AMENDMENT NO. 6
THIS AMENDMENT NO. 6 (this "Amendment") is made as of April_24, 1998, by
and between FINLAY FINE JEWELRY CORPORATION, a Delaware corporation with its
principal office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Consignee")
and RHODE ISLAND HOSPITAL TRUST NATIONAL BANK, a national banking association
with its principal office at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ (the "Consignor") amending certain provisions of the Gold Consignment
Agreement dated as of June 15, 1995 (as amended, modified or supplemented and in
effect, the "Consignment Agreement"), by and between the Consignee and the
Consignor. Capitalized terms used herein which are defined in the Consignment
Agreement and not defined herein shall have the same meaning herein as therein.
WHEREAS, the Consignee has requested that the Consignor agree to amend the
terms of the Consignment Agreement in certain respects as hereinafter more fully
set forth;
WHEREAS, the Consignor is willing to amend the terms of the Consignment
Agreement in such respects upon the terms and subject to the conditions
contained herein;
NOW, THEREFORE, in consideration of the mutual agreements contained in the
Consignment Agreement, herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
S1. Amendments of S1 of the Consignment Agreement.__Section 1 of the
Consignment Agreement is hereby amended by:
(a) deleting the text "two and one quarter percent (2-1/4%)" from clause (b) of
the definition of "Consignment Fixed Rate" and substituting in lieu thereof
the text "one and three-quarters percent (1-3/4%)".
(b) deleting the dollar amount "$25,000,000" contained in clause (b) of the
definition of "Consignment Limit" and substituting in lieu thereof the
dollar amount "$32,000,000".
(c) inserting in the place required by alphabetical order the following new
definitions:
"Existing Senior Discount Debentures: The Parent's 12% Senior Discount
Debentures due 2005, issued pursuant to an Indenture dated as of May 26, 1993,
as supplemented by the First Supplemental Indenture thereto dated as of October
28, 1994 and by the Second
Supplemental Indenture thereto dated as of July 14, 1995, in the form
provided to the Consignor."
"Existing Senior Notes: The Consignee's 10-5/8% Senior Notes due 2003, issued
pursuant to an Indenture dated as of May 26, 1993 as supplemented by the
First Supplemental Indenture thereto dated as of October 28, 1994 and by
the Second Supplemental Indenture thereto dated as of July 14, 1995, in the
form provided to the Consignor."
"1998Offering Expenses: Non-recurring charges, costs and expenses (including
transaction expenses, any write-off of deferred financing costs, debt
discount costs and redemption premiums and including interest expense
incurred solely in respect of the Existing Senior Notes and the Existing
Senior Discount Debentures and solely during the period prior to the
redemption thereof during which the Senior Debentures and the Senior Notes
shall also be outstanding), incurred by the Parent and its Subsidiaries in
connection with (a) the Parent's offering of its common stock on or about
the Sixth Amendment Effective Date pursuant to a registration statement
filed by the Parent with the Securities Exchange Commission on March 24,
1998, as such registration statement may be amended from time to ime, (b)
the Parent's offering of the Senior Debentures, (c) the Consignee's
offering of the Senior Notes and (d) the related redemption of the Existing
Senior Discount Debentures and the Existing Senior Notes."
(d) deleting the definition of "Maturity Date", in its entirety and
substituting in lieu thereof the following new definition:
"Maturity Date: The earliest of (a) December 31, 2001, (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."
(e) deleting definitions of "Senior Discount Debentures" and "Senior Notes" in
their entirety and substituting in lieu thereof the following new
definitions:
"Senior Debentures. The Parent's Senior Debentures due 2008 in the original
principal amount of $75,000,000, as in effect on the Sixth Amendment
Effective Date, which Senior Debentures are being issued pursuant to a
registration statement filed by the Parent with the Securities Exchange
Commission on March 24, 1998, as such registration statement may be amended
from time to time."
"Senior Notes: The Consignee's Senior Notes due 2008 in the original principal
amount of $150,000,000, as in effect on the Sixth Amendment Effective Date,
which Senior Notes are being issued pursuant to a registration statement
filed by the Consignee with the Securities Exchange Commission on March 24,
1998, as such registration statement may be amended from time to time."
"Sixth Amendment: Amendment No. 6 dated as of April 24, 1998 between the
Consignor and the Consignee, amending certain provisions of this
Agreement."
