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EXHIBIT 10.2
GOLD CONSIGNMENT AGREEMENT DATED JULY 27, 2000 BETWEEN
COMMEMORATIVE BRANDS, INC. AND THE BANK OF NOVA SCOTIA
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TABLE OF CONTENTS
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PAGE
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1. Availability.....................................................4
2. Commitment, Reduction of Commitment..............................4
3. Extension of Consignment Maturity Date...........................5
4. Orders...........................................................5
5. Deliveries by Scotiabank.........................................6
6. Fees.............................................................6
7. Title............................................................7
8. Commingling......................................................7
9. Safekeeping......................................................7
10. Purchase Request.................................................7
11. Purchase.........................................................8
12. Security.........................................................8
13. Invoices.........................................................9
14. Payments........................................................10
15. Reports, etc....................................................10
16. Period of Agreement.............................................10
17. Events of Default...............................................10
18. Agreement Effectiveness.........................................12
19. All Deliveries under Consignment................................13
20. Authorized Representatives......................................14
21. Representations of the Consignee................................14
22. Representations of Scotiabank...................................15
23. Covenants of the Consignee......................................15
</Table>
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<Table>
24. Notices.........................................................16
25. Deliveries by Consignee.........................................17
26. Indemnity Provisions............................................18
27. Assignment......................................................18
28. LAWS............................................................18
29. Amendments......................................................18
30. Judgment Currency...............................................18
31. Force Majeure...................................................19
32. Determination...................................................19
33. Expenses........................................................19
34. Survival........................................................19
35. Severability....................................................20
36. Execution in Counterparts, Effectiveness, etc...................20
37. Forum Selection and Consent to Jurisdiction.....................20
38. Waiver of Jury Trial............................................21
</Table>
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February 13, 2002
Commemorative Brands, Inc.
7211 Circle S Rd.
Austin, Texas 78745
Attention: Leah Bush
Re: EXTENSION OF MATURITY DATE
Dear Ladies and Gentlemen:
Please refer to the Letter Agreement for Fee Consignment and Purchase
of Gold (the "Consignment Agreement") dated as of July 27, 2000 between
Commemorative Brands, Inc. and The Bank of Nova Scotia. Terms defined in the
Consignment Agreement are, unless otherwise defined herein, used herein as
defined therein.
This letter will confirm our agreement with you to extend Consignment
Maturity Date from July 26, 2001 to July 25, 2002. Please acknowledge your
agreement with the foregoing by signing a counterpart of this letter and
returning it to us.
Very truly yours,
THE BANK OF NOVA SCOTIA
By: /s/ Joseph A. Lasiewski
----------------------------------
Joseph A. Lasiewski
Director - Metals Operations
By: /s/ Randy M. Weinerman
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Randy M. Weinerman
Senior Manager
ACKNOWLEDGED AND AGREED:
COMMEMORATIVE BRANDS, INC.
By: /s/ Leah Bush
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Its: Controller
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July 27,2000
Commemorative Brands, Inc.
7211 Circle S Road
Austin, Texas 78745
Re: Letter Agreement (this "Agreement") for Fee Consignment and
Purchase of Gold
Dear Ladies and Gentlemen:
We are pleased to confirm that, subject to your acceptance of this
facility, THE BANK OF NOVA SCOTIA ("Scotiabank") will be prepared to deliver
from time to time on a Business Day occurring prior to the Commitment
Termination Date, Gold (as such terms are defined below) upon consignment (the
"Consignment(s)") to Commemorative Brands, Inc. (the "Consignee") subject to
availability and to the terms and conditions outlined herein.
DEFINITIONS. For the purposes of this Agreement:
"Approved Inventory Location" shall mean any location set forth under
the appropriate heading on Exhibit A, and each other location previously
approved by Scotiabank from time to time.
"Base Rate" shall mean the higher of (with any change in the Base Rate
to be effective as of the date of change of either of the following rates):
(i) the rate of interest then most recently established by
Scotiabank in New York from time to time to be its base rate for
Dollars loaned in the United States, as in effect from time to time,
and
(ii) the Federal Funds Rate, as in effect from time to time, PLUS
one-half of one percent (0.50%) per annum.
Scotiabank's base rate is a reference rate and does not necessarily
represent the lowest or best rate charged to customers; Scotiabank may
make commercial loans or other loans at rates of interest at, above or
below Scotiabank's base rate.
"Borrowing Base" shall mean at any date of determination the amount
determined by Scotiabank based on the most recent Borrowing Base Certificate of
the sum of (i) 90% of the Dollar Value of the aggregate troy ounces of Gold
located at the Consignee's Plants, PLUS (ii) 70% of the Dollar Value of the
aggregate troy ounces of Gold located at Approved Inventory Locations, PLUS
(iii) 40% of the Dollar Value of the aggregate troy ounces of Gold located with
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the Consignee's salesmen, college book stores or jewelry stores as samples (but
such contribution to the Borrowing Base shall not exceed $1,000,000), PLUS (iv)
70% of the Dollar Value of the aggregate troy ounces of Gold located with
refiners approved by Scotiabank, PLUS (v) 90% of the Dollar Value of the
aggregate troy ounces of Gold located in the Consignee's pooled account with
Stern Leach, PROVIDED that the Borrowing Base shall not include the Dollar Value
of Processed Gold returned to the Consignee by the purchaser thereof for any
reason (including pursuant to customer warranty repairs).
"Borrowing Base Certificate" shall mean a certificate executed by an
authorized officer of the Consignee substantially in the form of Exhibit D.
"Business Day" shall mean any day, other than a Saturday, a Sunday or
a day that banks are authorized or entitled to be closed for business in New
York, New York, or in the case of any location to which Gold is to be delivered
or received, a day that transactions cannot be carried out at such location.
"Commitment" is defined in paragraph 2(a).
"Commitment Amount" is defined in paragraph 1.
"Commitment Termination Date" means the earliest of (i) the
Consignment Maturity Date, (ii) the date on which the Commitment Amount is
terminated in full pursuant to the terms hereof, (iii) the occurrence of any
Event of Default in paragraph 17(d) or (e) and (iv) the occurrence of any other
Event of Default and either (A) the declaration by Scotiabank that the Gold is
to be returned to it from consignment pursuant to paragraph 17 or (B) in the
absence of such declaration, the giving of notice by Scotiabank to the Consignee
that the Commitment has been terminated.
"Consignment Documents" shall mean, collectively, this Agreement, the
Guarantee and other related documents.
"Consignment Maturity Date" shall mean July 26, 2001, as such date may
be extended in the sole discretion of Scotiabank pursuant to paragraph 3.
"Consignment Request" shall mean a request delivered by an authorized
officer of the Consignee to Scotiabank in the form of Exhibit B hereto.
"Dollar Value" with respect to Gold shall mean, on the day of
determination, the value in dollars of one troy ounce of Gold, determined by the
daily London Afternoon Fixing Price with respect to Gold on such day times the
number of ounces of Gold in respect of which the Dollar Value is being
determined. In the event that there is no London Afternoon Fixing Price for Gold
on a particular day, the last established London Afternoon Fixing Price for Gold
shall apply.
"Dollars" and "$" shall mean lawful currency of the United States.
"Event of Default" is defined in paragraph 17.
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"Federal Funds Rate" shall mean for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with member banks of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by Scotiabank from three Federal funds brokers of
recognized standing selected by Scotiabank.
"Gold" shall mean gold in London Good Delivery bar form, loco London,
England, and of a minimum fineness of .9995, unless otherwise mutually agreed to
by Scotiabank and Consignee in advance of delivery to the Consignee. Gold shall
exclude customer gold contained in rings returned to the Consignee for repair,
replacement or resizing.
"Gold Rate" shall mean, with respect to any Consignment term, the
arithmetic mean rate for the relevant Consignment term as shown on Reuters LIBO
screen as at 10:00 a.m. London, England time three (3) Business Days prior to
the first day of the Consignment term, LESS the mean rate shown on such date on
the Reuters GOFO page as at 10:00 a.m. London, England time.
"Governmental Authority" shall mean any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or regulatory
body.
"Guaranty" is defined in paragraph 12.
"Guarantor" is defined in paragraph 12.
"including" shall mean "including without limitation".
"Intercreditor Agreement" shall mean the Intercreditor Agreement dated
as of July 27, 2000 between Scotiabank and Heller Financial, Inc., as agent
under the Taylor-CBI Credit Agreement confirming the priority of the security
interest of Scotiabank in the consigned Gold, in all respects in form and
substance satisfactory to Scotiabank, as in effect on the date hereof and as the
same maybe amended or modified from time to time.
"Lien" shall mean any security interest, mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
otherwise), charge against or interest in property to secure payment of a debt
or performance of an obligation or other priority or preferential arrangement of
any kind or nature whatsoever.
"Obligations" shall mean all obligations (monetary or otherwise) now
or hereafter arising of the Consignee or the Guarantor arising under or in
respect of this Agreement or other Consignment Document, including the
obligations of the Consignee to return or purchase Gold pursuant to the terms
hereof, but excluding the obligations of the Consignee and the Guarantor under
or in respect of the Taylor-CBI Credit Agreement.
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"Organic Document" shall mean, relative to the Consignee or the
Guarantor, its certificate of incorporation, its by-laws and all shareholder
agreements, voting trusts and similar arrangements applicable to any of its
authorized shares of capital stock.
