EXHIBIT 10.10(E)
AMENDMENT XX. 0
XXXXXXXXX XX. 0, dated as of December 27, 2006 (this
"Amendment"), to the Third Amended and Restated Credit Agreement, dated as of
May 19, 2005 (as amended by the Amendment, dated as of April 7, 2006, the
Amendment dated as of April 24, 2006, and the Amendment No. 3 dated as of
November 30, 2006, the "Credit Agreement"), among FINLAY FINE JEWELRY
CORPORATION, a Delaware corporation ("Finlay" or the "Borrower Representative")
and CARLYLE & CO. JEWELERS, a Delaware corporation ("Carlyle") (Finlay and
Carlyle are collectively referred to herein as the "Borrowers" and individually
as a "Borrower"), FINLAY ENTERPRISES, INC., a Delaware corporation (the
"Parent"), and GENERAL ELECTRIC CAPITAL CORPORATION ("GE Capital"), individually
and as administrative agent for each of the Lenders hereunder (GE Capital, in
such capacity, the "Agent"), for each of the Lenders hereunder, and the other
banks and other financial institutions named herein and whose signatures appear
on the signature pages thereto (GE Capital and such other banks and other
financial institutions and their respective successors and assigns,
individually, a "Lender" and collectively, the "Lenders"). Capitalized terms
used herein without definition shall have the respective meanings ascribed to
those terms in the Credit Agreement.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrowers have requested a facilities increase
option in an aggregate principal amount of up to $75,000,000; and
WHEREAS, the Lenders are willing to commit to the facilities
increase option as set forth herein; and
WHEREAS, the Borrowers have requested additional amendments to
the Credit Agreement as herein set forth; and
WHEREAS, the Borrowers, the Agent and the Lenders signatory
hereto have agreed to amend the Credit Agreement on the terms and subject to the
conditions herein provided; and
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1. Amendments to the Credit Agreement.
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(a) Cover Page and Preamble.
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(1) The cover page to the Credit Agreement is hereby
deleted in its entirety and replaced with Annex A hereto.
(2) The preamble to the Credit Agreement is hereby
amended by deleting it in its entirety and replacing it with the following:
THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated as
of May 19, 2005, among FINLAY FINE JEWELRY CORPORATION, a Delaware
corporation ("Finlay" or "Borrower Representative") and CARLYLE & CO.
JEWELERS, a Delaware corporation ("Carlyle") (Finlay and Carlyle are
collectively referred to herein as the "Borrowers" and individually as
a "Borrower"), FINLAY ENTERPRISES, INC., a
Delaware corporation (the "Parent"), GENERAL ELECTRIC CAPITAL
CORPORATION, a Delaware corporation having an office at 000 Xxxxxxx 0,
Xxxxxxx, XX 00000 ("GE Capital"), individually and as administrative
agent for each of the Lenders hereunder (GE Capital, in such capacity,
together with any successor administrative agent under Section 12.13
hereof, being the "Agent"), JPMorgan Chase Bank, N.A. ("JPMorgan"),
individually and as syndication agent (JPMorgan, in such capacity,
being the "Syndication Agent"), and the other banks and other
financial institutions named herein and whose signatures appear on the
signature pages hereto (GE Capital, JPMorgan, and such other banks and
other financial institutions and their respective successors and
assigns, individually, a "Lender" and collectively, the "Lenders").
(b) Section 1.1 Certain Defined Terms.
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(1) The following definitions shall be inserted in
proper alphabetical order:
"Acquired Business" shall have the meaning set forth
in the definition of Permitted Acquisition.
"Amendment No. 4 Effective Date" shall mean the
Effective Date under and as defined in Amendment No. 4 to the Third
Amended and Restated Credit Agreement, dated as of December 27, 2006,
among the Borrowers, the Parent, the Agent and the Lenders party
thereto.
"Applicable Recovery Percentage" shall mean the
percentage equal to (i) for the months of October through December, the
average of the net recovery percentage at cost set forth in the most
recently delivered appraisal delivered pursuant to Section 8.1(w) and
(ii) for the months of January through September, the average of the
net recovery percentage at cost set forth in the most recently
delivered appraisal delivered pursuant to Section 8.1(w), or, in either
case of clause (i) or (ii) above, such higher or lower percentage as
determined by the Agent consistent with the recovery percentages in
previous appraisals delivered pursuant to Section 8.1(w).
"Average Borrowing Base Excess Availability" shall
mean, on any date of determination, an amount equal to (i) the sum of
Borrowing Base Excess Availability for each day during the three
calendar months most recently ended divided by (ii) the number of days
occurring during such period.
"Average Excess Availability" shall mean, on any date
of determination, an amount equal to (i) the sum of Excess Availability
for each day during the three calendar months most recently ended
divided by (ii) the number of days occurring during such period.