"Sixth Amendment Effective Date: The date upon which the conditions to the
effectiveness of the Sixth Amendment set forth in Section 10 thereof, other
than the condition set forth in subparagaph (j) of such Section 10, shall
have been satisfied or waived in accordance with the terms of the Sixth
Amendment."
S2. Amendment of S5 of the Consignment Agreement.__Section 5 of the
Consignment Agreement is hereby amended by deleting the first paragraph thereof
in its entirety and substituting in lieu thereof the following new paragraph:
"On or prior to the Sixth Amendment Effective Date, the Consignee shall pay
to the Consignor a closing fee in the amount of $120,000. The Consignee shall
also pay to the Consignor, on the first day of each calendar month following the
Sixth Amendment Effective Date and upon the earlier to occur of the Maturity
Date or the date upon which the Commitment is no longer in effect, a commitment
fee calculated at a rate per annum which is equal to one half of one percent
(1/2%) of the average daily difference by which the Commitment amount (in
Dollars) exceeds the aggregate of the Fair Market Value of all Consigned
Precious Metal outstanding during the preceding calendar month or portion
thereof; provided, however, that no such commitment fee shall accrue or be
payable with respect to any calendar month or portion thereof during which the
average Fair Market Value of all Consigned Precious Metal outstanding during
such calendar month or portion thereof during which the Fair Market Value of all
Consigned Precious Metal outstanding during such calendar month or portion
thereof shall exceed $12,000,000. The Consignee shall also pay to the Consignor,
on or prior to the Sixth Amendment Effective Date and on each anniversary of the
date hereof, a collateral administration fee in the amount of $25,000 per
annum."
S3. Amendment of S6 of the Consignment Agreement.__Section 6 of the
Consignment Agreement is hereby amended by (a) replacing the period at the end
of subparagraph (p) thereof with a semicolon followed by the word "and", and (b)
adding the following new subparagraph (q) thereto immediately following
subparagraph (p):
"(q)__ttthe Consignee and its Subsidiaries have reviewed or are reviewing
the areas within their businesses and operations which could be adversely
affected by, and have developed or are developing a program to address on a
timely basis, the "Year 2000 Problem" (i.e. the risk that computer applications
used by any of the Consignee and its Subsidiaries may be unable to recognize and
perform properly date-sensitive functions involving certain dates prior to and
any date after December 31, 1999). Based upon such review, the Consignee
reasonably believes that the "Year 2000 Problem" will not have any materially
adverse effect on the business or financial condition of any of the Consignee or
its Subsidiaries."
S4. Amendment of S8.1 of the Consignment Agreement.__Section 8.1 of the
Consignment Agreement is hereby amended by (a) replacing the period at the end
of subparagraph (j) thereof with a semicolon followed by the word "and", and (b)
adding the following new subparagraphs (k) and (l) thereto immediately following
subparagraph (j):
"(k)__comply in all respects with Section 8.27 of the Amended and Restated
Credit Agreement dated as of September 11, 1997 entered into in connection with
the Dollar Facility, as such agreement is in effect on the Sixth Amendment
Effective Date (such Section 8.27 and the defined terms used therein being
incorporated by reference herein with the same effect as if set forth in their
entirety herein), and deliver to the Consignor copies of all information, plans,
assessments, reports or other documents delivered to the Dollar Agent or the
lenders under the Dollar Facility pursuant to such Section 8.27; and
(l)__the Parent shall (i) make an initial capital contribution to the
Consignee in the aggregate principal amount of $33,000,000 within five (5)
Business Days of the final and irrevocable redemption of the Existing Senior
Discount Debentures and (ii) make an additional capital contribution to the
Consignee consisting of any funds received by the Parent from the aggregate
proceeds of the issuance of the Senior Debentures which were not used by the
Parent for the payment of costs and premiums associated with the final and
irrevocable redemption of the Existing Senior Discount Debentures, including any
premiums associated therewith."
