Exhibit 10.6
VENDOR INTERCREDITOR AGREEMENT
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This Vendor Intercreditor Agreement (this "Agreement"),
dated as of September 8, 2004, is entered into by and between ▇▇▇▇▇▇▇ ▇▇▇▇
("Collateral Trustee"), in his capacity as the collateral agent for the Trade
Creditors (as defined below), and Bank of America, N.A. ("Senior Agent"), in
its capacity as the collateral agent for the Lenders (as defined below). This
Agreement is made with respect to the following facts:
▇. ▇▇▇▇▇▇▇▇'▇ Inc. ("▇▇▇▇▇▇▇▇'▇") and certain of its subsidiaries
have entered into that certain Second Amended and Restated Credit Agreement
dated as of September 7, 2004 (the "Credit Agreement"), with each of the
lending institutions from time to time party thereto as lenders (the
"Lenders"), Bank of America, N.A., as the Revolving Agent and the Collateral
Agent, and Jewelry Investors II, L.L.C., as the Term Agent.
B. Collateral Trustee is the collateral trustee for each of the trade
creditors (the "Trade Creditors") who has entered, or will enter, into a
secured trade credit program letter agreement (each, a "Letter Agreement,"
and, collectively, the "Letter Agreements") with one or more of the Credit
Parties (as defined herein) substantially in the form attached hereto as
Exhibit A. Each Letter Agreement provides, among other things, that the Trade
Creditor party thereto will continue to supply goods to the Credit Parties on
the terms and conditions set forth therein in consideration for the receipt of
certain payment assurances from the Credit Parties.
C. In connection with the Letter Agreements, the Credit Parties have
entered into the following documents, each dated as of the date hereof: (1)
the security agreement with Collateral Trustee in the form attached hereto as
Exhibit B (the "Trade Creditor Security Agreement"); (2) the Collateral Trust
Agreement with the Collateral Trustee in the form attached hereto as Exhibit C
(the "Collateral Trust Agreement"); and (3) the Guaranty Agreement (the
"Guaranty Agreement") attached hereto as Exhibit D.
D. The Lenders are proposing to continue to make available to certain
of the Credit Parties (collectively, the "Borrower") various secured financial
accommodations for the purposes of, among others, restructuring the Borrower's
indebtedness and providing working capital. However, the Lenders have
conditioned the extension of such financial accommodations on, among other
things, the forbearance and standstill of the Vendor Creditors (as defined
herein), as well as the subordination of the liens of the Collateral Trustee,
in the manner set forth below and in the Letter Agreements. Collateral
Trustee, on behalf of the Trade Creditors, hereby acknowledges and affirms
that Senior Creditors' financial accommodations to the Borrower constitute
valuable consideration to Trade Creditors.
NOW, THEREFORE, in order to induce the Lenders to make
available the loans and to extend such financial accommodations under the
Credit Agreement and to induce the Collateral Trustee and the Trade Creditors
to enter into the Letter Agreements and extend such financial accommodations
to the Credit Parties and for other good and valuable consideration the
receipt and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
1. Definitions and Rules of Construction.
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a. As used in this Agreement, the following terms have the
meanings set forth below unless the context or use expressly indicates a
different meaning or intent:
"Borrower" has the meaning given to it in the recitals to
this Agreement.
"Collateral" means any assets or property in which any
Credit Party has rights or the power to transfer rights to a secured party and
in which Senior Agent or any other Senior Creditor now has or later obtains a
Lien to secure any portion of the Senior Indebtedness, including the proceeds
thereof.
"Collateral Trustee" has the meaning given to it in the
preamble to this Agreement.
"Collateral Trust Agreement" has the meaning given to it in
the recitals to this Agreement.
"Consigning Trade Creditor" means any Trade Creditor that:
(i) delivers inventory in a consignment to any Credit Party; (ii) is a party
to the Trade Creditor Program Documents; and (iii) has at all times complied
with and not breached any of its obligations under the Trade Creditor Program
Documents.
