AMENDMENT No. 2
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AMENDMENT AGREEMENT No. 2 dated as of October 6, 1997 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") and;
WHEREAS, subject to the terms and conditions contained herein the parties
hereto desire to amend certain provisions of the Credit Agreement;
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. Amendments to Credit Agreement. The Credit Agreement shall be amended as
follows upon the Effective Date (as defined herein):
(a) Section 1.1 of the Credit Agreement is hereby amended to add the
following definitions in their proper alphabetical sequence:
"Diamond Park Asset Purchase Agreement" shall mean that certain Asset
Purchase Agreement dated as of September 3, 1997 by and among the Parent, the
Company, ▇▇▇▇ Corporation and Zale Delaware Inc., as in effect on the date
hereof."
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"Diamond Park Division" shall mean the business and assets acquired by the
Company pursuant to the Diamond Park Asset Purchase Agreement."
(b) Section 2.6(f) of the Credit Agreement is hereby amended to add the
following sentence immediately following the Applicable Margin grid:
"Notwithstanding the foregoing, if the Leverage Ratio for the fiscal quarter
ending October 31, 1998 is 4.60 or less, the Applicable Eurodollar Margin shall
be set at 1.50% per annum for the immediately succeeding fiscal quarter and the
Applicable Index Margin shall be set at 0.50 per annum for the immediately
succeeding fiscal quarter."
(c) Section 8.17 of the Credit Agreement is hereby amended in its entirety
to read as follows:
Section 8.17 (a) FINANCIAL COVENANTS. Leverage Ratio. The Parent shall
maintain, or cause to be maintained, a Leverage Ratio, as of the end of each
period of four consecutive quarters of the Parent ending on or about the dates
set forth below, of not more than the ratio set forth below opposite such date;
provided that, solely for the purposes of calculating the Leverage Ratio for the
fiscal quarter ending October 31, 1997 only, the calculation of Indebtedness for
Borrowed Money and EBITDA of the Parent and its Subsidiaries for such fiscal
quarter shall not include any Indebtedness for Borrowed Money or EBITDA
otherwise attributable to the Parent or its Subsidiaries in connection with the
consummation of the transactions contemplated by the Diamond Park Asset Purchase
Agreement, and provided, further, that solely for the purposes of the
calculation of the Leverage Ratio for the fiscal quarters ending January 31,
1998, April 30, 1998, and July 31, 1998, the Parent may utilize the actual
historical earnings information (provided to the Company by ▇▇▇▇ Corporation
pursuant to the Diamond Park Asset Purchase Agreement) in respect of the
operation of the Diamond Park Division by ▇▇▇▇ Corporation prior to the
Company's acquisition of the Diamond Park Division to calculate EBITDA for such
fiscal quarters:
Four Fiscal Quarters
Ending On or About Ratio
------------------ -----
October 31, 1997 5.75
January 31, 1998 4.30
April 30, 1998 5.95
July 31, 1998 5.95
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October 31, 1998 5.75
January 31, 1999 3.90
April 30, 1999 5.60
July 31, 1999 5.60
October 31, 1999 5.40
January 31, 2000 3.85
April 30, 2000 5.00
July 31, 2000 5.00
October 31, 2000 4.80
January 31, 2001 3.50
April 30, 2001 4.50
July 31, 2001 4.50
October 31, 2001 4.30
January 31, 2002 3.20
April 30, 2002 4.50
July 31, 2002 4.50
October 31, 2002 4.30
January 31, 2003 3.20
April 30, 2003 and each Fiscal 4.50
Quarter thereafter
(b) Fixed Charge Coverage Ratio. The Parent shall maintain, or cause to be
maintained, as of the end of each period of four consecutive fiscal quarters of
the Parent ending on or about the dates set forth below, a Fixed Charge Coverage
Ratio of not less than:
Four Fiscal Quarters
Ending On or About Ratio
------------------ -----
October 31, 1997 1.20
January 31, 1998 1.30
April 30, 1998 1.30
July 31, 1998 1.30
October 31, 1998 1.30
January 31, 1999 1.40
April 30, 1999 1.40
July 31, 1999 1.40
October 31, 1999 1.45
January 31, 2000 and Each Fiscal 1.50
Quarter Thereafter
(c) EBITDA. The Parent shall maintain, or cause to be maintained, EBITDA
for each period of four consecutive fiscal quarters of the Parent ending on or
about the dates set forth below of not less than the amount set forth below
