AMENDMENT NO. 1 TO
INTERCREDITOR AGREEMENT
THIS AMENDMENT NO. 1 TO INTERCREDITOR AGREEMENT (the "Amendment") is made
as of September 29, 2000 by and between SOVEREIGN BANK, as successor to Fleet
National Bank, formerly known as BankBoston, N.A., as successor to Rhode Island
Hospital Trust National Bank (the "Bank"), and GENERAL ELECTRIC CAPITAL
CORPORATION, a corporation organized under the banking laws of the State of New
York, in its capacity as agent (in such capacity, "GE Capital") under the
Amended and Restated Credit Agreement dated as of September 11, 1997 (the "GE
Capital Agreement") among Finlay Fine Jewelry Corporation (the "Borrower"),
Finlay Enterprises, Inc. (the "Parent"), the Agent and the lenders party
thereto, with the acknowledgment and consent of the Borrower, amending the
Intercreditor Agreement dated as of June 15, 1995 (the "Intercreditor
Agreement") between the Bank and GE Capital, and acknowledged and consented to
by the Borrower. Capitalized terms used herein without other definition shall
have the meanings assigned to them in the Intercreditor Agreement.
WHEREAS, the Bank and GE Capital, with the acknowledgment and consent of
the Borrower, have heretofore entered into the Intercreditor Agreement in order
to set forth the relative priorities of their respective security interests in
and liens on the GE Capital Collateral and the Bank Collateral and to establish
certain other matters relating thereto;
WHEREAS, the Borrower wishes to establish eFinlay, Inc., a Delaware
corporation ("eFinlay"), to engage in certain e-commerce business opportunities;
WHEREAS, in connection therewith, the Borrower wishes, from time to time,
to convey certain inventory consisting in part of Specified Gold Jewelry and
Bank Collateral to eFinlay;
WHEREAS, eFinlay is willing to guaranty the obligations of the Borrower
under the GE Capital Agreement and to grant to GE Capital a security interest in
all of its assets;
WHEREAS, eFinlay is willing to guaranty the obligations of the Borrower
under the Bank Agreement and to grant to the Bank a security interest in and
lien upon any Specified Gold Jewelry owned by eFinlay;
WHEREAS, the parties hereto wish to ensure that (i) any Specified Gold
Jewelry at any time owned by eFinlay shall be deemed to constitute and be
entitled to the benefits of Specified Gold Jewelry, Bank Collateral and Bank
Priority Collateral under and for all purposes of the Intercreditor Agreement
and (ii) that all
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assets of eFinlay shall be deemed to constitute and be entitled to the benefits
of GE Capital Collateral under and for all purposes of the Intercreditor
Agreement;
WHEREAS, in order to accomplish the foregoing, each of the parties hereto
is willing to amend the Intercreditor Agreement in certain respects upon the
terms and subject to the conditions contained herein;
NOW, THEREFORE, in consideration of the mutual agreements contained in the
Intercreditor Agreement, herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ss.1. Amendment of ss.1(a) of the Intercreditor Agreement. Section 1(a) of
the Intercreditor Agreement is hereby amended by:
(a) inserting in the definition of "Bank Collateral", immediately
before the period (".") at the end thereof the following text: "; provided,
however, that Bank Collateral shall at all times be deemed to include
Specified Gold Jewelry owned by eFinlay".
(b) deleting from the definition of "Bank Documents" the text "as in
effect on the date hereof" and inserting in lieu thereof the following
text: "as in effect on the First Amendment Effective Date".
(c) deleting from the definition of "Bank Obligations" the text "as in
effect on the date hereof" and inserting in lieu thereof the following
text: "as in effect on the First Amendment Effective Date."
(d) deleting the period (".") at the end of the definition of "Bank
Security Documents" and inserting in lieu thereof the following text: "and
shall include the eFinlay Bank Guaranty and the eFinlay Bank Security
Agreement."
(e) inserting, in the order required by alphabetical order, the
following new definitions:
"eFinlay" shall mean eFinlay, Inc., a Delaware corporation.
""eFinlay Bank Guaranty" shall mean the eFinlay Guaranty dated as of
September 29, 2000, issued by eFinlay in favor of the Bank, as amended,
restated, supplemented or modified from time to time.
"eFinlay Bank Security Agreement" shall mean the eFinlay Security
Agreement dated as of September 29, 2000 between the Bank and eFinlay, as
amended, restated, supplemented or modified from time to time.
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"eFinlay GE Capital Guaranty" shall mean the Guaranty dated as of
September 29, 2000, issued by eFinlay in favor of GE Capital, as amended,
restated, supplemented or modified from time to time.
