rights at the date hereof.
(c) The execution, delivery and performance by the Borrower of this
Agreement, the Notes, each Loan Document and each Related Document to which
it is or is to be a party and the consummation by the Borrower of the
transactions contemplated hereby, are within the Borrower's corporate
powers, have been duly authorized by all necessary corporate action, and do
not (i) contravene the Borrower's charter or by-laws, (ii) violate any law
(including, without limitation, the Exchange Act), rule, regulation
(including, without limitation, Regulation X of the Board of Governors of
the Federal Reserve System), order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the breach of, or
constitute a default under, any loan agreement, contract, indenture,
mortgage, deed of trust, lease or other instrument binding on or affecting
any Loan Party, any of its Subsidiaries (other than any Subsidiaries of the
Borrower) or any of its or their properties, the effect
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66
of which conflict, breach or default is reasonably likely to have a
Material Adverse Effect (with respect to clause (a) of the definition
thereof, the term "Person" shall refer to the Borrower) or (iv) except for
the liens created by the Collateral Documents, the voting trust agreements
(other than the voting trust agreements relating to the capital stock of FN
Holdings and FN Parent) referred to in Sections 3.01(g)(xvi) and
3.02(i)(xv) of the Original Credit Agreement, the Amended and Restated
Voting Trust Agreement dated as of December 16, 1996 among The Bank of New
York, the Cigar Guarantor, C&F Guarantor and the Collateral Agent, the
Amended and Restated Voting Trust Agreement dated as of December 16, 1996
among The Bank of New York, the Flavors Guarantor, C&F Guarantor and the
Collateral Agent, the Amended and Restated Voting Trust Agreement dated as
of December 16, 1996 among Trans Network Insurance Services Inc., FG
Guarantor, The Bank of New York and the Collateral Agent, the Second
Amended and Restated Voting Trust Agreement dated as of December 16, 1996
among FG Guarantor, First Gibraltar, The Bank of New York and the
Collateral Agent and the voting trust agreements referred to in Section
3.01(k)(xii)(A), result in or require the creation or imposition of any
Lien upon or with respect to any of the properties of any Loan Party or any
of its Subsidiaries (other than any Subsidiaries of the Borrower). The
Borrower is not in violation of any such law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award or in breach of
any such contract, loan agreement, indenture, mortgage, deed of trust,
lease or other instrument, the violation or breach of which would be
reasonably likely to have a Material Adverse Effect (with respect to clause
(a) of the definition thereof, the term "Person" shall refer to the
Borrower).
(d) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required
for (i) the due execution, delivery and performance by the Borrower of this
Agreement or the Notes or any other Loan Document or any Related Document
to which it is or is to be a party or for the consummation of the
transactions contemplated hereby, (ii) the grant by the Borrower of the
Liens granted by it pursuant to the Collateral Documents, (iii) the
perfection or maintenance of the Liens created by the Collateral Documents
(including the first priority nature thereof) or (iv) the exercise by the
Administrative Agent or any Lender of its rights under the Loan Documents
or the remedies in respect of the Collateral pursuant to the Collateral
Documents, except for the filing of financing statements in accordance with
Sections 3.01 and 3.02 of the Original Credit Agreement, Section
3.01(f)(vii) and (viii) of the Second Credit Agreement, Section
3.01(f)(vii) of the Third Credit Agreement, Section 3.01(f)(ix) of the
Fourth Credit Agreement, the filing of financing statements and amendments
to financing statements in accordance with Section 3.01(h)(viii) and (x) of
the Existing Credit Agreement and the filing of financing statements and
amendments to financing statements in accordance with Section 3.01 of this
Agreement and except as may be required in
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67
connection with the disposition of any portion of the Collateral by laws
affecting the offering and sale of securities generally; provided, however,
that no representation or warranty is made as to any consent of,
authorization, approval or other action by, or notice to or filing with,
any banking agency or regulatory body applicable to the Administrative
Agent, the Collateral Agent, the Syndication Agent or the Documentation
Agent.
(e) This Agreement has been, and each of the Notes, each other Loan
Document to which the Borrower is a party when delivered hereunder will
have been, duly executed and delivered by the Borrower. This Agreement is,
and each of the Notes and each other Loan Document to which the Borrower is
a party when delivered hereunder will be, the legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance
with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforceability of
creditor's rights generally.
(f) The Consolidated and consolidating balance sheets of Marvel III
and its Subsidiaries as at December 31, 1995, and the related Consolidated
and consolidating statements of income and cash flows of Marvel III and its
Subsidiaries for the fiscal year then ended, accompanied, in the case of
the aforementioned Consolidated balance sheets and related Consolidated
statements of income and cash flows, by an opinion of Ernst & Young,
independent public accountants, and the Consolidated and consolidating
balance sheets of Marvel III and its Subsidiaries as at September 30, 1996,
and the related Consolidated and consolidating statements of income and
cash flows of Marvel III and its Subsidiaries for the nine months then
ended, duly certified by the chief financial officer of Marvel III, copies
of which have been furnished to each Lender, fairly present, subject, in
the case of said balance sheets as at September 30, 1996, and said
statements of income and cash flows for the nine months then ended, to
year-end audit adjustments, the Consolidated and consolidating financial
condition of Marvel III and its Subsidiaries as at such dates and the
Consolidated and consolidating results of the operations of Marvel III and
its Subsidiaries for the periods ended on such dates, all in accordance
with generally accepted accounting principles applied on a consistent
basis.
(g) There is no pending or threatened action, proceeding, governmental
investigation or arbitration affecting any Loan Party, the Bank or any of
their Subsidiaries (other than any Subsidiary of the Borrower ) before any
court, governmental agency or arbitrator, which is reasonably likely to
have a Material Adverse Effect (with respect to clause (a) of the
definition thereof, the term "Person" shall refer to such Loan Party or the
Bank, as the case may be) or that purports to affect the legality, validity
or enforceability of this Agreement, any Note, any other
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68
Loan Document or any Related Document or the consummation of the
transactions contemplated hereby or thereby.
(h) The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying Margin Stock and no proceeds of
any Advance will be used to purchase or carry any Margin Stock, or to
extend credit to others for the purpose of purchasing or carrying any
Margin Stock.
(i) No proceeds of any Advance will be used to acquire any equity
security of a class that is registered pursuant to Section 12 of the
Exchange Act.
(j) The Borrower and its ERISA Affiliates are in compliance in all
material respects with the applicable provisions of ERISA and the Code with
respect to each Plan thereof. No ERISA Event has occurred or is reasonably
expected to occur with respect to any Plan of the Borrower or any of its
ERISA Affiliates. The amount of all Unfunded Pension Liabilities under all
Plans of the Borrower and its ERISA Affiliates does not exceed $60,000,000.
None of the Borrower or any of its ERISA Affiliates has made contributions
or incurred any Withdrawal Liability to any Multiemployer Plan within the
past five years, and it is not reasonably expected that such contributions
shall be made or required or that such liability shall be incurred in any
such case in amounts or under circumstances that would be reasonably likely
to result in a material liability to the Borrower or any of its ERISA
Affiliates. Schedule B (Actuarial Information) to the 1995 annual report
(Form 5500 Series) for each Plan of the Borrower and each of its ERISA
Affiliates, copies of which have been filed with the Internal Revenue
Service and furnished or made available to the Lenders, is complete and
accurate in all material respects and fairly presents the funding status of
such Plan, and since the date of such Schedule B there has been no material
adverse change in such funding status. The obligations of the Borrower and
its Subsidiaries for post-retirement benefits to be provided under Plans
which are welfare benefit plans (as defined in Section 3(l) of ERISA) are
not reasonably likely to have a Material Adverse Effect (in the case of
clause (a) of the definition thereof, the term "Person" shall refer to the
Borrower).
(k) The operations and properties of the Borrower are in substantial
compliance with all Environmental Laws, all necessary Environmental Permits
have been obtained and are in effect for the operations and properties of
the Borrower and the Borrower is in compliance with all such Environmental
Permits, except, as to all of the above, where the failure to do so would
not be reasonably likely to have a Material Adverse Effect (in the case of
clause (a) of the definition thereof, the term "Person" shall refer to the
Borrower); and no circumstances exist that are reasonably likely to (i)
form the basis of an Environmental Action against the Borrower or any of
its
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properties or (ii) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law that would, in the case of either (i) or (ii) above, be
reasonably likely to have a Material Adverse Effect (in the case of clause
(a) of the definition thereof, the term "Person" shall refer to the
Borrower).
(l) The Borrower has filed, has caused to be filed or has been
included in all tax returns (Federal, state, local and foreign) required to
be filed and has paid all taxes shown thereon to be due, together with
applicable interest and penalties.
(m) The Borrower is not an "investment company," or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company", as such terms are defined in the Investment Company Act of 1940,
as amended. Neither the making of any Advances, nor the application of the
proceeds or repayment thereof by the Borrower, nor the consummation of the
other transactions contemplated hereby, will violate any provision of such
Act or any rule, regulation or order of the Securities and Exchange
Commission thereunder.
(n) The Borrower is Solvent.
(o) Set forth on Schedule III hereto is a complete and accurate list
of all Debt (other than intercompany Debt, Debt under the Loan Documents
and Debt under the Revolving Credit Agreement and the "Loan Documents"
referred to therein) of the Borrower as of the date hereof, showing as of
the date hereof the principal amount outstanding thereunder; and there is
no other agreement, contract, loan agreement, indenture, mortgage, deed of
trust, lease or other instrument binding on or affecting the Borrower that
imposes any material Obligation or material restriction on the Borrower.
(p) Set forth on Schedule IV hereto is a complete and accurate list of
all Investments held by the Borrower as of the date hereof, showing as of
the date hereof the amount, obligor or issuer and maturity, if any,
thereof.
SECTION 4.02. Representations and Warranties Applicable to Marvel. On
and after the Marvel Inclusion Date, the representations and warranties
contained in Section 4.01(g), (k), (l) and (m) and in the last sentence of
Section 4.01(c) shall be deemed to also cover Marvel and its Subsidiaries as if
such Persons were explicitly referred to in such Sections.
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ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrower
will:
(a) Compliance with Laws, Etc. Comply, and, on and after the Marvel
Inclusion Date, cause Marvel and each of its Subsidiaries to comply, in all
material respects with all applicable laws, rules, regulations and orders
(such compliance to include, without limitation, paying before the same
become delinquent all taxes, assessments and governmental charges imposed
upon it or upon its property except to the extent contested in good faith),
the failure to comply with which would, individually or in the aggregate,
be reasonably likely to have a Material Adverse Effect (with respect to
clause (a) of the definition thereof, the term "Person" shall refer to the
Borrower).