"Consigning Trade Creditor Interests" means the interest of
a Consigning Trade Creditor in inventory delivered in a consignment to a
Credit Party, but only to the extent (x)(i) such consignment is evidenced by a
written agreement between the Consigning Trade Creditor and the Credit Party
at the time of the delivery of the inventory; (ii) the Credit Parties have
accurately and timely complied with the reporting requirements of the Credit
Agreement with respect to the inventory, and (iii) such reports have
identified such inventory as having been delivered in a consignment or (y) the
Consigning Trade Creditor has perfected its interest in the applicable
inventory pursuant to the UCC and has satisfied the conditions set forth in
Section 9-324 of the UCC to obtain priority over a conflicting security
interest in such inventory.
"Credit Agreement" has the meaning given to it in the
preamble to this Agreement.
"Credit Documents" means the Credit Agreement and all other
agreements, instruments and documents delivered in connection with the Credit
Agreement.
"Credit Parties" means ▇▇▇▇▇▇▇▇'▇, each of its subsidiaries
party to the Credit Agreement, all other Persons who may become Credit Parties
(as defined in the Credit Agreement) and all of their respective predecessors,
successors and assigns.
"Discharge of Senior Indebtedness" means the satisfaction of
each of the following requirements: (a) indefeasible payment in full in cash
of all Senior Indebtedness; (b) with respect to all letters of credit issued
in connection with the Senior Indebtedness, termination of such letters of
credit or delivery of a supporting letter of credit satisfactory to the Senior
Creditors; (c) termination of all obligations by the Senior Creditors to
advance funds or otherwise provide value to any Credit Party; (d) adequate
provision is made for the satisfaction of any indemnification right of any
Senior Creditor in respect of an asserted claim (whether or not such claim has
been filed or registered with any court, governmental authority, or any other
governing body, as applicable) that is required to be treated as a material
loss contingency under generally accepted accounting principles in the United
States applied on a consistent basis and such contingency is established by
the Senior Creditor(s) no later than 90 days after the indefeasible payment in
full in cash of all Senior Indebtedness, provided that the Vendor Creditors
will be entitled to petition a court of competent jurisdiction to determine
the propriety of any such contingency to the extent the contingency exceeds
$4,000,000; and (e) Senior Agent has provided written notice of satisfaction
of conditions (a) through (d) above to Collateral Trustee.
"Enforcement Action" means any of the following actions when
taken by any Vendor Creditor:
(i) enforcement of a Lien of the Collateral
Trustee;
(ii) commencement of legal action against any
Credit Party or any portion of the Collateral for
foreclosure or replevin or other enforcement of a Lien on
any of the Collateral; or bidding on any of the Collateral
at a foreclosure or like sale;
(iii) taking control or possession of any
Collateral or any other properties or assets of any Credit
Party;
(iv) exercising any remedy (judicially or
non-judicially), including a right of setoff, against any
Credit Party or any of their respective properties or
assets, but excluding adjustments, credits and debits
between the Credit Parties and the Trade Creditors in the
ordinary course of business;
(v) joining any petition for the involuntary
bankruptcy of any Credit Party;
(vi) taking any action to interfere with any
rights of the Senior Agent or any other Senior Creditor in
respect of any Credit Party and their respective properties
or assets or the ability of any Senior Creditor to realize
upon or otherwise deal with any Credit Party or such
property or assets;
(vii) notifying any account debtor of any Credit
Party to make payment directly to it, as secured party;
(viii) taking any action to collect any or all of
the Standstill Amount or any claim in respect thereof
against any Credit Party or any of its properties or assets
or any property or assets of any direct or indirect
Subsidiary of any Credit Party; or
(ix) commencement or maintenance of any action,
suit or other proceeding at law, in equity or otherwise in
furtherance of any of the foregoing or to otherwise enforce
rights against any Credit Party or any of their respective
properties or assets or to direct the owner of such property
or assets to sell or otherwise dispose of any interest
therein.
provided, that an "Enforcement Action" does not include the
commencement or maintenance of an action at law to collect
amounts owing by a Credit Party other than the Standstill
Amount so long as the action does not relate to (a) the
enforcement of a Lien or any similar action constituting
action against the Collateral, including the foreclosure on
any Collateral or any other taking of Collateral outside the
ordinary course of business (other than obtaining and filing
judgments against the Credit Parties and the payment of
amounts owed by a Credit Party), or (b) joining or otherwise
participating in a petition or pleading seeking an
Insolvency Proceeding.