S5. Amendment of S8.2 of the Consignment Agreement.__Section 8.2 of the
Consignment Agreement is hereby amended by:
(a) deleting subparagraph (vi) of clause (a) thereof in its entirety and
substituting in lieu thereof the following new subparagraph (vi):
"(vi)__Indebtedness of the Consignee (A) evidenced by the Senior Notes in an
aggregate principal amount not to exceed $150,000,000, and (B) evidenced by
the Existing Senior Notes in an aggregate principal amount not to exceed
$135,000,000, provided that such Indebtedness described in this clause (B)
shall be permitted solely until the earlier of (1) redemption of such
Existing Senior Notes with the proceeds from the issuance of the Senior
Notes and other available cash and (2) June 24, 1998;"
(b) replacing the period at the end of subparagraph (d)(ii)(F) thereof with a
semicolon followed by the word "and"
(c) adding the following new subparagraph (d)(ii)(G) thereto immediately
following existing subparagraph (d)(ii)(F) thereof:
"(G) so long as no Default or Event of Default has occurred and is continuing or
would occur after giving effect thereto, the Consignee may make payments to
the Parent in such amounts as are necessary to enable the Parent to make
interest payments on the Senior Debentures;"
(d) adding the following new clause (D) to the proviso contained in
subparagraph (h) thereof immediately prior to the semicolon at the end of
clause (C) of such proviso:
",and (D) the Consignee shall redeem or repurchase all of the Existing
Senior Notes with the proceeds from the issuance of the Senior Notes
and other available cash".
S6. Amendment of S8.3 of the Consignment Agreement. Section 8.3 of the
Consignment Agreement is hereby amended by:
(a) (i) deleting the ratio "1.15 to 1; or" in su paragraph (a) thereof and
substituting in lieu thereof the phrase "the ratio set forth opposite the
date set forth in the table below upon which such period shall have ended"
and (ii) inserting the following new table at the end of subparagraph (a)
thereof:
"Period Ending: Ratio:
1/31/98 1.17:1
4/30/98 1.17:1
7/31/98 1.17:1
10/31/98 1.17:1
1/31/99 1.26:1
4/30/99 1.26:1
7/31/99 1.26:1
10/31/99 1.31:1
1/31/00 and 1.35:1"
thereafter
(b) deleting subparagraph (b) thereof in its entirety and substituting in lieu
thereof the following new subparagraph (b):
"(b) __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:
1/31/98 4.73:1
4/30/98 6.55:1
7/31/98 6.55:1
10/31/98 6.33:1
1/31/99 4.29:1
4/30/99 6.16:1
7/31/99 6.16:1
10/31/99 5.94:1
1/31/00 4.24:1
4/30/00 5.50:1
7/31/00 5.50:1
10/31/00 5.28:1
1/31/01 3.85:1
4/30/01 4.95:1
7/31/01 4.95:1
10/31/01 4.73:1
1/31/02 3.52:1
;provided, however, that solely for the purposes of calculating the
above ratio as of, and for the fiscal period ended on, October 31,
1997 only, there shall be excluded from such calculation any effect
upon Indebtedness for Borrowed Money of the Parent and its
Subsidiaries and on Consolidated EBITDA of the Parent and its
Subsidiaries resulting from the acquisition by the Consignee of the
assets and business acquired from the Diamond Park Fine Jewelry
Division (the "Diamond Park Division") of Zale Delaware, Inc. (the
"Seller") pursuant to the terms of a certain Asset Purchase Agreement
dated September 3, 1997 among the Parent, the Consignee, the Seller
and ▇▇▇▇ Corporation, as in effect on the date of Amendment No. 4
hereto (the "Acquisition"), or from the related financing of such
Acquisition under the Dollar Facility; and provided, further, that
solely for the purposes of calculating the above ratio as of, and for
the fiscal periods ending on, January 31, 1998, April 30, 1998 and
July 31, 1998, the Consignee may utilize the actual historical
earnings information (provided to the Consignee by ▇▇▇▇ Corporation
pursuant to the Acquisition) in respect of the operation of the
Diamond Park Division by the Seller prior to the Consignee's
acquisition of the Diamond Park Division to calculate Consolidated
EBITDA for such fiscal periods."
(c) inserting the following new subparagraph (c) therein immediately
following subparagraph (b) thereof:
"(c) 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:
1/31/98 $55,800,000
4/30/98 $58,500,000
7/31/98 $58,500,000
10/31/98 $60,300,000
1/31/99 $63,000,000
4/30/99 $63,000,000
7/31/99 $63,000,000
10/31/99 $63,000,000
1/31/00 $67,500,000
4/30/00 $67,500,000
7/31/00 $67,500,000
10/31/00 $67,500,000
1/31/01 $72,000,000
4/30/01 $73,800,000
7/31/01 $73,800,000
10/31/01 $73,800,000
1/31/02 $78,300,000
;provided, however, that solely for the purposes of calculating
Consolidated EBITDA for the fiscal periods ending on October 31, 1997,
January 31, 1998, April 30, 1998 and July 31, 1998, the Consignee may
utilize the actual historical earnings information (provided to the
Consignee by ▇▇▇▇ Corporation pursuant to the Acquisition) in respect
of the operation of the Diamond Park Division by the Seller prior to
the Consignee's acquisition of the Diamond Park Division to calculate
Consolidated EBITDA for such fiscal periods."