"eFinlay GE Capital Security Agreement" shall mean the Security
Agreement dated as of September 29, 2000, between GE Capital and eFinlay,
as amended, restated, supplemented or modified from time to time.
"First Amendment Effective Date" shall mean the "Effective Date", as
defined in Amendment No. 1 To Intercreditor Agreement dated as of September
29, 2000 by and between the Bank and GE Capital, with the acknowledgment
and consent of the Borrower."
(f) inserting in the definition of "GE Capital Collateral",
immediately before the period (".") at the end thereof the following text:
"; provided, however, that GE Capital Collateral shall at all times be
deemed to include all of the assets of each of Finlay Merchandising &
Buying, Inc. ("FMBI"), Finlay Jewelry, Inc. ("Finlay Jewelry") and
eFinlay".
(g) deleting from the definitions of "GE Capital Loan Documents", "GE
Capital Obligations", and "GE Capital Security Documents", the text "the
date hereof" and substituting in lieu thereof the text "the First Amendment
Effective Date".
(h) deleting the period (".") at the end of the definition of "GE
Capital Security Documents" and inserting in lieu thereof the following
text: "and shall include the eFinlay GE Capital Guaranty and the eFinlay GE
Capital Security Agreement, and the guaranties and security agreements
entered into by FMBI and Finlay Jewelry in favor of GE Capital."
(i) deleting the period (".") from the end of the definition of "Lien"
and substituting in lieu thereof the following text: ", eFinlay, Finlay
Merchandising & Buying, Inc. or Finlay Jewelry, Inc.".
(j) deleting from the definition of "Precious Metal" the text "the
date hereof" and substituting in lieu thereof the text "the First Amendment
Effective Date".
(k) deleting the definition of "Specified Gold Jewelry" in its
entirety and substituting in lieu thereof the following definition:
""Specified Gold Jewelry" shall have the meaning assigned to such term
in the Bank Agreement as in effect on the First Amendment Effective Date
and shall include Specified Gold Jewelry owned by eFinlay, but shall not
include any proceeds of Specified Gold Jewelry other than the proceeds of
casualty insurance in respect of any loss or destruction of or damage to
Specified Gold Jewelry, which proceeds of casualty insurance shall be
included."
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ss.2. Amendment of ss.2a.4(b) of the Intercreditor Agreement. Section
2a.4(b) of the Intercreditor Agreement is hereby amended by:
(a) deleting the first sentence of subsection (ii) thereof in its
entirety and substituting in lieu thereof the following text:
"The Borrower shall deliver to GE Capital such copies of checks
constituting Payment Amounts, Store Statements, Consignment Memos,
statements regarding the sale of Specified Gold Jewelry and other
inventory by eFinlay and other materials as may be needed in order for
GE Capital to make the necessary calculations under clause (c) below."
(b) amending subsection (iii) thereof by (i) deleting the text "or in
the event that GE Capital receives proceeds of Specified Gold Jewelry which
does not constitute a Payment Amount," and (ii).inserting, immediately
after the text "Payment Amount" in each of the first two places it appears
in such subsection, the text "or other proceeds of Specified Gold Jewelry".
ss.3. Amendment of ss.2.a4(c) of the Intercreditor Agreement. Section
2.a4(c) of the Intercreditor Agreement is hereby amended by:
(a) inserting, in the preamble thereof, immediately after the text
"the Borrower" and immediately before the text "during any calendar month",
the text "or eFinlay".
(b) deleting from the preamble thereof the text "from each Payment
Amount or other proceeds of Specified Gold Jewelry received by GE Capital
from each host store in respect of such calendar month," and substituting
in lieu thereof the following text: "from each Payment Amount or other
proceeds of Specified Gold Jewelry (including proceeds of Specified Gold
Jewelry owned by eFinlay) received by GE Capital from each host store or
otherwise (including from purchasers of Specified Gold Jewelry) in respect
of such calendar month,".
(b) inserting in clause (II) thereof, immediately after the text: "in
the case of proceeds of Specified Gold Jewelry other than any Payment
Amount" and immediately before the text "or, subject to paragraph (b) of
this Section 2a.4", the following text "(including, without limitation,
proceeds of Specified Gold Jewelry owned by eFinlay)".
ss.4. Amendment of ss.4(B)(1) of the Intercreditor Agreement. Section
4(B)(1) of the Intercreditor Agreement is hereby amended by deleting therefrom
the text "Bank Loan Documents" and substituting in lieu thereof the text "Bank
Documents".