"Plant" shall mean, as the context may require, any of the Consignee's
facilities set forth under the appropriate heading on Exhibit A.
"Processed Gold" shall mean an undivided interest in each product of
any goods and inventory containing Gold located at a Plant or an Approved
Inventory Location or for which Gold located at a Plant or an Approved inventory
Location comprises a part thereof, which undivided interest shall be, with
respect to any such product, equal to the ratio that the Dollar Value of such
Gold contained in such product or comprising a part thereof bears to the cost of
such product. Terms defined in the U.C.C. and used in this definition have the
meanings set forth in the U.C.C.
"Taylor-CBI Credit Agreement" shall mean the Amended and Restated
Credit Agreement dated as of July 27, 2000 among TP Holding Corp., Taylor
Publishing Company, Taylor Production Services Co., LP and the Consignee as
borrowers, Heller Financial, Inc., as agent, Key Corporate Capital, Inc., as
syndication agent, Scotiabank, as documentation agent, and the financial
institutions party thereto as in effect on the date hereof and as amended or
modified from time to time; PROVIDED that if such Credit Agreement shall be
refinanced or otherwise terminated and is no longer of force and effect at a
time when this Agreement is still in effect, then, for purposes of this
Agreement, the "Taylor-CBI Credit Agreement" shall mean the Taylor-CBI Credit
Agreement, as in effect immediately prior to the date of such refinancing or
termination.
"U.C.C." shall mean the Uniform Commercial Code as in effect in the
State of New York from time to time.
"Value Date" shall mean the date two Business Days after the rate is
set for the purchase of Gold hereunder.
1. AVAILABILITY. Gold delivered and held on consignment hereunder from
time to time by the Consignee shall not at any time have a Dollar Value which is
in excess of the least of (i) the Dollar Value of 27,000 troy ounces of Gold,
(ii) $10,125,000 and (iii) the Borrowing Base (the least of (i), (ii) and (iii)
being the "Commitment Amount").
2. COMMITMENT; REDUCTION OF COMMITMENT.
(a) COMMITMENT. On the terms and subject to the conditions of this
Agreement (including paragraphs 18 and 19), Scotiabank agrees from time to time
on any Business Day occurring prior to the Commitment Termination Date to
deliver Gold that will be held on consignment by the Consignee in an aggregate
amount (not in excess of the Commitment Amount) as requested by the Consignee.
The commitment of Scotiabank described in this paragraph 2(a) is herein referred
to as its "Commitment." On the terms and subject to the conditions hereof, the
Consignee may from time to time prior to the Commitment Termination Date have
Gold consigned to it, continue to hold under consignment all or a portion of
such
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Gold, return all or a portion of such Gold from consignment to Scotiabank and/or
purchase all or a portion of such Gold, and thereafter have Gold consigned to it
again.
(b) RESTORATION OF COMMITMENT AMOUNT. If at any time the Dollar
Value of the Gold held on consignment hereunder by the Consignee should exceed
the Commitment Amount (as such amount may have been reduced pursuant to the
terms of this Agreement), then Scotiabank may at its option, by telex or
telecopied notice to the Consignee, require that by the end of the Business Day
immediately following the day upon which such telex or telecopied notice is
given, the Consignee to either:
(i) re-deliver to Scotiabank a portion of the Gold held on
consignment hereunder sufficient to reduce the Dollar Value of the
Gold continued to be held on consignment hereunder to an amount no
greater than the Commitment Amount; or
(ii) purchase from Scotiabank, at a purchase price agreed to
between the parties by the end of such Business Day, a quantity of the
Gold held on consignment hereunder sufficient to reduce the Dollar
Value of the Gold held on consignment hereunder to an amount no
greater than the Commitment Amount.
With respect to item (ii) above, if the parties are unable to agree to a
purchase price, then the Commitment Amount shall be restored pursuant to the
provisions of item (i) above.
3. EXTENSION OF CONSIGNMENT MATURITY DATE. The Consignment Maturity
Date shall be subject to extension as set forth in this paragraph.
(a) Scotiabank may, by written notice to the Consignee given not
later than 60 days prior to the first Consignment Maturity Date and/or each and
any successive Consignment Maturity Date thereafter (if the Commitment then
remains in effect), extend the then existing Consignment Maturity Date for 364
days from the date of such notice. The Consignee acknowledges and agrees that
Scotiabank is under no obligation, express or implied, to extend the Commitment
Termination Date.
(b) The Consignee or Scotiabank may, by delivery of written
notice to the other party given not later than 60 days prior to the first
Consignment Maturity Date, and/or each and any successive Consignment Maturity
Date thereafter (if the Commitment then remains in effect), irrevocably indicate
that it does not wish to extend the then Consignment Maturity Date, and this
Agreement shall terminate on the then Consignment Maturity Date.
4. ORDERS. Requests for delivery of Gold will be made by an authorized
representative of the Consignee to an authorized officer of Scotiabank by
telephone, telex or telecopied transmission. Each request will indicate the
quantity and quality of the Gold to be delivered, the date on which the delivery
is requested to be made and the required term of the Consignment (which shall
not extend past the then existing Consignment Maturity Date), which term may be
for up to six (6) months or any other term which is acceptable to Scotiabank.
All telephone requests shall be confirmed in writing to Scotiabank within five
(5) days of such request.
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5. DELIVERIES BY SCOTIABANK.
(a) Following receipt of a request for delivery of Gold by the
Consignee, Scotiabank will arrange for the delivery of the Gold to a Plant or an
Approved Inventory Location and on the date agreed upon for delivery. Scotiabank
will assume all risk of loss or damage to the Gold until it has been delivered
to a Plant or, if applicable, an Approved Inventory Location at which time such
risk shall pass to the Consignee. Such delivery shall be accompanied by a
delivery statement provided by Scotiabank setting out the quantity and quality
of Gold delivered.
(b) If on receipt of the Gold it is determined by the Consignee
that the Gold delivered by Scotiabank to the Consignee is of a different
quantity and/or quality than is set out in the delivery statement, the Consignee
shall forthwith give notice of such discrepancy to Scotiabank. In that event,
Scotiabank shall be entitled to conduct such tests and make such examination of
the Gold as it considers necessary or desirable. If such tests or examinations
determine that the Gold delivered by Scotiabank to the Consignee is of a
different quantity and/or quality than was set out in the said delivery
statement, then Scotiabank or the Consignee, as the case maybe, shall make the
appropriate adjustments.
(c) Unless Scotiabank receives from the Consignee the above
described notice of discrepancy within three (3) Business Days of receipt of the
Gold, then the Gold delivered will be deemed to be as set out in the delivery
statement that accompanied the delivery.
6. FEES.
(a) The Consignee will pay (i) on the Consignment Maturity Date,
(ii) monthly within five (5) days following the receipt by the Consignee of an
invoice from Scotiabank pursuant to paragraph 13, (iii) on the last day of a
Consignment term and (iv) on the date of any reduction in the Commitment Amount
pursuant to paragraph 2(b); in making up the applicable Consignment at a per
annum rate _____________________ (i) the sum of (x) the Gold Rate on the Dollar
Value of each on consignment hereunder as in effect three (3) Business Day of
the applicable Consignment then in effect for such Gold PLUS ____________ BY
(ii) the number of troy ounces of Gold consigned for ________________ which rate
shall remain in effect for the term of the applicable ____________________ event
that a Consignment is made with no fixed Consignment __________ applicable
thereto, then the rate applicable to such Consignment shall be as agreed upon by
the parties and subject to change upon three (3) Business Days' notice by
Scotiabank to the Consignee, and the Consignee agrees that such rate shall not
be subject to approval by the Consignee. In the event that the Consignee and
Scotiabank should fail at any time to agree upon the rate to apply to a
Consignment or the renewal of a Consignment term, then the Consignee shall
immediately deliver the subject Gold for which there is no agreement to
Scotiabank, as provided for in paragraph 16 hereof.
(b) The Consignee agrees to pay to Scotiabank (i) on the date
hereof, an upfront fee equal to $50,625 and (ii) a commitment fee equal to
0.375% per annum MULTIPLIED BY the difference between (A) $10,125,000 and(B) the
average Dollar Value of the daily number of ounces of Gold actually consigned
hereunder during the relevant period, such commitment fee
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to be payable in arrears on the last day of each month and on the Commitment
Termination Date, and (iii) an annual renewal fee of $21,000, payable on each
renewal date hereof if Scotiabank extends the Consignment Maturity Date pursuant
to paragraph 3.
(c) All rates in this Agreement shall be calculated on the basis
of a 360 day year and for the actual number of days elapsed.
7. TITLE.
(a) Title to the Gold delivered by Scotiabank and held by the
Consignee on consignment for Scotiabank will remain with Scotiabank and will not
pass to the Consignee until such time as the Gold is purchased by the Consignee
as provided for in paragraphs 7(b), 10, and 11 hereof. In the event that only a
portion of a Consignment is purchased, then title as pertains to that portion
only will transfer to the Consignee.
(b) Title to the Gold purchased by the Consignee as provided for
in paragraphs 10 and 11 hereof will pass to the Consignee upon receipt by
Scotiabank of all Dollars due to it from the Consignee in payment for the Gold
purchased.