(b) Compliance with Environmental Laws. Comply and, on and after the
Marvel Inclusion Date, cause Marvel and each of its Subsidiaries and all
lessees and all other Persons occupying its properties to comply, in all
material respects, with all Environmental Laws and Environmental Permits
applicable to its operations and properties; obtain and renew all
Environmental Permits necessary for its operations and properties; and
conduct, and cause, on and after the Marvel Inclusion Date, Marvel and each
of its Subsidiaries to conduct, any investigation, study, sampling and
testing, and undertake any cleanup, removal, remedial or other action
necessary to remove and clean up all Hazardous Materials from any of its
properties, in accordance with the requirements of all Environmental Laws;
provided, however, that the Borrower and, on and after the Marvel Inclusion
Date, Marvel and its Subsidiaries shall not be required to undertake any
such cleanup, removal, remedial or other action to the extent that its
obligation to do so is being contested in good faith and by proper
proceedings and appropriate reserves are being maintained with respect to
such circumstances.
(c) Maintenance of Insurance. Maintain, and, on and after the Marvel
Inclusion Date, cause Marvel and each of its Subsidiaries to maintain,
insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is usually carried
by companies engaged in similar businesses and owning similar properties in
the same general areas in which the Borrower, Marvel or such Subsidiary
operates.
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71
(d) Preservation of Corporate Existence, Etc. Preserve and maintain,
and, on and after the Marvel Inclusion Date, cause Marvel to preserve and
maintain, its corporate existence, rights (charter and statutory) and
franchises; provided, however, that neither the Borrower nor Marvel shall
be required to preserve any of its rights or franchises if the Board of
Directors of the Borrower (or, in the case of Marvel, the executive
committee of the Board of Directors of Marvel) shall determine that the
preservation thereof is no longer desirable in the conduct of the business
of the Borrower or Marvel, as the case may be, and that the loss thereof is
not disadvantageous in any material respect to the Borrower, Marvel or the
Lenders.
(e) Visitation Rights. At any reasonable time and from time to time,
upon reasonable prior notice, permit the Administrative Agent or any of the
Lenders or any agents or representatives thereof, to the extent reasonably
requested to examine and make copies of and abstracts from the records and
books of account of, and visit the properties of, the Borrower and, on and
after the Marvel Inclusion Date, Marvel and its Subsidiaries, and to
discuss the affairs, finances and accounts of the Borrower and, on and
after the Marvel Inclusion Date, Marvel and its Subsidiaries with any of
their officers or directors and with their independent certified public
accountants.
(f) Keeping of Books. Keep, and cause, on and after the Marvel
Inclusion Date, Marvel and each of its Subsidiaries to keep, proper books
of record and account, in which full and correct entries shall be made of
all financial transactions and the assets and business of the Borrower,
Marvel and each such Subsidiary to the extent necessary to permit the
preparation of the financial statements required to be delivered hereunder.
(g) Maintenance of Properties, Etc. Maintain and preserve, and cause,
on and after the Marvel Inclusion Date, Marvel and each of its Subsidiaries
to maintain and preserve, all of its properties that are used or useful in
the conduct of its business in good working order and condition, ordinary
wear and tear excepted.
(h) Termination of Financing Statements. Upon the request of the
Administrative Agent, and at the expense of the Borrower, within 10 days
after such request, furnish to the Administrative Agent proper termination
statements on Form UCC-3 covering such financing statements as the
Administrative Agent may reasonably request that were listed in the
completed requests for information referred to in Section 3.01(k)(ix)(2).
(i) Collateral Account. Maintain the Borrower Collateral Account and
the L/C Cash Collateral Account with Citibank pursuant to the terms of the
Borrower Security Agreement.
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72
(j) Reporting Requirements. Furnish to the Lenders through the
Administrative Agent:
(i) as soon as available and in any event within 50 days after
the end of each of the first three quarters of each fiscal year of the
Borrower, Consolidated balance sheets of the Borrower and its
Subsidiaries as of the end of such quarter and Consolidated statements
of earnings, cash flows and stockholders' equity of the Borrower and
its Subsidiaries for the period commencing at the end of the previous
fiscal year and ending with the end of such quarter, certified
(subject to normal year-end audit adjustment and the absence of
footnotes) on behalf of the Borrower by the chief financial officer of
the Borrower;
(ii) as soon as available and in any event within 105 days after
the end of each fiscal year of the Borrower, a copy of the annual
audit report for such year for the Borrower and its Subsidiaries,
containing financial statements for such year certified in a manner
reasonably acceptable to the Mafco Finance Required Lenders by Ernst &
Young or other independent public accountants reasonably acceptable to
the Mafco Finance Required Lenders;
(iii) together with each delivery of financial statements
pursuant to clauses (i) and (ii) above, a certificate executed on
behalf of the Borrower by a senior officer of the Borrower stating
that no Default has occurred and is continuing or, if a Default has
occurred and is continuing, a statement as to the nature thereof and
the action that the Borrower has taken and proposes to take with
respect thereto;
(iv) as soon as possible and in any event within five days after
knowledge of the occurrence of each Default continuing on the date of
such statement, a statement executed on behalf of the Borrower by the
chief financial officer of the Borrower setting forth details of such
Default and the action which the Borrower has taken and proposes to
take with respect thereto;
(v) as soon as available and in any event no later than February
1 of each fiscal year of the Bank, forecasts prepared by management of
the Bank, in form satisfactory to the Administrative Agent, of balance
sheets and income statements on a quarterly basis for the term of the
Term Facility;
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73
(vi) promptly after the sending or filing thereof, copies of any
filings and statements that the Borrower or any Subsidiary of the
Borrower files with the Securities and Exchange Commission or any
national securities exchange;
(vii) promptly and in any event within (A) thirty days after the
Borrower knows or has reason to know that any ERISA Event with respect
to the Borrower or any of its ERISA Affiliates has occurred, a
statement describing such ERISA Event and the action, if any, that the
Borrower or such ERISA Affiliate proposes to take with respect
thereto, (B) thirty days either after receipt thereof by the Borrower
or after the Borrower knows or has reason to know of the receipt
thereof by any of its ERISA Affiliates from the sponsor of a
Multiemployer Plan of the Borrower or any of its ERISA Affiliates, a
copy of each notice received by any such Person concerning the
imposition of Withdrawal Liability upon such Person, the
reorganization or termination of such Multiemployer Plan, or the
amount of the liability incurred, or that may be incurred, by the
Borrower or any of its ERISA Affiliates in connection with any such
event and (C) ten Business Days either after receipt thereof by the
Borrower or after the Borrower knows or has reason to know of the
receipt thereof by any of its ERISA Affiliates, copies of each notice
from the PBGC stating its intention to terminate any Plan of the
Borrower or any of its ERISA Affiliates or to have a trustee appointed
to administer any such Plan, provided that in the case of any event
described in clauses (A), (B) or (C) hereof, such event shall have a
Material Adverse Effect (with respect to clause (a) of the definition
thereof, the term "Person" shall refer to the Borrower);
(viii) in the event of any change in GAAP from the date of the
annual financial statements referred to in Section 4.01(f) and upon
delivery of any financial statement required to be furnished under
clause (i) or (ii) of this Section 5.01(j), a statement of
reconciliation conforming any information contained in such financial
statement with GAAP as in effect on the date of the annual financial
statements referred to in Section 4.01(f);
(ix) promptly upon any officer of the Borrower obtaining
knowledge thereof, written notice of (A) the institution or
non-frivolous threat of any action, suit, proceeding, governmental
investigation or arbitration against or affecting the Borrower or any
of its Subsidiaries or any property of the Borrower or any of its
Subsidiaries (any such action, suit, proceeding, investigation or
arbitration being a "Proceeding") or (B) any material development in
any Proceeding that is already pending, where such Proceeding or
development has not previously been disclosed by the Borrower
hereunder and would be reasonably likely to have a Material Adverse
Effect (in the case of
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74
clause (a) of the definition of Material Adverse Effect, the term
"Person" shall refer to the Borrower); together in each case with such
other information as any Lender through the Administrative Agent may
reasonably request to enable the Lenders and their counsel to evaluate
such matters;
(x) promptly after the furnishing thereof, copies of any material
statement or material report furnished to any other holder of the
securities of the Borrower or, on and after the Marvel Inclusion Date,
of Marvel or of any Subsidiary of Marvel pursuant to the terms of any
indenture, loan or credit or similar agreement and not otherwise
required to be furnished to the Lenders pursuant to any other clause
of this Section 5.01(j);
(xi) promptly upon receipt thereof, copies of all notices,
requests and other documents received by any Loan Party or any
Subsidiary of any Loan Party under or pursuant to any Related Document
and, from time to time upon request by the Administrative Agent, such
information and reports regarding the Related Documents as the
Administrative Agent may reasonably request;
(xii) within 10 days after receipt, copies of all Revenue Agent
Reports (Internal Revenue Service Form 886), or other written
proposals of the Internal Revenue Service, that propose, determine or
otherwise set forth positive adjustments to the Federal income tax
liability of the affiliated group (within the meaning of Section
1504(a)(1) of the Internal Revenue Code) of which the Borrower is a
member aggregating $5,000,000 or more;
(xiii) promptly, and in any event within five Business Days after
the due date (with extensions) for filing the final Federal income tax
return in respect of each taxable year, a certificate of the Borrower
(a "Tax Certificate"), signed on behalf of the Borrower by the
President or the chief financial officer of the Borrower, stating that
the common parent of the affiliated group (within the meaning of
Section 1504(a)(1) of the Internal Revenue Code) of which the Borrower
is a member has paid to the Internal Revenue Service or other taxing
authority the full amount that such affiliated group is required to
pay in respect of Federal income tax for such year;
(xiv) promptly after the occurrence thereof, notice of any
condition or occurrence on any property of the Borrower or, on and
after the Marvel Inclusion Date, Marvel or any Subsidiary of Marvel
that results in a material noncompliance by the Borrower, Marvel or
any of Marvel's Subsidiaries with any Environmental Law or
Environmental Permit or would be reasonably likely to (i) form the
basis of an Environmental Action against the Borrower, Marvel
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75
or any of Marvel's Subsidiaries or any such property that would be
reasonably likely to have a Material Adverse Effect (in the case of
clause (a) of the definition of Material Adverse Effect, the term
"Person" shall refer to the Borrower) or (ii) cause any such property
to be subject to any restrictions on ownership, occupancy, use or
transferability under any Environmental Law or Environmental Permit or
would be reasonably likely to (i) form the basis of an Environmental
Action against the Borrower, Marvel or any of Marvel's Subsidiaries or
such property that could have a Material Adverse Effect (in the case
of clause (a) of the definition of Material Adverse Effect, the term
"Person" shall refer to the Borrower);
(xv) promptly after any deposit in the Borrower Collateral
Account, a certificate signed on behalf of the Borrower by the
president or chief financial officer of the Borrower, stating the
amount of such deposit and the source of the funds of such deposit,
together with a schedule in form and substance reasonably satisfactory
to the Administrative Agent setting forth in reasonable detail the
computations and other information on which the amount and source of
such deposit were determined; and
(xvi) such other information respecting the condition (financial
or otherwise), operations, assets or business of the Borrower or any
of its Subsidiaries as any Lender through the Administrative Agent may
from time to time reasonably request.