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opposite such date, provided, that solely for the purposes of the calculation of
EBITDA for the fiscal quarters ending October 31, 1997, January 31, 1998, April
30, 1998, and July 31, 1998, the Parent may utilize the actual historical
earnings information (provided to the Company by ▇▇▇▇ Corporation pursuant to
the Diamond Park Asset Purchase Agreement) in respect of the operation of the
Diamond Park Division by ▇▇▇▇ Corporation prior to the Company's acquisition of
the Diamond Park Division to calculate EBITDA for such fiscal quarters:
Four Fiscal Quarters
Ending On or About Amount
------------------ ------
October 31, 1997 $62,000,000
January 31, 1998 $62,000,000
April 30, 1998 $65,000,000
July 31, 1998 $65,000,000
October 31, 1998 $67,000,000
January 31, 1999 $70,000,000
April 30, 1999 $70,000,000
July 31, 1999 $70,000,000
October 31, 1999 $70,000,000
January 31, 2000 $75,000,000
April 30, 2000 $75,000,000
July 31, 2000 $75,000,000
October 31, 2000 $75,000,000
January 31, 2001 $80,000,000
April 30, 2001 $82,000,000
July 31, 2001 $82,000,000
October 31, 2001 $82,000,000
January 31, 2002 and each Fiscal $87,000,000
Quarter thereafter
(d) Sonab EBITDA. Sonab shall maintain, or cause to be maintained EBITDA
for each period of four consecutive fiscal quarters of Sonab ending on or about
the dates set forth below of not less than the amount set forth below opposite
such dates.
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Four Fiscal Quarters
Ending On or About Amount
------------------ ------
October 31, 1997 $2,700,000
January 31, 1998 $2,700,000
April 30, 1998 $2,700,000
July 31, 1998 $2,700,000
October 31, 1998 $2,700,000
January 31, 1999 $2,800,000
April 30, 1999 $2,800,000
July 31, 1999 $2,800,000
October 31, 1999 $2,800,000
January 31, 2000 $3,000,000
April 30, 2000 $3,000,000
July 31, 2000 $3,000,000
October 31, 2000 $3,000,000
January 31, 2001 $3,200,000
April 30, 2001 $3,200,000
July 31, 2001 $3,200,000
October 31, 2001 $3,200,000
January 31, 2002 and each Fiscal $3,400,000
Quarter thereafter
3. 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 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
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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.
4. 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 each of the
Lenders and (ii) the acknowledgement attached hereto shall have been executed
and delivered by each of the Subsidiaries.
5. 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.
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
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.
7. Gold Consignment Agreement. The Lenders hereby consent to the execution
and delivery by the Company of
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Amendment No. 4 and Limited Consent to the Gold Consignment Agreement, such
Amendment No. 4 and Limited Consent being substantially in the form attached
hereto as Exhibit A.
8. 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.
9. 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.
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/▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
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FINLAY FINE JEWELRY CORPORATION
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
GENERAL ELECTRIC CAPITAL CORPORATION,
Individually and as Agent
By: /s/▇▇▇▇ Luck
------------------------------
Name: ▇▇▇▇ Luck
Title: Being Duly Authorized
FLEET PRECIOUS METALS, INC.
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: AVP
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: SVP
THE CHASE MANHATTAN BANK
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇.▇▇▇▇▇
Title: Auth. Signatory
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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. 2 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/▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
SONAB HOLDINGS, INC.
By:/s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
SONAB INTERNATIONAL, INC.
By:/s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
SOCIETE NOUVELLE D'ACHAT DE BIJOUTERIE - S.O.N.A.B.
By:/s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Attorney-In-Fact
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