"Borrowing Base Excess Availability" shall mean, on
any date of determination, the excess, if any, of (a) the Aggregate
Borrowing Base minus (b) the aggregate outstanding Loans and Letter of
Credit Obligations at such time.
"Disqualified Stock" shall mean (a) the Stock of any
Person that by its terms (or by the terms of any equity into which it
is convertible or for which it is exchangeable), or upon the occurrence
of any event, matures or is mandatorily
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redeemable, pursuant to a sinking fund obligation or otherwise, or is
exchangeable for Indebtedness of such Person or is redeemable at the
option of the holder thereof, in whole or in part, in each case, on or
prior to six months after the Maturity Date or (b) any Stock which
pays dividends (other than in the form of additional shares of such
Stock).
"Facilities Increase" shall have the meaning set
forth in Section 2.2(c) hereof.
"Facilities Increase Date" shall have the meaning set
forth in Section 2.2(c) hereof.
"Facilities Increase Notice" shall mean a notice from
the Borrowers to the Agent requesting a Facilities Increase, which may
include any proposed term and condition for such proposed Facilities
Increase but shall include in any event the amount of such proposed
Facilities Increase.
"Finlay Appraisal Value" shall mean, at any time, an
amount equal to the then Applicable Recovery Percentage multiplied by
the value of the Inventory of the Finlay Credit Parties at the end of
the most recently ended month pursuant to Section 8.1(x).
"Foreign Inventory" shall mean any Inventory located
outside of the United States of America or Canada.
"Foreign Receivables" shall mean any Receivables
located outside of the United States of America or Canada.
"Permitted Acquisition" shall mean the purchase by a
Borrower or Guarantor after the date hereof of all or substantially all
of the assets of any Person or a business or division of such Person
(whether pursuant to a merger or other transaction) or of all or a
majority of the capital stock of a Person (such assets or Person being
referred to herein as the "Acquired Business") and in one or a series
of transactions that satisfies each of the following conditions as
determined by the Agent:
(a) Agent shall have received not less than
ten (10) Business Days' prior written notice of the proposed
acquisition and such information with respect thereto as Agent
may reasonably request, including (i) the proposed date and
amount of the acquisition, (ii) a list and description of the
assets or shares to be acquired, (iii) the total purchase
price for the assets to be purchased (and the terms of payment
of such purchase price), (iv) a summary of the due diligence
undertaken by such Borrower or Grantor in connection with such
acquisition, and (v) appropriate financial statements of the
Acquired Business;
(b) the Acquired Business shall be an
operating business or company that engages in a line of
business substantially similar to the business that Borrowers
and Guarantors are engaged in on date hereof;
(c) the consideration (other than common
stock and equity-based compensation) paid for or in connection
with the assets or capital stock (or as merger consideration)
of the Acquired Business shall not exceed $35,000,000 per
annum and after giving effect to such consideration, the
aggregate amount of
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all consideration paid for all Permitted Acquisitions shall
not exceed $50,000,000 in the aggregate, provided, that up
to 50% of the consideration of any such Permitted
Acquisition may be in the form of a Seller Note, provided,
further, that (i) if any unsecured Indebtedness of the
Acquired Business is assumed by any Borrower or Guarantor in
connection with a Permitted Acquisition, the amount of such
unsecured Indebtedness shall count toward the aggregate
amount of consideration paid for such Permitted Acquisition
and (ii) no equity-based consideration shall include
Disqualified Stock;
(d) Agent shall have received: (i) the most
recent annual and interim quarterly financial statements with
respect to the Acquired Business and related statements of
income and cash flows showing positive cash flows for the
immediately preceding fiscal year of such Acquired Business,
(ii) detailed forecasts of cash flows for the Acquired
Business forecasting positive future cash flows, (iii)
detailed projections for Parent and its Subsidiaries through
the Maturity Date giving pro forma effect to such acquisition,
based on assumptions reasonably satisfactory to Agent,
prepared in good faith and in a manner and using such
methodology as is consistent with the most recent financial
statements delivered to Agent pursuant to Section 8.1 hereof,
and otherwise in form and substance reasonably satisfactory to
Agent, and (iv) revised projections dated no earlier than ten
(10) days prior to the date of such acquisition forecasting
the amount of the Borrowing Base and Excess Availability for
the twelve (12) month period following the acquisition, in
form and substance reasonably satisfactory to Agent,
representing Borrowers' reasonable best estimate of the future
Borrowing Base and Excess Availability for the period set
forth therein, which projections shall have been prepared on
the basis of the assumptions set forth therein which Borrowers
believe are fair and reasonable as of the date of preparation
in light of current and reasonably foreseeable business
conditions;
(e) if Agent so elects, Agent shall have
received an appraisal of the Inventory of the Acquired
