WAIVER AND AMENDMENT No. 2, dated as of June 28, 1998 (this
"Amendment"), to the Loan and Security Agreement, dated as of April 25, 1997
(as heretofore or hereafter amended, supplemented and otherwise modified, the
"Agreement"), among The Cosmetic Center, Inc. (the "Borrower"), the financial
institutions listed therein and BankAmerica Business Credit, Inc., as Agent.
W I T N E S S E T H:
WHEREAS, the Borrower and the Lenders are parties to the Agreement;
WHEREAS, the Borrower has requested that the Lenders waive and modify
certain provisions of the Agreement and the Lenders are willing to do so on the
terms and conditions as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
parties hereto hereby agrees as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized terms
used herein have the respective meanings ascribed thereto in the Agreement.
2. Waiver of certain Covenants. The Lender hereby waives any
non-compliance by Borrower with the financial covenants set forth in Section
9.28 and Section 9.29 as of the last day of the second fiscal quarter of 1998.
3. Amendments to the Agreement. The Agreement is hereby amended as
follows:
(a) Section 1.1 of the Agreement is amended by inserting the
following new definition between the definitions "Account
Debtor" and "Adjusted Tangible Net Worth"
"Additional Revlon Note" means a demand promissory note from
the Borrower to Revlon which shall be executed after the date
hereof. Such promissory note shall have, among others, the
following terms and conditions: (1) principal shall not be less
than $5,000,000, (2) the interest rate shall not be greater
than 9 1/4%, (3) interest payment dates shall be the same as
set forth in the Revlon Note, (4) principal and interest
payments shall only be
made if no Event of Default has occurred and is continuing, (5)
principal payments shall only be made if Lender has received
from the Borrower at least one Business Day's notice of such
payment and for ten consecutive Business Day's prior to such
principal payment, and after giving effect thereto,
Availability shall be at least $7,500,000. The Borrower shall
deliver the Additional Revlon Note to the Agent prior to its
execution for Lenders' approval.
(b) Section 9.13 of the Agreement is amended by adding the
following immediately after the words "Exhibit C" in clause (b)
thereof:
"and Debt under the Additional Revlon Note"
(c) Section 9.15 is hereby amended by replacing the word
"and" immediately before clause (v) with comma, and adding the following
immediately after the word "detail" in clause (v):
"and (vi) if no Event of Default has occurred and is
continuing, (A) make interest payments under the
Additional Revlon Note and (B) make principal payments
under the Additional Revlon Note, provided that with
respect to each such principal payment Lender has received
from the Borrower at least one Business Day's notice of such
payment and either (1) the Majority Lenders have consented
thereto or (2) ten consecutive Business Days prior to such
payment and after giving effect to such payment,
Availability shall be at least $7,500,000."
4. Representations and Warranties. To induce the Lenders to enter into
this Amendment, the Borrower hereby represents and warrants as follows, with the
same effect as if such representations and warranties were set forth in the
Agreement:
(i) the Borrower has the power and authority to enter into this Amendment
and has taken all corporate action required to authorize the
Borrower's execution, delivery and performance of this Amendment.
This Amendment has been duly executed and delivered by the Borrower,
and the Agreement, as amended hereby, constitutes the valid and
binding obligation of the Borrower, enforceable against the Borrower
in accordance with its terms. The execution, delivery, and
performance of this Amendment and the Agreement, as amended hereby,
by the Borrower will not violate its certificate of incorporation
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or by-laws or any material agreement or legal requirement
binding on the Borrower.
(ii) On the date hereof and after giving effect to the terms of
this Amendment, (A) the Agreement and the other Loan Documents
are in full force and effect and constitute binding
obligations, enforceable against the Borrower in accordance
with their respective terms; (B) no Default or Event of Default
has occurred and is continuing; and (C) the Borrower has no
defense to or setoff, counterclaim or claim against payment of
the Obligations and enforcement of the Loan Documents based
upon a fact or circumstance existing or occurring on or prior
to the date hereof.
5. Limited Effect. Except as expressly amended hereby, all of the
covenants, representations and warranties (including, without limitation,
those found in Section 9.1), and provisions of the Agreement are and shall
continue to be in full force and effect. Upon the effectiveness of this
Amendment, each reference in the Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import and each reference in the other
Loan Documents to the Agreement shall mean and be a reference to the Agreement
as amended hereby.
6. Conditions of Effectiveness. This Amendment shall become effective
as of June 27, 1998 when and only when this Amendment shall be executed and
delivered by the Borrower, the Agent and the Lenders.
7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED TO THE
CONFLICT OF LAWS PROVISIONS) OF THE STATE OF NEW YORK.
8. Counterparts. This Amendment may be executed by the parties hereto
in any number of separate counterparts, each of which shall be an original, and
all of which taken together shall be deemed to constitute one and the same
instrument.
9. Amendment. No modification or waiver of any provision of this
Amendment, or any consent to any departure by the Borrower therefrom, shall in
any event be effective unless the same shall be in writing, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed and delivered by their respective proper and duly
authorized officers as of the day and year first above written.
"BORROWER"
The Cosmetic Center, Inc., as the Borrower
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President & Treasurer
"AGENT"
BankAmerica Business Credit, Inc., as the Agent
By /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
"LENDERS"
BankAmerica Business Credit, Inc., as a Lender
By /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
BankBoston, N.A., as a Lender
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
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