"▇▇▇▇▇▇▇▇'▇" has the meaning given to it in the recitals to
this Agreement
"Guaranty Agreement" has the meaning given to it in the
recitals to this Agreement.
"Insolvency Proceedings" means, severally and collectively,
any of the following:
(i) any insolvency, bankruptcy,
receivership, liquidation, reorganization, readjustment,
composition, or other similar proceeding relating to any
Credit Party, its creditors, or its property;
(ii) any proceeding for the liquidation,
dissolution, or other winding-up of any Credit Party,
voluntary or involuntary, whether or not involving
insolvency, reorganization, or bankruptcy proceedings;
(iii) any assignment by any Credit Party
for the benefit of creditors; or
(iv) any other marshalling of the assets
of any Credit Party.
"Lenders" has the meaning given to it in the recitals to
this Agreement.
"Letter Agreement" has the meaning given to it in the
recitals of this Agreement.
"Lien" means any security interest, mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory
or other), consignment, right of offset or recoupment, charge, preference,
priority, or other lien or preferential arrangement of any kind or nature
whatsoever (including any conditional sale or other title retention agreement
and any financing lease having substantially the same economic effect as any
of the foregoing).
"Person" means any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust, or other
enterprise (whether or not incorporated) or any governmental authority.
"Senior Agent" has the meaning given to it in the preamble
to this Agreement.
"Senior Creditor" means any of the Senior Agent, the Term
Agent, the Revolving Agent, or any Lender, and "Senior Creditors" means all of
them, collectively.
"Senior Indebtedness" means, collectively, (i) all
indebtedness and other obligations of any Credit Party now or hereafter
existing or hereafter incurred or which arise under, out of or in connection
with the Credit Agreement, the Credit Documents and all other documents,
instruments and agreements made, executed, delivered, filed or given by any
Credit Party with or in favor of any Senior Creditor in connection herewith or
therewith, as they may be amended, supplemented, extended, renewed, modified
or restated from time to time, whether for principal, premium, interest
(including all interest accruing after the initiation of any Insolvency
Proceeding at the then-applicable rate provided in the Credit Agreement,
whether or not allowed), fees, expenses, indemnities or otherwise; (ii) all
other indebtedness for credit extended by any Senior Creditor to any Credit
Party from time to time, whether for principal, premium, interest (including
all interest accruing after the initiation of any Insolvency Proceeding at the
then-applicable rate provided in the relevant documents, whether or not
allowed), fees, expenses, indemnities or otherwise; and (iii) any and all
refinancings of any or all of the indebtedness and other obligations referred
to in clauses (i) or (ii) above.
"Standstill Amount" means the amounts owed and past due as
of July 31, 2004 (inclusive of interest, as applicable, as of such date), with
respect to asset merchandise invoices and memo merchandise invoices, which
remain unpaid by a Credit Party to a Trade Creditor.
"Trade Creditor Program Documents" means, collectively, the
Letter Agreements, the Trade Creditor Security Agreement, the Collateral Trust
Agreement and the Guaranty Agreement.
"Trade Creditors" has the meaning given to it in the
recitals to this Agreement.
"Trade Creditor Security Agreement" has the meaning given to
it in the recitals to this Agreement.
"UCC" means the Uniform Commercial Code (or any successor
statute), as in effect from time to time, of the State of New York or of any
other state, the laws of which are required as a result thereof to be applied
in connection with the issue of perfection of security interests; provided
that to the extent that the UCC is used to define any term in this Agreement
and such term is defined differently in different Articles or Divisions of the
UCC, the definition of such term contained in Article or Division 9 governs.
"Vendor Creditor" means any of the Collateral Trustee or any
Trade Creditor and "Vendor Creditors" means all of them, collectively.
