SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 6, 1997*
Finlay Fine Jewelry Corporation
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(Exact name of registrant as specified in its charter)
Delaware 33-59380 13-3287757
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
521 Fifth Avenue, New York, New York 10175
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(Address of principal executive offices) (zip code)
Registrant's Telephone Number, including Area Code: (212) 808-2060
---------------
N/A
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(Former name or former address, if changed since last report)
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* The Registrant is not subject to the filing requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934 and is voluntarily filing
this Current Report on Form 8-K.
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On October 6, 1997 (the "Closing Date"), Finlay Enterprises, Inc., a
Delaware corporation ("FEI"), and Finlay Fine Jewelry Corporation, a Delaware
corporation which is a wholly-owned subsidiary of FEI ("Buyer"), consummated the
acquisition (the "Acquisition") from Zale Delaware, Inc., a Delaware corporation
("Seller"), of certain assets used by Seller, through its Diamond Park Fine
Jewelers division, in connection with operating leased fine jewelry departments
(each, a "Department") in department stores owned by Marshall Field & Company
("Marshall Field's"), Parisian, Inc. ("Parisian"), Mercantile Stores Company,
Inc. ("Mercantile") and Dillard Department Stores, Inc. ("Dillard's"). The
Acquisition was consummated pursuant to the terms and provisions of an Asset
Purchase Agreement dated September 3, 1997 (the "Agreement") among FEI, Buyer,
Zale Corporation, a Delaware corporation which owns all of the outstanding
securities of Seller ("Zale"), and Seller.
Pursuant to the terms and provisions of the Agreement, on the Closing Date,
Buyer purchased from Seller the following assets owned by the Seller as of the
Closing Date (collectively, the "Division Assets"): (i) the license agreements
between the Seller and each of Marshall Field's, Parisian and Mercantile
relating to the operation of Departments located in department stores owned by
Marshall Field's, Parisian and Mercantile, respectively (collectively, the
"Acquired Departments"), (ii) certain other contracts, distribution
arrangements, equipment leases and vendor, sales, purchase, advertising and
other similar agreements used in connection with or relating to the operation of
the Acquired Departments or Division Assets (the "Acquired Business"), in each
case as more specifically described in the Agreement and subject to the
limitations described therein, (iii) all equipment, fixtures, furniture,
leasehold improvements and personal property owned by the Seller and related
exclusively to, used solely by or located in the Acquired Departments, (iv) to
the extent assignable, all permits, certifications, franchises, licenses,
approvals and other authorizations held by the Seller which related primarily to
the operation of the Acquired Business, (v) subject to the limitations and
exclusions described in the Agreement, all finished goods inventory which
related primarily to the operation of the Acquired Business and which were
located at the Seller's distribution center in Irving, Texas or in the Acquired
Departments (collectively, the "Inventories"), (vi) all supplies, spare and
replacement parts and other related items located in the Acquired Departments
and in the Seller's warehouse in Irving, Texas which were used primarily in
connection with the operation of the Acquired Business (collectively, the
"Supplies"), (vii) all of Seller's data, trade secrets and confidential
information exclusively related to the operation of the Acquired Business, if
any, (viii) all goodwill relating to the operation of the Acquired Business, if
any, (ix) all prepayments, prepaid expenses, refunds and deposits relating to
the operation of the Acquired Business, (x) petty cash on hand at the Acquired
Departments and (xi) certain other miscellaneous assets described in the
Agreement.
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<PAGE>
In consideration for the Division Assets, the Buyer paid to the Seller on
the Closing Date (the "Division Assets Purchase Price"), which amount was equal
to the sum of the following amounts: (i) the Closing Inventory Price (as defined
in the Agreement) of the Inventories; (ii) the amortized/depreciated cost of all
fixed or capital assets located in the Acquired Departments; (iii) the aggregate
amount of petty cash at the Acquired Departments; (iv) the aggregate amount of
prepayments, prepaid expenses, refunds and deposits relating to the Acquired
Business; (v) the aggregate amount of the Supplies located in Seller's
warehouse; and (vi) $2,400,000.