Business and such other assets of the Acquired Business as
Agent may specify, in each case in form and containing
assumptions and appraisal methods satisfactory to Agent by an
appraiser reasonably acceptable to Agent, on which Agent and
Lenders are expressly permitted to rely;
(f) if Agent so elects, Agent shall have
completed a field examination with respect to the business and
assets of the Acquired Business in accordance with Agent's
customary procedures and practices and as otherwise required
by the nature and circumstances of the business of the
Acquired Business, the scope and results of which shall be
reasonably satisfactory to Agent, and upon the reasonable
request of Agent, the Inventory acquired by such Borrower or
Guarantor, as the case may be, pursuant to such acquisition
shall at all times after such acquisition be separately
identified and reported to Agent in a manner reasonably
satisfactory to Agent;
(g) in the case of the acquisition of Stock
of any Person or the formation of any Subsidiary in connection
with such acquisition, (i) the Borrower or Guarantor forming
such Subsidiary shall (A) execute and deliver to Agent, a
pledge and security agreement, in form and substance
reasonably satisfactory to Agent, granting to Agent a first
pledge of and lien on all of the issued and outstanding shares
of Stock of any such Subsidiary, (B) deliver the
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original stock certificates evidencing such shares of Stock
(or such other evidence as may be issued in the case of a
limited liability company), together with stock powers with
respect thereto duly executed in blank (or the equivalent
thereof in the case of a limited liability company in which
such interests are certificated, or otherwise take such
actions as Agent shall reasonably require with respect to
Agent's security interests therein) and (ii) as to any such
Subsidiary, the Borrower or Guarantor forming such
Subsidiary shall cause any such Subsidiary to execute and
deliver to Agent, the following (each in form and substance
reasonably satisfactory to Agent), (A) an absolute and
unconditional guarantee of payment of the Obligations, (B) a
security agreement granting to Agent a first security
interest and lien upon all of the assets of any such
Subsidiary, and (C) such other agreements, documents and
instruments as Agent may reasonably require in connection
with the documents referred to above in order to make such
Subsidiary a party to this Agreement as a "Borrower" or as a
"Guarantor" as Agent may determine, including, but not
limited to, supplements and amendments hereto, authorization
to file UCC financing statements and other consents,
waivers, acknowledgments and other agreements from third
persons which Agent may reasonably deem necessary in order
to permit, protect and perfect its security interests in and
liens upon the assets purchased, corporate resolutions and
other organization and authorizing documents of such Person,
and favorable opinions of counsel to such person;
(h) in the case of an acquisition of assets
(other than Stock), Agent shall have received, in form and
substance reasonably satisfactory to Agent, (i) evidence that
Agent has valid and perfected security interests in and liens
upon all purchased assets to the extent such assets constitute
Collateral hereunder, (ii) such other agreements, documents
and instruments as Agent may require in connection with such
assets, including, but not limited to, supplements and
amendments hereto, authorization to file UCC financing
statements and other consents, waivers, acknowledgments and
other agreements from third persons which Agent may deem
necessary in order to permit, protect and perfect its security
interests in and liens upon the assets purchased, corporate
resolutions and other organization and authorizing documents
of such Person, and favorable opinions of counsel to such
person, and (iii) the agreement of the seller consenting to
the collateral assignment by such Borrower or Guarantor
purchasing such assets of all rights and remedies and claims
for damages of such Borrower or Guarantor relating to the
Collateral (including, without limitation, any bulk sales
indemnification) under the agreements, documents and
instruments relating to such acquisition;
(i) in the case of the acquisition of the
Stock of another Person, the board of directors (or other
comparable governing body) of such other Person shall have
duly approved such acquisition and such Person shall not have
announced that it will oppose such acquisition or shall not
have commenced any action which alleges that such acquisition
will violate applicable law;
(j) no Default or Event of Default shall
exist or have occurred and be continuing as of the date of the
acquisition or any payment in respect thereof and after giving
effect to the acquisition or such payment;
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(k) Agent shall have received true, correct
and complete copies of all material agreements, documents and
instruments relating to such acquisition, which documents
shall be reasonably satisfactory to Agent.
"Seller Note" shall mean an unsecured note issued by
any Borrower in favor of the seller of an Acquired Business in form and
substance reasonably satisfactory to the Administrative Agent.
(2) The definition of "Fee Letters" is hereby deleted
in its entirety and replaced with the following:
"Fee Letters" shall mean that certain fee letter,
dated on or about the date hereof, between GE Capital and Finlay.