b. For purposes of this Agreement, the following additional
rules of construction apply, unless specifically indicated to the contrary:
(a) wherever from the context it appears appropriate, each term stated in
either the singular or plural includes the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender include the
masculine, the feminine, and the neuter; (b) the term "or" is not exclusive;
(c) the term "including" (or any form thereof) is not limiting or exclusive;
(d) all references to statutes and related regulations include any amendments
of same and any successor statutes and regulations; (e) the words "this
Agreement", "herein", "hereof", "hereunder" or other words of similar import
refer to this Agreement as a whole including the schedules, exhibits, and
annexes hereto, as the same may be amended, modified or supplemented; (f) all
references in this Agreement to sections, schedules, exhibits, and annexes
refer to the corresponding sections, schedules, exhibits and annexes of or to
this Agreement; (g) all references to any instruments, documents or
agreements, including references to the Credit Agreement, include any and all
modifications, amendments and supplements thereto and any and all extensions
or renewals thereof to the extent permitted under this Agreement, and any and
all instruments, documents and agreements evidencing any refinancing or
replacement of any of the financing provided thereby or in connection
therewith; and (h) terms used in this Agreement that are defined in the UCC
and are not otherwise defined in this Agreement, including the terms
"consignment," "consignor," and "consignee," have the meanings specified
therefor in the UCC.
2. Acknowledgements and Consents.
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a. Notwithstanding anything to the contrary set forth in
the Trade Creditor Program Documents, the Collateral Trustee, on behalf of
itself and the Trade Creditors, hereby (i) acknowledges that the Credit
Parties are prohibited from paying to the Trade Creditors, prior to September
1, 2005, any amount that would cause the Standstill Amount to be less than $15
million; (ii) represents, warrants, and covenants that the Collateral Trustee
is the agent of the Trade Creditors pursuant to the Collateral Trust Agreement
and has authority from the Trade Creditors to enter into and perform this
Agreement for and on behalf of the Trade Creditors, and that the Trade
Creditors are bound by this Agreement; and (iii) represents, warrants, and
covenants that the Collateral Trustee will not at any time be indemnified by
or accept indemnification from the Trade Creditors for taking any Enforcement
Action that is prohibited by this Agreement. The Senior Creditors are entering
into this Agreement in reliance upon, without limitation, the Collateral
Trustee's acknowledgments, representations, warranties, and covenants
contained in this Section 2.a.
b. Notwithstanding anything contained in the Credit
Agreement to the contrary, the Senior Agent, on behalf of the Lenders, hereby
acknowledges and consents to the grant by the Credit Parties of a Lien to the
Collateral Trustee on the Collateral under the Trade Creditor Security
Agreement, and (ii) represents, warrants, and covenants that the Senior Agent
is the agent of the Lenders and has authority from the Lenders to enter into
and perform this Agreement for and on behalf of the Lenders, and that the
Lenders are bound by this Agreement.
c. Notwithstanding: (i) the order or time of attachment;
(ii) the order, time, or manner of perfection; or (iii) the failure to file or
record, or the time of filing or recordation, of any document or instrument,
or other method of perfecting a Lien: no Senior Creditor will contest the
validity or perfection of the Lien of the Collateral Trustee under the Trade
Creditor Security Agreement, and no Vendor Creditor will contest the validity,
perfection or priority of the Liens of the Senior Agent under the Credit
Agreement or the other Credit Documents.
d. Any conflicts between the Senior Creditors, on the one
hand, and any Vendor Creditor, on the other hand, with respect to the
Collateral will be resolved solely by reference to this Agreement.
e. For the sole and limited purpose of perfecting the
security interest of the Collateral Trustee in those types or items of
Collateral in which a security interest may be perfected only by possession or
control under the UCC, Collateral Trustee hereby appoints Senior Agent as its
agent and bailee for the limited purpose of possessing or controlling on its
behalf any such Collateral that may come into the possession or control of the
Senior Agent from time to time, provided that Senior Agent shall not under any
circumstances whatsoever incur any liability or duty to any Vendor Creditor by
virtue of acting as Collateral Trustee's agent or bailee hereunder or
otherwise in connection with this Section 2.e, and Senior Agent may relinquish
possession or control of Collateral in its possession or control without the
consent of any Vendor Creditor, and without incurring liability to any Vendor
Creditor. No assurance is made by Senior Agent that this Section 2.e is
effective to perfect Collateral Trustee's security interest in those types or
items of Collateral in which a security interest may be perfected solely by
possession or control. The Vendor Creditors jointly and severally indemnify
the Senior Agent and each of its employees, officers, attorneys,
representatives, and agents (each such Person being called an "Indemnitee")
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted
against any Indemnitee arising out of, in connection with, or as a result of
the appointment of Senior Agent as agent of Collateral Trustee.
