AMENDMENT AGREEMENT No. 7 AND WAIVER
AMENDMENT AGREEMENT No. 7 AND WAIVER dated as of December 31, 1999 among
FINLAY ENTERPRISES, INC., a Delaware corporation (the "Parent"), FINLAY FINE
JEWELRY CORPORATION, a Delaware corporation (the "Company"), the lenders named
herein and signatory hereto (the "Lenders") and GENERAL ELECTRIC CAPITAL
CORPORATION, as agent (the "Agent"), for the Lenders.
W I T N E S S E T H :
WHEREAS, the Parent, the Company, the Lenders and the Agent are parties to
an Amended and Restated Credit Agreement dated as of September 11, 1997 (as
heretofore and hereafter amended, modified or supplemented from time to time in
accordance with its terms, the "Credit Agreement");
WHEREAS, Societe Nouvelle d'Achat de Bijouterie - S.O.N.A.B., an indirect
wholly-owned subsidiary of the Company ("Sonab"), proposes to sell certain of
its assets (the "Asset Sale") to Histoire d'Or and a wholly-owned subsidiary
thereof (collectively, the "Buyer") pursuant to an Asset Purchase Agreement
dated as of December 23, 1999 between Sonab and Buyer and the ancillary
documents related thereto (the "Asset Purchase Agreement"); and
WHEREAS, subject to the terms and conditions contained herein the parties
hereto desire to amend or waive compliance with certain provisions of the Credit
Agreement in connection with the Asset Sale; and
NOW THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, and subject to the fulfillment of the conditions set forth
below, the parties hereto agree as follows:
1. Defined Terms. Unless otherwise specifically defined herein, all
capitalized terms used herein shall have the respective meanings ascribed to
such terms in the Credit Agreement.
2. Waivers to the Credit Agreement. Upon the Effective Date (as defined
below):
(a) Compliance by the Parent and the Company with the provisions of Section
9.4 is hereby waived in connection with the Asset Sale solely to allow for (i)
the escrow arrangements with respect to 80% of the Inventory Price (as defined
in the Asset Purchase Agreement) (excluding 1% of the adjusted book value of the
Inventory (as defined in the Asset Purchase Agreement)) and the entirety of the
Nice Store Business Price (as defined in the Asset Purchase Agreement), and (ii)
the deferred payment of 20% of the Inventory Price (as defined in the Asset
Purchase Agreement), or the remaining
balance thereof, on December 31, 2000 (50% of which shall be paid to Sonab on
such date and 50% to be subject to escrow for an additional one year period).
(b) Compliance by the Parent and the Company with the provisions of Section
9.5 of the Credit Agreement is hereby waived solely to allow for the sale of
assets pursuant to the Asset Purchase Agreement and the winding up of the
operations of Sonab.
3. Amendments to Credit Agreement. The Credit Agreement shall be amended as
follows upon the Effective Date (as defined below):
(a) Section 1.1 of the Credit Agreement is hereby amended by adding the
following definitions in the appropriate alphabetical sequence:
"Buyer" shall mean Histoire d'Or and a wholly-owned subsidiary
thereof, the buyers under the SONAB Asset Purchase Agreement.
"SONAB Asset Purchase Agreement" shall mean the Asset Purchase
Agreement dated as of December 23, 1999 between Sonab, as seller, and Histoire
d'Or and a wholly-owned subsidiary thereof, as buyers, and the ancillary
documents related thereto.
(b) The definition of "EBITDA" contained in Section 1.1 of the Credit
Agreement is hereby amended by adding to clause (ii) thereof the following: "(D)
the gross amount of the write-off associated with the sale of assets by Sonab to
Buyer, the liquidation of the balance of the net assets of Sonab and the closure
of the Sonab operation, to a maximum of $27 million."; and by adding to clause
(iii) thereof the words "and (D)" after the words "clause (C)".
(c) The definition of "Fixed Charge Coverage Ratio" contained in Section
1.1 of the Credit Agreement is hereby amended by adding to clause (a)(i)(x)
thereof after the words "Tax Allocation Agreement" the following: ", adjusted
upward to negate the tax benefit resulting from the write-off associated with
the sale of assets by Sonab to Buyer, the liquidation of the balance of the net
assets of Sonab and the closure of the Sonab operation.".
(d) Section 2.5(c) of the Credit Agreement is hereby deleted in its
entirety.
(e) Section 7(b) of the Credit Agreement is hereby replaced in its entirety
with the following:
"(b) From and after the Closing Date, proceeds of Revolving Advances
to the Company shall be used (i) for the working capital and general corporate
purposes (including, without limitation, for the purpose of opening and
maintaining not more than twenty-two factory outlet stores operated by the
Company to the extent set forth in Section 9.1 and 9.24 hereof) of the Company
and its Subsidiaries to the extent such purposes are permitted hereunder and
(ii) to repurchase Senior Notes to the extent such purchases are permitted
hereunder."