(d) inserting the following new text therein immediately following
subparagraph (c) thereof:
"Notwithstanding the foregoing provisions of this Section 8.3, for
purposes of calculating the financial covenants set forth in
Sections 8.3(a), (b) and (c) above, there shall be excluded from
such calculations the effect of any 1998 Offering Expenses."
S7. References to "Senior Discount Debentures". The Consignment Agreement
is hereby amended to delete each reference to "Senior Discount Debentures" in
its entirety and to substitute in lieu thereof the text "Senior Debentures".
S8. Limited Consent. Subject to the satisfaction of the conditions
precedent set forth in S10 hereof, the Consignor hereby consents to the
execution and delivery by the Consignee of Amendment No. 3 to the Amended and
Restated Credit Agreement dated as of September 11, 1997, among the Consignee,
the Parent, the Dollar Agent and the lenders party thereto, such Amendment No. 3
being in substantially the form attached hereto as Exhibit A.
S9. Representations and Warranties.__The Consignee hereby represents and
warrants to the Consignor as follows:
(a) Representations and Warranties in Consignment Agreement. The
representations and warranties of the Consignee contained in the
Consignment Agreement were true and correct in all material respects when
made and continue to be true and correct in all material respects on the
date hereof, except to the extent of changes resulting from transactions
contemplated or permitted by the Consignment Documents and this Amendment
and changes occurring in the ordinary course of business that do not result
in a Materially Adverse Effect, and to the extent that such representations
and warranties relate expressly to an earlier date.
(b) Authority, No Conflicts, Etc. The execution, delivery and performance by
the Consignee of this Amendment and the consummation of the transactions
contemplated hereby (i)__are within the corporate power of the Consignee
and have been duly authorized by all necessary corporate action on the part
of the Consignee, (ii)__do not require any approval or consent of, or
filing with, any governmental agency or authority, or any other person,
association or entity (except for the consent of the Dollar Agent and each
of the lenders under the Dollar Facility, which consent is being obtained
concurrently herewith as required by Section 10 hereof), which bears on the
validity of this Amendment or the Consignment Documents and which is
required by law or the regulation or rule of any agency or authority, or
other person, association or entity, (iii)__do not violate any provisions
of any law, rule or regulation or any provision of any order, writ,
judgment, injunction, decree, determination or award presently in effect in
which the Consignee is named in a manner which has or could reasonably be
expected to have a Materially Adverse Effect, (iv)__do not violate any
provision of the Charter Documents of the Consignee, (v)__do not result in
any breach of or constitute a default under any agreement or instrument to
which the Consignee is a party or by which it or any of its properties is
bound, including without limitation any indenture, loan or credit
agreement, lease, debt instrument or mortgage, in a manner which has or
could reasonably be expected to have a Materially Adverse Effect, and
(vi)__do not result in or require the creation or imposition of any
mortgage, deed of trust, pledge, lien, security interest or other charge or
encumbrance of any nature upon any of the assets or properties of the
Consignee except in favor of the Consignor pursuant to the Security
Documents.
(c) Enforceability of Obligations. This Amendment has been duly executed
and delivered by the Consignee and constitutes the legal, valid and binding
obligation of the Consignee, enforceable against the Consignee in accordance
with its terms, provided that (a)__enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or similar laws of general application affecting the rights and
remedies of creditors, and (b)__enforcement may be subject to general principles
of equity, and the availability of the remedies of specific performance and
injunctive relief may be subject to the discretion of the court before which any
proceedings for such remedies may be brought.