3. Consigned Goods.
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a. Notwithstanding: (i) the order or time of attachment;
(ii) the order, time, or manner of perfection; (iii) the failure to file or
record, or the time of filing or recordation, of any document or instrument,
or other method of perfecting a Lien; or (iv) anything in the Credit Agreement
to the contrary: no Senior Creditor shall challenge or contest the validity,
perfection or priority of the Consigning Trade Creditor Interests. The parties
acknowledge that in the jewelry business, a consignment may be characterized
as a "memo" or "memo sale" or similar expression, and this Section 3.a. shall
apply to all of the foregoing and to any item of similar description to the
extent that each of the foregoing constitutes a consignment under the UCC.
Nothing in this Section 3.a. relieves any Trade Creditor from the requirement
of satisfying the criteria set forth in the definitions of "Consigning Trade
Creditor" and "Consigning Trade Creditor Interests" in order to obtain the
benefit of this Section 3.a.
b. Each Trade Creditor hereby irrevocably waives and
relinquishes the benefit of any and all Liens (except for the Lien in favor of
the Collateral Trustee under the Trade Creditor Security Agreement) in: (i)
the proceeds of any inventory delivered in a consignment to a Credit Party and
(ii) any inventory delivered in a consignment to a Credit Party and later
purchased by any Credit Party with the consent of the Consigning Trade
Creditor (whether or not the purchase price has been paid).
4. Subordination and Standby; Payments Received by Vendor
Creditors.
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a. Notwithstanding: (i) the order or time of attachment;
(ii) the order, time, or manner of perfection; or (iii) the order or time of
filing or recordation of any document or instrument, or other method of
perfecting a Lien: any and all Liens of the Collateral Trustee in the
Collateral, whether now existing or hereafter granted or arising, shall in
each case be subordinate to the rights, Liens and interests in the Collateral,
whether now existing or hereafter granted or arising, held by Senior Agent or
any other Senior Creditor. Until the Discharge of Senior Indebtedness, no
Vendor Creditor shall commence, prosecute, participate in or support or assist
in any way any Enforcement Action.
b. The Collateral Trustee, on its own behalf and on
behalf of the Vendor Creditors, hereby irrevocably authorizes the Senior Agent
to demand, collect, compromise, receive, enforce and accept any and all
payments or distributions of any kind on account of or in respect of the
Collateral, whether paid directly or indirectly by any Credit Party or any
other Person in an Insolvency Proceeding or otherwise. All such payments or
distributions received by the Senior Agent shall be applied to the Senior
Indebtedness (including attorneys' fees and expenses of collection owed to any
Senior Creditor by any Credit Party), whether then due or not, and the Senior
Creditors shall account to the Collateral Trustee only for any balance
remaining. Any Vendor Creditor that receives any such payments or
distributions shall hold such payments or distributions in trust for the
Senior Agent and shall deliver the same promptly to the Senior Agent.
5. Conflicts.
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To the extent of any conflict between the terms and
conditions of the Trade Creditor Program Documents and this Agreement, the
terms and conditions of this Agreement shall control.
6. Postpetition Financing; Liens.
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In the event of any Insolvency Proceeding, (a) the Vendor
Creditors hereby consent to any Credit Party's use of the cash collateral of
the Senior Creditors, the continued financing by any or all of the Senior
Creditors of any Credit Party, and the granting of senior Liens and claims to
the Senior Creditors in connection with any such post-petition financing or
the use of cash collateral of any Senior Creditor(s) by any Credit Party; and
(b) no objection will be raised by any Vendor Creditor (excluding for purposes
of avoiding doubt any statutory creditors' committee appointed in any
Insolvency Proceeding) to any such financing or use of cash collateral on the
ground of a failure to provide "adequate protection" for any Vendor Creditor's
Lien or any other grounds, provided that the foregoing does not prohibit
Vendor Creditors from seeking a Lien on the post-petition Collateral, for
purposes of adequate protection of its interest in the pre-petition
Collateral, with the same priority as the Lien of the Collateral Trustee prior
to the commencement of the Insolvency Proceeding.
