GUARANTY FEE AGREEMENT
This Guaranty Fee Agreement ( the "Agreement"), dated as of September 15,
1999, is by and between Xxxxxxxx'x Inc., a Delaware corporation ("Xxxxxxxx'x")
and Crescent Jewelers Inc., a Delaware corporation and its wholly-owned
subsidiary, Crescent Jewelers, a California corporation (collectively,
"Crescent").
WHEREAS, to induce Xxxxxxxx'x to enter into that certain Guaranty
Agreement dated as of September 15, 1999 (as amended, restated, supplemented or
otherwise modified from time to time, the "Guaranty") in favor of Bank of
America, N.A., as administrative agent for the Lenders under that certain Credit
Agreement dated as of September 15, 1999 (as amended, restated, supplemented or
otherwise modified from time to time, the "Crescent Credit Agreement"), among
Crescent, the Lenders named therein and Bank of America, N.A., as administrative
agent, Crescent has agreed to compensate Xxxxxxxx'x pursuant to the terms of
this Agreement;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, receipt of which is hereby acknowledged, the parties do
hereby agree as follows:
1. Definitions.
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Except as otherwise indicated, all terms used herein and not otherwise
defined shall have the meaning ascribed to them in the Crescent Credit
Agreement.
2. Guaranty Fee.
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(a) On the Closing Date, Crescent agrees to execute and deliver to
Xxxxxxxx'x a Warrant Agreement substantially in the form attached as Exhibit A
hereto.
(b) Crescent agrees to pay to Xxxxxxxx'x a fee equal to 2% per annum of the
average amount of the Guaranteed Obligations (as defined in the Guaranty) during
the preceding fiscal quarter (the "Guaranty Fee"). The Guaranty Fee will be
payable in arrears on the 15th calendar day after the end of each fiscal
quarter. The calculation of the Guaranty Fee will be made by the Chief Financial
Officer of Crescent and certified to Xxxxxxxx'x in writing within 10 calendar
days after the end of each fiscal quarter. In the event the Guaranty Fee is not
paid when due, interest shall accrue on the unpaid fee commencing as of the end
of the fiscal quarter at the Base Rate plus 2%.
(c) Amounts owing under this Agreement are expressly made subordinate and
junior in right of payment to the prior payment in full in cash and cash
equivalents of all loans, obligations and other amounts owing under the Crescent
Credit Agreement and the
other Credit Documents relating thereto (collectively, the "Senior
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Obligations"), and termination of commitments thereunder, in the manner provided
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therein; provided that
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(i) prior to (A) the occurrence of a Bankruptcy Event, or (B) notice
from the Administrative Agent of the occurrence of an Event of Default
under the Crescent Credit Agreement, Crescent may make payment, and
Xxxxxxxx'x may receive, the Guaranty Fee and other amounts owing hereunder,
and
(ii) thereafter, unless the Bankruptcy Event shall have been dismissed
or the Event of Default shall have been remedied or waived, as appropriate,
(A) no payment shall be made, direct or indirect, of the Guaranty
Fee or other amounts owing hereunder or otherwise in respect hereof,
nor shall Xxxxxxxx'x exercise any remedies hereunder or in respect of
any collateral interests in respect of amounts owing hereunder;
(B) any payment or other amounts payable on or in respect of this
Agreement shall be paid directly to the Administrative Agent for
application to the Senior Obligations, and
(C) if, notwithstanding the foregoing provisions, Xxxxxxxx'x
shall receive payment on or in respect of this Agreement in
contravention of the provisions hereof, such amounts shall be received
and held in trust for the benefit of the holders of the Senior
Obligations and will be promptly paid over to the Administrative Agent
for the Senior Obligations,
until the Senior Obligations have been paid in full in cash or cash
equivalents.
3. Term.
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This Agreement shall remain in full force and effect until the Guaranty is
terminated.
4. Legal Opinion.
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On the Closing Date, counsel to Crescent shall deliver a legal opinion in
form and scope satisfactory to counsel for Xxxxxxxx'x with regard to the
organization, existence and capitalization of Crescent Jewelers Inc. and each of
its Subsidiaries and the enforceability of this Agreement and the Warrant
Agreement.
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5. Miscellaneous.
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(a) All communications under this Agreement shall be in writing and shall
be delivered or mailed to the address set forth below, or at such other address
as shall have furnished in writing after the date hereof.
If to Crescent:
Crescent Jewelers
000 00xx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxxxxx, Chief Financial Officer
If to Xxxxxxxx'x
Xxxxxxxx'x Inc.
0 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Chief Financial Officer
Any written communication so addressed and mailed by certified mail,
return receipt requested, shall be deemed to have been given when so mailed.
All other written communications shall be deemed to have been given upon receipt
thereof.
(b) This Agreement shall be governed by and construed in accordance with
the law of the State of Delaware.
(c) This Agreement shall be binding upon the parties hereto and their
respective successors and assigns, and shall inure to the benefit of and be
enforceable by the parties hereto and their respective successors and assigns.
(d) This Agreement may be amended or supplemented, and the observance of
any term hereof or thereof may be waived, only with the written consent of
Xxxxxxxx'x and Crescent.
(e) This Agreement may be executed and delivered simultaneously in one or
more counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
[Signatures On Next Page]
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IN WITNESS WHEROF, the undersigned have caused their names to be signed
hereto by the respective officers thereunto duly authorized as of the day and
year first above written.
CRESCENT JEWELERS INC.
/s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: Senior Vice President
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and Chief Financial Officer
CRESCENT JEWELERS
/s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: Chief Financial Officer
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XXXXXXXX'X INC.
/s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Senior Vice President
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Chief Financial Officer,
Treasurer and Secretary
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