8. COMMINGLING. The Consignee and Scotiabank agree that the Consignee
shall be permitted, in the ordinary course of its business as being conducted on
the date of this Agreement, to commingle the Gold held on consignment for
Scotiabank with any other Gold or Gold (in each case located at the Plants or
Approved Inventory Locations) containing alloys being held by the Consignee on
consignment, safekeeping, or trust, or with Gold or Gold containing alloys owned
by the Consignee. The Consignee shall also be permitted to accept returns from
its customers containing Gold for repair, replacement, restyling etc. without
being in violation of this Agreement.
9. SAFEKEEPING. Until such time as the Gold being returned to
Scotiabank has been received by Scotiabank, or purchased by the Consignee, as
hereinafter provided, the Consignee will afford the Gold no less safekeeping
protection than it affords Gold held for its own account. The Consignee will
arrange insurance coverage, acceptable to Scotiabank and naming Heller
Financial, Inc., as agent as loss payee and additional insured, on the Gold held
on consignment for Scotiabank by the Consignee in such amounts and covering such
risks as is usually carried by companies engaged in a similar business and the
Consignee shall, upon request, deliver to Scotiabank a copy of all policies for
such insurance. If Scotiabank delivers written notice to the Consignee setting
forth Scotiabank's reasonable belief that an Approved Inventory Location offers
inadequate safekeeping protection for the Gold, the Consignee shall transfer all
Gold contained at such Approved Inventory Location to a Plant or another
Approved Inventory Location within 10 days following receipt of such notice.
10. PURCHASE REQUEST. If the Consignee wishes to purchase part or all
of the Gold held hereunder on consignment for Scotiabank, an authorized
representative of the Consignee will make a request to an authorized officer of
Scotiabank by telephone, telex or telecopied transmission stating the quantity
and quality of Gold to be purchased and the proposed Value Date of the purchase.
All telephone requests shall be confirmed in writing to Scotiabank within five
(5) days of such request.
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11. PURCHASE. Scotiabank shall at least two (2) Business Days prior to
the proposed Value Date for a purchase or such lesser period as Scotiabank may
accommodate (in its sole discretion), by its authorized officer, provide an
authorized representative of the Consignee with a quotation of the price (based
on the current market price for such Gold), as of the Value Date, of the Gold to
be purchased. If such price is agreed to by the authorized representative of the
Consignee, such Gold will thereupon be conclusively deemed to have been
contracted for purchase, with payment of the purchase price by the Consignee to
be on the relevant Value Date.
12. SECURITY.
(a) As continuing collateral security for the present and future
Obligations of the Consignee to Scotiabank hereunder and under the other
Consignment Documents, Commemorative Brands Holding Corp. (the "Guarantor")
shall deliver in favor of Scotiabank (together with registrations, filings and
other supporting documentation deemed necessary by Scotiabank to perfect same),
in the form attached hereto as Exhibit C, its unsecured guaranty (the
"Guaranty") of the present and future Obligations of the Consignee to
Scotiabank.
(b) The intent of the parties hereto is to create a true
consignment from Scotiabank to the Consignee and not a consignment for security;
PROVIDED, HOWEVER, that in order to protect the rights of Scotiabank in the
event that either this Agreement and under the other Consignment Documents and
the transactions contemplated hereby and thereby are construed at any time with
respect to any Gold as other than a true consignment from Scotiabank to the
Consignee (including as a result of a Gold Sale), then as security for its
Obligations the Consignee hereby grants Scotiabank a Lien on and security
interest in and to the Collateral (whether now or hereafter existing).
"COLLATERAL" means all of the Consignee's right, title and interest in and to
(i) all Gold of any quality or fineness (including the Gold consigned and
purchased under this Agreement), located from time to time at the Plants or the
Approved Inventory Locations or in transit or with the Consignee's salesmen,
college book stores or jewelry stores as samples, (ii) all Processed Gold
located from time to time at the Plants or the Approved Inventory Locations or
in transit or with the Consignee's salesmen, college book stores or jewelry
stores as samples and (iii) an undivided interest in all proceeds of such Gold,
including, to the extent that the Consignee has not returned to Scotiabank
and/or purchased pursuant to the terms hereof any amount of Gold that is
delivered to any account debtor of the Consignee, an undivided interest in the
accounts owing by such account debtor, and related general intangibles (if any)
arising from the sale of such Gold (including the Gold and the Gold comprising
any Processed Gold) in each case which undivided interest shall be, with respect
to any such proceeds, accounts or general intangibles, equal to the ratio that
the Dollar Value of such Gold contained in the goods delivered to such account
debtor or comprising a part thereof bears to the total cost of such goods. Terms
used in the definition of Collateral for which meanings are provided in the
U.C.C. are used in the definition of Collateral with such meanings. "Gold Sale"
means any sale of Gold by Scotiabank to the Consignee, which sale shall occur at
any time the Consignee takes title to any Gold, whether pursuant to paragraph 10
and 11 or at such earlier or other date as provided by law or court order or
decree. To the extent this Agreement and any other Consignment Document and the
transactions contemplated hereby and thereby are not construed as a true
consignment from Scotiabank to the Consignee, or upon the occurrence of any Gold
Sale, the security interest granted pursuant to this paragraph secures the
complete and punctual payment of all Obligations of the Consignee, whether now
or hereafter
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existing. To the extent any Gold of any quality or fineness located at a Plant
or any Approved Inventory Location becomes part of a product, Scotiabank shall
only have and shall continue to have rights or interests in and to such product
to the extent of an undivided interest in such product that is equal to the
ratio that the cost of such Gold contained in such product or comprising a part
thereof bears to the cost of such product. In addition, Gold of any quality or
fineness (including the Gold) located at a Plant or any Approved Inventory
Location that becomes part of a product shall continue to be considered as being
consigned to the Consignee hereunder to the same extent as if such Gold did not
become part of a product and shall be subject to all the terms hereof and any
other Consignment Document (including the continuation of title to such Gold in
Scotiabank). Notwithstanding the express intent of the parties hereto that this
Agreement and any other Consignment Document and the transactions contemplated
hereby be a true consignment from Scotiabank to the Consignee, the Consignee
shall file precautionary Uniform Commercial Code financing statements to protect
the rights of Scotiabank in and to the Collateral. In furtherance of the intent
of the parties hereto that this Agreement and the transactions contemplated
hereunder and thereunder are a true consignment from Scotiabank to the
Consignee, and not a consignment for security, Scotiabank agrees that for so
long as no Event of Default has occurred and is continuing, it will not initiate
any action, suit or proceeding claiming that this Agreement or any of the
transactions contemplated hereunder are other than a true consignment from
Scotiabank to the Consignee.
(c) The Consignee agrees that, from time to time at its own
expense, the Consignee will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or desirable,
or that Scotiabank may request, in order to perfect, preserve and protect any of
its interest in the Gold.
13. INVOICES.
(a) Scotiabank will furnish the Consignee, as at the last day of
each month and as at the last day of a Consignment term, a statement of the
quantity and quality of Gold held on consignment for Scotiabank and a
calculation of the consignment fee in accordance with paragraph 6 hereof payable
by the Consignee, together with an invoice for such charges.
(b) In the case of purchases of Gold in accordance with
paragraphs 10 and 11, Scotiabank will furnish the Consignee promptly after each
purchase is agreed to with a statement setting forth the quantity and quality of
the Gold sold, and a calculation of the purchase price payable by the Consignee,
together with an invoice for such purchase price.
(c) Fai1ure by Scotiabank to issue a statement and/or an invoice
or failure to issue such statement and/or invoice in a timely manner, does not
negate the Consignee's Obligations.
(d) If there is a discrepancy between the statement provided by
Scotiabank and the agreed to terms of the purchase by the Consignee, as the
Consignee understands them to be, the Consignee shall forthwith notify
Scotiabank of such discrepancy. If such notification is not received by
Scotiabank within three (3) Business Days of receipt of the statement by the
Consignee then such statement shall be deemed to be correct.
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14. PAYMENTS. Payment of the consignment fee will be made by the
Consignee within ten (10) Business Days following the last day of each month and
on the last day of a Consignment term. Payment of the purchase price of the Gold
will be made on the Value Date. In either case, payment will be made in Dollars
in same day funds by any method mutually agreed upon from time to time. If an
amount payable hereunder is not paid when due, the Consignee will pay interest
on the unpaid amount, based on a 360 day year, calculated and payable upon
demand for the actual number of days elapsed and compounded monthly until paid
in full, at the Base Rate plus 2% per annum.
15. REPORTS, ETC.
(a) Within ten (10) days after the end of each month, the
Consignee will send a report in writing to Scotiabank setting out the quantity
and quality of the Gold held on consignment for Scotiabank as of the end of such
month and the location (whether at a Plant, an Approved Inventory Location or
otherwise) of all Gold (by ounces) consigned hereunder.
(b) The Consignee will deliver a Borrowing Base Certificate (as
of the last Business Day of the previous week) to Scotiabank on the date hereof
and every two weeks thereafter on every other Monday (or if such date of
delivery is not a Business Day, the next succeeding Business Day) during the
term of this Agreement.
(c) The Consignee will deliver to Scotiabank its and the
Guarantor's quarterly financial statements within forty-five (45) days after the
end of each of such party's first three fiscal quarters and their respective
annual audited financial statements within ninety (90) days after the end of
each fiscal year of such party and any other information as Scotiabank may
reasonably request from time to time.