7. Cooperation with Senior Agent's Exercise of Remedies.
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If the Senior Agent determines in its discretion to exercise
any right or remedy with respect to any or all Credit Parties or all or any
portion of the Collateral, the Collateral Trustee shall immediately take all
action reasonably requested by Senior Agent to assist in the exercise of such
rights or remedies, including executing and delivering such agreements and
releases as may be reasonably required in order to permit Senior Agent to
sell, foreclose upon, or otherwise dispose of any of the Collateral free and
clear of any claims of the Vendor Creditors with respect thereto. In the event
of a sale or other disposition of Collateral by any Credit Party with the
consent of the Senior Agent, and if Senior Agent is releasing its Lien in
connection therewith, Collateral Trustee, upon request of Senior Agent to
Collateral Trustee, shall release its Lien in the Collateral so as to
facilitate such sale or other disposition, provided that the Liens of all
Senior Creditors and Collateral Trustee in such Collateral shall attach to the
proceeds of such sale or other disposition, and the provisions of this
Agreement shall be otherwise applicable to such proceeds (including any
provisions applicable with respect to priority of Liens in such proceeds, or
application thereof to the Senior Indebtedness). If the Collateral Trustee
does not execute a release document requested by Senior Agent pursuant to this
Section 7 no later than 5 business days after demand therefor, Senior Agent is
hereby irrevocably authorized to execute such release document on behalf of
such Collateral Trustee, and the Collateral Trustee hereby irrevocably
constitutes and appoints the Senior Agent as attorney-in-fact for such
Collateral Trustee to execute such release (the power of attorney being
coupled with an interest shall be irrevocable).
8. Miscellaneous.
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If any Vendor Creditor violates any of the terms of this
Agreement, in addition to any remedies in law, equity or otherwise, Senior
Creditors may restrain such violation in any court of law and may interpose
this Agreement as a defense in any action by such Vendor Creditor.
9. Vendor Creditors' Waivers.
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a. The entire Senior Indebtedness shall be deemed to have
been made or incurred in reliance upon this Agreement. Collateral Trustee
expressly waives all notice of the acceptance by Senior Creditors of the
subordination and other provisions of this Agreement and agrees that no Senior
Creditor has made any warranties or representations with respect to the
legality, validity, enforceability, collectability or perfection of the Senior
Indebtedness or any Liens held in connection therewith.
b. The Vendor Creditors agree that Senior Creditors shall
be entitled to manage and supervise their loans in accordance with applicable
law and their usual practices, modified from time to time as they deem
appropriate under the circumstances, without regard to the existence of any
rights that any Vendor Creditor may now or hereafter have in or to any assets,
and without the necessity of notice to or receipt of consent of the Vendor
Creditors. Senior Creditors shall have no liability to any Vendor Creditors,
and the terms of this Agreement shall not be affected, as a result of any and
all lawful actions which any Senior Creditor takes or omits to take (including
actions with respect to the creation, perfection or continuation of its Liens,
actions with respect to the occurrence of a default, actions with respect to
the foreclosure upon, sale, release or failure to realize upon, any of
Collateral, and actions with respect to the collection of any claim for all or
any part of the Senior Indebtedness from any account debtor or any other
party), regardless of whether any such actions or omissions may affect Senior
Creditors' rights to deficiency or any Vendor Creditor's right of subrogation
or reimbursement.
c. Senior Creditors may, from time to time, enter into
agreements and settlements with any Credit Party as they may determine,
including any substitution of collateral, any release of any Lien and any
release of any Credit Party.
d. The Vendor Creditors waive any and all rights they may
have to require Senior Creditors to ▇▇▇▇▇▇▇▇ assets.
e. Senior Creditors shall have the right, without notice
to the Vendor Creditors, to amend, supplement or modify the Senior
Indebtedness, in any manner whatsoever, including any extensions or shortening
of time of payments (even if such shortening causes any Senior Indebtedness to
be due on demand or otherwise), any revision of any amortization schedule with
respect thereto, and any increase in the amount of the Senior Indebtedness,
and the Vendor Creditors consent and agree to any such amendment, supplement
or modification.
10. Waivers.
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No waiver shall be deemed to be made by any Senior Creditor
or Vendor Creditors of any of their respective rights hereunder unless it is
in writing signed by the waiving party. Each such waiver shall be a waiver
only with respect to the specific instance involved and shall in no way impair
the rights of the waiving party or the obligations of the other party to the
waiving party in any other respect at any other time.
