SECOND AMENDMENT TO
AMENDED AND RESTATED
GOLD CONSIGNMENT AGREEMENT
DATED AS OF MARCH 30, 2001
THIS SECOND AMENDMENT is made as of the 30th day of September, 2002,
among SOVEREIGN BANK (formerly known as Rhode Island Hospital Trust National
Bank), a Federal Savings Bank with an office at 00 Xxxxxxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxx Xxxxxx 00000, as a bank ("Sovereign") and together with the
other lending institutions from time to time (collectively, the "Institutions"),
SOVEREIGN PRECIOUS METALS, LLC, a Pennsylvania limited liability company
("LLC"), FINLAY FINE JEWELRY CORPORATION, a Delaware corporation ("Finlay") and
EFINLAY, INC. a Delaware corporation ("EFinlay").
W I T N E S S E T H T H A T:
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WHEREAS, Sovereign, Finlay and EFinlay are parties to a certain Amended
and Restated Gold Consignment Agreement dated as of March 30, 2001, as amended
by a First Amendment to Amended and Restated Gold Consignment Agreement dated as
of December 31, 2001 (as amended, the "Consignment Agreement"), relating to the
consignment by the Institutions to Finlay;
WHEREAS, Sovereign, Finlay and eFinlay desire to further amend and
modify the Consignment Agreement in certain respects;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Article 1 of the Consignment Agreement is hereby amended by deleting
the defined terms, "Consignment Fixed Rate", "Consignment Limit", "Dollar
Facility", "Intercreditor Agreement", "Maturity Date", "Maximum Drawing Amount"
and "Security Documents" and replacing them with the following:
"Consignment Fixed Rate: With respect to any Interest Period, the
amount equal to (a) the greater of (i) the Eurodollar Rate for such Interest
Period minus the average of rates quoted to the Agent as the London Interbank
Bullion Rates as displayed on Xxxxxx'x gold loan screen or, if Xxxxxx'x gold
loan screen is not available, as set by the Agent, for Precious Metal forwards
for such period (the "Contango Rate"), and (ii) zero (0), plus (b) two percent
(2.00%).
Consignment Limit: The least of (a) 165,000 fine xxxx ounces of
Precious Metal, (b) Consigned Precious Metal having a Fair Market Value or
unpaid purchase price equal to the Total Commitment, or (c) the sum of (i) the
product of (A) ninety percent (90%) times (B) the number of xxxx ounces of
Precious Metal contained in Eligible Specified Gold Jewelry of the Consignees
plus (ii) the product of (A) ninety percent (90%) times (B) the sum of (1) the
amount of Eligible Cash Deposits divided by the Second London Gold Fixing for
any day of reference,
plus (2) the Maximum Drawing Amount of the Letter of Credit divided by the
Second London Gold Fixing for such day of reference.
Dollar Facility: Collectively, the Loan Documents, as such term is
defined in the Amended and Restated Credit Agreement dated as of September 11,
1997, among Finlay, the Parent, the Dollar Agent and the Lenders (as defined
therein) as such facility has been or may be amended, restated or otherwise
modified or as such facility may be replaced, increased, renewed, supplemented,
refunded or refinanced by another facility on terms substantially similar to the
current facility, provided that such Dollar Facility shall be subject at all
times to the terms and provisions of the Intercreditor Agreement.
Intercreditor Agreement: The Intercreditor Agreement dated as of June
15, 1995 between the Agent and the Dollar Agent (and acknowledged and consented
to by Finlay), as the same is amended and/or restated on the Closing Date and as
further amended, restated, modified, renewed, replaced or supplemented from time
to time on terms and conditions substantially similar to the Intercreditor
Agreement as it exists on the date hereof.
Maturity Date: The earliest of (a) July 31, 2005, (b) the maturity date
from time to time in effect under the Dollar Facility, or (c) such other date on
which all Obligations may become due and payable pursuant to the terms hereof.
Maximum Drawing Amount: The maximum aggregate amount from time to time
that the Agent may draw under the Letter of Credit or the Collateral Letter of
Credit.
Security Documents: Collectively, the Security Agreement, the Cash
Collateral Agreement, the Letter of Credit and Collateral Letter of Credit."
2. Article 1 of the Consignment Agreement is hereby further amended by
adding the following new definition:
"Collateral Letter of Credit: The standby letter of credit issued on or
after the date hereof by General Electric Capital Corporation or such
other issuer as shall be approved by the Agent in writing in advance,
in favor of the Agent for the benefit of the Agent and the
Institutions, having a Maximum Drawing Amount of ten percent (10%) of
the Fair Market Value of the Consigned Precious Metal outstanding at
any time, which Collateral Letter of Credit is being issued to secure
the Obligations of the Consignees hereunder, as the same may be
replaced, amended, increased, modified, extended or renewed from time
to time upon terms and conditions approved by the Agent in writing in
advance and otherwise in accordance with the provisions hereof,
provided that such Collateral Letter of Credit shall either (a) have an
expiry date not earlier than the Maturity Date or (b) be drawable
without condition by the Agent no later than thirty (30) days prior to
the stated expiry thereof (if not previously renewed). Furthermore, the
Maximum Drawing Amount of the Collateral Letter of Credit shall not be
available for inclusion in determination of the availability under the
Consignment Limit."
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3. Section 8.3 of the Consignment Agreement is hereby amended by
deleting Section 8.3.2 in its entirety and replacing it with the following:
"8.3.2. Indebtedness to EBITDA. No Consignee will and where applicable,
each Consignee will not permit its Subsidiaries to, permit the ratio of
(i) the aggregate principal amount of all Indebtedness for Borrowed
Money of the Parent and its Subsidiaries on a consolidated basis as of
any fiscal quarter ending date set forth in the table below to (ii)
Consolidated EBITDA of the Parent and its Subsidiaries for the period
of four consecutive fiscal quarters ending on such fiscal quarter
ending date in such table, to exceed the ratio set forth opposite such
date in such table:
Fiscal Quarter
Ending Date: Ratio:
----------- -----
4/30/02 4.95:1
7/31/02 4.95:1
10/31/02 4.72:1
1/31/03 3.52:1."
4. Section 8.3 of the Consignment Agreement is hereby further amended
by deleting Section 8.3.3 in its entirety and replacing it with the following:
"8.3.3. Minimum EBITDA. No Consignee will and where applicable, each
Consignee will not permit its Subsidiaries to, permit Consolidated
EBITDA of the Parent and its Subsidiaries for any period of four
consecutive fiscal quarters ending on any date set forth in the table
below to be less than the amount set forth opposite such date in such
table:
Date: Amount:
---- ------
4/30/02 $66,500,000
7/31/02 $66,500,000
10/31/02 $66,500,000
1/31/03 $68,400,000."
5. Schedule XII of the Consignment Agreement is hereby amended by
deleting it in its entirety and replacing it with Schedule XII-Amended attached
hereto and made a part hereof.
6. Finlay and EFinlay each hereby grant and reconfirm the security
interest granted to Agent pursuant to the Security Agreement, as amended hereby.
7. The effectiveness of the transactions described herein shall be
subject to (i) delivery to LLC of this Second Amendment, (ii) payment to LLC of
the closing fee of $187,500, and (iii) payment of all outstanding legal fees due
and owing to counsel to Sovereign and LLC.
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8. Each of Finlay and EFinlay and the Agent hereby agree that, except
as expressly provided herein, the terms and provisions of the Consignment
Agreement remain unchanged and the Consignment Agreement remains in full force
and effect in accordance with its terms. The term "Agreement" as used in the
Consignment Agreement and all references to the Consignment Agreement in any
other documents or agreements among any of the parties hereto which relate to
either Finlay or EFinlay shall refer, from and after the date hereof, to the
Consignment Agreement as amended and supplemented by this Second Amendment.
9. Each of Finlay and Efinlay hereby ratifies and reaffirms that (i)
the representations and warranties contained in the Consignment Agreement, as
amended by the terms hereof, are true and correct as of the date hereof, except
that references to financial statements shall refer to the latest financial
statements furnished pursuant to the Consignment Agreement and (ii) no Event of
Default (as defined in the Consignment Agreement) nor any event which with
notice or the lapse of time, or both, would constitute an Event of Default
exists as of the date hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each of the parties hereto has caused this
amendment to be executed in several counterparts, each of which shall be deemed
to be an original as of the day and year first above written.
SOVEREIGN BANK, as Agent and a Lender
By /s/ Xxxxxxxxx Xxxxx
-------------------------------------
Title Vice President
-------------------------------------
SOVEREIGN PRECIOUS METALS, LLC, as Agent and a Lender
By /s/ Xxxxxxxxx Xxxxx
-------------------------------------
Title Vice President
-------------------------------------
COMMERZBANK INTERNATIONAL S.A.
By /s/ Xxxxxxx Xxxxx
-------------------------------------
Title Vice President
-------------------------------------
FINLAY FINE JEWELRY CORPORATION
By /s/ Xxxxx Xxxxxxxx
-------------------------------------
Title Senior V.P., Treasurer and
Chief Financial Officer
------------------------------------
EFINLAY, INC.
By /s/ Xxxxx Xxxxxxxx
-------------------------------------
Title Senior V.P., Treasurer and
Chief Financial Officer
------------------------------------
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SCHEDULE XII AMENDED
OTHER LENDING INSTITUTIONS
Institutions, Commitment and Consignment Percentages
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CONSIGNMENT
INSTITUTION COMMITMENT PERCENTAGE
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Sovereign Bank $30,000,000 60.00%
Precious Metals
00 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxxxx Xxxxx
Tel: 000-000-0000
Fax: 000-000-0000
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Commerzbank International $20,000,000 40.00%
A.G., New York Branch
Treasury Department, 32nd Floor
2 World Financial Center
Xxx Xxxx, XX 00000-0000
Attn: Xxx XxxXxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
Commerzbank International
S.A.
00, xxx Xxxxx Xxxx
X-0000 Xxxxxxxxxx
Attn: Xxxx Xxxxxxxxxxx
Tel: 011352-4779-11420
Fax: 011352-4779-11840
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TOTAL $50,000,000 100%
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