16. PERIOD OF AGREEMENT.
(a) On the relevant Consignment Maturity Date, the Consignee
shall, if it has not already done so, re-deliver to Scotiabank all Gold which is
held for Scotiabank by the Consignee under the relevant terminated Consignments
by either physically delivering the Gold to Scotiabank, or by purchasing the
Gold from Scotiabank as provided for in paragraphs 10 and 11 hereof and shall
pay to Scotiabank all applicable amounts due and accruing to it hereunder. If an
Event of Default should occur prior to the Consignment Maturity Date or prior to
any other applicable date of termination for a Consignment, Scotiabank's right
to terminate this Agreement and make demand hereunder shall take effect
immediately.
(b) If the Taylor-CBI Credit Agreement is terminated and the
obligations of CBI thereunder are paid in full, then the Consignee and
Scotiabank agree to amend this Agreement to provide for an uncommitted facility
without any commitment fee.
17. EVENTS OF DEFAULT. Upon the occurrence of any one of the following
events of default (an "Event of Default"):
(a) failure by the Consignee to deliver any amount of Gold or pay
any purchase price, consignment fees, interest or other amounts in respect of
any Gold held on
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consignment hereunder or purchased from Scotiabank, within three (3) Business
Days of the date on which it is due hereunder;
(b) failure by the Consignee to restore the Commitment Amount as
required by paragraph 2;
(c) the Consignee or the Guarantor makes any representation or
warranty hereunder which is incorrect in any material respect; or breaches any
covenant hereunder or under any other Consignment Document or fails to perform
or observe, in any material respect, any other term or provision contained in
this Agreement or under any other Consignment Document and any such breach of
covenant or failure to perform or observe shall remain unremedied for ten (10)
days after written notice thereof has been given by Scotiabank to the Consignee
in the manner provided for in paragraph 23 hereof;
(d) any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or any other proceedings for the relief of debtors
and/or creditors are instituted by or against the Consignee or the Guarantor,
and, in the case of any such proceeding instituted against the Consignee or the
Guarantor (but not instituted by such party), any such proceeding shall remain
undismissed, or unstayed for a period of seventy-five (75) days or any of the
actions sought in such proceeding (including the entry of an order for relief
against it or the appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property) shall occur;
(e) an order is made or an effective resolution passed for the
winding-up or liquidation of the Consignee or the Guarantor; or a secured party
takes possession of all or any material part of the undertaking, property or
assets of the Consignee or the Guarantor; or the Consignee or the Guarantor has
a distress, execution, attachment, sequestration or other legal process levied,
enforced or sued on or against all or substantially all of its undertaking,
property or assets and such secured party maintains possession, or any such
process is not dismissed, discharged, stayed or restrained, in each case within
seventy-five (75) days thereafter;
(f) subject to the provisions contained in Section 3 of the
Intercreditor Agreement, the Consignee or the Guarantor admits its inability to
pay its debts generally; or the Consignee or the Guarantor fails to pay any of
its indebtedness in an aggregate amount of not less than $5,000,000 when due and
such failure continues after any applicable grace period specified in an
agreement or instrument relating to such indebtedness;
(g) subject to the provisions contained in Section 3 of the
Intercreditor Agreement, the Consignee or the Guarantor permits any default
under any agreement or instrument relating to its indebtedness, or any other
event, to occur and continue after any applicable grace period specified in such
agreement or instrument and the effect of such default or event is to
accelerate, or to permit the acceleration of, the maturity of indebtedness in an
aggregate amount of not less than $5,000,000;
(h) the Consignee or the Guarantor denies, to any extent, its
respective obligations under the Guaranty or any other Consignment Document or
claims the Guaranty or any other Consignment Document to be invalid or withdrawn
in whole or in part; or the
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Guaranty is determined to be invalid in whole or in part by a court or other
judicial entity, or is invalidated in whole or in part by any Act, regulation or
governmental action; or the Consignee or the Guarantor breaches any of its
covenants as contained in the Guaranty or any other Consignment Document and
such breach is not remedied or waived within 10 days of such breach, or makes
any representation or warranty as contained in the Guaranty or any other
Consignment Document which is incorrect in any material respect; or
(i) subject to the provisions contained in Section 3 of the
Intercreditor Agreement, any Event of Default under and as defined in the
Taylor-CBI Credit Agreement occurs and is continuing;
then Scotiabank may terminate the Commitment and accelerate the Consignment
Maturity Date and, upon making a demand in writing upon the Consignee, will
become entitled to have the Consignee deliver to Scotiabank forthwith all Gold
held by the Consignee on consignment for Scotiabank hereunder and shall be
entitled to receive payment forthwith from the Consignee of all amounts due and
accruing to Scotiabank hereunder and under the other Consignment Documents.
Delivery of such Gold shall be made by either physically delivering the Gold to
Scotiabank or by paying to Scotiabank the spot value of the Gold then held by
the Consignee, as determined by Scotiabank, as of the date and time of
termination and/or acceleration (as applicable), and by so paying such amount,
the Consignee shall be deemed to have purchased the Gold which it was required
to re-deliver to Scotiabank. If the Consignee fails to immediately deliver to
Scotiabank all such Gold held on consignment hereunder or fails to immediately
pay to Scotiabank all other amounts due to it hereunder, Scotiabank may proceed
to take such steps as it deems fit, including realizing upon any security it
holds in that respect.
18. AGREEMENT EFFECTIVENESS. The agreement of Scotiabank to make the
initial consignment of Gold shall be subject to the prior or concurrent
satisfaction of each of the conditions precedent set forth below:
(a) the delivery of resolutions of the Board of Directors of the
Consignee and the Guarantor then in full force and effect authorizing the
execution, delivery and performance of this Agreement and each other document to
be executed by it hereunder;
(b) the delivery of true and complete copies of the Organic
Documents of the Consignee and the Guarantor;
(c) the delivery of the incumbency and signatures of the officers
of the Consignee and the Guarantor authorized to act with respect to this
Agreement and each other document executed by it;
(d) the delivery of acknowledgment copies (or other evidence
satisfactory to Scotiabank) of properly filed Uniform Commercial Code financing
statements (Form UCC-1) dated a date reasonably near to the date hereof, naming
Commemorative Brands, Inc., as the consignee and The Bank of Nova Scotia as the
consignor or other similar instruments or documents, flied under the Uniform
Commercial Code of all jurisdictions as may be necessary or, in the opinion of
Scotiabank, desirable to perfect the interest of Scotiabank pursuant to the
terms of this Agreement.
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(e) the delivery of executed copies of proper Uniform Commercial
Code Form UCC-3 amendment and/or termination statements, if any, necessary to
assign or terminate all Liens and other rights of any Person in any Collateral
previously granted by the Consignee to Scotiabank;
(f) the delivery of certified copies of Uniform Commercial Code
Requests for Information or Copies (Form UCC-1), or a similar search report
certified by a party acceptable to Scotiabank, dated a date reasonably near to
the date hereof, listing all effective financing statements which name the
Consignee (under its trade names, present name and any previous names) as the
debtor and which are filed in the jurisdictions in which filings were made
pursuant to CLAUSE (D) above, together with copies of such financing statements
(none of which shall cover any Collateral);
(g) the delivery of the opinion of Schulte Roth & Zabel LLP
counsel for the Consignee and Guarantor in form and substance acceptable to
Scotiabank;
(h) the delivery of insurance certificates in form and substance
reasonably acceptable to Scotiabank and showing Heller Financial Inc. as loss
payee and as an additional insured; and
(i) the delivery of the Intercreditor Agreement and the
satisfaction or waiver of the conditions set forth in Section 7.1 of the
Taylor-CBI Credit Agreement and the concurrent funding of the initial loans
thereunder.