11. Information Concerning Financial Condition.
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Each Vendor Creditor hereby assumes responsibility for
keeping itself informed of the financial condition of any Credit Party and of
all other circumstances bearing upon the risk of nonpayment of the Senior
Indebtedness or any amounts outstanding under the Trade Creditor Program
Documents, and agrees that no Senior Creditor shall have any duty to advise it
of information known to such Senior Creditor regarding such condition or any
such circumstances. In the event any Senior Creditor, in its sole discretion,
undertakes, at any time or from time to time, to provide any such information
to any Vendor Creditor, no Senior Creditor shall be under any obligation (i)
to provide any such information to any Vendor Creditor on any subsequent
occasion, (ii) to undertake any investigation not a part of its regular
business routine, or (iii) to disclose any information which, pursuant to its
commercial finance practices, such Senior Creditor wishes to maintain
confidential.
12. Third Party Beneficiaries.
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a. This Agreement is solely for the benefit of Senior
Creditors, Collateral Trustee and the Trade Creditors and their respective
successors and assigns, and neither any Credit Party nor any other Persons are
intended to be third party beneficiaries hereunder or to have any right,
benefit, priority or interest under, or because of the existence of, or to
have any right to enforce, this Agreement. Senior Agent and Collateral Trustee
shall have the right to modify or terminate this Agreement at any time without
notice to or approval of any Credit Party or any other Person.
b. If any third party satisfies the Senior Indebtedness
owing to Senior Creditors, Senior Creditors may assign their rights and
remedies hereunder to such third party, and such third party shall be deemed
to be Senior Agent and Senior Creditor for all purposes of this Agreement.
13. Notices.
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For the purposes of this Agreement, written notices shall be
sent by U.S. first class mail, postage prepaid; or by U.S. certified mail,
return receipt requested, postage prepaid; or by personal delivery; or by
facsimile confirmed by the recipient; and addressed to the notified party at
its address set forth below its signature line, or such other address
specified by the party with like notice. Notices shall be deemed received 3
business days after deposit in the U.S. mail, if sent by first class mail;
upon the date set forth in the return receipt, if by certified mail; on the
day of confirmation of delivery by the recipient, if by facsimile; the
business day following the day on which the same has been delivered prepaid to
a reputable national overnight air courier service; or on the day of
transmittal by personal delivery.
14. Agency.
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a. If the Senior Agent resigns or is removed as agent
pursuant to the Credit Agreement, the successor agent appointed pursuant to
the Credit Agreement will, upon the effectiveness of such appointment, be the
Senior Agent under this Agreement.
b. If the Collateral Trustee resigns or is removed as
trustee under the Trade Creditor Program Documents, the successor trustee
appointed pursuant to the Trade Creditor Program Documents will, upon the
effectiveness of such appointment, be the Collateral Trustee hereunder and the
trustee for the Trade Creditors under the Trade Creditor Security Agreement.
15. Additional Lenders and Trade Creditors.
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Additional Persons may become parties to the Credit
Agreement pursuant to the terms thereof, and as of the date on which each such
additional Person becomes a "Lender" or is granted a participation under the
Credit Agreement as provided therein, such Person shall be a Lender hereunder
and shall be entitled and bound, as applicable, to all of the duties, rights
and benefits of a Lender under this Agreement. Additional Persons may enter
into a Letter Agreement with ▇▇▇▇▇▇▇▇'▇ on and after the date hereof, and as
of the date on which each such additional Person becomes an Approved Trade
Creditor under the Trade Creditor Program Documents as provided therein, such
Person shall be a Trade Creditor hereunder and shall be entitled and bound, as
applicable, to all of the duties, rights and benefits of a Trade Creditor
under this Agreement.
16. Exculpation.
-----------
No Senior Creditor shall be liable to the Collateral Trustee
for any action or failure to act or any error of judgment, negligence, or
mistake or oversight whatsoever on its part or on the part of its respective
agents, representatives, officers, employees, or attorneys with respect to any
transaction relating to the Senior Indebtedness or the Collateral.