(3) The definition of "Finlay Borrowing Base" is
hereby amended by deleting the existing definition in full and replacing it with
the following:
"Finlay Borrowing Base" shall mean, at any time, an
amount equal to the sum of (a) the lesser of (i) 65% of the aggregate
value (lower of cost (on a first-in-first-out basis consistent with
Finlay's practices) and current market value) of Finlay Eligible
Inventory and (ii) 85% of the Finlay Appraisal Value plus (b) an amount
equal to 85% of the Net Amount of Eligible Receivables of the Finlay
Credit Parties; in each case as indicated on the most recent monthly
Borrowing Base Certificate delivered to the Agent by Finlay as of such
time, unless a more recent Borrowing Base Certificate has been
requested by the Agent pursuant to Section 8.1 and delivered by Finlay
to the Agent, in which case as indicated on such more recent Borrowing
Base Certificate. In no event shall the Finlay Borrowing Base be
attributable to Foreign Inventory and Foreign Receivables.
Notwithstanding the foregoing, if any License Agreement in effect as of
the Amendment No. 4 Effective Date is not renewed, or notice is
received that a License Agreement will not be renewed, each advance
rate set forth in clause (a) above against such Inventory located at
locations covered by such License Agreement shall be reduced by ten
(10) percentage points.
The Agent reserves the right to adjust the Finlay
Borrowing Base in its reasonable judgment by revising standards of
eligibility, establishing reserves and/or increasing or decreasing from
time to time the percentages set forth above, in which case "Finlay
Borrowing Base" shall be defined to include such revisions, reserves or
altered percentages. Notwithstanding the foregoing, any increase in the
percentages set forth above shall be subject to Section 12.2.
(4) The definition of "Initial Adjustment Date" is
hereby deleted in its entirety.
(5) The definition of "Leverage Ratio" is hereby
deleted in its entirety.
(6) The definition of "Majority Lenders" is hereby
amended by inserting between "at such time" and "or (b)" the following:
"; provided that General Electric Capital Corporation
and GE Business Capital Corporation together shall be considered one
Lender for purposes of this clause (a)"
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(7) The definition of "Maturity Date" is hereby
amended by deleting "January 15, 2008" and replacing it with "January 15, 2011."
(8) The definition of "Revolving Credit Facility
Commitment" is hereby deleted in its entirety and replaced with the following:
"Revolving Credit Facility Commitment" shall mean, at
any time, an amount equal to $225,000,000 or such lesser or greater
amount after giving effect to (i) each reduction of the Revolving
Credit Facility Commitment pursuant to Section 2.5 hereof and (ii) each
Facilities Increase.
(9) The definition of "Specialty Stores Borrowing
Base" is hereby amended by deleting the last paragraph of such definition and
replacing it with the following:
The Agent reserves the right to adjust the Specialty
Stores Borrowing Base in its reasonable judgment by revising standards
of eligibility, establishing reserves, and/or increasing or decreasing
from time to time the percentages set forth above, in which case
"Specialty Stores Borrowing Base" shall be defined to include such
revisions, reserves or altered percentages. Notwithstanding the
foregoing, any increase in the percentages set forth above shall be
subject to Section 12.2.
(10) Clause (a) of the definition of "Specialty
Stores Borrowing Base Percentage" is hereby amended by deleting "60%" and
replacing it with "65%".
(c) Section 2.2 Revolving Credit Facility Commitment
and Borrowing Limit. Section 2.2 (Revolving Credit Facility Commitment and
Borrowing Limit) is hereby amended by inserting at the end of such section the
following:
(c) Facilities Increase. (i) Provided that no
Default or Event of Default is continuing or would result therefrom,
the Borrowers may, after the Amendment No. 4 Effective Date, deliver
to the Agent a Facilities Increase Notice to request an increase (a
"Facilities Increase") in the aggregate Revolving Commitments in a
principal amount not to exceed $75,000,000 in the aggregate for all
such requests; provided, however, that (A) such requested increase
shall be in a minimum principal amount of $12,500,000, (B) no
Facilities Increase of the Revolving Credit Facility shall be
effective later than 180 days prior to the Maturity Date and (C) no
more than three Facilities Increases shall be made pursuant to this
clause (c). Nothing in this Agreement shall be construed to obligate
any Lender to negotiate for (whether or not in good faith), solicit,
provide or consent to any increase in the Revolving Commitments, and
any such increase may be subject to changes in any term herein.
(ii) The Agent shall promptly notify each
Lender of the proposed Facilities Increase and of the proposed
terms and conditions therefor agreed among the Borrowers and
the Agent. Each such Lender (and each of their Affiliates)
may, in its sole discretion, commit to participate in such
Facilities Increase by forwarding its commitment to the Agent
therefor in form and substance satisfactory to the Agent. The
Agent shall allocate, on a pro rata basis amounts not to
exceed for each such Lender the commitment received from such
Lender or Affiliate for the Revolving Credit Facility, the
Revolving Commitments to be made as part of the Facilities
Increase to the Lenders from which it has received such
commitments to participate in the Revolving Credit
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Facility. If the Agent does not receive enough commitments
from existing Lenders or their Affiliates, the Agent or any
of its Affiliates will use its reasonable efforts to
allocate any excess in the proper amount of the Facilities
Increase to other Qualified Assignees, provided that any
such Qualified Assignee is reasonably satisfactory to the
Agent and the Borrowers.