S10. Condition to Effectiveness.__The effectiveness of this Amendment shall
be subject to satisfaction of the following conditions precedent, in each case
in form and substance satisfactory to the Consignor; provided that the
effectiveness of the amendments described in Section 5(a) of this Amendment (and
the associated amendments to the definitions of "Senior Notes" and "Existing
Senior Notes", in each case solely for purposes of using such amended
definitions in such Section 5(a) hereof) shall not be subject to satisfaction of
the condition precedent set forth in subparagraph (j) of this Section 10:
(a) this Amendment duly executed by each of the Consignee and the Consignor;
(b) a Certificate of the Secretary or Assistant Secretary of the Consignee
certifying as to the Consignee's charter documents (as certified by the
Secretary of State of the State of Delaware), by-laws, incumbency and
authorizing resolutions of the Consignee's board of directors authorizing
the transactions contemplated by the Amendment;
(c) a good standing certificate from the Secretary of State of the State of
Delaware regarding the Consignee's good standing;
(d) foreign qualification certificates for the Consignee from each jurisdiction
in which the Consignee has qualified to do business as a foreign
corporation;
(e) a legal opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, counsel to the Consignee;
(f) a cash amount equal to $145,000, comprised of (i) the closing fee in the
amount of $120,000 contemplated by S5 of the Consignment Agreement (as
amended by this Amendment) and (ii) the annual collateral administration
fee in the amount of $25,000 contemplated by S5 of the Consignment
Agreement (as amended by this Amendment);
(g) evidence of the issuance by the Parent of its Senior Debentures due 2008 in
the maximum aggregate principal amount of $75,000,000 (the "New Senior
Debentures"), the net cash proceeds of which shall be used to redeem the
Senior Discount Debentures (as defined in the Consignment Agreement prior
to the amendments contemplated by this Amendment);
(h) evidence of the issuance by the Consignee of its Senior Notes due 2008 in
the maximum aggregate principal amount of $150,000,000 (the "New Senior
Notes"), the net cash proceeds of which shall be used to redeem the Senior
Notes (as defined in the Consignment Agreement prior to the amendments
contemplated by this Amendment);
(i) evidence of the issuance by the Parent of up to $19,200,000 (and in any
event yielding net cash proceeds to the Parent of not less than
$12,700,000) of its common stock, provided that if the Parent shall be
unable to complete such issuance of common stock for any reason, the Parent
shall have instead issued additional New Senior Debentures or other
Indebtedness of the Parent in an aggregate principal amount not less than
$12,700,000 on terms and conditions satisfactory to the Consignor in its
sole discretion; and provided further that the net cash proceeds of such
issuance shall be used to redeem the Senior Discount Debentures (as defined
in the Consignment Agreement prior to the amendments contemplated by this
Amendment);
(j) evidence of the repayment in full of the existing Senior Discount
Debentures (as defined in the Consignment Agreement prior to the amendments
contemplated by this Amendment) of the Parent and the existing Senior Notes
(as defined in the Consignment Agreement prior to the amendments
contemplated by this Amendment) of the Consignee with the proceeds of the
New Senior Debentures and the New Senior Notes and other available cash,
including the retirement in full of all such Senior Discount Debentures and
Senior Notes and all fees and expenses in connection therewith;
(k) evidence of the amendment of the Dollar Facility to provide for, among
other things, an increase in the maximum principal amount of credit to be
extended thereunder from $225,000,000 to $275,000,000; and
(l) evidence of the Consignee's receipt of all necessary or appropriate third
party consents or approvals to the transactions contemplated hereby,
including, without limitation, consents or approvals from the Dollar Agent
and each of the lenders under the Dollar Facility.
S11. Ratifications, etc.__Except as expressly provided in this Amendment,
all of the terms and conditions of the Consignment Agreement and the other
Consignment Documents shall remain in full force and effect. All references in
the Consignment Agreement or any related agreement or instrument to the
Consignment Agreement shall hereafter refer to the Consignment Agreement as
amended hereby. The Consignee confirms and agrees that the Obligations of the
Consignee to the Consignor under the Consignment Documents, as amended and
supplemented hereby, are secured by and are entitled to the benefits of the
Security Documents.
S12.__No Implied Waiver. Except as expressly provided herein, nothing
contained herein shall constitute a waiver of, impair or otherwise affect any
Obligations, any other obligations of the Consignee or any right of the
Consignor consequent thereon.
S13. Governing Law.__This Amendment is intended to take effect as an
instrument under seal and shall be construed according to and governed by the
internal laws of the State of Rhode Island.
S14. Execution in Counterparts.__This Amendment may be executed in any
number of counterparts and by each party on a separate counterpart, each of
which when so executed and delivered shall be an original, but all of which
together shall constitute one instrument. In proving this Amendment, it shall
not be necessary to produce or account for more than one such counterpart signed
by the party against whom enforcement is sought.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.
FINLAY FINE JEWELRY
CORPORATION
By: /s/▇▇▇▇▇ ▇. Secheckner
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
RHODE ISLAND HOSPITAL TRUST
NATIONAL BANK
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Sr. Vice President