17. Consent to Jurisdiction; Additional Waivers.
-------------------------------------------
Vendor Creditors and Senior Creditors consent to the
jurisdiction of any state or federal court located within New York County, New
York or Los Angeles County, California. Each Vendor Creditor waives personal
service of any and all process upon it, and each Vendor Creditor consents that
all service of process be made in the manner set forth in Section 13 by
serving notice solely on Collateral Trustee. Vendor Creditors and Senior
Creditors waive, to the fullest extent each may effectively do so, any defense
or objection based upon forum non conveniens and any defense or objection to
venue of any action instituted within New York County, New York or Los Angeles
County, California. EACH OF THE SENIOR CREDITORS AND THE VENDOR CREDITORS
WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION TO ENFORCE OR DEFEND ANY
MATTER ARISING FROM OR RELATED TO THIS AGREEMENT.
18. Governing Law.
-------------
This Agreement has been delivered and accepted at and shall
be deemed to have been made in the State of New York, and shall be
interpreted, and the rights and liabilities of the parties hereto determined,
in accordance with the internal laws (as opposed to conflicts of laws
provisions) of the State of New York.
19. Successors and Assigns.
----------------------
This Agreement shall be binding upon and shall inure to the
benefit of the parties' respective successors and permitted assigns, subject
to the provisions hereof.
20. Integrated Agreement.
--------------------
This Agreement sets forth the entire understanding of the
parties with respect to the within matters and may not be modified or amended
except upon a writing signed by all parties.
21. Authority.
---------
Each of the signatories hereto certifies that such party has
all necessary authority to execute this Agreement.
22. Counterparts.
------------
This Agreement may be executed in one or more counterparts,
each one of which when so executed shall be deemed to be an original, and all
of which taken together shall constitute one and the same agreement.
[Signature page follows]
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first above written.
"Collateral Trustee"
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇
--------------------------
▇▇▇▇▇▇▇ ▇▇▇▇
Address for notices:
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Otterbourg, Steindler, Houston
& ▇▇▇▇▇, P.C.
▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
"Senior Agent"
BANK OF AMERICA, N.A.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------
Title: Vice President
Address for notices:
Bank of America, N.A.
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Portfolio Manager
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Jenkens & ▇▇▇▇▇▇▇▇▇
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Jewelry Investors II, L.L.C.
c/o Farallon Capital Partners
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
All of the foregoing is acknowledged as of
the date first set forth above:
CREDIT PARTIES:
▇▇▇▇▇▇▇▇'▇ INC.
By: /s/ C. ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: C. ▇▇▇▇▇▇ ▇▇▇▇▇
Title:
▇▇▇▇▇▇▇▇'▇ FLORIDA PARTNERSHIP
By: ▇▇▇▇▇▇▇▇'▇ Management Corp., its
Managing Partner
By: /s/ C. ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: C. ▇▇▇▇▇▇ ▇▇▇▇▇
Title:
FI STORES LIMITED PARTNERSHIP
By: ▇▇▇▇▇▇▇▇'▇ Inc., its general partner
By: /s/ C. ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: C. ▇▇▇▇▇▇ ▇▇▇▇▇
Title:
▇▇▇▇▇▇▇▇'▇ HOLDING CORP.
By: /s/ C. ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: C. ▇▇▇▇▇▇ ▇▇▇▇▇
Title:
▇▇▇▇▇▇▇▇'▇ MANAGEMENT CORP.
By: /s/ C. ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: C. ▇▇▇▇▇▇ ▇▇▇▇▇
Title:
FCJV HOLDING CORP.
By: /s/ C. ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: C. ▇▇▇▇▇▇ ▇▇▇▇▇
Title:
FCJV, L.P.
By: FCJV Holding Corp., its general partner
By: /s/ C. ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: C. ▇▇▇▇▇▇ ▇▇▇▇▇
Title:
▇▇▇▇▇▇▇▇'▇ INVESTMENTS LLC
By: ▇▇▇▇▇▇▇▇'▇ Inc.,
its Managing Member
By: /s/ C. ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: C. ▇▇▇▇▇▇ ▇▇▇▇▇
Title:
▇▇▇▇▇▇▇▇'▇ BENEFICIARY INC.
By: /s/ C. ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: C. ▇▇▇▇▇▇ ▇▇▇▇▇
Title:
