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EXHIBIT 10.1
FOURTH AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT, made as of September 14, 2001, by and among
the parties identified as "Lenders" on the signature pages to this Amendment
("LENDERS"), CITICORP USA, INC., as agent for the Lenders (herein, in such
capacity as agent, called "AGENT"), and MAYOR'S JEWELERS, INC., formerly known
as XXX XXXX MARKETING, INC., a Delaware corporation ("XXX XXXX"), individually
and as "Borrowers' Agent", as defined in the "Loan Agreement" referenced below,
JBM RETAIL COMPANY, INC., a Delaware corporation ("JBM"), and MAYOR'S JEWELERS,
INC., a Florida corporation ("MAYOR'S") (Xxx Xxxx, JBM and Mayor's hereinafter
referred to collectively as the "BORROWERS" and each individually as a
"Borrower").
W I T N E S S E T H :
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WHEREAS, Borrowers, Lenders and the Agent are parties to a
Loan and Security Agreement, dated as of July 28, 1998 (herein, as amended to
date, the "LOAN AGREEMENT"), pursuant to which Lenders have agreed to extend
certain credit to Borrowers upon the terms and conditions contained therein; and
WHEREAS, "Events of Default" (as defined in the Loan
Agreement) have occurred and are continuing as a result of Borrowers' failure to
comply with the requirements of Sections 5.3(B), (C) and (D) of the Loan
Agreement with respect to the Fiscal Quarter ending on or about July 31, 2001
("EXISTING EVENTS OF DEFAULT"); and
WHEREAS, Borrowers have requested that Lenders waive the
Existing Events of Default and, subject to the terms and conditions set forth
herein, Lenders are willing to do so; and
WHEREAS, Borrowers, Lenders and the Agent have agreed to amend
the Loan Agreement in certain respects as hereinafter set forth; and
WHEREAS, Borrowers, Lenders and the Agent desire to enter into
this Amendment in order to give effect to the foregoing;
NOW, THEREFORE, in consideration of the foregoing premises,
Borrowers, the Agent and Lenders agree as follows:
1. DEFINITIONS. Unless otherwise expressly provided herein, all
capitalized terms used herein (without definition) shall have the meanings given
to such terms in the Loan Agreement.
2. WAIVER. Pursuant to Borrowers' request, Lenders hereby waive the
Existing Events of Default; provided, HOWEVER, that such waiver is limited to
the Existing Events of Default and shall not be, or be deemed to be, a waiver of
any other Default or Event of Default presently or hereafter existing.
3. AMENDMENT TO BORROWING AVAILABILITY DEFINITION. The definition of
"Borrowing Availability" set forth in Section 1.1 of the Loan Agreement is
hereby amended by deleting clause (ii) thereof in its entirety and substituting
in lieu thereof the following revised clause (ii):
(ii) the LESSER of (A) up to sixty-five percent (65%) of the
value of Eligible Inventory of Borrowers at such date, calculated on the basis
of the lower of cost or market value, with cost calculated on a first in, first
out basis, and with the exact percentages within such range applicable to
various types of Eligible Inventory of each Borrower to be determined by the
Agent from time to time (as to which indicative initial percentages are
specified below in this definition) and (B) eighty-five percent (85%) of the
percentage derived from the ratio of (1) the median appraised orderly
liquidation value of all owned Inventory of Borrowers at such date, determined
by reference to the gemological review most recently delivered by Borrowers to
the Agent pursuant to Section 5.1(K) hereof or any other applicable provision,
to (2) all owned Inventory of Borrowers at such date, calculated on the basis of
the lower of cost or market value, with cost calculated on a first in, first out
basis;
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4. AMENDMENT TO INTEREST MARGIN DEFINITION. The definition of "Interest
Margin" set forth in Section 1.1 of the Loan Agreement is hereby deleted in its
entirety and the following revised definition of "Interest Margin" is hereby
substituted in lieu thereof:
"INTEREST MARGIN" - (a) with respect to each LIBOR Rate Loan,
four percent (4.00%) per annum, being the interest rate to be added to the LIBOR
Rate in order to determine the LIBOR Margined Rate and (b) with respect to each
Base Rate Loan, two and three-fourths percent (2.75%) per annum, being the
interest rate to be added to the Base Rate in order to determine the Base
Margined Rate.
5. AMENDMENTS TO AFFIRMATIVE COVENANTS.
(a) Section 5.1(I) of the Loan Agreement is hereby amended by
deleting therefrom the phrase "On a monthly basis, on or before the
fifteenth day of each Fiscal Month (or more frequently if requested by
the Agent)" and substituting in lieu thereof the phrase "On a weekly
basis, on or before Tuesday of each week (or more frequently if
requested by the Agent)".