19. ALL DELIVERIES UNDER CONSIGNMENT. The obligation of Scotiabank to
deliver any Gold on the occasion of any consignment (including the initial
consignment) to the Consignee and the requirement that Scotiabank continue to
consign to the Consignee any previously consigned Gold subject to a maturing
term of consignment (upon the occasion of the expiration of such term) is
subject to satisfaction of each of the conditions precedent set forth in this
paragraph 19:
(a) COMPLIANCE WITH WARRANTIES, NO DEFAULT, ETC. Both before and
after giving effect to the delivery of Gold requested to be held under
consignment hereunder, the following statements shall be true and correct: (i)
the representations and warranties set forth in this Agreement and each other
Consignment Document shall be true and correct in all material respects with the
same effect as if then made (unless stated to relate solely to an earlier date,
in which case such representations and warranties shall be true and correct as
of such earlier date); (ii) except as disclosed by the Consignee to Scotiabank
on the date hereof, (A) no litigation, arbitration or governmental investigation
or proceeding shall be pending or, to the knowledge of the Consignee, threatened
against the Guarantor, the Consignee or any of its subsidiaries which may
reasonably be expected to materially adversely affect the Consignee's, or the
Consignee and its Subsidiaries' taken as a whole, business, operations, assets,
revenues, properties or prospects; and (B) no development shall have occurred in
any litigation, arbitration or governmental investigation or proceeding
disclosed by the Consignee to Scotiabank on the date hereof which may reasonably
be expected to materially adversely affect the business, operations, assets,
revenues, properties or prospects of the Guarantor, the Consignee or the
Consignee and its subsidiaries, taken as a whole;
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(b) there shall not be any pending or, to the knowledge of the
Consignee, threatened, litigation, arbitration or governmental investigation or
proceeding which purports to affect the legality, validity or enforceability of
this Agreement or any other Consignment Document;
(c) there is sufficient availability under paragraph 1, and a
sufficient Commitment under paragraph 2, to make the requested consignment of
Gold;
(d) all documents executed or submitted pursuant hereto by or on
behalf of the Consignee in connection with such consignment (or continuation, as
the case may be) shall be satisfactory in form and substance to Scotiabank and
its counsel; Scotiabank and its counsel shall have received all information,
approvals, opinions, documents or instruments as Scotiabank or its counsel may
reasonably request;
(e) no Event of Default (nor any event which with the passage of
time or the giving of notice, or both, would become an Event of Default) shall
have then occurred and be continuing, and neither the Guarantor, the Consignee
nor any of its subsidiaries shall be in material violation of any law or
governmental regulation or court order or decree the violation of which would
have a material adverse effect on the business, operations, assets, revenues,
properties or prospects of the Guarantor, the Consignee or the Consignee and its
subsidiaries, taken as a whole; and
(f) Scotiabank shall have received a Consignment Request for such
Consignment. Each of the delivery of a Consignment Request and the acceptance by
the Consignee of any Gold to be held by it under consignment shall constitute a
representation and warranty by the Consignee to Scotiabank that on the date of
such consignment or extension of term (both immediately before and after giving
effect thereto) the statements made in CLAUSES (a), (b), (c), (d) and (e) of
this paragraph 19 are true and correct.
20. AUTHORIZED REPRESENTATIVES. Scotiabank will, from time to time,
provide the Consignee with the names and specimen signatures of two or more
persons who are to be its authorized officers for the purposes hereof.
21. REPRESENTATIONS OF THE CONSIGNEE. The Consignee hereby represents
and warrants to Scotiabank that: (a) it has full corporate power and authority
to purchase Gold from Scotiabank and to receive and hold Gold for Scotiabank on
the terms and conditions contained herein; (b) it has obtained all necessary
governmental and other approvals, if any, to receive and hold and purchase Gold;
(c) this Agreement has been duly authorized by all necessary corporate action;
(d) the execution, delivery and performance of this Agreement by the Consignee
will not result in the breach of its Organic Documents or a violation of or
default under any contract or agreement to which the Consignee or its properties
is bound; and (e) when executed and delivered by the Consignee, this Agreement
will constitute the legal, valid and binding obligation of the Consignee,
enforceable in accordance with the terms hereof, except as enforceability is
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting generally the enforcement of creditors' rights and
except to the extent that availability of the remedy of specific performance or
injunctive relief and other equitable remedies.
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22. REPRESENTATIONS OF SCOTIABANK. Scotiabank hereby represents and
warrants to the Consignee that it shall have title free and clear of any
encumbrance to all Gold to be delivered to the Consignee under this Agreement,
and that it has full power and authority to deliver and sell Gold to the
Consignee on the terms and conditions contained herein.
23. COVENANTS OF THE CONSIGNEE.
(a) RECORDS: The Consignee shall maintain at its principal place
of business records reasonably satisfactory to Scotiabank with respect to the
Gold delivered by Scotiabank hereunder, and shall permit an authorized officer
of Scotiabank, or a representative not necessarily in Scotiabank's employ, at
the Consignee's expense (up to $45,000 per year), to examine such records at any
reasonable time during normal business hours, at reasonable intervals and
without prior notice.
(b) TAXES: The Consignee shall pay all taxes, customs duties,
assessments and charges lawfully levied, assessed or imposed in respect of the
Gold held by the Consignee for Scotiabank hereunder or upon the sale of such
Gold by Scotiabank to the Consignee, except any tax in respect of the income of
Scotiabank.
All payments by the Consignee shall be made without set-off or
counterclaim and free and clear of any taxes (including any value added tax),
levies, duties, charges, fees or deductions for withholdings whatsoever.
If, as a result of any requirement, it should be necessary for
the Consignee to deduct or withhold any amount from any payment hereunder, then
the Consignee shall make an additional payment so that the amount received by
Scotiabank after such deduction or withholding equals the amount that would have
been received by Scotiabank if there had been no such deduction or withholding
requirement.
Evidence satisfactory to Scotiabank of the payment of any tax,
etc. referred to in this paragraph will, upon the request of Scotiabank made
from time to time, be provided by the Consignee to Scotiabank.
(c) OBSERVE LAWS: The Consignee shall duly observe and conform in
all material respects to all valid requirements of any Governmental Authority
relative to the holding of Gold by the Consignee for Scotiabank hereunder.
(d) The Consignee agrees that it will at all times cause all Gold
held on consignment hereunder and not sold to a customer of the Consignee to be
located only (i) at the Plants or the Approved Inventory Locations, (ii) in
transit between the Plants or the Approved Inventory Locations, (iii) with its
salesmen, college book stores or jewelry stores as samples, and/or (iv) in
transit to Scotiabank; PROVIDED, HOWEVER, that no sale to any customer of the
Consignee shall be made unless the Consignee shall have first either purchased
or returned a like amount of Gold to Scotiabank pursuant to the terms of this
Agreement. The Consignee further agrees that except for Gold (under and as
defined in this Agreement), no other Gold that is not owned by the Consignor
will be kept in a Plant or an Approved Inventory Location. In any event, if any
Gold (other than Gold (under and as defined in this Agreement), Processed Gold
owned by the Consignee and Processed Gold to be returned to the owner thereof)
shall at any
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time be located at a Plant or an Approved Inventory Location, the Consignee
agrees that such Gold shall be transferred (by book entry or otherwise) as soon
as practicable (and in any event no later than the next Business Day) to another
facility of the Consignee's. The Consignee shall also be permitted to accept
returns from its customers containing Gold for repair, replacement, restyling
etc. without being in violation of this Agreement.
(e) The Consignee agrees that it shall use the Gold held on
consignment pursuant to the terms of this Agreement only in connection with the
completion of customer orders in the ordinary course of business at the Plants
or the Approved Inventory Locations.
(f) The Consignee agrees that it shall, within 20 days after the
date hereof, use reasonable efforts to cause the delivery of acknowledgment
copies (or other evidence satisfactory to Scotiabank) of properly filed Uniform
Commercial Code financing statements (Form UCC-1) dated a date reasonably near
to the date hereof, (1) naming Commemorative Brands, Inc. as the consignee and
The Bank of Nova Scotia as the Consignor, or other similar instruments or
documents, filed under the Uniform Commercial Code in jurisdictions to be agreed
by the Consignee and Scotiabank for Gold located with the Consignee's salesmen,
college book stores or jewelry stores as samples, and (ii) naming Commemorative
Brands, Inc., as the consignor and The Bank of Nova Scotia as the assignee of
the consignor and as consignees the various operators of the Approved Inventory
Locations (but limited to Richards and West, AuraFin, and Traditional Heritage
and those that are refiners) or other similar instruments or documents, filed
under the Uniform Commercial Code of all jurisdictions as may be necessary or,
in the opinion of Scotiabank, desirable to perfect the interest of Scotiabank
pursuant to the terms of this Agreement.
(g) The Consignee agrees that it will not permit to be located at
any of (i) the OK Casting Approved Inventory Location, (ii) the Durhams Approved
Inventory Location or (iii) any other Approved Inventory Location located in a
jurisdiction in which Scotiabank has not filed UCC-1 financing statements of the
type referred to in clause (f)(ii) above with respect to the Collateral, Gold
with a Dollar Value in excess of $100,000 at any one Approved Inventory Location
or $500,000 at all such Approved Inventory Locations.
24. NOTICES. Any notice in writing may be given by being delivered by
hand or by being sent by authenticated telex, telecopied transmission in the
case of the Consignee to:
Commemorative Brands, Inc.
7211 Circle S Rd.
Austin, TX 78745
Attention:Clyde W. Walls, Treasurer
Facsimile No.: (512) 443-5213
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WITH A COPY TO:
Schulte Roth & Zabel LLP
900 Third Avenue
New York, NY 10022
Attention: Marc Weingarten, Esq.
Facsimile No.: (212) 593-5955
AND IN THE CASE OF SCOTIABANK TO:
The Bank of Nova Scotia
c/o Scotia Mocatta
One Liberty Plaza
New York, New York 10006
Attention: Director of Operations
Facsimile No.: (212) 912-8503
WITH A COPY TO:
Mayer, Brown & Platt
190 S. LaSalle Street
Chicago, Illinois 60603
Attention: J. Thomas Mullen, Esq.
Facsimile No.: (312) 701-7711
or to such other address, telex or telecopier number as may hereafter be
notified in writing by the Consignee or Scotiabank, respectively and any such
notice, if given by band, authenticated telex or telecopied transmission will be
deemed to have been given when delivered or sent.