In addition to the foregoing, the Agreement further provides that Buyer
shall purchase from Seller, on February 27, 1998 (or on such other date as shall
be agreed to by the Buyer and Seller), all finished goods inventories located at
the Departments in department stores owned by Dillard's as of January 31, 1998,
subject to the limitations and exclusions described in the Agreement (the
"Dillard's Inventories"). The purchase price to be paid by the Buyer for the
Dillard's Inventories (the "Dillard's Inventories Purchase Price" and, together
with the Division Assets Purchase Price, the "Purchase Price") shall be equal to
the Invoiced Cost thereof, such amount not to exceed $4,950,000 in the
aggregate; provided, however, that in the event the Dillard's Inventories
Purchase Price is determined to be in excess of $4,950,000, the Buyer shall have
the option of purchasing any such excess Dillard's Inventories by increasing the
Dillard's Inventories Purchase Price by an amount equal to the Invoiced Cost (as
defined in the Agreement) of such excess Dillard's Inventories.
The parties to the Agreement currently estimate that the Purchase Price to
be paid by the Buyer for the Division Assets and the Dillard's Inventories will
equal approximately $63 million.
Pursuant to the Agreement, Zale has agreed that, for a period of seven
years following the Closing Date, it shall not engage, either directly or
indirectly, in the department store leased fine jewelry business.
In connection with the Acquisition, FEI and Buyer refinanced their
revolving credit facility with General Electric Capital Corporation and certain
other lenders to increase the amount available thereunder to $225 million. The
additional borrowing capacity was used to finance the Acquisition and will also
be available to fund seasonal borrowing needs.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
Not applicable.
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<PAGE>
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
10.1 Asset Purchase Agreement dated September 3, 1997 among Finlay
Enterprises, Inc. ("FEI"), Finlay Fine Jewelry Corporation ("FFJC"), Zale
Corporation and Zale Delaware, Inc. (incorporated by reference to Exhibit
10.6 to FFJC's Quarterly Report on Form 10-Q for the period ended August 2,
1997, as filed with the Securities and Exchange Commission on September 16,
1997).
10.2 Amendment No. 2 dated October 6, 1997 to the Amended and Restated
Credit Agreement dated as of September 11, 1997 among General Electric
Capital Corporation, individually and in its capacity as agent, certain
other lenders and financial institutions, FEI and FFJC.
10.3 Amendment No. 4 and Limited Consent dated as of October 6, 1997
to the Gold Consignment Agreement dated as of June 15, 1995 between FFJC
and Rhode Island Hospital Trust National Bank.
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<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
FINLAY FINE JEWELRY CORPORATION
(Registrant)
Dated: October 15, 1997 By: /s/ Barry D. Scheckner
----------------------------
Barry D. Scheckner
Senior Vice President and
Chief Financial Officer
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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, Zale Corporation and Zale Delaware Inc., as in effect on the date
hereof."
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<PAGE>
"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 Zale Corporation
pursuant to the Diamond Park Asset Purchase Agreement) in respect of the
operation of the Diamond Park Division by Zale 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
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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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<PAGE>
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 Zale Corporation pursuant to
the Diamond Park Asset Purchase Agreement) in respect of the operation of the
Diamond Park Division by Zale 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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<PAGE>
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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<PAGE>
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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<PAGE>
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/Barry Scheckner
-----------------------------------
Name: Barry Scheckner
Title: Senior Vice President and
Chief Financial Officer
7
<PAGE>
FINLAY FINE JEWELRY CORPORATION
By: /s/Barry Scheckner
-----------------------------------
Name: Barry Scheckner
Title: Senior Vice President and
Chief Financial Officer
GENERAL ELECTRIC CAPITAL CORPORATION,
Individually and as Agent
By: /s/Rick Luck
------------------------------
Name: Rick Luck
Title: Being Duly Authorized
FLEET PRECIOUS METALS, INC.