(k) Look-Forward Certificate. With respect to each deposit (other than
of income or proceeds of Collateral Investments) to the Collateral Accounts
(other than the Second Mafco Collateral Account and the L/C Cash Collateral
Account), the Borrower shall, within 15 Business Days prior to the date of
such deposit or within five Business Days after the date of such deposit,
deliver a certificate (the "Look-Forward Certificate") to the
Administrative Agent stating that the pro forma amounts available to be
loaned by First Gibraltar to Borrower Parent, together with amounts
received by Mafco pursuant to or in connection with any Related Document,
will not be less than $15 million in any calendar quarter (of which at
least $10 million shall be from amounts available to be loaned by First
Gibraltar to Borrower Parent) and will not be insufficient to pay interest
on the Advances then outstanding and interest on the Debt then outstanding
under the Revolving Credit Agreement, together with a schedule in form
reasonably satisfactory to the Administrative Agent setting forth in
reasonable detail the computations, assumptions and other information on
which such certification is based) (taking into account, among other
things, the Bank's performance to date, the quality of the Bank's assets
and the presence of any agreement with the Bank's regulators including, but
not limited to, an agreement relating to capital, asset quality,
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76
dividends or management); provided, however, that, notwithstanding the
foregoing, if a Look-Forward Certificate has been delivered to the
Administrative Agent within 90 days prior to a deposit in the Mafco
Collateral Account of amounts paid under or in connection with any Related
Document or Asset Sale, the Borrower may, instead of delivering a
Look-Forward Certificate to the Administrative Agent, deliver a certificate
(a "Deposit Certificate") to the Administrative Agent, within 15 Business
Days prior to the date of such deposit or within five Business Days after
the date of such deposit, stating that (x) there has been no adverse change
in (1) the financial condition of each of the Bank and Mafco and its
Subsidiaries, taken as a whole, since the date of the last Look-Forward
Certificate that was delivered to the Administrative Agent or (2) the
projections contained in such Look-Forward Certificate and (y) no event has
occurred and is continuing which constitutes an Event of Default or would
constitute an Event of Default but for the requirement that notice be given
or time elapse or both.
(l) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the
Loan Documents with any of their Affiliates (other than the Borrower or any
of its Subsidiaries) on terms that are fair and reasonable and no less
favorable to the Borrower or such Subsidiary than it would obtain in a
comparable arm's-length transaction with a Person that is not an Affiliate;
provided, however, that for purposes of this Section 5.01(l), the term
"Affiliate" shall not include any officer or director of the Borrower or
such Subsidiary, as the case may be, who does not possess directly or
indirectly the power to vote 5% or more of the Voting Stock of the Borrower
or its Subsidiaries; provided further that nothing in this Section 5.01(l)
shall restrict the performance by the parties to Marvel Tax Sharing
Agreements of their respective obligations thereunder.
(m) Mafco Tax Group. Maintain its status as a member of the affiliated
group (within the meaning of Section 1504(a)(1) of the Code) of which Mafco
is the common parent.
(n) Net Cash Proceeds. Deposit all of the Net Cash Proceeds received
by the Borrower from and after the Effective Date from Asset Sales (other
than Net Cash Proceeds required to be applied to prepay or repay the Term
Facilities or the Debt outstanding under the Revolving Credit Agreement) in
the Mafco Collateral Account.
(o) Use of Proceeds. Use the proceeds of the Advances to purchase or
defease all or a portion of the Revlon Worldwide Bonds.
SECTION 5.02. Negative Covenants. So long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrower
will not:
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(a) Liens, Etc. Create or suffer to exist any Lien, upon or with
respect to any of its properties, whether now owned or hereafter acquired,
or sign or file under the Uniform Commercial Code of any jurisdiction, a
financing statement that names the Borrower as debtor or sign any security
agreement authorizing any secured party thereunder to file such financing
statement, or assign any right to receive income, other than the following
Liens: (i) Liens created by the Loan Documents or the "Loan Documents"
referred to in the Revolving Credit Agreement; (ii) the Liens described on
Schedule V provided that in the event any property subject to any such Lien
is released from such Lien, such released property may not thereafter be
subjected to any Lien other than Liens created by the Loan Documents or the
"Loan Documents" referred to in the Revolving Credit Agreement; (iii)
mechanics', materialmen's, carriers' and similar Liens arising in the
ordinary course of business securing obligations that are not overdue for a
period of more than 30 days or which are being contested in good faith and
by proper proceedings and as to which appropriate reserves are being
maintained; (iv) Liens for taxes, assessments and governmental charges or
levies not yet due and payable or which are being contested in good faith
and by proper proceedings and as to which appropriate reserves are being
maintained; and (v) judgment or other similar Liens, provided that there
shall be no period of more than 10 consecutive days during which a stay of
enforcement of the related judgment shall not be in effect.
(b) Lease Obligations. Create, incur, assume or suffer to exist any
obligations as lessee (i) for the rental or hire of real or personal
property in connection with any sale and leaseback transaction, or (ii) for
the rental or hire of other real or personal property of any kind under
leases or agreements to lease having an original term of one year or more.
(c) Mergers, Etc. Merge into or consolidate with any Person or permit
any Person to merge into it.
(d) Sales, Etc., of Assets. Sell, lease, transfer or otherwise dispose
of any assets or grant any option or other right to purchase, lease or
otherwise acquire any assets except (i) dispositions of obsolete, worn out
or surplus property disposed of in the ordinary course of business, (ii) a
transfer of any Coleman Worldwide LYONS held by the Borrower to Coleman
Worldwide and (iii) sales, leases, transfers or other dispositions of
assets for cash and for no less than fair market value, provided that, in
the case of an Asset Sale, the Borrower complies with the provisions of
Section 5.01(o) in respect of the Net Cash Proceeds of such Asset Sale.
(e) Dividends, Repurchases, Etc. Declare or pay any dividends,
purchase, redeem, retire, defease or otherwise acquire for value any of its
capital stock or any warrants, rights or options to acquire such capital
stock, now or hereafter outstanding,
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return any capital to its stockholders as such, make any distribution of
assets, capital stock, warrants, rights, options, obligations or securities
to its stockholders as such, except that the Borrower may (i) declare and
deliver dividends and distributions payable only in common stock or
warrants, rights or options to acquire common stock, (ii) declare and pay
cash dividends to its stockholders in an amount not to exceed the amount
released by the Collateral Agent from the Borrower Collateral Account
pursuant to the provisions of Section 7 of the Borrower Security Agreement
or the proceeds of the Advances and the proceeds of borrowings under the
Revolving Credit Agreement and (iii) declare and pay cash dividends to its
stockholders in an amount not to exceed the Net Cash Proceeds received by
Mafco and its Subsidiaries from Asset Sales on and after the Effective Date
solely to permit the compliance by Mafco and its Subsidiaries with the
requirements of Section 5.01(n) and Section 7(q) of the Mafco Guaranty.
(f) Investments. Make or hold any Investment in any Person, other than
(i) Investments by the Borrower and its Subsidiaries in Cash Equivalents,
(ii) a loan by the Borrower to Mafco of up to $650,000,000 out of the
proceeds of the Advances and the proceeds of borrowings under the Revolving
Credit Agreement, (iii) Investments by the Borrower in Mafco or any of its
Subsidiaries in an amount not to exceed the sum of the amount released by
the Collateral Agent from the Borrower Collateral Account pursuant to the
provisions of Section 7 of the Borrower Security Agreement plus the
aggregate amount of any Investments in the Borrower made by Mafco or any of
its Subsidiaries out of the proceeds from the amount released by the
Collateral Agent from the Mafco Collateral Accounts pursuant to Section 7
of the Mafco Security Agreement, (iv) Investments existing on the date
hereof, (v) contributions by the Borrower of common stock of Marvel to
Marvel III Holdings Inc., Marvel Holdings Inc. or Marvel (Parent) Holdings
Inc., (vi) Investments by the Borrower in the Coleman Worldwide LYONS,
(vii) Investments by the Borrower in the New Marvel Shares and (viii)
Investments in Mafco in an amount not to exceed the Net Cash Proceeds
received by Mafco and its Subsidiaries from Asset Sales on and after the
Effective Date solely to permit the compliance by Mafco and its
Subsidiaries with the requirements of Section 5.01(n) and Section 7(q) of
the Mafco Guaranty.
(g) Change in Nature of Business. Engage in any business other than
the ownership of the capital stock of Marvel III Holdings Inc.
(h) Accounting Changes. Make or permit any change in accounting
policies affecting (i) the presentation of financial statements or (ii)
reporting practices, except in either case as required or permitted by
GAAP.
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(i) Debt. Create, incur, assume or suffer to exist any Debt other
than: (i) Debt under the Loan Documents and under the Revolving Credit
Agreement and the "Loan Documents" referred to therein, (ii) endorsement of
negotiable instruments for deposit or collection or similar transactions in
the ordinary course of business and (iii) Debt evidenced by the promissory
note dated March __, 1997 made by the Borrower in favor of C&F Guarantor in
an aggregate principal amount up to $200,000,000.
(j) Charter Amendments. Amend its certificate of incorporation or
bylaws.
(k) Prepayments, Etc., of Debt. Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner, or
make any payment in violation of any subordination terms of, any Debt,
other than the prepayment of the Advances in accordance with the terms of
this Agreement, or amend, modify or change in any manner any term or
condition of any Debt or any agreement relating to such Debt other than (i)
mandatory and optional prepayments of the Debt under the Revolving Credit
Agreement pursuant to the terms thereof or any other Debt permitted
pursuant to the terms of Section 5.02(i), (ii) prepayments of Debt required
by Section 7(q) of the Mafco Guaranty and (iii) amendments, modifications
and changes to the terms and conditions of the Revolving Credit Agreement
pursuant to its terms.
(l) Negative Pledge. Enter into or suffer to exist any agreement
prohibiting or conditioning the creation or assumption of any Lien upon any
of its property or assets other than (i) in favor of the Administrative
Agent and the Lenders, (ii) any prohibition or condition existing on the
date hereof or (iii) any prohibition or condition contained in the
Revolving Credit Agreement or the "Loan Documents" referred to therein.
(m) Partnerships. Become a general partner in any general or limited
partnership.
(n) Capital Expenditures. Make any Capital Expenditures.
(o) Issuance of Capital Stock. Issue any capital stock or warrants,
rights or options to acquire such capital stock.
(p) Payment Restrictions. Create or otherwise cause or suffer to exist
or become effective any consensual encumbrance or restriction of any kind
on the ability of the Borrower to (i) pay dividends or make any other
distributions on any of the Borrower's capital stock, (ii) make loans or
advances to Mafco or any subsidiary of Mafco or (iii) repay or prepay any
Debt owed by the Borrower other than any
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(x) consensual encumbrances or restrictions existing on the date hereof and
(y) other consensual encumbrances or restrictions that are no more onerous
than those encumbrances and restrictions in existence on the date hereof
with respect to the Borrower.
(q) Amendment, Etc., of Related Documents. During such time as Marvel
is a member of the affiliated group (within the meaning of Section
1504(a)(1) of the Code) of which Mafco is the common parent, cancel or
terminate any Related Document to which it is a party or consent to or
accept any cancellation or termination thereof, amend, modify or change in
any manner any term or condition or give any consent, waiver or approval
thereunder, waive any default under or any breach of any term or condition
in such Related Document, agree in any manner to any other amendment,
modification or change of any term or condition of any Related Document, or
take any other action in connection with any such Related Document that
would impair the value of the interest or rights of Mafco thereunder or
that would impair the interest or rights of any Agent, the Collateral Agent
or any Lender Party thereunder or permit any of its Subsidiaries to do any
of the foregoing; provided, however, that anything to the contrary in this
sentence notwithstanding, any provision of any Marvel Tax Agreement may be
cancelled, terminated, amended, modified or changed in any manner, or any
consent, waiver or approval thereunder may be given, or any default or
breach thereunder may be waived, in each case, to the extent required by or
otherwise agreed to with, any governmental agency having regulatory
authority or supervision over any Subsidiary of the Borrower.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of, or interest on,
any Advance or any fees payable to the Administrative Agent or any Lender
hereunder, in each case when the same becomes due and payable, or any Loan
Party shall fail to make any other payment hereunder within five Business
Days after the same becomes due and payable; or
(b) Any representation or warranty made by any Loan Party or any FN
Party or under or in connection with any Loan Document or FN Document shall
prove to have been incorrect in any material respect when made or
confirmed; or
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(c) (i) The Borrower shall fail to perform or observe any term,
covenant or agreement contained in Section 5.01(h), 5.01(i), 5.01(j),
5.01(k), 5.01(m), 5.01(n) or 5.02, (ii) Mafco shall fail to perform or
observe any term, covenant or agreement contained in Section 7(i), 7(j),
7(l), 7(o), 7(p), 7(q) or 8 of the Mafco Guaranty, (iii) Coleman Guarantor
shall fail to perform or observe any term, covenant or agreement contained
in Section 7(i), 7(k), 7(m) or 8 of the Coleman Guaranty, (iv) Borrower
Parent shall fail to perform or observe any term, covenant or agreement
contained in Section 7(j) or 8 of the Borrower Parent Guaranty, (v) New
World Guarantor shall fail to perform or observe any term, covenant or
agreement contained in Section 7(h), 7(j), 7(k) or 8 of the New World
Guaranty, (vii) C&F Guarantor shall fail to perform or observe any term,
covenant or agreement contained in Section 7(h), 7(j), 7(k) or 8 of the C&F
Guaranty, (vii) Cigar Guarantor shall fail to perform or observe any term,
covenant or agreement contained in Section 7(h), 7(j), 7(k) or 8 of the
Cigar Guaranty, (viii) Flavors Guaranty shall fail to perform or observe
any term, covenant or agreement contained in Section 7(h), 7(j), 7(k) or 8
of the Flavors Guaranty, (ix) on and after the Revlon Inclusion Date,
Revlon Guarantor shall fail to perform or observe any term, covenant or
agreement contained in Section 7(h), 7(j) or 8 of the Revlon Guaranty, (x)
Revlon Worldwide Holdings shall fail to perform or observe any term,
covenant or agreement contained in Section , or of the Revlon Worldwide
Holdings Guaranty, (xi) on and after the MCG Inclusion Date, MCG shall fail
to perform or observe any term, covenant or agreement contained in certain
Sections of the MCG Guaranty substantially identical to the Sections of the
Revlon Worldwide Holdings Guaranty set forth in clause (x) above or (xii)
any Loan Party shall fail to perform or observe any other term, covenant or
agreement contained in any Loan Document on its part to be performed or
observed if such failure shall remain unremedied for 30 days after written
notice thereof shall have been given to the Borrower by the Administrative
Agent or any Lender; or
(d) (i) Any A Company, any Designated Operating Company or the Bank
shall fail to pay any principal of or premium or interest on any Debt which
is outstanding in a principal amount of at least $10,000,000 in the
aggregate (but excluding Debt outstanding hereunder) of such A Company,
such Designated Operating Company or the Bank (as the case may be), when
the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Debt; or (ii) any other event
shall occur or condition shall exist (other than (x) during the period from
the date hereof through June 30, 1997, the breach by Marvel of certain
financial covenants for the fiscal quarter ended September 30, 1996, for
the fiscal quarter ending December 31, 1996, for the fiscal quarter ending
March 31, 1997 and for the fiscal quarter ending
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June 30, 1997 under its senior bank credit agreements and (y) in the case
of the Specified Holding Company Debt, any event or condition relating to
Marvel, Marvel III Holdings Inc., Marvel (Parent) Holdings Inc. or Marvel
Holdings Inc.) under any agreement or instrument relating to any such Debt
and shall continue after the applicable grace period, if any, specified in
such agreement or instrument, if the effect of such event or condition is
to accelerate, or to permit the acceleration of, the maturity of such Debt;
or (iii) any such Debt shall be declared to be due and payable, or required
to be prepaid (other than by a regularly scheduled required prepayment),
redeemed, purchased or defeased, or an offer to prepay, redeem, purchase or
defease such Debt shall be required to be made, in each case prior to the
stated maturity thereof; or (iv) in the case of any Specified Holding
Company Debt, any event or condition relating to Marvel, Marvel III
Holdings Inc., Marvel (Parent) Holdings Inc. or Marvel Holdings Inc. shall
occur and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event or
condition is to accelerate the maturity of such Debt; or
(e) Any A Company, any Designated Operating Company (other than
Marvel) or the Bank shall generally not pay its debts as such debts become
due, or shall admit in writing its inability to pay its debts generally, or
shall make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against any A Company, any Designated
Operating Company (other than Marvel) or any FN Party seeking to adjudicate
it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its property and, in
the case of any such proceeding instituted against it (but not instituted
by it), either such proceeding shall remain undismissed or unstayed for a
period of 45 days, or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief against,
or the appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property) shall occur;
or any A Company, any Designated Operating Company (other than Marvel) or
the Bank shall take any corporate action to authorize any of the actions
set forth above in this Section 6.01(e); or
(f) Any judgment or order for the payment of money in excess of
$10,000,000 shall be rendered against any A Company, any Designated
Operating Company or the Bank and there shall be any period of 10
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect
unless such judgment or order shall have been vacated, satisfied or
dismissed or bonded pending appeal; provided, however, that any
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such judgment or order shall not be an Event of Default under this Section
6.01(f) if and for so long as (i) the entire amount of such judgment or
order is covered by a valid and binding policy of insurance between the
defendant and the insurer covering payment thereof and (ii) such insurer,
which shall be rated at least "A" by A.M. Best Company, has been notified
of, and has not disputed the claim made for payment of the amount of such
judgment or order; or
(g) Any non-monetary judgment or order shall be rendered against any A
Company, any Designated Operating Company or the Bank that is reasonably
likely to have a Material Adverse Effect (in the case of clause (a) of the
definition thereof, the term "Person" shall refer to the Borrower) and
there shall be any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect unless such judgment or order shall have
been vacated, satisfied, discharged or bonded pending appeal; or
(h) Ronald O. Perelman (or in the event of his incompetence or death,
his estate, heirs, executor, administrator, committee or other personal
representative) shall cease to beneficially own (i) at least 80% of the
Voting Stock of any A Company, any Designated Operating Company (other than
Marvel, Consolidated Cigar Holdings, PCT and Revlon) or the Bank, (ii) on
and after the Marvel Inclusion Date, at least a majority of the voting
power of the Voting Stock of Marvel, (iii) at least a majority of the
voting power of the Voting Stock of Revlon, and (iv) on and after the MCG
Inclusion Date, at least a majority of the voting power of the Voting Stock
of Consolidated Cigar Holdings, in each case other than as a result of an
Asset Sale pursuant to which all of the common stock held by Mafco and its
Subsidiaries in any A Company, any Designated Operating Company or the Bank
(or, in any such case, in such Person's direct or indirect parent) is sold
and the Net Cash Proceeds of such Asset Sale is applied in accordance with
the terms of the Loan Documents and the "Loan Documents" referred to in the
Revolving Credit Agreement; or
(i) Any ERISA Event shall have occurred with respect to Mafco or any
of its ERISA Affiliates and such ERISA Event, together with any and all
other ERISA Events that shall have occurred with respect to Mafco or any of
its ERISA Affiliates, is reasonably likely to have a Material Adverse
Effect (with respect to clause (a) of the definition thereof, the term
"Person" shall refer to Mafco); or
(j) Mafco or any of its ERISA Affiliates shall have been notified by
the sponsor of a Multiemployer Plan of the Borrower or any of its ERISA
Affiliates that it has incurred Withdrawal Liability to such Multiemployer
Plan in an amount that, when aggregated with all other amounts required to
be paid to Multiemployer Plans by Mafco and its ERISA Affiliates as
Withdrawal Liability (determined as of the date of such
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notification), exceeds $10,000,000 or requires payments exceeding
$10,000,000 per annum; or
(k) Mafco or any of its ERISA Affiliates shall have been notified by
the sponsor of a Multiemployer Plan of the Borrower or any of its ERISA
Affiliates that such Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, and as a result of
such reorganization or termination the aggregate annual contributions of
Mafco and its ERISA Affiliates to all Multiemployer Plans that are then in
reorganization or being terminated have been or will be increased over the
amounts contributed to such Multiemployer Plans for the plan years of such
Multiemployer Plans immediately preceding the plan year in which such
reorganization or termination occurs by an amount exceeding $10,000,000; or
(l) Any provision of any Loan Document, Related Document or FN
Document after delivery thereof pursuant to the Original Credit Agreement,
the Second Credit Agreement, the Third Credit Agreement, the Fourth Credit
Agreement, the Existing Credit Agreement, Section 3.01 hereof or pursuant
to the definition of "MCG Inclusion Date" shall for any reason cease (other
than pursuant to the terms thereof or, in the case of the Marvel Tax
Agreements, in accordance with the terms of this Agreement and the
Revolving Credit Agreement) to be valid and binding on or enforceable
against any party to it, or any party to any such document shall so state
in writing; or
(m) Any Collateral Document after delivery thereof pursuant to the
Original Credit Agreement, the Second Credit Agreement, the Third Credit
Agreement, the Fourth Credit Agreement, the Existing Credit Agreement,
Section 3.01 hereof or the definition of "MCG Inclusion Date" shall for any
reason (other than pursuant to the terms thereof) cease to create a valid
and perfected first priority Lien on the Collateral purported to be covered
thereby; or
(n) Any provision of the FN Holdings Debt Document, the FN Holdings
New Debt Document, the Second New FN Holdings Debt Document, the FN
Holdings Preferred Stock or the FN Parent Debt Document shall be
terminated, amended, waived or otherwise modified without the consent of
the Mafco Finance Required Lenders or any provision of the First Gibraltar
Charter Document shall be amended or modified without the consent of the
Mafco Finance Required Lenders (other than as permitted by the terms of the
Mafco Guaranty); or
(o) The Bank fails to maintain the minimum capital and leverage ratios
required as of the Effective Date for the Bank to be considered as a "well
capitalized"
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"savings association" pursuant to 12 U.S.C. Section 1831o and 12 C.F.R.