(iii) Each Facilities Increase shall become
effective after the satisfaction of the conditions precedent
set forth in Section 6.3, on a date agreed by the Borrowers
and the Agent (a "Facilities Increase Date"). The Agent shall
notify the Lenders and the Borrower, on or before 1:00 p.m. on
the Business Day preceding the Facilities Increase Date of the
effectiveness of the Facilities Increase.
(iv) On the Facilities Increase Date, each
Lender or Qualified Assignee participating in such Facilities
Increase shall purchase from each existing Lender having
Revolving Loans outstanding on such Facilities Increase Date,
without recourse or warranty, an undivided interest and
participation, to the extent of such Lender's pro rata share
in the Revolving Credit Facility of the new Revolving
Commitments (after giving effect to such Facilities Increase),
in the aggregate outstanding Revolving Loans, so as to ensure
that, on the Facilities Increase Date after giving effect to
such Facilities Increase, each Lender holds its pro rata share
in the Revolving Credit Facility and the Revolving Loans
outstanding on such Facilities Increase Date.
(d) Section 2.6 Interest. Section 2.6(f) is hereby
deleted in its entirety and replaced with the following:
(f) The Applicable Index Margin and Applicable
Eurodollar Margin, will be 0.00% and 1.50% per annum, respectively, as
of the Amendment No. 4 Effective Date. The Applicable Margins will then
be adjusted (up or down) prospectively on a quarterly basis as
determined by Borrower's Average Borrowing Base Excess Availability,
commencing on the first day of the Borrower's first full calendar
quarter following the Amendment No. 4 Effective Date. Adjustments in
Applicable Margins will be determined by reference to the following
levels:
LEVEL IF AVERAGE BORROWING BASE APPLICABLE APPLICABLE
EXCESS AVAILABILITY IS INDEX MARGIN EURODOLLAR MARGIN
I < $75 million 0.25% 2.00%
II > $75 million and 0.00% 1.75%
-
< $100 million
III > $100 million and 0.00% 1.50%
-
< $150 million
IV > $150 million 0.00% 1.25%
-
; provided, that if the Average Excess Availability is less
than $30 million as of the last day of any calendar quarter, the
Applicable Index Margin and the Applicable Eurodollar Margin shall be
at least Level II.
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(e) Section 3.1 Mandatory Prepayments. Section 3.1 is hereby
amended by deleting paragraph (c) in its entirety and replacing it with
"Intentionally deleted."
(f) Section 3.5 Unused Facility Fee. Section 3.5 (Unused
Facility Fee) is hereby amended by deleting "thirty-seven and one-half basis
points (37.5 b.p.) per annum" and replacing it with "twenty-five basis points
(25 b.p.) per annum."
(g) Section 6 Conditions Precedent to Each Borrowing and
Issuance of Letters of Credit. Section 6 (Conditions Precedent to Each Borrowing
and Issuance of Letters of Credit) is hereby amended by inserting at the end of
such section the following:
ss.6.3 CONDITIONS PRECEDENT TO EACH FACILITIES
INCREASE. The effectiveness of each Facilities Increase shall be
subject to the satisfaction of all of the following conditions
precedent:
(a) Certain Documents. The Agent shall have
received on or prior to the Facilities Increase Date for such
Facilities Increase each of the following, each dated such Facilities
Increase Date unless otherwise indicated or agreed to by the Agent, in
form and substance satisfactory to the Agent:
(i) written commitments duly executed by
existing Lenders or Qualified Assignees in an aggregate
amount equal to the amount of the proposed Facilities
Increase (as agreed among the Borrowers and the Agent but in
any case not to exceed, in the aggregate for all such
Facilities Increases, the maximum amount set forth in the
Facilities Increase Notice) and, in the case of each such
Qualified Assignee, an assumption agreement in form and
substance satisfactory to the Agent and duly executed by the
Borrowers, the Agent and such Qualified Assignee;
(ii) an amendment to this Agreement (including
to Exhibit A), effective as of the Facilities Increase Date
and executed by the Borrowers and the Agent, to the extent
necessary to implement terms and conditions of the
Facilities Increase;
(iii) for the account of each Lender or
Qualified Assignee participating in such Facilities Increase
having requested the same by notice to the Agent and the
Borrowers received by each at least three Business Days prior
to the Facilities Increase Date (or such later date as may be
agreed by the Borrowers), Revolving Notes in the Revolving
Credit Facility conforming to the requirements set forth in
Section 2.3;
(iv) for each Credit Party executing any Loan
Document as part of such Facilities Increase, certified copies
of such Credit Party's board of directors or other appropriate
governing body approving and authorizing the execution,
delivery and performance of each document executed as part of
such Facilities Increase to which such Credit Party is a
party;
(v) duly executed favorable opinions of
counsel to the Credit Parties (in form and substance
satisfactory to the Agent, as the Agent may request); it
being understood that to the extent that such opinions of
counsel shall rely upon any other opinion of counsel, each
such other opinion shall be in form
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and substance satisfactory to Agent and shall provide that
the Agent and Lenders may rely thereon; and
(vi) such other document as the Agent may
reasonably request or as any Lender participating in such
Facilities Increase may require as a condition to its
commitment in such Facilities Increase.