By: /s/David P. Berube
------------------------------
Name: David P. Berube
Title: AVP
By: /s/Anthony J. Capuano
-----------------------------
Name: Anthony J. Capuano
Title: SVP
THE CHASE MANHATTAN BANK
By: /s/Irene B. Spector
----------------------------
Name: Irene B. Spector
Title: VP
GOLDMAN SACHS CREDIT PARTNERS L.P.
By: /s/Edward C. Forst
----------------------------
Name: Edward C.Forst
Title: Auth. Signatory
8
<PAGE>
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/Barry Scheckner
-----------------------------------
Name: Barry Scheckner
Title: Senior Vice President and
Chief Financial Officer
SONAB HOLDINGS, INC.
By:/s/Barry Scheckner
-----------------------------------
Name: Barry Scheckner
Title: Senior Vice President and
Chief Financial Officer
SONAB INTERNATIONAL, INC.
By:/s/Barry Scheckner
-----------------------------------
Name: Barry Scheckner
Title: Senior Vice President and
Chief Financial Officer
SOCIETE NOUVELLE D'ACHAT DE BIJOUTERIE - S.O.N.A.B.
By:/s/Barry Scheckner
-----------------------------------
Name: Barry Scheckner
Title: Attorney-In-Fact
9
AMENDMENT NO. 4 AND LIMITED CONSENT
THIS AMENDMENT NO. 4 AND LIMITED CONSENT (this "Amendment") is made as of
October 6, 1997, by and between FINLAY FINE JEWELRY CORPORATION, a Delaware
corporation with its principal office at 521 Fifth Avenue, New York, New York
10175 (the "Consignee") and RHODE ISLAND HOSPITAL TRUST NATIONAL BANK, a
national banking association with its principal office at One Hospital Trust
Plaza, Providence, Rhode Island 02903 (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 and consent to certain
actions to be taken by the Consignee, all as hereinafter more fully set forth;
WHEREAS, the Consignor is willing to amend the terms of the Consignment
Agreement in such respects and to grant such consent, upon the terms and subject
to the conditions contained herein; and
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:
1. Amendment to the Consignment Agreement. Subject to the satisfaction of
the conditions precedent set forth in 4 hereof, the Consignment Agreement is
hereby amended by deleting Section 8.3(b) of the Consignment Agreement in its
entirety and substituting in lieu thereof the following new text:
"(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:
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<PAGE>
Fiscal Quarter
Ending Date: Ratio:
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10/31/97 6.30:1
01/31/98 4.70:1
;provided, however, that in calculating the above ratio as of 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 being acquired
from the Diamond Park Fine Jewelry 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 Zale
Corporation, as in effect on the date hereof (the "Acquisition"), or from
the related financing of such Acquisition under the Dollar Facility."
2. Limited Consent. Subject to the satisfaction of the conditions precedent
set forth in 4 hereof, the Consignor hereby consents to the execution and
delivery by the Consignee of Amendment No. 1 and Amendment No. 2 to the Amended
and Restated Credit Agreement dated as of September 11, 1997, among the
Consignee, the Parent, the Dollar Agent and the lenders parties thereto, such
Amendment No. 1 and Amendment No. 2 being in substantially the forms attached
hereto as Exhibits A and B, respectively.
3. 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, 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
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<PAGE>
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 4 hereof), (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, 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.
4. Condition to Effectiveness. The effectiveness of this Amendment shall be
subject to the delivery of the following, each in form and substance
satisfactory to the Consignor:
(a) this Amendment executed by each of the Consignee and the
Consignor; and
(b) evidence of the consent of the Dollar Agent and each of the
lenders under the Dollar Facility to the execution and delivery of this
Amendment by the Consignor and the Consignee.
5. 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.
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6. 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.
7. 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.
8. 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.
FINLAY FINE JEWELRY
CORPORATION
By:/s/Barry Scheckner
----------------------------
Name: Barry Scheckner
Title: Senior Vice President and
Chief Financial Officer
RHODE ISLAND HOSPITAL TRUST
NATIONAL BANK
By:/s/Janice M. Stinchfield
---------------------------------
Name: Janice M. Stinchfield
Title: Vice President
5