(b) Section 5.1(K) of the Loan Agreement is hereby deleted in
its entirety and the following revised Section 5.1(K) is hereby
substituted in lieu thereof:
(K) Furnish to the Agent, at least three (3) times in each
calendar year as provided in the next succeeding sentence, or
more frequently if requested by the Agent at any time when an
Event of Default has occurred and is continuing, a review
report as to Borrower's Inventory, including a valuation
thereof, prepared by a reputable non-affiliated gemological
company, selected by the Agent (except as provided
hereinbelow). One such report in each calendar year shall be
provided to the Agent concurrently with the delivery to the
Agent of Xxx Xxxx'x annual audited financial statements
pursuant to Section 5.1(H) hereof for the preceding Fiscal
Year and the other two such reports shall be delivered to the
Agent at such times in each calendar year as it shall request.
The Agent and Lenders agree that, with respect only to the
report to be delivered to the Agent in each calendar year
concurrently with Xxx Xxxx'x annual audited financial
statements for the preceding Fiscal Year, delivery to Agent of
a copy of a review report commissioned by Borrower's certified
public accountants from a reputable non-affiliated gemological
company in connection with the preparation of such
accountant's audit report for Xxx Xxxx'x financial statements
for its preceding Fiscal Year shall satisfy the requirement
for such report (but not any other report) relative to the
calendar year in question if the preparer of such report and
the form and scope of such report are reasonably satisfactory
to Agent.
(c) Borrowers acknowledge and agree that pursuant to Sections
5.1(G) and 8.4 of the Loan Agreement the Agent may conduct, at
Borrowers' expense, such number of field audits as it reasonably
requests in any calendar year. Without limitation of the foregoing,
Borrowers acknowledge and agree that the Agent intends to conduct at
least three (3) field audits in each calendar year.
6. AMENDMENTS TO FINANCIAL COVENANTS.
(a) Section 5.3 of the Loan Agreement is hereby amended by
adding thereto, immediately after subsection (E) thereof, the following new
subsection (F) to read as follows:
(F) EXCESS COLLATERAL AVAILABILITY. Maintain at all times
"Excess Collateral Availability" (as defined below) of at
least Eight Million Dollars ($8,000,000). For purposes hereof,
"Excess Collateral Availability" shall mean the excess at any
one time of (i) Borrowing Availability over (ii) the total
amount of the outstanding Revolver Loans.
(b) Section 5.3 of the Loan Agreement is hereby further
amended by adding the following paragraph immediately after new subsection (F)
thereof:
Lenders hereby agree that during the period
commencing on the date of the Fourth Amendment to Loan and
Security Agreement, among Borrowers, Lenders and the Agent,
and ending on the last day of Borrowers' Fiscal Quarter ending
on or about April 30, 2002 ("WAIVER END DATE"), so long as Xxx
Xxxx and its Subsidiaries are in compliance with the
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requirements of the preceding subsection (F), the failure of
Xxx Xxxx and its Subsidiaries to comply with the requirements
of the preceding subsections (B), (C) and (D) for the third
Fiscal Quarter 2001 and/or the fourth Fiscal Quarter 2001
shall not constitute Events of Default; PROVIDED, HOWEVER,
that on the Waiver End Date, any failures of Borrowers to have
complied with such covenants for such periods shall constitute
Events of Default.
7. GEMOLOGICAL REVIEW. Without limitation of the requirements of
Section 5.1(K) of the Loan Agreement, within sixty (60) days after the date
hereof, at Borrowers' expense, Borrowers shall deliver to the Agent a review
report as to Borrowers' Inventory, including a valuation thereof, prepared by a
reputable non-affiliated gemological company selected by the Agent.
8. MISCELLANEOUS.
(a) EFFECT OF AMENDMENT. Except as set forth expressly herein,
all terms of the Loan Agreement, as amended hereby, shall be and remain
in full force and effect and shall constitute the legal, valid, binding
and enforceable obligations of Borrowers to the Agent and Lenders. To
the extent any terms and conditions in any of the Loan Documents shall
contradict or be in conflict with any terms or conditions of the Loan
Agreement, after giving effect to this Amendment, such terms and
conditions are hereby deemed modified and amended accordingly to
reflect the terms and conditions of the Loan Agreement as modified and
amended hereby. This Amendment may be signed in multiple counterparts,
all of which shall constitute one and the same agreement.
(b) RATIFICATION. Borrowers hereby restate, ratify and
reaffirm each and every term and condition set forth in the Loan
Agreement, as amended hereby, and the Loan Documents, effective as of
the date hereof.
(c) ESTOPPEL. To induce the Agent and Lenders to enter into
this Amendment, Borrowers hereby acknowledge and agree that, as of the
date hereof, no Default or Event of Default has occurred and is
continuing and, in addition, there exists no right of offset, defense,
counterclaim or objection in favor of Borrowers with respect to any
Obligations.
(d) GOVERNING LAW. This Amendment shall be governed by, and
construed in accordance with, the internal laws (and not the laws of
conflicts) of the State of New York.
(e) COSTS AND EXPENSES. Borrowers agree to pay on demand all
costs and expenses of the Agent in connection with the preparation,
execution, delivery and enforcement of this Amendment and all other
Loan Documents executed in connection herewith, the closing hereof, and
any other transactions contemplated hereby, including the fees and
out-of-pocket expenses of the Agent's counsel.
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IN WITNESS WHEREOF, this Amendment has been duly executed by
the parties hereto as of the date first above written.
"BORROWER"
MAYOR'S JEWELERS, INC., formerly known as
Xxx Xxxx Marketing, Inc.
By: /s/ XXXXX XXXXXXXX
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Title: Senior Vice President
MAYOR'S JEWELERS, INC.
By: /s/ XXXXX XXXXXXXX
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Title: Senior Vice President
JBM RETAIL COMPANY, INC.
By: /s/ XXXXX XXXXXXXX
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Title: Senior Vice President
"AGENT"
CITICORP USA, INC.
By:
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Name:
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Title:
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"LENDERS"
CITICORP USA, INC.
By: /s/ MILES X. XXXXXXX
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Title: Vice President
FLEET RETAIL FINANCE INC., f/k/a
BankBoston Retail Finance, Inc.
By: /s/ XXXXX XXXXXXXXXXX
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Title: Vice President
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FOOTHILL CAPITAL CORPORATION
By: /s/ XXXXXXX XXXXXXXXXX
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Title: Vice President
FIRST UNION NATIONAL BANK
By:
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Name: Xxxxxxx Xxxxxxxxx
Title: Vice President
NATIONAL CITY COMMERCIAL FINANCE, INC.
By: /s/ XXXXXX XXXXXXX
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Title: Vice President
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ACKNOWLEDGMENT OF GUARANTORS
Each of the undersigned, being a guarantor, pursuant to certain
Corporate Guaranty and Security Agreement, dated as of July 28, 1998
(collectively, the "GUARANTY"), of the obligations of Xxx Xxxx Marketing, Inc.,
JBM Retail Company, Inc. and Mayor's Jewelers, Inc. (collectively, "BORROWERS")
under the "Loan Agreement" referenced in the within and foregoing Fourth
Amendment to Loan and Security Agreement among the lenders named therein,
Citicorp USA, Inc., as agent for such lenders, and Borrowers (the "FOURTH
AMENDMENT") hereby (a) acknowledges its receipt of a copy of, and consents to
the Fourth Amendment, (b) agrees to be bound thereby and (c) acknowledges and
agrees that the Guaranty shall continue in full force and effect from and after
the execution and delivery of the Fourth Amendment without modification,
diminution or impairment.
IN WITNESS WHEREOF, the undersigned have set their hands as of the 14th
day of September, 2001.
JBM VENTURE CO., INC.
By: /s/ XXXXX XXXXXXXX
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Title: Vice President
ULTIMATE FINE JEWELRY INTERNATIONAL, INC.
By: /s/ XXXXX XXXXXXXX
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Title: Vice President
JBM INTERNATIONAL, INC.
By: /s/ XXXXX XXXXXXXX
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Title: Vice President
XXXXX & BERKELE, INC.
By: /s/ XXXXX XXXXXXXX
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Title: Vice President
MAYOR'S JEWELERS INTELLECTUAL PROPERTY
HOLDING COMPANY
By: /s/ XXXXX XXXXXXXX
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Title: Vice President
MAYOR'S JEWELERS RECEIVABLES
HOLDING COMPANY
By: /s/ XXXXX XXXXXXXX
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Title: Vice President
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AMERICAN HOROGICAL CORPORATION
By: /s/ XXXXX XXXXXXXX
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Title: Vice President
XXX XXXX MARKETING/PUERTO RICO, INC.
By: /s/ XXXXX XXXXXXXX
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Title: Vice President
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