(b) Fees and Expenses. There shall have been paid
to the Agent, for the account of the Agent, any Lender (including any
Person becoming a Lender as part of such Facilities Increase on such
Facilities Increase Date) or any L/C Issuer, as the case may be, any
reasonable fees and expenses due and payable on or before the
Facilities Increase Date for such Facilities Increase.
(c) Conditions to Extensions of Credit. As of the
Facilities Increase Date for such Facilities Increase, (i) the
conditions precedent set forth in Section 6.1 shall have been
satisfied both before and after giving effect to such Facilities
Increase, (ii) such Facilities Increase shall be made on the terms and
conditions set forth in Section 2.2(c)(i) and (iii) to the extent
applicable, the Parent shall be in compliance with Section 8.17 as of
the most recently ended fiscal quarter on a pro forma basis both
before and after giving effect to such Facilities Increase.
(h) Section 8.1 Financial Statements and Other Information.
(1) Section 8.1(t) is hereby amended by deleting
such paragraph in its entirety and replacing it with the following:
(t) On February 15, May 15, August 15 and
November 15 of each year, (i) a report of the Borrowers and their
Subsidiaries detailing the amount of "consigned" or "memo" inventory
and owned inventory of the Borrowers and their Subsidiaries in each of
the following categories: (A) inventory under two years old, (B)
inventory between two and three years old, (C) inventory between three
and four years old and (D) inventory more than four years old, (ii) a
certification by each Borrower that the amount of "consigned" or
"memo" inventory subject to duly executed Consignor Letters represents
at least ninety percent (90%) of the "memo" or "consigned" inventory
(based on book value) of such Borrower in accordance with Section
8.14, (iii) copies of any Consignor Letters duly executed by
consignors of "consigned" or "memo" inventory other than those
Consignor Letters already delivered to the Agent and listed on Annex B
to Amendment No. 4 to the Credit Agreement, dated as of the Amendment
No. 4 Effective Date, among the Agent, the Borrowers and the Lenders
party thereto and (iv) a complete list of Consignor Letters duly
executed by consignors of "consigned" or "memo" inventory.
(2) Section 8.1 is hereby amended by inserting the
following at the end of such section:
(w) At least once each Fiscal Year, inventory
appraisals on the Inventory of the Finlay Credit Parties only prepared
by an independent appraiser satisfactory to the Agent at the expense of
the Credit Parties; provided, however, that (i) the Agent may cause a
second appraisal during any Fiscal Year period at the expense of the
Credit Parties if Excess Availability is less than $40,000,000 for five
(5) consecutive Business Days at any time during such Fiscal Year and
(ii) the Agent may cause
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additional appraisals to be undertaken if in its reasonable discretion
it deems such additional appraisals necessary or appropriate, provided
that the Credit Parties shall not be obligated to pay for any such
additional appraisals pursuant to this clause (ii) unless (A) a
Default or Event of Default has occurred and is continuing, or (B)
Excess Availability is at any time equal to or less than $30,000,000,
in which case any such additional appraisal shall be at the expense of
the Credit Parties.
(x) No later than thirty (30) days after the end of
each month, or more frequently if requested by the Agent, an inventory
report as of the end of such month, including a calculation of all
Finlay Eligible Inventory and all Inventory of the Finlay Credit
Parties not constituting Eligible Inventory in form and detail
acceptable to the Agent.
(y) If requested, no later than thirty (30) days
after the end of each month, or more frequently if requested by the
Agent, inventory reports as of the end of such month by category and
location, together with a reconciliation to the corresponding Finlay
Borrowing Base and the Finlay Credit Parties' general ledger.
(z) No later than 12:00 noon (New York time) five
(5) Business Days after the end of each calendar quarter a certificate
dated the last day of such calendar quarter from Finlay stating the
Average Excess Availability for the most recently ended calendar
quarter.
(aa) Such other reports or information regarding the
Collateral of the Finlay Credit Parties as the Agent shall reasonably
request from time to time.