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(f) Sections 7(d) and 7(e) of the Credit Agreement are hereby deleted in
their entirety.
(g) The last sentence of Section 8.1(p) of the Credit Agreement is hereby
deleted in its entirety.
(h) Section 8.24 of the Credit Agreement is hereby deleted in its entirety.
(i) Section 8.25 of the Credit Agreement is hereby deleted in its entirety.
(j) Sections 9.3(e)(ii) and (q) of the Credit Agreement are hereby deleted
in their entirety.
(k) Section 9.9 of the Credit Agreement is hereby amended by adding to the
end thereof the following sentence: "In addition to the foregoing, Sonab shall
be permitted to make severance and incentive payments to Xxxxxxx Xxxxxxxx and
Xxxxxxx XxXxxx in connection with the termination of the Sonab operation.".
(l) The proviso in the last sentence of Section 9.14 of the Credit
Agreement is hereby replaced in its entirety with the following: "provided,
however, that the sole business of Sonab shall be to provide transition services
to the Buyer prior to the winding up of Sonab's operations.".
(m) Section 9.23 of the Credit Agreement is hereby deleted in its entirety.
(n) Section 9.25 of the Credit Agreement is hereby deleted in its entirety.
(o) Section 11.1(d) of the Credit Agreement is hereby amended by adding to
the end thereof the following sentence: "The only business that Sonab engages in
is to provide transition services to the Buyer prior to the winding up of
Sonab's operations.".
4. Release of Security Interest. The Lenders hereby authorize the Agent to
release its security interest in the assets that are contemplated to be sold by
Sonab to Buyer pursuant to the Asset Purchase Agreement.
5. Representations and Warranties. Each of the Parent and the Company
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 Company 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 Company and the acknowledgement attached hereto has been duly executed and
delivered by each Subsidiary. This Amendment and the Credit Agreement as amended
hereby constitute the legal, valid and binding obligation of the Parent and the
Company, enforceable against them in accordance with their respective terms,
subject to applicable
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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, approval, license
or authorization would not result in a Material Adverse Effect.
(d) After giving effect to this Amendment, each of the Company 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) 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.
6. Effective Date. The amendments to the Credit Agreement contained herein
shall not become effective (the "Effective Date") until (i) this Amendment has
been duly executed and delivered by the Company, the Parent and the Majority
Lenders and (ii) the acknowledgement attached hereto shall have been executed
and delivered by each of the Subsidiaries.
7. Expenses. The Company agrees to pay on demand all costs and expenses,
including reasonable attorneys' fees, of the Agent incurred in connection with
this Amendment.
8. 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
Company 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.
9. Gold Consignment Agreement. The Lenders hereby consent to the execution
and delivery by the Company of an amendment to the Gold Consignment Agreement
consistent with the terms of this Amendment.
10. 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
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by telecopier shall be effective as delivery of a manually executed counterpart
of this Amendment.
11. 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.
* * *
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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 ENTERPRISES, INC.
By: /s/ Xxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
FINLAY FINE JEWELRY CORPORATION
By: /s/ Xxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
GENERAL ELECTRIC CAPITAL CORPORATION,
Individually and as Agent
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Duly Authorized Signatory
FLEET PRECIOUS METALS, INC.
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
By: /s/ Xxxxxxx X. X'Xxxxxxxx
-----------------------------------
Name: Xxxxxxx X. X'Xxxxxxxx
Title: Vice President
THE CHASE MANHATTAN BANK
By: /s/Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
XXXXXXX XXXXX CREDIT PARTNERS L.P.
By: /s/ Xxxxxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxxxxx Xxxxxxx
Title: Authorized Signatory
ABN AMRO BANK N.V.
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
By: /s/ Xxxx Xxxxxx
-----------------------------------
Name: Xxxx Xxxxxx
Title: Senior Vice President
BANK LEUMI
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President
TRANSAMERICA BUSINESS CREDIT
CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
Each of the Guarantors, by signing below, confirms in favor of the Agent and the
Lenders that it consents to the terms and conditions of the foregoing Amendment
No. 7 to the Amended and Restated Credit Agreement and agrees that it has no
defense, offset, claim, counterclaim or recoupment with respect to any of its
obligations or liabilities under its respective Guaranty and that all terms of
such Guaranty shall continue in full force and effect, subject to the terms
thereof.
FINLAY JEWELRY, INC.
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Senior Vice President and Chief Financial Officer
SONAB HOLDINGS, INC.
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Senior Vice President and Chief Financial Officer
SONAB INTERNATIONAL, INC.
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Senior Vice President and Chief Financial Officer
SOCIETE NOUVELLE D'ACHAT DE BIJOUTERIE - S.O.N.A.B.
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Attorney-in-fact
FINLAY MERCHANDISING & BUYING, INC.
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Senior Vice President and Chief Financial Officer