If the Consignee or any of its agents or employees makes an oral
request or gives an oral notice hereunder to Scotiabank, whether to an agent or
an employee of Scotiabank then, until it has received notice in writing by the
Consignee, Scotiabank shall be entitled to rely on its dealings with the
Consignee upon those oral instructions whether by telephone or otherwise. In so
relying, neither Scotiabank nor any agent or employee shall incur any liability
to the Consignee in acting upon such oral instructions, contemplated hereby and
which Scotiabank believes in good faith to have been given by a person
authorized by the Consignee to effect any applicable transaction. In the event
there is a discrepancy between the oral instructions and any written
confirmation in respect thereof, or in the absence of receiving confirmation,
the oral instructions as understood by Scotiabank will be deemed to be the
controlling instructions.
25. DELIVERIES BY CONSIGNEE. All deliveries of Gold to be made
hereunder by the Consignee to Scotiabank will be free of all Liens, and made in
accordance with the directions of Scotiabank or, in the absence of such
directions, in a commercially acceptable manner to Scotiabank at the address of
Scotiabank specified in paragraph 24 above. The Consignee shall bear the cost of
such delivery and shall bear the risk of loss of or damage to such Gold until
delivery is made by it to Scotiabank.
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26. INDEMNITY PROVISIONS. If the introduction of or any change in or
in the interpretation of, or any change in its application to the Consignee of,
any law or any regulation or guideline issued by any central bank or other
Governmental Authority (whether or not having the force of law), including any
reserve or special deposit requirement or any tax (other than tax on
Scotiabank's general income), or any capital requirement, has due to
Scotiabank's compliance the effect, directly or indirectly, of (i) increasing
the cost to Scotiabank of performing its obligations hereunder; (ii) reducing
any amount received or receivable by Scotiabank hereunder or its effective
return hereunder or on its capital; or (iii) causing Scotiabank to make any
payment or to forgo any return based on any amount received or receivable by
Scotiabank hereunder, then upon demand from time to time the Consignee shall pay
such amount as shall compensate Scotiabank for any such cost, reduction, payment
or forgone return. The Consignee shall further indemnify Scotiabank for all
costs, losses and expenses incurred by Scotiabank in connection with (i) the
early termination of any Consignment term, (ii) the failure of the Consignee for
any reason to return the required amount of Gold back to Scotiabank on the dates
required pursuant to the terms of this Agreement, except to the extent the
Consignee has purchased such Gold from Scotiabank in accordance with the terms
hereof or (iii) the return of any Gold to Scotiabank on other than the last day
of the Consignment term applicable to such Gold; and agrees that Scotiabank
shall have no liability to the Consignee for any reason in respect of this
facility other than on account of Scotiabank's gross negligence or willful
misconduct. Any certificate of Scotiabank in respect of the foregoing will be
conclusive and binding upon the Consignee, except for manifest error, PROVIDED
that Scotiabank shall determine the amounts owing to it in good faith using any
reasonable averaging and attribution methods.
27. ASSIGNMENT. The Consignee may not assign or transfer any of its
rights or obligations hereunder without the prior written consent of Scotiabank.
Scotiabank may at any time assign or transfer all or any of its rights and/or
obligations hereunder, provided such assignment or transfer is to its successors
in title or to a wholly-owned subsidiary or a branch or office of Scotiabank and
each such assignee is entitled to rely on the provisions contained in paragraph
25.
28. LAWS. THIS AGREEMENT WILL BE INTERPRETED AND GOVERNED IN ALL
RESPECT BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
29. AMENDMENTS. This Agreement constitutes the entire Agreement
between the Consignee and Scotiabank in respect of the subject matter hereof and
may only be amended by a document signed by the Consignee and Scotiabank.
30. JUDGMENT CURRENCY. If any payment of a currency required hereunder
is required to be made in a currency of payment which is different from the
currency of exchange in the jurisdiction in which it is to be received, the
obligation of the payor to make payments in the currency of payment will not be
discharged or satisfied by any tender or recovery pursuant to any judgment
expressed or converted into the applicable currency of exchange of the
jurisdiction of the payment except to the extent such tender or recovery shall
result in the effective receipt (upon legal conversion from the applicable
currency of exchange to the required currency of payment at the spot buying rate
of Scotiabank of the currency of payment in the applicable currency of exchange
quoted by Scotiabank at the time of conversion and receipt of the funds) by
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the payee of the full amount of such currency of payment as at the date when
such payment was due with interest to the date of such payment or, if greater,
on the date when payment is made. The obligation of the payor shall be
enforceable as an additional or alternative cause of action for the purpose of
recovery in the currency of exchange of the jurisdiction of the payment of the
amount (if any) by which such effective receipt shall fall short of the full
amount of such currency of payment and such right shall not be affected or
merged into any judgment obtained in the applicable currency of exchange.
31. FORCE MAJEURE. If Scotiabank is prevented from or hindered in
making delivery of Gold or the making of delivery is delayed by reason of force
majeure (which shall be deemed for this purpose to include war, civil commotion,
act of terrorism, hijacking, strike, walkout, industrial dispute, fire,
explosion, storm, tempest, flood, act or omission of any Governmental Authority
or of a person or body for the time being exercising the power and authority of
such body (whether in Canada, New York, Texas or elsewhere) or any further cause
not within the direct control of Scotiabank) Scotiabank shall be under no
liability whatsoever in respect thereof and the time for delivery by Scotiabank
shall be extended for a period equal to that during which delivery is so
prevented, hindered or delayed; however, notwithstanding the foregoing,
Scotiabank may, if it so chooses, by notice in writing given to the Consignee,
advise that it will not make the delivery affected by the force majeure.
Scotiabank shall not be liable for any loss arising on or in
connection with any lack of delivery of Gold to the Consignee hereunder as a
result of moratorium, currency restrictions or changes thereof and the Consignee
shall indemnify Scotiabank against any loss suffered as a result thereof.
32. DETERMINATION. Scotiabank shall have the right to determine at any
time, and in its discretion (exercised in good faith as defined in Section 1-201
of the UCC), as to whether any event, circumstance, or thing envisaged in this
Agreement is or would be "material" or "adverse", as such terms are used herein.
33. EXPENSES. The Consignee agrees to pay on demand all out-of-pocket
expenses of Scotiabank (including reasonable attorneys' fees), in connection
with (i) the negotiation, preparation, execution and delivery of this Agreement
and the other Consignment Documents, including any amendments, waivers,
consents, supplements or other modifications to this Agreement and the other
Consignment Documents as may from time to time hereafter be required, whether or
not the transactions contemplated hereby are consummated, (ii) the preparation
and review of the form of any document or instrument relevant to this Agreement
and the other Consignment Documents, (iii) the filing, recording, refilling or
recording of any Uniform Commercial Code financing statements relating thereto
and all amendments, supplements and modifications to any thereof and any and all
other documents or instruments of further assurance required to be filed or
recorded or refiled or rerecorded by the terms hereof; (iv) the exercise by
Scotiabank of its examination rights as set forth in and subject to paragraph
23(a) and (v) the administration and monitoring of this Agreement and the other
Consignment Documents, and compliance of the parties hereto with respect to the
terms hereof.
34. SURVIVAL. The obligations of the Consignee under paragraphs 25,
26, 29 and 33 shall survive any termination of this Agreement, the payment in
full of all Obligations,
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the return to the Scotiabank of all Gold and the termination of the Commitment.
The representations and warranties made by the Consignee in this Agreement and
in each other Consignment Document shall survive the execution and delivery of
this Agreement and each such other Consignment Document.
35. SEVERABILITY. Any provision of this Agreement or any other
Consignment Document which is prohibited or unenforceable in any jurisdiction
shall, as to such provision and such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or such other Consignment Document or affecting the
validity or enforceability of such provision in any other jurisdiction.
36. EXECUTION IN COUNTERPARTS, EFFECTIVENESS, ETC. This Agreement may
be executed by the parties hereto in several counterparts, each of which shall
be deemed to be an original and all of which shall constitute together but one
and the same agreement. This Agreement shall become effective when counterparts
hereof executed on behalf of the Consignee and Scotiabank (or notice thereof
satisfactory to Scotiabank) shall have been received by Scotiabank and notice
thereof shall have been given by Scotiabank to the Consignee.
37. FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY
OTHER CONSIGNMENT DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF SCOTIABANK OR THE CONSIGNEE
SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE CITY AND STATE
OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK; PROVIDED, HOWEVER. THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT SCOTIABANK'S OPTION, IN THE
COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.
THE CONSIGNEE HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS, FOR ITSELF AND TO THE
EXTENT PERMITTED BY APPLICABLE LAW, ITS PROPERTY, TO THE JURISDICTION OF THE
COURTS OF THE CITY AND STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS
SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH SUCH LITIGATION. THE CONSIGNEE FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY
PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. THE CONSIGNEE HEREBY
EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY
SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT
ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT
THAT THE CONSIGNEE HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION
OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
-20-
<Page>
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE CONSIGNEE HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE OTHER CONSIGNMENT DOCUMENTS.
38. WAIVER OF JURY TRIAL. SCOTIABANK AND THE CONSIGNEE HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR BASED, OR ARISING OUT
OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER CONSIGNMENT
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF SCOTIABANK OR THE CONSIGNEE. THE CONSIGNEE
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER CONSIGNMENT DOCUMENT
TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR
SCOTIABANK ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER CONSIGNMENT
DOCUMENT.
-21-
<Page>
If the foregoing terms and conditions are satisfactory, please so
indicate by executing on the enclosed copy of this Agreement the form of
acceptance and returning it to us on or before July 27, 2000, failing which this
offer will expire.