(i) Section 8A (Carlyle Collateral Reporting). Section 8A(c) is
hereby amended by deleting such paragraph in its entirety and replacing it with
the following:
(c) At least once each Fiscal Year, inventory
appraisals on the Inventory of the Specialty Stores Credit Parties only
prepared by an independent appraiser satisfactory to the Agent at the
expense of the Credit Parties; provided, however, that (i) the Agent
may cause a second appraisal during any Fiscal Year period at the
expense of the Credit Parties if Excess Availability is less than
$40,000,000 for five (5) consecutive Business Days at any time during
such Fiscal Year and (ii) the Agent may cause additional appraisals to
be undertaken if in its reasonable discretion it deems such additional
appraisals necessary or appropriate, provided that the Credit Parties
shall not be obligated to pay for any such additional appraisals
pursuant to this clause (ii) unless (A) a Default or Event of Default
has occurred and is continuing, or (B) Excess Availability is at any
time equal to or less than $30,000,000, in which case any such
additional appraisal shall be at the expense of the Credit Parties,
(j) Section 8.17 Financial Covenants. Section 8.17 (Financial
Covenants) is hereby deleted in its entirety and replaced with the following:
ss.8.17. FINANCIAL COVENANTS. At any time when Excess
Availability is less than $20,000,000 or the Borrowing Base Excess
Availability is less than $40,000,000, the Parent shall have
maintained, as of the end of the most recent period of four consecutive
fiscal quarters of the Parent ended prior to such time, a Fixed Charge
Coverage Ratio of not less than 1.10.
11
(k) Section 8.19 License Agreements. Paragraph (b) of
Section 8.19 (License Agreements) is hereby amended by (i) deleting "and (v)"
and (ii) inserting in its place the following:
, (v) provide the Agent with Written Notice upon
receiving notice or having knowledge that a License Agreement shall not
be renewed and (vi)
(l) Section 8.22 Cash Management. Section 8.22 (Cash Management)
is hereby amended by (i) deleting paragraphs (g) and (h) in their entirety and
inserting in each place "Intentionally Omitted" and (ii) deleting "(g)" in the
last paragraph of such section and replacing it with "(f)".
(m) Section 9.2 Liens. Section 9.2 (Liens) is hereby amended by
(i) deleting "$4,000,000" in paragraph (d) and replacing it with "$6,000,000"
and (ii) inserting at the end of such section the following:
(p) Liens existing on property or assets acquired
pursuant to a Permitted Acquisition; provided, that, any such
Indebtedness that is secured by such Liens is otherwise permitted under
Section 9.3 hereof; and such Liens are not incurred in connection with
or contemplation of, such acquisition and do not attach to any other
asset of such Borrower, Guarantor or Subsidiary thereof;
(n) Section 9.4 Loans, Investments and Guarantees. Section 9.4
is hereby amended by (i) deleting "Specialty Store Credit Party" in paragraph
(q) and replacing it with "Credit Party" and (ii) inserting at the end of such
section the following:
(t) Permitted Acquisitions;
(o) Section 9.5 Merger, Sale of Assets, Dissolution, Etc.
Section 9.5 is hereby amended by (x) deleting the "and" at the end of paragraph
(k), (y) deleting the "." at the end of paragraph (m) and inserting in its place
"; and" and (z) inserting at the end of such section the following:
(n) the consummation of Permitted Acquisitions.
(p) Section 9.18 Capital Stock. Section 9.18 is hereby amended
by inserting before the period at the end of such section the following:
and Permitted Acquisitions
(q) Section 12.2 Amendment, Modification and Waiver. Paragraph
(c) of Section 12.2 is hereby amended by inserting before the period at the end
of such paragraph the following:
; or
(vii) increase the percentages in the definition of
Finlay Borrowing Base or Specialty Stores Borrowing Base.
(r) Exhibit A to Credit Agreement. Exhibit A to the Credit
Agreement is hereby deleted in its entirety and replaced by Exhibit A attached
hereto.
12
(s) Exhibit 8.1(p) to Credit Agreement. Exhibit 8.1(p) to the
Credit Agreement is hereby deleted in its entirety and replaced by Exhibit
8.1(p) attached hereto.
Section 2. Conditions to Effectiveness. This Amendment shall become
effective as of the date hereof (the "Effective Date") upon receipt by the Agent
of the following:
(a) Counterparts of this Amendment duly executed by the Agent,
each Lender and each Credit Party;
(b) Opinions of counsel to the Borrowers in form and substance
satisfactory to the Agent;
(c) Such other items from the Credit Parties as the Agent may
reasonably request in writing; and
(d) All fees and expenses of the Agent and the Lenders due and
payable by the Borrowers pursuant to the Fee Letter, dated on or about the date
hereof, between GE Capital and Finlay.
Section 3. Representations and Warranties. Each of the Parent and the
Borrowers represents and warrants as follows (which representations and
warranties shall survive the execution and delivery of this Amendment):
(a) Each of the Parent and the Borrowers has taken all
necessary action to authorize the execution, delivery and performance of this
Amendment.
(b) This Amendment has been duly executed and delivered by the
Parent and the Borrowers. This Amendment and the Credit Agreement as amended
hereby constitute the legal, valid and binding obligation of the Parent and the
Borrowers, enforceable against them in accordance with their respective terms,
subject to applicable bankruptcy, reorganization, insolvency, moratorium and
similar laws affecting the enforcement of creditors' rights generally and by
general equity principles.
