Exhibit 10.1
TERM LOAN AGREEMENT
Dated as of September 4, 2009
between
PHYSICIANS FORMULA, INC.
and
MILL ROAD CAPITAL, L.P.
THIS LOAN AGREEMENT, THE OTHER LOAN DOCUMENTS (AS DEFINED BELOW), THE TERM LOAN
(AS DEFINED BELOW) AND ALL OTHER OBLIGATIONS (AS DEFINED BELOW), AND THE LIENS
CREATED BY THE LOAN DOCUMENTS ARE SUBJECT TO THAT CERTAIN INTERCREDITOR AND
SUBORDINATION AGREEMENT DATED AS OF EVEN DATE HEREWITH AMONG PHYSICIANS FORMULA,
INC., MILL ROAD CAPITAL, L.P., UNION BANK, N.A. AND THE OTHER PARTIES REFERRED
TO THEREIN, AS SUCH AGREEMENT MAY BE AMENDED FROM TIME TO TIME IN ACCORDANCE
WITH THE TERMS THEREOF.
TERM LOAN AGREEMENT
This Term Loan Agreement (the "Loan Agreement") is made as of the 4th day of
September, 2009 by and among PHYSICIANS FORMULA, INC., a New York corporation
(the "Borrower") having its principal place of business at 1055 West 8th Street,
Azusa, CA 91702, and MILL ROAD CAPITAL, L.P., a Delaware limited partnership
(the "Lender") having its principal place of business at Two Sound View Drive,
Greenwich, CT 06830.
RECITALS
WHEREAS, Borrower has requested Lender provide a $4,200,000 term loan facility;
and
WHEREAS, the term loan facility shall be used for working capital and for other
general corporate purposes; and
WHEREAS, Lender is willing to provide such loan upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, the parties, in consideration of their mutual covenants and
agreements hereinafter set forth, and intending to be legally bound hereby,
covenant and agree as follows:
1.
DEFINITIONS AND RULES OF INTERPRETATION.
1.1.
Definitions.
The following terms shall have the meanings set
forth in this §1 or elsewhere in the provisions of this Loan Agreement referred
to below:
Affiliate.
As to any Person, (a) any Person which, directly or indirectly,
controls, is controlled by or is under common control with the first Person or
(b) any Person who is a director, officer, shareholder, member or partners (i)
of such Person, (ii) of a Subsidiary of such Person or (iii) of any Person
described in the preceding clause (a).
"Control" of a Person means the power,
directly or indirectly, (a) to vote 10% or more of the Capital Stock (on a fully
diluted basis) of the Person having ordinary voting power for the election of
directors, managing members or general partners (as applicable); or (b) to
direct or cause the direction of the management and policies of the Person
(whether by contract or otherwise).
Balance Sheet Date.
June 30, 2009.
Borrower.
As defined in the preamble hereto.
Borrower Affiliate.
An Affiliate of the Borrower, any Subsidiary of Borrower or
any Guarantor.
Business Day.
Any day which is neither a Saturday or Sunday nor a legal holiday
on which commercial banks are authorized or required to be closed in Greenwich,
Connecticut, the State of New York or the State of California.
1
Capital Stock.
Any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership or economic interests in