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ss.5. Amendment of ss.6(c) of the Intercreditor Agreement. Section 6(c) of
the Intercreditor Agreement is hereby deleted in its entirety and the following
subsection is hereby substituted in lieu thereof:
"(a) Notices. All notices, requests and other communications to any
party hereunder shall be in writing and shall be personally delivered or
sent by registered mail, postage prepaid, return receipt requested, or by a
reputable courier delivery service or, alternatively by telecopy, and shall
be given,
if to the Bank: Sovereign Bank
Precious Metals
1 West Mezzanine
00 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxx,
Senior Vice President
Telecopier: (000) 000-0000
with a copy to: Xxxxxxx Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. X. Xxxxx, Xx. or
Xxxxxxxx Xxxxxx Xxxxxx, Esq.
Telecopier: (000) 000-0000
if to GE Capital: General Electric Capital Corporation
000 Xxxxxxxxxxx Xxxxxx
Xxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Finlay Account Manager
Telecopier: (000) 000-0000 and
Attention: Xxxx Xxxxxx, Esq.
Telecopier: (000) 000-0000
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with a copy to: Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Telecopier: (000) 000-0000
if to the Borrower: Finlay Fine Jewelry Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxx Xxxxxxxx
Telecopier: (000) 000-0000
with a copy to: Blank Rome Xxxxxx Xxxxxxxxxx LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telecopier: 000-000-0000
or such other address or telecopy number as such party may hereafter specify by
notice to GE Capital, the Bank and the Borrower. Each such notice, request or
other communication shall be effective (i) if given by telecopy, when such
telecopy is transmitted to the telecopy number specified in this Section and the
appropriate confirmation by the recipient thereof is received, (ii) if given by
registered mail, 72 hours after such communication is deposited with the post
office, addressed as aforesaid or (iii) if given by any other means, when
delivered at the address specified in this Section."
ss.6. Representations and Warranties. Each of the Bank and GE Capital
represents and warrants to the other as follows:
(a) Representations and Warranties. The representations and warranties of
such Lender contained in the Intercreditor 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 Intercreditor Agreement and this Amendment, 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 such Lender of this Amendment and the consummation of the
transactions contemplated hereby and thereby (i) are within the
corporate power of such Lender and have been duly authorized by all
necessary corporate action on the part of such Lender, (ii) do not
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require any approval or consent of, or filing with, any governmental
agency or authority, or any other person, association or entity which
bears on the validity of this Amendment or the Intercreditor Agreement
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 such Lender is named, and, (iv) do
not result in any breach of or constitute a default under any
agreement or instrument to which such Lender is a party or by which it
or any of its properties is bound, including without limitation any
indenture, contract, lease, debt instrument or mortgage.
(c) Enforceability of Obligations. Each of the Amendment Documents has
been duly executed and delivered by such Lender and constitutes the
legal, valid and binding obligation of such Lender, enforceable
against such Lender 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.
ss.7. Conditions to Effectiveness. This Amendment shall be effective as of
the date first above written (the "Effective Date") upon the Bank's and GE
Capital's receipt of this Amendment duly executed by each of the Bank, GE
Capital and the Borrower.
ss.8. Ratifications, etc. Except as expressly provided in this Amendment,
all of the terms and conditions of the Intercreditor Agreement shall remain in
full force and effect. All references in the Intercreditor Agreement or any
related agreement or instrument to the Intercreditor Agreement shall hereafter
refer to the Intercreditor Agreement, as amended hereby.
ss.9. No Implied Waiver. Except as expressly provided herein, nothing
contained herein shall constitute a waiver of, impair or otherwise affect any
obligations of the Borrower under the Bank Documents or the GE Capital Loan
Documents, any other obligations of either Lender or any right of either Lender
consequent thereon.
ss.10. 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 New York.
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ss.11. 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.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.
SOVEREIGN BANK, as successor to
FLEET NATIONAL BANK, formerly known
as BANKBOSTON, N.A., as successor in
interest to RHODE ISLAND HOSPITAL
TRUST NATIONAL BANK
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Vice President
GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent
By: /s/ Xxxxx X. Xxxxx, Xx.
---------------------------------
Name: Xxxxx X. Xxxxx, Xx.
Title: Duly Authorized Signatory
ACKNOWLEDGED AND AGREED:
FINLAY FINE JEWELRY
CORPORATION
By: /s/ Xxxxx Xxxxxxxx
--------------------------
Name: Xxxxx Xxxxxxxx
Title: Senior Vice President, Chief Financial
Officer and Treasurer