(c) No consent or approval of any person, firm, corporation or
entity, and no consent, license, approval or authorization of any governmental
authority is or will be required in connection with the execution, delivery,
performance, validity or enforcement of this Amendment other than any such
consent, approval, license or authorization which has been obtained and remains
in full force and effect or where the failure to obtain such consent, license,
approval or authorization would not result in a Material Adverse Effect.
(d) After giving effect to this Amendment, each of the
Borrowers and the Parent is in compliance with all of the various covenants and
agreements set forth in the Credit Agreement and each of the other Loan
Documents.
(e) After giving effect to this Amendment, no event has
occurred and is continuing which constitutes a Default or an Event of Default.
(f) Attached hereto as Annex B is a true and correct list of
all the Consignor Letters entered into by the Credit Parties in accordance with
Section 8.14 of the Credit Agreement and copies of all such Consignor Letters
have been delivered by the Borrowers to the Agent as of the Effective Date in
accordance with Section 8.14 of the Credit Agreement.
13
(g) All representations and warranties contained in the Credit
Agreement and each of the other Loan Documents are true and correct in all
material respects as of the date hereof, except to the extent that any
representation or warranty relates to a specified date, in which case such are
true and correct in all material respects as of the specific date to which such
representations and warranties relate.
Section 4. Effective Date. The amendments to the Credit Agreement
contained herein shall become effective as of December 27, 2006 (the "Effective
Date") only at such time as this Amendment has been duly executed by the
Borrowers, the Parent and the Lenders.
Section 5. Expenses. The Borrowers agrees to pay on demand all costs
and expenses, including reasonable attorneys' fees, of the Agent incurred in
connection with this Amendment.
Section 6. Continued Effectiveness. The term "Agreement", "hereof",
"herein" and similar terms as used in the Credit Agreement, and references in
the other Loan Documents to the Credit Agreement, shall mean and refer to, from
and after the Effective Date, the Credit Agreement as amended by this Amendment.
Each of the Borrowers and the Parent hereby agrees that all of the covenants and
agreements contained in the Credit Agreement and the Loan Documents are hereby
ratified and confirmed in all respects.
Section 7. Counterparts. This Amendment may be executed in
counterparts, each of which shall be an original, and all of which, taken
together, shall constitute a single instrument. Delivery of an executed
counterpart of a signature page to this Amendment by telecopier shall be
effective as delivery of a manually executed counterpart of this Amendment.
Section 8. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York without giving
effect to the conflict of laws provisions thereof.
[SIGNATURE PAGES FOLLOW]
14
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their respective officers as of the date first
written above.
FINLAY FINE JEWELRY CORPORATION
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxx
Title: SVP & CFO
CARLYLE & CO. JEWELERS
By: /s/ Xxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxxx
Title: SVP & CFO
FINLAY ENTERPRISES, INC.
By: /s/ Xxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxxx
Title: SVP & CFO
GENERAL ELECTRIC CAPITAL
CORPORATION,
as Lender and as Agent
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Duly Authorized Signatory
XX XXXXXX XXXXX BANK, NATIONAL ASSOCIATION,
as Lender and Syndication Agent
By: /s/ Xxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxx
Title: SVP
[SIGNATURE PAGE TO AMENDMENT NO. 4]
XXXXX FARGO FOOTHILL, LLC,
as Lender
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: AVP
GE BUSINESS CAPITAL CORPORATION,
as Lender
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Duly Authorized Signatory
[SIGNATURE PAGE TO AMENDMENT NO. 4]
ANNEX A
TO
AMENDMENT NO. 4
---------------
================================================================================
U.S. $225,000,000
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
dated as of May 19, 2005,
among
GENERAL ELECTRIC CAPITAL CORPORATION,
individually and in its capacity as administrative agent,
JPMORGAN CHASE BANK, N.A.,
individually and in its capacity as syndication agent,
GE CAPITAL MARKETS, INC.,
in its capacity as lead arranger and bookrunner,
CERTAIN OTHER LENDERS AND
FINANCIAL INSTITUTIONS PARTIES HERETO,
FINLAY FINE JEWELRY CORPORATION
CARLYLE & CO. JEWELERS
and
FINLAY ENTERPRISES, INC.
================================================================================
The following is a list of omitted schedules and exhibits to the Amendment No. 4
to the Third Amended and Restated Credit Agreement. Finlay agrees to furnish
supplementally a copy of any omitted schedule or exhibit to the Securities and
Exchange Commission upon request.
Annex B - Consignor Letters
Exhibit A - Lenders, Commitments and Initial Eurodollar Offices
Exhibit 8.1(p) - Form of Borrowing Base Certificate