Yours truly,
THE BANK OF NOVA SCOTIA
By: /s/ Joseph A. Lasiewski
-------------------------------------
Its: Director - Metals Operations
By: /s/ Randy M. Weinerman
-------------------------------------
Its: Senior Manager
ACCEPTED:
Dated: July 27, 2000.
COMMEMORATIVE BRANDS, INC.
By: /s/ David B. Pittaway
-----------------------------
Name: David B. Pittaway
Title: Vice President
-22-
<Page>
EXHIBIT A
PLANTS AND APPROVED INVENTORY LOCATIONS
PLANTS
OWNED PROPERTY:
1. 7211 Circle S Road, Austin, TX
LEASED PROPERTY:
1. 7101 Intermodal Drive, Louisville, KY
2. 6404 Burleson Road, Suite 120, Austin, TX
3. 15 John Dietsch Boulevard, North Attleboro, MA
4. 4605 Osborn, El Paso, TX
APPROVED INVENTORY LOCATIONS
1. Richards and West, 1255 University Avenue, Rochester, NY; Contract
Manufacturer
2. Stern Leach, 49 Pearl Street, Attleboro, MA; Refiner
3. Pease and Curren, 75 Pennsylvania Avenue, Worwick, RI; Refiner
4. Hereaus, 65 Euclid Avenue, Newark, NJ; Refiner
5. Metalor, 225 John Diestch Boulevard, North Attleboro, MA; Refiner
6. OK Casting, 3520 Charleston Road, Norman, OK; Contract Manufacturer
7. AuraFin, 770 International Parkway, Sunrise, FL; Contract Manufacturer
8. Traditional Heritage, 3051 Rd. 591, Ponce, PR; Contract Manufacturer
9. Dunhams, 7365 Remeon, Suite 8204, El Paso, TX; Contract Manufacturer
A-1
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EXHIBIT B
FORM OF CONSIGNMENT REQUEST
The Bank of Nova Scotia,
as Consignor
One Liberty Plaza
New York, New York 10006
Attention: Director of Operations
Re: COMMEMORATIVE BRANDS, INC.
Gentlemen and Ladies:
This Consignment Request is delivered to you pursuant to paragraph
19(f) of the Letter Agreement for Fee Consignment and Purchase of Gold dated as
of July 27, 2000 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the "Agreement"), between Commemorative Brands,
Inc., a Delaware corporation (the "Consignee") and The Bank of Nova Scotia
("Scotiabank"). Unless otherwise defined herein or the context otherwise
requires, terms used herein have the meanings provided in (or by reference in)
the Agreement.
The Consignee hereby requests that Scotiabank make a consignment of
__________ troy ounces of Gold to the Consignee on _________ __, 200_ for a
Consignment term of ________ month(s) to be delivered to the [Plant][Approved
Inventory Location] located at ___________________________________. The proposed
Value Date is __________, 200__.
The Consignee hereby certifies and warrants that both before and after
giving effect to the consignments requested HEREBY, all statements set forth in
clauses (a), (b), (c), (d) and (e) of paragraph 19 of the Agreement are true and
correct in all material respects, and all conditions to consignment in clauses
(a), (b), (c), (d) and (e) of such paragraph have been satisfied.
The Consignee agrees that if prior to the time of the making of the
consignment requested hereby any matter certified to herein by it will not be
true and correct at such time as if then made, it will immediately so notify
Scotiabank. Except to the extent, if any, that prior to the time of the making
of the consignment requested hereby Scotiabank shall receive written notice to
the contrary from the Consignee, each matter certified to herein shall be deemed
once again to be certified as true and correct at the date of the making of such
consignment as if then made.
B-1
<Page>
The Consignee has caused this Consignment Request to be executed and
delivered, and the certification arid warranties contained herein to be made, by
its duly Authorized Officer this ____ day of _________________, 200__.
COMMEMORATIVE BRANDS, INC.
By:
--------------------------------------
Title:
B-2
<Page>
EXHIBIT C
FORM OF GUARANTY
GUARANTY
THIS GUARANTY dated as of July 27, 2000, is executed in favor of The
Bank of Nova Scotia ("Scotiabank").
W I T N E S S E T H:
WHEREAS, Commemorative Brands, Inc. (the "Company") has entered into a
Letter Agreement for Fee Consignment and Purchase of Gold dated as of even date
herewith (as amended or otherwise modified from time to time, the "Consignment
Agreement"; capitalized terms used herein but not otherwise defined have the
respective meanings set forth in the Consignment Agreement) with Scotiabank
pursuant to which Scotiabank has agreed to deliver Gold to the Company on
consignment subject to the terms and conditions set forth therein.
WHEREAS, the operations of the undersigned are integrated with those
of the Company to such an extent that the financial strength and flexibility of
the Company have a direct impact on the undersigned; and
WHEREAS, the undersigned will benefit from the consignment of Gold to
the Company pursuant to the Consignment Agreement and is willing to guaranty the
Liabilities (as defined below) as hereinafter set forth;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned hereby
unconditionally, as primary obligor and not merely as surety, guarantees the
full and prompt payment when due, whether by acceleration or otherwise, and at
all times thereafter, of all obligations (monetary or otherwise) of the Company
to Scotiabank, howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent, now or hereafter existing, or due or to become
due, which arise out of or in connection with the Consignment Agreement, any
other Consignment Document or any document or instrument executed in connection
therewith, in each case as the same may be amended, modified, extended or
renewed from time to time, and all costs and expenses paid or incurred by
Scotiabank in enforcing this Guaranty against the undersigned (all such
obligations, costs and expenses being herein collectively called the
"Liabilities"); PROVIDED, HOWEVER, that the liability of the undersigned
hereunder shall be limited to the maximum amount of the Liabilities which the
undersigned may guaranty without violating any fraudulent conveyance or
fraudulent transfer law.
The undersigned agrees that, in the event of the dissolution or
insolvency of the Company or the undersigned, or the inability or failure of the
Company or the undersigned to pay debts as they become due, or an assignment by
the Company or the undersigned for the benefit of creditors, or the occurrence
of any other Event of Default (as defined in the Consignment Agreement) under
paragraphs 17(d) or 17(e) of the Consignment Agreement, and if such event shall
occur at a time when any of the Liabilities may not then be due and payable,
C-1
<Page>
the undersigned will pay to Scotiabank forthwith the full amount which would be
payable hereunder by the undersigned if all Liabilities were then due and
payable.
This Guaranty shall in all respects be a continuing, absolute and
unconditional guaranty, and shall remain in full force and effect
(notwithstanding, without limitation, the dissolution of the undersigned or that
at any time or from time to time no Liabilities are outstanding) until the
Commitment (as defined in the Consignment Agreement) has terminated and all
Liabilities have been paid in full.
The undersigned further agrees that if at any time all or any part of
any payment theretofore applied by Scotiabank to any of the Liabilities is or
must be rescinded or returned by Scotiabank for any reason whatsoever
(including, without limitation, the insolvency, bankruptcy or reorganization of
the Company or the undersigned), such Liabilities shall, for the purposes of
this Guaranty, to the extent that such payment is or must be rescinded or
returned, be deemed to have continued in existence, notwithstanding such
application by Scotiabank, and this Guaranty shall continue to be effective or
be reinstated, as the case may be, as to such Liabilities, all as though such
application by Scotiabank had not been made.
Scotiabank may, from time to time, at its sole discretion and without
notice to the undersigned, take any or all of the following actions: (a) retain
or obtain the primary or secondary obligation of any obligor or obligors, in
addition to the undersigned, with respect to any of the Liabilities, (b) extend
or renew any of the Liabilities for one or more periods (whether or not longer
than the original period), alter or exchange any of the Liabilities, or release
or compromise any obligation of the undersigned hereunder or any obligation of
any nature of any other obligor with respect to any of the Liabilities, (c)
release its security interest in, or surrender, release or permit any
substitution or exchange for, all or any part of any property securing any of
the Liabilities or any obligation hereunder, or extend or renew for one or more
periods (whether or not longer than the original period) or release, compromise,
alter or exchange any obligations of any nature of any obligor with respect to
any such property, and (d) resort to the undersigned for payment of any of the
Liabilities when due, whether or not Scotiabank shall have resorted to any
property securing any of the Liabilities or any obligation hereunder or shall
have proceeded against any other obligor primarily or secondarily obligated with
respect to any of the Liabilities.
Notwithstanding any payment made by or for the account of the
undersigned pursuant to this Guaranty, the undersigned shall not be subrogated
to any rights of Scotiabank until such time as this Guaranty shall have been
discontinued and Scotiabank shall have received payment of the full amount of
all liabilities of the undersigned hereunder.
The undersigned hereby expressly waives: (a) notice of the acceptance
by Scotiabank of this Guaranty, (b) notice of the existence or creation or
non-payment of all or any of the Liabilities, (c) presentment, demand, notice of
dishonor, protest, and all other notices whatsoever, and (d) all diligence in
collection or protection of or realization upon any Liabilities or any security
for or guaranty of any Liabilities.
The creation or existence from time to time of additional Liabilities
to Scotiabank is hereby authorized, without notice to the undersigned, and shall
in no way affect or impair the rights of Scotiabank or the obligations of the
undersigned under this Guaranty.