Section 565, as such Sections may be amended, reenacted or redesignated
from time to time; or
(p) (i) The common stock of any Designated Operating Company (other
than Marvel, Consolidated Cigar Holdings and PCT) trading on the date
hereof shall cease to be publicly traded on the New York Stock Exchange;
(ii) at any time prior to the receipt by Mafco and its Subsidiaries after
the Effective Date of Net Cash Proceeds in an amount at least equal to $365
million from the sale, monetization or other disposal of News Corp.
Preferred ADRs, News Corp. Preferred ADRs shall cease to be publicly
traded; (iii) on or after the Marvel Inclusion Date, the common stock of
Marvel shall cease to be publicly traded on the New York Stock Exchange or
the Nasdaq National Market System; or (iv) on and after the MCG Inclusion
Date, the common stock of Consolidated Cigar Holdings shall cease to be
publicly traded on the New York Stock Exchange; or
(q) Gerald J. Ford shall beneficially or legally own shares of the
common stock of FN Holdings other than shares of the Class B Common Stock;
or
(r) Any Person party to the Related Documents shall fail to directly
deposit in the Mafco Collateral Account (i) a payment to Mafco under any
Related Document (which payment is required to be made and is permitted
under each indenture and credit agreement to which such Person is a party)
or (ii) a loan to Mafco of the proceeds of any payment received by such
Person under any Related Document (which loan is required to be made and is
permitted under each indenture and credit agreement to which such Person is
a party) and such failure shall remain unremedied for three Business Days
other than any such failure which results from a termination or amendment
of any Related Document in accordance with the terms of this Agreement and
the Revolving Credit Agreement; or
(s) (i) Mafco shall fail to furnish to the Administrative Agent and
the Lenders on or prior to December 1, 1997, a business plan setting forth,
in respect of all of the Debt of Mafco and its Subsidiaries (other than
Debt of the Designated Operating Companies, the Bank, Marvel, Marvel III
Holdings Inc., Marvel (Parent) Holdings Inc., Marvel Holdings Inc.,
Meridian Sports Incorporated and their respective Subsidiaries) that is
scheduled to come due during calendar year 1998 and 1999, the method by
which all such Debt shall be repaid, prepaid, redeemed or refinanced on a
timely basis, including without limitation, through Asset Sales, issuances
of Debt, issuances of equity or contributions to capital, in each case in
reasonable detail as to the identity of the assets to be sold, the issuer
of the Debt or equity and such other details as the Mafco Finance
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Required Lenders shall request or (ii) the Mafco Finance Required Lenders
shall not have approved the form and substance of such business plan on or
prior to December 31, 1997; or
(t) the MCG Inclusion Date shall fail to occur within six months
following the Effective Date;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Commitment of each Lender to make Advances to be terminated,
whereupon the same shall forthwith terminate, and (ii) shall at the request, or
may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Notes, all interest thereon and all other amounts payable under
this Agreement to be forthwith due and payable, whereupon the Notes, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of
which are hereby expressly waived by the Borrower; provided, however, that, in
the event of an actual or deemed entry of an order for relief with respect to
the Borrower under the Federal Bankruptcy Code, (A) the obligation of each
Lender to make Advances shall automatically be terminated and (B) the Notes,
all such interest and all such amounts shall automatically become and be due
and payable, without presentment, demand, protest or any notice of any kind,
all of which are hereby expressly waived by the Borrower.
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ARTICLE VII
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
SECTION 7.01. Authorization and Action. Each Lender hereby appoints
and authorizes each of the Administrative Agent and the Collateral Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to the Administrative
Agent and the Collateral Agent, as the case may be, by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto. As to
any matters not expressly provided for by the Loan Documents (including,
without limitation, enforcement or collection of the Notes), each of the
Administrative Agent and the Collateral Agent shall not be required to exercise
any discretion or take any action, but shall be required to act or to refrain
from acting (and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Required Lenders, and such instructions
shall be binding upon all Lenders and all holders of Notes; provided, however,
that neither the Administrative Agent nor the Collateral Agent shall be
required to take any action which exposes the Administrative Agent or the
Collateral Agent, as the case may be, to personal liability or which is
contrary to this Agreement or applicable law. Each of the Administrative Agent
and the Collateral Agent agrees to give to each Lender prompt notice of each
notice and other report given to it by the Borrower pursuant to the terms of
this Agreement.
SECTION 7.02. Administrative Agent's and Collateral Agent's Reliance,
Etc. Neither the Administrative Agent nor the Collateral Agent nor any of their
respective directors, officers, agents or employees, shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
the Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, each of the
Administrative Agent and the Collateral Agent: (i) may treat the payee of any
Note as the holder thereof until the Administrative Agent receives and accepts
an Assignment and Acceptance entered into by the Lender that is the payee of
such Note, as assignor, and an Eligible Assignee, as assignee, as provided in
Section 8.07; (ii) may consult with legal counsel (including counsel for the
Borrower), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith
by it in accordance with the advice of such counsel, accountants or experts;
(iii) makes no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, warranties or representations
(whether written or oral) made in or in connection with the Loan Documents;
(iv) shall not have any duty to ascertain or to inquire as to the performance
or observance of any of the terms, covenants or conditions of the Loan
Documents on the part of the Borrower or to inspect the property (including the
books and records) of the Borrower; (v) shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or
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priority of any lien or security interest created or purported to be created
under or in connection with the Loan Documents or any other instrument or
document furnished pursuant hereto; and (vi) shall incur no liability under or
in respect of the Loan Documents by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopier,
telegram, cable or telex) believed by it to be genuine and signed or sent by
the proper party or parties.
SECTION 7.03. Citibank and Affiliates. With respect to its
Commitments, the Advances made by it and the Note issued to it, Citibank shall
have the same rights and powers under the Loan Documents as any other Lender
and may exercise the same as though it were not the Administrative Agent or the
Collateral Agent and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include Citibank hereunder in its individual capacity.
Citibank and its affiliates may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking engagements from and
generally engage in any kind of business with, the Borrower, any of its
Subsidiaries and any Person who may do business with or own securities of the
Borrower or any such Subsidiary, all as if Citibank were not the Administrative
Agent or the Collateral Agent and without any duty to account therefor to the
Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon either the Administrative Agent or
the Collateral Agent or any other Lender and based on the financial statements
referred to in Section 4.01(f) and such other documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon the Administrative Agent, the Collateral Agent or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 7.05. Indemnification. (a) Each Lender severally agrees to
indemnify each of the Administrative Agent and the Collateral Agent (in each
case to the extent not promptly reimbursed by the Borrower) from and against
such Lender's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever that
may be imposed on, incurred by, or asserted against the Administrative Agent or
the Collateral Agent, as the case may be, in any way relating to or arising out
of the Loan Documents or any action taken or omitted by the Administrative
Agent or the Collateral Agent, as the case may be, under the Loan Documents;
provided, however, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Administrative
Agent's or the Collateral Agent's gross negligence or willful misconduct.
Without limitation
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of the foregoing, each Lender agrees to reimburse the Administrative Agent and
the Collateral Agent promptly upon demand for its ratable share of any costs
and expenses (including, without limitation, fees and expenses of counsel)
payable by the Borrower under Section 8.04, to the extent that the
Administrative Agent or the Collateral Agent, as the case may be, is not
promptly reimbursed for such costs and expenses by the Borrower. For purposes
of this Section 7.05(a), the Lenders' respective ratable shares of any amount
shall be determined, at any time, according to the sum of (a) the aggregate
principal amount of the Advances outstanding at such time and owing to the
respective Lenders and (b) their respective unused Term Commitments at such
time. In the event that any Defaulted Advance shall be owing by any Defaulting
Lender at any time, such Lender's Commitment with respect to the Facility under
which such Defaulted Advance was required to have been made shall be considered
to be unused for purposes of this Section 7.05(a) to the extent of the amount
of such Defaulted Advance. The failure of any Lender to reimburse the
Administrative Agent or the Collateral Agent promptly upon demand for its
ratable share of any amount required to be paid by the Lender to the
Administrative Agent or the Collateral Agent, as the case may be, as provided
herein shall not relieve any other Lender of its obligation hereunder to
reimburse the Administrative Agent or the Collateral Agent, as the case may be,
for its ratable share of such amount, but no Lender shall be responsible for
the failure of any other Lender to reimburse the Administrative Agent or the
Collateral Agent, as the case may be, for such other Lender's ratable share of
such amount. Without prejudice to the survival of any other agreement of any
Lender hereunder, the agreement and obligations of each Lender contained in
this Section 7.05(a) shall survive the payment in full of principal, interest
and all other amounts payable hereunder and under the other Loan Documents.
SECTION 7.06. Successor Administrative Agent and Collateral Agent.
Each of the Administrative Agent and the Collateral Agent may resign at any
time by giving written notice thereof to the Lenders and the Borrower and may
be removed at any time with or without cause by, in the case of the
Administrative Agent, the Required Lenders and, in the case of the Collateral
Agent, the Mafco Finance Required Lenders. Upon any such resignation or
removal, the Required Lenders or the Mafco Finance Required Lenders shall have
the right to appoint, with the consent of the Borrower, a successor
Administrative Agent or Collateral Agent, respectively, which shall be a
Lender, or if no Lender consents to act as Administrative Agent or Collateral
Agent, as the case may be, hereunder, an institution that would be permitted to
be an Eligible Assignee hereunder. If no successor Administrative Agent or
Collateral Agent, as the case may be, shall have been so appointed by the
Required Lenders or the Mafco Finance Required Lenders, as the case may be, and
shall have accepted such appointment, within 30 days after the retiring
Administrative Agent's or Collateral Agent's giving of notice of resignation or
the Required Lenders' or the Mafco Finance Required Lenders' removal of the
retiring Administrative Agent or Collateral Agent, then the retiring
Administrative Agent, or Collateral Agent, as the case may be, may, on behalf
of the Lenders, appoint a successor Administrative Agent or Collateral Agent,
as the case may be, which shall
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be a commercial bank that is acceptable to the Borrower (which shall not
unreasonably withhold its approval). Upon the acceptance of any appointment as
Administrative Agent or Collateral Agent, as the case may be, thereunder by a
successor Administrative Agent or Collateral Agent, as the case may be, such
successor Administrative Agent or Collateral Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent or Collateral Agent, as the case may be, and the
retiring Administrative Agent or Collateral Agent, as the case may be, shall be
discharged from its duties and obligations under the Loan Documents. After any
retiring Administrative Agent's or Collateral Agent's resignation or removal
hereunder as Administrative Agent or Collateral Agent, the provisions of this
Article VII shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent or Collateral Agent, as the case
may be.