C-2
<Page>
No delay on the part of Scotiabank in the exercise of any right or
remedy shall operate as a waiver thereof, and no single or partial exercise by
Scotiabank of any right or remedy shall preclude other or further exercise
thereof or the exercise of any other right or remedy; nor shall any modification
or waiver of any provision of this Guaranty be binding upon Scotiabank except as
expressly set forth in a writing duly signed and delivered on behalf of
Scotiabank. No action of Scotiabank permitted hereunder shall in any way affect
or impair the rights of Scotiabank or the obligations of the undersigned under
this Guaranty. For purposes of this Guaranty, Liabilities shall include all
obligations of the Company to Scotiabank arising under or in connection with the
Consignment Agreement or any other Consignment Document, notwithstanding any
right or power of the Company or anyone else to assert any claim or defense as
to the invalidity or unenforceability of any obligation, and no such claim or
defense shall affect or impair the obligations of the undersigned hereunder.
Pursuant to the Consignment Agreement, (a) this Guaranty has been
delivered to Scotiabank and (b) Scotiabank has been authorized to enforce this
Guaranty on behalf of itself. All payments by the undersigned pursuant to this
Guaranty shall be made to Scotiabank.
This Guaranty shall be binding upon the undersigned and the successors
and assigns of the undersigned; and to the extent that the Company or the
undersigned is either a partnership or a corporation, all references herein to
the Company and to the undersigned, respectively, shall be deemed to include any
successor or successors, whether immediate or remote, to such partnership or
corporation.
This Guaranty shall be construed in accordance with and governed by
the internal laws of the State of New York. Wherever possible each provision of
this Guaranty shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Guaranty shall be prohibited
by or invalid under such law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
This Guaranty may be executed in any number of counterparts, and each
such counterpart shall be deemed to be an original but all such counterparts
shall together constitute one and the same Guaranty.
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS GUARANTY OR ANY OTHER CONSIGNMENT DOCUMENT SHALL BE BROUGHT AND
MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER,
THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY
BE BROUGHT, AT SCOTIABANK'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE UNDERSIGNED HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. THE UNDERSIGNED
FURTHER
C-3
<Page>
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, TO THE ADDRESS SET FORTH BELOW ITS SIGNATURE HERETO (OR SUCH OTHER
ADDRESS AS IT SHALL HAVE SPECIFIED IN WRITING TO SCOTIABANK AS ITS ADDRESS FOR
NOTICES HEREUNDER) OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW
YORK. THE UNDERSIGNED HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO
ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. TO THE EXTENT THAT THE UNDERSIGNED HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE UNDERSIGNED
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
GUARANTY AND THE OTHER CONSIGNMENT DOCUMENTS.
THE UNDERSIGNED, AND (BY ACCEPTING THE BENEFITS HEREOF) SCOTIABANK,
HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS GUARANTY, ANY OTHER CONSIGNMENT DOCUMENT
AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN
THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY
LENDING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND
AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
C-4
<Page>
IN WITNESS WHEREOF, this Guaranty has been duly executed and delivered
as of the day and year first above written.
COMMEMORATIVE BRANDS HOLDING CORP.
By:
--------------------------------
Name:
Title:
Address:
c/o Castle Harlan Partners III, L.P.
150 East 58th Street
37th Floor
New York, New York 10155
Attention: David B. Pittaway
Facsimile: (212) 207-8042
C-5
<Page>
EXHIBIT D
FORM OF BORROWING BASE CERTIFICATE
The Bank of Nova Scotia
One Liberty Plaza
New York, New York 10006
Re: Letter Agreement for Fee Consignment and Purchase of Gold, dated
as of July 27, 2000 (as amended or otherwise modified from time
to time, the "Gold Cosignment Agreement") between Commemorative
Brands, Inc. and The Bank of Nova Scotia
Ladies/Gentlemen:
Terms to which meanings are ascribed in the Gold Consignment Agreement
are used in this Borrowing Base Certificate with such meanings.
The Company hereby certifies that the Dollar Value of Gold held on
consignment under the Gold Consignment Agreement on ________________ did not
exceed the Borrowing Base. The related computations are set forth in SCHEDULE I
hereto.
IN WITNESS WHEREOF, the Company has caused this Borrowing Base
Certificate to be executed and delivered by its chief financial officer on the
____ day of _______________, ___.
COMMEMORATIVE BRANDS, INC.
By:
--------------------------------------
Name:
Title:
D-1
<Page>
SCHEDULE I
TO
BORROWING BASE CERTIFICATE
<Table>
1. GOLD AT THE COMPANY'S PLANTS
1A. Dollar Value of Gold located at the Company's Plants $______
1B. Percentage of the Dollar Value of Gold located at the Company's Plants 90%
included in Borrowing Base
1C. Margined Dollar Value of Gold located at the Company's Plants (item 1A $______
times item 1B)
2. GOLD AT APPROVED INVENTORY LOCATIONS
2A. Dollar Value of Gold located at Approved Inventory Locations $______
2B. Percentage of the Dollar Value of Gold located at Approved Inventory 70%
Locations included in Borrowing Base
2C. Margined Dollar Value of Gold located at Approved Inventory Locations (item $______
2A times item 2B)
3. GOLD WITH COMPANY'S SALESPERSONS
3A. Dollar Value of Gold located with the Company's salespersons, bookstores $______
and jewelry stores as samples
3B. Percentage of the Dollar Value of Gold located with the Company's 40%
salespersons, bookstores and jewelry stores as samples included in
Borrowing Base
3C. Margined Dollar Value of Gold located with the Company's salespersons, $______
bookstores and jewelry stores as samples (the lesser of: (i) item 3A times
item 3B or (ii) $1,000,000)
4. GOLD AT APPROVED REFINERS
4A. Dollar Value of Gold located at approved refiners $______
4B. Percentage of the Dollar Value of Gold located at approved refiners 70%
included in Borrowing Base
</Table>
Sched. I-1
<Page>
<Table>
4C. Margined Dollar Value of Gold located at approved refiners (item 4A times $______
item 4B)
5. GOLD IN STERN LEACH POOLED ACCOUNT
5A. Dollar Value of Gold located in pooled account with Stern Leach $______
5B. Percentage of the Dollar Value of Gold located in pooled account with Stern 90%
Leach included in Borrowing Base
5C. Margined Dollar Value of Gold located in pooled account with Stern Leach $______
(item 5A times item 5(C)
6. BORROWING BASE $______
(item 1C + item 2C + item 3C + item 4C + item 5C)
7. DOLLAR VALVE OF GOLD ON CONSIGNMENT $______
8. ACCOUNTS SUBJECT TO SECURITY INTEREST
8A. Aggregate amount owing by the Company to Scotiabank for Gold purchased from $______
Scotiabank
83. Accounts receivable of Account Debtors to the Company with respect to Gold $______
purchased from Scotiabank
8C. Accounts receivable subject to lien of Scotiabank (lesser of item 8A and $______
item 8B)
</Table>
Sched. I-2
<Page>
If the foregoing terms and conditions are satisfactory, please so
indicate by executing on the enclosed copy of this Agreement the form of
acceptance and returning it to us on or before July __, 2000, failing which this
offer will expire.
Yours truly,
THE BANK OF NOVA SCOTIA
By: /s/ Joseph A. Lasiewski
--------------------------------------
Its: Director - Metals Operations
By: /s/ Randy M. Weinerman
--------------------------------------
Its: Senior Manager
ACCEPTED
Dated: July __, 2000.
COMMEMORATIVE BRANDS, INC.
By: /s/ David B. Pittaway
-----------------------------
Name: David B. Pittaway
Title: Vice President
Sched. I-3
<Page>
PLANTS AND APPROVED LOCATIONS
OWNED PROPERTY:
1. 7211 Circle S Road, Austin, TX
LEASED PROPERTY:
1. 7101 Intermodal Drive, Louisville, KY
2. 6404 Burleson Road, Suite 120, Austin, TX
3. 15 John Dietsch Boulevard, North Attleboro, MA
4. 4605 Osborn, El Paso, TX
5. Fulton #820, Parque Industrial Antonio J. Bermudez, Juarez, Chihuahua,
Mexico
MANUFACTURER AND REFINERS:
1. Stem Leach, 49 Pearl Street, Attleboro, MA; Refiner
2. Pease and Curren, 75 Pennsylvania Avenue, Worwick, RI; Refiner
3. Hereaus, 65 Euclid Avenue, Newark, NJ; Refiner
4. Handy & Harmon, 300 Rye Street, South Windsor, CT; Refiner
5. Metalor, 225 John Diestch Boulevard, North Attleboro, MA; Refiner
6. OK Casting, 3520 Charleston Road, Norman, OK; Contract Manufacturer
7. AuraFin, 770 International Parkway, Sunrise, FL; Contract Manufacturer
8. Traditional Heritage, 3051 Rd. 591, Ponce, PR; Contract Manufacturer
9. Dunhams, 7365 Remeon, Suite 8204, El Paso, TX; Contract Manufacturer
10. Richards and West, 1255 University Avenue, Rochester, NY; Contract
Manufacturer
11. Herbert Stephan, Hauptstrasse 282 Idar-Oberstein Germany; Contract
Manufacturer (manufactures synthetic stones and holds approximately
$80,000 worth of stones belonging to CBI)
Sched. I-5