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ARTICLE VIII
MISCELLANEOUS
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SECTION 8.01. Amendments, Etc. No amendment or waiver of any provision
of this Agreement or the Notes, nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Mafco Finance Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or
consent shall, unless in writing and signed by each of the Lenders (other than
any Lender which is, at such time, a Defaulting Lender) and the Revolving
Credit Agreement Lenders (other than any Revolving Credit Agreement Lender
which is, at such time, a "Defaulting Lender" under the Revolving Credit
Agreement), do any of the following: (i) waive any of the conditions specified
in Section 3.01 or 3.02, (ii) change the definition of the term "Mafco Finance
Required Lenders", (iii) release any material portion of the Collateral or
permit the creation, incurrence, assumption or existence of any Lien on any
material portion of the Collateral other than (A) releases of any material
portion of the Collateral or the creation, incurrence, assumption or existence
of any such Lien in connection with Asset Sales (which shall include, for
purposes of this Section 8.01, sales, monetizations or other disposals of the
News Corp. Preferred ADRs) the Net Cash Proceeds of which are applied as
contemplated by the Loan Documents and the "Loan Documents" under the Revolving
Credit Agreement, (B) releases of the News Corp. Preferred ADRs pursuant to the
terms of the Loan Documents and the "Loan Documents" under the Revolving Credit
Agreement and (C) the Liens created by the Collateral Documents and the Liens
permitted by Section 5.02(a), Section 8(a) of the Borrower Parent Guaranty,
Section 8(a) of the Coleman Guaranty, Section 8(a) of the Mafco Guaranty,
Section 8(a) of the C&F Guaranty, Section 8(a) of the Cigar Guaranty, Section
8(a) of the Flavors Guaranty, Section 8(a) of the New World Guaranty, Section
8(a) of the Revlon Guaranty, Section 8(a) of the Revlon Worldwide Holdings
Guaranty and, on and after the MCG Inclusion Date, the comparable provision of
the MCG Guaranty, (iv) amend this Section 8.01, (v) increase the Commitments of
the Lenders or subject the Lenders to any additional obligations, (vi) reduce
the principal of, or interest on, the Notes or any fees or other amounts
payable hereunder or (vii) postpone any date fixed for any mandatory reduction
in the Commitments or for any payment of principal of, or interest on, the
Notes or any fees or other amounts payable hereunder or amend Section 2.03 or
2.05(b) (other than Section 2.05(b)(vii)); provided further that,
notwithstanding the foregoing, Section 2.05(b)(ii) may be amended by the
Supermajority Lenders and the "Supermajority Lenders" under the Revolving
Credit Agreement in connection with the issuance of preferred stock by FN
Parent and/or FN Holdings if all of the proceeds of such issuance are used to
prepay or repay in full the Debt outstanding under the First Gibraltar Credit
Agreement; provided further that no change to the definition of the term
"Required Lenders" shall be made unless in writing and signed by each of the
Lenders (other than any Lender which is, at such times a Defaulting Lender)
provided further that no amendment, waiver or consent shall, unless in writing
and signed by the Administrative Agent in addition to the Lenders and Revolving
Credit Agreement Lenders required above to take such action, affect the rights
or duties of the Administrative Agent under this Agreement or any Note;
provided further that no amendment, waiver or consent
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shall, unless in writing and signed by the Collateral Agent in addition to the
Lenders and Revolving Credit Agreement Lenders required above to take such
action, affect the rights or duties of the Collateral Agent under this
Agreement.
SECTION 8.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic,
telex or cable communication) and mailed, telecopied, telegraphed, telexed,
cabled or delivered, if to the Borrower, at its address at c/o MacAndrews and
Forbes Holdings Inc., 35 East 62nd Street, New York, New York 10021, Attention:
General Counsel, if to any Financial Institution at its Domestic Lending Office
on Schedule I hereto; if to any other Lender, at the address specified in the
Assignment and Acceptance pursuant to which it became a Lender; and if to the
Administrative Agent or the Collateral Agent, at its address at 399 Park
Avenue, New York, New York 10043, Attention: James Buchanan, or, as to the
Borrower, the Administrative Agent or the Collateral Agent, at such other
address as shall be designated by such party in a written notice to the other
parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower, the
Administrative Agent and the Collateral Agent. All such notices and
communications shall be effective (i) when received, if mailed or delivered or
telecopied (including machine acknowledgment), or (ii) when delivered to the
telegraph company, confirmed by telex answerback or delivered to the cable
company, respectively, except that notices and communications to the
Administrative Agent pursuant to Article II or VII shall not be effective until
received by the Administrative Agent.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any
Lender or the Administrative Agent or the Collateral Agent to exercise, and no
delay in exercising, any right hereunder or under any Note shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 8.04. Costs; Expenses. (a) The Borrower agrees to pay on
demand all reasonable out-of-pocket costs and expenses of the Administrative
Agent and the Collateral Agent in connection with the preparation, execution,
delivery, administration, modification and amendment of the Loan Documents and
the other documents to be delivered hereunder (including, without limitation,
(A) all due diligence, transportation, computer, duplication, appraisal, audit
and insurance expenses and fees and expenses of consultants engaged with the
prior consent of the Borrower (which consent shall not be unreasonably
withheld) and (B) the reasonable fees and out-of-pocket expenses of counsel for
the Administrative Agent with respect thereto, with respect to advising the
Administrative Agent and the Collateral Agent as to their respective rights and
responsibilities, or the protection or preservation of rights or interests,
under the Loan Documents, with respect to negotiations with the Borrower or
with other creditors of the Borrower arising out of any Default or any events
or circumstances that
<PAGE>
94
may give rise to a Default and with respect to presenting claims in, monitoring
or otherwise participating in any bankruptcy, insolvency or other similar
proceeding affecting creditors' rights generally and any proceeding ancillary
thereto). The Borrower further agrees to pay on demand all reasonable
out-of-pocket costs and expenses of the Administrative Agent, the Collateral
Agent and the Lenders in connection with the enforcement of the Loan Documents
and the other documents to be delivered hereunder, whether in action, suit,
litigation, any bankruptcy, insolvency or other similar proceeding affecting
creditors' rights generally or otherwise (including, without limitation, the
reasonable fees (including the allocated costs of internal counsel) and
reasonable expenses of counsel for the Administrative Agent, the Collateral
Agent and each Lender with respect thereto) and expenses in connection with the
enforcement of rights under this Section 8.04(a).
(b) If any payment of principal of any Eurodollar Rate Advance is made
by the Borrower to or for the account of a Lender other than on the last day of
the Interest Period for such Advance, as a result of a payment or Conversion
pursuant to Section 2.09(c) or 2.10, acceleration of the maturity of the Notes
pursuant to Section 6.01 or for any other reason, the Borrower shall, upon
demand by such Lender (with a copy of such demand to the Administrative Agent),
pay to the Administrative Agent for the account of such Lender any amounts
required to compensate such Lender for any additional losses, costs or expenses
which it may reasonably incur as a result of such payment, including, without
limitation, any loss, cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender to fund or
maintain such Advance.
(c) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, the Collateral Agent, the Documentation Agent, the
Syndication Agent and each Lender and each of their affiliates and their
officers, directors, trustees, employees, agents and advisors (each, an
"Indemnified Party") from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of (or in connection with the preparation for a defense of) any
investigation, litigation or proceeding arising out of, related to or in
connection with this Agreement and the transactions contemplated hereby,
whether or not an Indemnified Party is a party thereto, whether or not the
transactions contemplated hereby are consummated, whether or not any such
claim, investigation, litigation or proceeding is brought by the Borrower or
any other person and whether or not such Indemnified Party is a Lender at such
time) except (i) to the extent such claim, damage, loss, liability or expense
(x) is found in a final, non-appealable judgment by a court of competent
jurisdiction (a "Final Judgment") to have resulted from such Indemnified
Party's gross negligence or willful misconduct or (y) arises from any legal
proceedings commenced against any Lender by any other Lender (in its capacity
as such and not as Administrative Agent, Collateral Agent, Documentation Agent
or Syndication Agent), and (ii) in the case of any litigation brought by the
Borrower
<PAGE>
95
(A) seeking a judgment against any Indemnified Party for any wrongful
act or omission of such Indemnified Party and (B) in which a Final Judgment is
rendered in the Borrower's favor against such Indemnified Party, the provisions
of this paragraph will not be available to provide indemnification for any
damage, loss, liability or expense incurred by such Indemnified Party in
connection with such litigation described in clause (i) or in connection with
any claim for which Final Judgment is rendered in the Borrower's favor in a
litigation described in clause (ii) of this Section 8.04(c).
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set-off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of the Borrower against any and all of the
obligations of the Borrower to such Lender now or hereafter existing under this
Agreement and the Note or Notes held by such Lender, whether or not such Lender
shall have made any demand under this Agreement or such Note or Notes and
although such obligations may be unmatured. Each Lender agrees promptly to
notify the Borrower after any such set-off and application shall be made by
such Lender, provided that the failure to give such notice shall not affect the
validity of such set-off and application; provided further that no Lender shall
exercise any such right of set-off or any other right of set-off without the
prior consent of the Administrative Agent. The rights of each Lender under this
Section 8.05 are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which such Lender may have.
SECTION 8.06. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower and the Administrative Agent
and when the Administrative Agent shall have been notified by each Financial
Institution that such Financial Institution has executed it and thereafter
shall be binding upon and inure to the benefit of the Borrower, the
Administrative Agent and each Lender and their respective successors and
assigns, except that the Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of the
Administrative Agent and the Required Lenders.
SECTION 8.07. Assignments and Participations. (a) Each Lender may and,
if demanded by the Borrower pursuant to Section 2.14, will assign to one or
more banks or other entities all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Commitment, the Advances owing to it and the Note or Notes held by it);
provided, however, that (i) each such assignment shall be of a uniform, and not
a varying, percentage of all rights and obligations under and in respect of the
Term Facility;
<PAGE>
96
(ii) the amount of the Commitment of the assigning Lender being assigned
pursuant to each such assignment (determined as of the date of the Assignment
and Acceptance with respect to such assignment) shall in no event be less than
$10,000,000 and shall be an integral multiple of $1,000,000 in excess thereof,
or shall be an assignment to another Lender or an assignment of all of the
assigning Lender's rights and obligations hereunder and under the Notes, (iii)
each such assignment shall be to another Lender, an Affiliate of the assigning
Lender or to an Eligible Assignee, (iv) each such assignment made as a result
of a demand by the Borrower pursuant to Section 2.14 shall be arranged by the
Borrower after consultation with the Administrative Agent and shall be either
an assignment of all of the rights and obligations of the assigning Lender
under this Agreement or an assignment of a portion of such rights and
obligations made concurrently with another such assignment or other such
assignments that together cover all of the rights and obligations of the
assigning Lender under this Agreement, (v) no Lender shall be obligated to make
any such assignment as a result of a demand by the Borrower pursuant to Section
2.14 unless and until such Lender shall have received one or more payments from
either the Borrower or one or more Eligible Assignees in an aggregate amount at
least equal to the aggregate outstanding principal amount of the Advances owing
to such Lender, together with accrued interest thereon to the date of payment
of such principal amount and all other amounts payable to such Lender under
this Agreement, (vi) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note or Notes subject
to such assignment and a processing and recordation fee of $3,000 from the
assignee and (vii) no such assignments shall be permitted without the consent
of the Administrative Agent and the Borrower (such consent not to be
unreasonably withheld). Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, (x) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and (y) the Lender assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such assigning Lender makes no representation
or warranty and assumes no responsibility
<PAGE>
97
with respect to the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under this Agreement or
any other instrument or document furnished pursuant hereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the financial statements referred to in Section 4.01(f) and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the Administrative
Agent, the Collateral Agent, such assigning Lender or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes each of the Administrative
Agent and the Collateral Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement as are delegated to the
Administrative Agent or the Collateral Agent, as the case may be, by the terms
hereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of this Agreement are required to be
performed by it as a Lender.
(c) The Administrative Agent shall maintain at its address referred to
in Section 8.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitment of, and principal amount of the Advances owing
under each Facility to, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrower, the Administrative Agent, and the
Lenders may treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
together with any Note or Notes subject to such assignment, the Administrative
Agent shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower. Within five Business Days
after its receipt of such notice, the Borrower, at its own expense, shall
execute and deliver to the Administrative Agent in exchange for the surrendered
Note or Notes a new Note or Notes to the order of such Eligible Assignee in an
amount equal to the Commitment assumed by it under a Facility pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained a
Commitment hereunder under such Facility, a new Note to the order of the
assigning Lender in an amount equal to such Commitment retained by it
hereunder. Such new Note or Notes shall be in an aggregate principal
<PAGE>
98
amount equal to the aggregate principal amount of such surrendered Note or
Notes, shall be dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of Exhibit A.
(e) Each Lender may sell participations to one or more banks or other
entities in or to all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment,
the Advances owing to it and the Note or Notes held by it); provided, however,
that (i) such Lender's obligations under this Agreement (including, without
limitation, its Commitment to the Borrower hereunder) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations, (iii) such Lender shall remain the
holder of any such Note for all purposes of this Agreement, (iv) the Borrower,
the Administrative Agent, the Collateral Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and (v) no participant
under any such participation shall have any right to approve any amendment or
waiver of any provision of any Loan Document, or any consent to any departure
by the Borrower therefrom, except to the extent that such amendment, waiver or
consent would reduce or postpone any date fixed for payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation.
(f) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 8.07, disclose
to the assignee or participant or proposed assignee or participant, any
information relating to the Borrower furnished to such Lender by or on behalf
of the Borrower; provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree pursuant to an
agreement substantially in the form of Exhibit I to preserve the
confidentiality of any confidential information relating to the Borrower
received by it from such Lender.
(g) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Advances
owing to it and the Note or Notes held by it) in favor of any Federal Reserve
Bank in accordance with Regulation A of the Board of Governors of the Federal
Reserve System.
SECTION 8.08. Governing Law; Submission to Jurisdiction. (a) This
Agreement and the Notes shall be governed by, and construed in accordance with,
the laws of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or Federal court of the United States of America sitting in New York
City, and any appellate court thereof, in
<PAGE>
99
any action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State
or, to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. Subject to the foregoing and to
paragraph (c) below, nothing in this Agreement shall affect any right that any
party hereto may otherwise have to bring any action or proceeding relating to
this Agreement against any other party hereto in the courts of any
jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any New York State or Federal
court and the defense of an inconvenient forum to the maintenance of such
action or proceeding in any such court.
(d) The Borrower agrees that service of process may be made on the
Borrower by personal service of a copy of the summons and complaint or other
legal process in any such suit, action or proceeding, or by registered or
certified mail (postage prepaid) to the address of the Borrower specified in
Section 8.02, or by any other method of service provided for under the
applicable laws in effect in the State of New York.
SECTION 8.09. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE DOCUMENTATION AGENT, THE
SYNDICATION AGENT AND THE LENDERS IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
ADVANCES OR THE ACTIONS OF THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE
DOCUMENTATION AGENT, THE SYNDICATION AGENT OR ANY LENDER IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
MAFCO FINANCE CORP.
By
----------------------------------
Name:
Title:
CITIBANK, N.A.,
as Administrative Agent and Collateral Agent
By
----------------------------------
Name:
Title:
<PAGE>
AMENDMENT TO
EMPLOYMENT AGREEMENT
FIRST AMENDMENT dated as of January 1, 1997 to Employment Agreement
dated October 28, 1993, between Andrews Group Incorporated, a Delaware
corporation (the "Company") and Paul E. Shapiro (the "Executive").
WHEREAS, the parties entered into an Employment Agreement dated as
of October 28, 1993 (as heretofore amended, the "Employment Agreement"); and
WHEREAS, the Employment Agreement terminates in accordance with its
terms on December 31, 1996; and
WHEREAS, the parties wish to extend and amend the Agreement as
provided herein.
NOW THEREFORE, the parties agree as follows:
1. Section 2.1 is amended by deleting "December 31, 1996" and
inserting in lieu thereof "December 31, 1999".
2. Section 3.1 is amended by deleting "$600,000" and inserting in
lieu thereof "$900,000 through December 31, 1997, $950,000 through December
31, 1998 and $1,000,000 through the end of the Term".
3. Section 3.2 is amended by deleting "$150,000" in the last
sentence thereof and inserting in lieu thereof "$167,000 and, in respect of
1996 shall be $750,000."
4. A new Section 3.2.1 shall be added to the Agreement as follows:
"3.2.1. Performance Bonus. The Executive shall participate in a
performance bonus plan to be adopted by the Company which will
permit the Executive to receive, upon achievement of operating
goals to be agreed upon with respect to each year of the Term a
bonus of up to 100% of each years' Base
Salary."
5. Sections 2.2, 4.1, 4.2 and 4.4 each are amended by deleting the
words "eighteen months" in each place such words appear in such sections and
replacing them with the words "twenty-four months".
<PAGE>
6. Section 4.4 is further amended by deleting the last two sentences
thereof which read as follows:
"The Company's obligations pursuant to this Section 4.4 are
subject to the Executive's duty to mitigate damages by seeking
other employment. To the extent that the Executive shall earn
compensation during the Damage Period (without regard to when
such compensa tion is paid), the Base Salary payments to be
made by the Company pursuant to this Section 4.4 shall be
corresponding reduced."
7. Paragraph 2 of Appendix I is hereby amended in its entirety to be
as follows:
"2. Automobile. The Company shall provide the Executive with a
radio car service for his continuous use. The Company shall
pay, upon presentation of an expense statement, all reasonable
expenses associated with the car service. The Company also
shall afford the Executive the right to use an automobile on a
continuing basis and shall provide garaging near the
Executive's residence, all on the following basis. The Company
shall pay, upon presentation of an expense statement, all
reasonable expenses associated with the operation of such
automobile and the rental of such garage space in the same
manner as is, from time to time, in effect with respect to
executive officers of the Company generally, including, without
limitation, all reasonable maintenance and insurance expenses.
The automobile furnished by the Company shall be a late model
BMW 750i or like vehicle to be reasonably selected by the
Executive. Upon the expiration of the Term, the Executive
promptly shall return the automobile to the Company."
8. Paragraph 7 of Appendix I is hereby amended by deleting
"$100,000" in clause (ii) of the first sentence thereof and inserting in lieu
thereof "$150,000".
9. Paragraph 8 of Appendix I is hereby amended by adding the
following to the end thereof:
"The Company and the Executive agree that
the Executive shall receive options to ac-
2
<PAGE>
quire 250,000 shares of common stock of Marvel on or about each
of January 1, 1997 and 1998 and options to acquire 100,000
shares of common stock of Marvel on or about January 1, 1999
(the grant required to be made in 1999 shall, however, if
permitted by provisions of the stock option plan, be made with
the earliest of the grants to be made hereunder). If in
connection with an extraordinary transaction involving Marvel,
the stock option plan for Marvel and previous grants to
executives of Marvel are restructured, then on the date that
options or other stock rights are granted to other executives
of Marvel, the Executive shall receive stock options or other
stock rights in Marvel on a basis at least equivalent
(including terms of vesting, early vesting, option exercise
price and the like) to other senior executives of Marvel
(except, with respect to the number of options granted, the
Chairman of Marvel)."
10. The parties agree that except as expressly amended
hereby, the Agreement as amended hereby shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
ANDREWS GROUP INCORPORATED
By:/s/ William C. Bevins
------------------------
Name: William C. Bevins
Title: Chief Executive Officer
/s/ Paul E. Shapiro
-------------------
Paul E. Shapiro
<PAGE>
EXHIBIT 21
ANDREWS GROUP INCORPORATED
LIST OF SUBSIDIARIES
AS OF APRIL 15, 1997
<TABLE>
<CAPTION>
COMPANY NAME STATE OF INCORPORATION
- --------------------------------------------------- --------------------------
<S> <C>
Andrews Acquisition Corp. Delaware (DE)
924 Bel Aire Corp. DE
AGI Management Corp. New York (NY)
New Marvel Acquisition Corp. DE
Four Star Holdings Corp. DE
Mafco Guarantor Corp. DE
Mafco Finance Corp. DE
Marvel III Holdings Inc. DE
Marvel (Parent) Holdings Inc. DE
Marvel Entertainment Group Inc. DE
Marvel Holdings Inc. DE
Heroes World Distribution, Inc. DE
MRV, Inc. DE
Marvel Direct Marketing Inc. DE
Marvel Characters Inc. DE
Toy Biz, Inc. DE
Toy Biz International LTD. Hong Kong
Welsh Publishing Group, Inc. NY
Marvel Restaurant Venture Corp. DE
Malibu Comics Entertainment Inc. California (CA)
Panini S.p.A. Italy
Panini Verlags GMBH Germany
Panini France S.A. France
Les Editions Recreatris France
Panini Nederland B.V. Netherlands
Panini Canada LTD. Canada
Panini Ireland LTD. Ireland
Panini Brasil LTDA. Brazil
Panini U.K. LTD. United Kingdom
Panini Licensing North America Inc. NY
Panini Stickers LTD. United Kingdom
Marvel Comics LTD. United Kingdom
Panini Publishing Services United Kingdom
Adespan U.K. LTD. United Kingdom
Panini Espana SA. Spain
Panini U.S.A. Inc. NY
The Emerald Foundation Ireland
Panini Portugal Editores LDA Portugal
Panini Brasil S/A Brasil
Fleer Corp. DE
Dr. Torrents S.A. Spain
<PAGE>
Fleer Espanol Spain
The Asher Candy Company DE
Skybox International Inc. DE
Fleer GMBH Germany
Frank H. Fleer Corp. DE
Fleer Sales Corp. DE
Impel Movieline Inc. DE
Skybox Management Inc. DE
L.C. Holding Corporation DE
Highgate Pictures, Inc. DE
Highgate Productions Inc. DE
Learning Corporation of America DE
Learning Corporation of America Films, Inc. DE
</TABLE>
The above subsidiary listing does not include New World Communications Group
and subsidiaries which were sold in 1997.
<PAGE>
POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that the undersigned hereby
constitutes and appoints each of Glenn P. Dickes, Joram C. Salig and Laurence
Winoker or any of them, each acting alone, his true and lawful
attorney-in-fact and agent, with full power of substitution, for him and in
his name, place and stead, in any and all capacities, in connection with the
ANDREWS GROUP INCORPORATED (the "Corporation") Annual Report on Form 10-K for
the year ended December 31, 1996 under the Securities Exchange Act of 1934, as
amended, including, without limiting the generality of the forego ing, to sign
the Form 10-K in the name and on behalf of the Corporation or on behalf of the
undersigned as a director or officer of the Corporation, and any amendments to
the Form 10-K and any instrument, contract, document or other writing, of or
in connection with the Form 10-K or amendments thereto, and to file the same,
with all exhibits thereto, and other documents in connection therewith,
including this power of attorney, with the Securities and Exchange Commission
and any applicable securities exchange or securities self-regulatory body,
granting unto said attorneys-in-fact and agents, each acting alone, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, each acting alone, or his
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has signed these presents this
14th day of April 1997.
/s/ RONALD O. PERELMAN
---------------------------------
RONALD O. PERELMAN
<PAGE>
POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that the undersigned hereby
constitutes and appoints each of Glenn P. Dickes, Joram C. Salig and Laurence
Winoker or any of them, each acting alone, his true and lawful
attorney-in-fact and agent, with full power of substitution, for him and in
his name, place and stead, in any and all capacities, in connection with the
ANDREWS GROUP INCORPORATED (the "Corporation") Annual Report on Form 10-K for
the year ended December 31, 1996 under the Securities Exchange Act of 1934, as
amended, including, without limiting the generality of the forego ing, to sign
the Form 10-K in the name and on behalf of the Corporation or on behalf of the
undersigned as a director or officer of the Corporation, and any amendments to
the Form 10-K and any instrument, contract, document or other writing, of or
in connection with the Form 10-K or amendments thereto, and to file the same,
with all exhibits thereto, and other documents in connection therewith,
including this power of attorney, with the Securities and Exchange Commission
and any applicable securities exchange or securities self-regulatory body,
granting unto said attorneys-in-fact and agents, each acting alone, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, each acting alone, or his
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has signed these presents this
14th day of April 1997.
/s/ WILLIAM C. BEVINS
-----------------------------------
WILLIAM C. BEVINS
<PAGE>
POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that the undersigned hereby
constitutes and appoints each of Glenn P. Dickes, Joram C. Salig and Laurence
Winoker or any of them, each acting alone, his true and lawful
attorney-in-fact and agent, with full power of substitution, for him and in
his name, place and stead, in any and all capacities, in connection with the
ANDREWS GROUP INCORPORATED (the "Corporation") Annual Report on Form 10-K for
the year ended December 31, 1996 under the Securities Exchange Act of 1934, as
amended, including, without limiting the generality of the forego ing, to sign
the Form 10-K in the name and on behalf of the Corporation or on behalf of the
undersigned as a director or officer of the Corporation, and any amendments to
the Form 10-K and any instrument, contract, document or other writing, of or
in connection with the Form 10-K or amendments thereto, and to file the same,
with all exhibits thereto, and other documents in connection therewith,
including this power of attorney, with the Securities and Exchange Commission
and any applicable securities exchange or securities self-regulatory body,
granting unto said attorneys-in-fact and agents, each acting alone, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, each acting alone, or his
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has signed these presents this
14th day of April 1997.
/s/ DONALD G. DRAPKIN
------------------------------------
DONALD G. DRAPKIN
<PAGE>
POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that the undersigned hereby
constitutes and appoints each of Glenn P. Dickes, Joram C. Salig and Laurence
Winoker or any of them, each acting alone, his true and lawful
attorney-in-fact and agent, with full power of substitution, for him and in
his name, place and stead, in any and all capacities, in connection with the
ANDREWS GROUP INCORPORATED (the "Corporation") Annual Report on Form 10-K for
the year ended December 31, 1996 under the Securities Exchange Act of 1934, as
amended, including, without limiting the generality of the forego ing, to sign
the Form 10-K in the name and on behalf of the Corporation or on behalf of the
undersigned as a director or officer of the Corporation, and any amendments to
the Form 10-K and any instrument, contract, document or other writing, of or
in connection with the Form 10-K or amendments thereto, and to file the same,
with all exhibits thereto, and other documents in connection therewith,
including this power of attorney, with the Securities and Exchange Commission
and any applicable securities exchange or securities self-regulatory body,
granting unto said attorneys-in-fact and agents, each acting alone, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, each acting alone, or his
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has signed these presents this
14th day of April 1997.
/s/ HOWARD GITTIS
------------------------------------
HOWARD GITTIS
<PAGE>
POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that the undersigned hereby
constitutes and appoints each of Glenn P. Dickes, Joram C. Salig and Laurence
Winoker or any of them, each acting alone, his true and lawful
attorney-in-fact and agent, with full power of substitution, for him and in
his name, place and stead, in any and all capacities, in connection with the
ANDREWS GROUP INCORPORATED (the "Corporation") Annual Report on Form 10-K for
the year ended December 31, 1996 under the Securities Exchange Act of 1934, as
amended, including, without limiting the generality of the forego ing, to sign
the Form 10-K in the name and on behalf of the Corporation or on behalf of the
undersigned as a director or officer of the Corporation, and any amendments to
the Form 10-K and any instrument, contract, document or other writing, of or
in connection with the Form 10-K or amendments thereto, and to file the same,
with all exhibits thereto, and other documents in connection therewith,
including this power of attorney, with the Securities and Exchange Commission
and any applicable securities exchange or securities self-regulatory body,
granting unto said attorneys-in-fact and agents, each acting alone, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, each acting alone, or his
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has signed these presents this
14th day of April 1997.
/s/ BRUCE SLOVIN
---------------------------
BRUCE SLOVIN
<PAGE>
POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that the undersigned hereby
constitutes and appoints each of Glenn P. Dickes, Joram C. Salig and Laurence
Winoker or any of them, each acting alone, his true and lawful
attorney-in-fact and agent, with full power of substitution, for him and in
his name, place and stead, in any and all capacities, in connection with the
ANDREWS GROUP INCORPORATED (the "Corporation") Annual Report on Form 10-K for
the year ended December 31, 1996 under the Securities Exchange Act of 1934, as
amended, including, without limiting the generality of the forego ing, to sign
the Form 10-K in the name and on behalf of the Corporation or on behalf of the
undersigned as a director or officer of the Corporation, and any amendments to
the Form 10-K and any instrument, contract, document or other writing, of or
in connection with the Form 10-K or amendments thereto, and to file the same,
with all exhibits thereto, and other documents in connection therewith,
including this power of attorney, with the Securities and Exchange Commission
and any applicable securities exchange or securities self-regulatory body,
granting unto said attorneys-in-fact and agents, each acting alone, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, each acting alone, or his
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has signed these presents
this 14th day of April 1997.
/s/ JOSEPH P. PAGE
---------------------------------
JOSEPH P. PAGE
<PAGE>
POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that the undersigned hereby
constitutes and appoints each of Glenn P. Dickes, Joram C. Salig and Laurence
Winoker or any of them, each acting alone, his true and lawful
attorney-in-fact and agent, with full power of substitution, for him and in
his name, place and stead, in any and all capacities, in connection with the
ANDREWS GROUP INCORPORATED (the "Corporation") Annual Report on Form 10-K for
the year ended December 31, 1996 under the Securities Exchange Act of 1934, as
amended, including, without limiting the generality of the forego ing, to sign
the Form 10-K in the name and on behalf of the Corporation or on behalf of the
undersigned as a director or officer of the Corporation, and any amendments to
the Form 10-K and any instrument, contract, document or other writing, of or
in connection with the Form 10-K or amendments thereto, and to file the same,
with all exhibits thereto, and other documents in connection therewith,
including this power of attorney, with the Securities and Exchange Commission
and any applicable securities exchange or securities self-regulatory body,
granting unto said attorneys-in-fact and agents, each acting alone, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, each acting alone, or his
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has signed these presents this
14th day of April 1997.
/s/ LAURENCE WINOKER
----------------------------------
LAURENCE WINOKER
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the andrews
Group Incorporated Consolidated Balance Sheet and Statement of Operations and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000277025
<NAME> ANDREWS GROUP INCORPORATED
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 26
<SECURITIES> 0<F1>
<RECEIVABLES> 275
<ALLOWANCES> (46)
<INVENTORY> 78
<CURRENT-ASSETS> 576
<PP&E> 132
<DEPRECIATION> (33)
<TOTAL-ASSETS> 1,332
<CURRENT-LIABILITIES> 446
<BONDS> 0<F1>
0<F1>
0<F1>
<COMMON> 0<F1>
<OTHER-SE> (1,244)
<TOTAL-LIABILITY-AND-EQUITY> 1,332
<SALES> 746
<TOTAL-REVENUES> 746
<CGS> 536
<TOTAL-COSTS> 826
<OTHER-EXPENSES> 647
<LOSS-PROVISION> 0<F1>
<INTEREST-EXPENSE> 200
<INCOME-PRETAX> (847)
<INCOME-TAX> (150)
<INCOME-CONTINUING> (667)
<DISCONTINUED> 4
<EXTRAORDINARY> (7)
<CHANGES> 0<F1>
<NET-INCOME> (670)
<EPS-PRIMARY> 0<F1>
<EPS-DILUTED> 0<F1>
<FN>
<F1>
Amounts inaplicable or not disclosed as a separate line on the Consolidated
Balance Sheets or Consolidated Statements of Operations are reported as
0 herein.
</FN>
</TABLE>
