EXHIBIT 10.13
FIFTH AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT ("Amendment"), made as of April 30, 2002, by
and among the parties identified as "Lenders" on the signature pages to this
Amendment ("Lenders"), CITICORP USA, INC., as agent for the Lenders (herein, in
such capacity as agent, called "Agent"), and MAYOR'S JEWELERS, INC., formerly
known as JAN BELL MARKETING, INC., a Delaware corporation ("Jan Bell"),
individually and as "Borrowers' Agent", as defined in the "Loan Agreement"
referenced below, JBM RETAIL COMPANY, INC., a Delaware corporation ("JBM"), and
MAYOR'S JEWELERS, INC., a Florida corporation ("Mayor's") (Jan Bell, JBM and
Mayor's hereinafter referred to collectively as the "Borrowers" and each
individually as a "Borrower").
WITNESSETH:
WHEREAS, Borrowers, Lenders and the Agent are parties to a
Loan and Security Agreement, dated as of July 28, 1998 (herein, as amended to
date, including, without limitation, pursuant to a Fourth Amendment to Loan and
Security Agreement, dated as of September 14, 2001 ("Fourth Amendment"), the
"Loan Agreement"), pursuant to which Lenders have agreed to extend certain
credit to Borrowers upon the terms and conditions contained therein; and
WHEREAS, pursuant to the Fourth Amendment, so long as
Borrowers remained in compliance with the requirements of Section 5.3(F) of the
Loan Agreement, Lenders agreed to waive temporarily, through April 30, 2002,
Events of Default resulting from Borrowers' failure to comply with the
requirements of Sections 5.03(B), (C) and (D) for the third Fiscal Quarter 2001
and/or the fourth Fiscal Quarter 2001; and
WHEREAS, Borrowers have requested that Lenders extend such
waiver through May 31, 2002 and expand such temporary waiver to include a
temporary waiver, through May 31, 2002, of (i) Events of Default resulting from
Borrowers' failure to comply with the requirements of Sections 5.3 (B), (C) and
(D) of the Loan Agreement for the first Fiscal Quarter 2002, (ii) the Event of
Default resulting from Borrowers' failure to deliver to the Agent Borrowers'
audited financial statements for their Fiscal Year ending on or about January
31, 2002 within ninety (90) days after such Fiscal Year end as required
pursuant to Section 5.1(H)(i) of the Loan Agreement, accompanied by the
gemological report required to be delivered pursuant to Section 5.1(K) of the
Loan Agreement, and (iii) the Event of Default resulting from Borrowers'
failure to deliver to the Agent Borrowers' unaudited interim financial
statements for their Fiscal Month ending on or about February 28, 2003 as
required pursuant to Section 5.1(H)(iii) of the Loan Agreement; and
WHEREAS, subject to the terms and conditions set forth herein
Lenders are willing to extend and expand their temporary waiver in the manner
described hereinabove; and
WHEREAS, Borrowers, Lenders and the Agent desire to enter
into this Amendment in order to evidence their mutual agreement in regard to
such extension and expansion and certain other matters;
NOW, THEREFORE, in consideration of the foregoing premises,
Borrowers, the Agent and Lenders agree as follows:
1. Definitions. Unless otherwise expressly provided herein, all
capitalized terms used herein (without definition) shall have the meanings
given to such terms in the Loan Agreement.
2. Amendment to Definition of Borrowing Availability.
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(a) Effective during the period commencing on May 1,
2002 and ending on May 30, 2002, clause (ii) of the first sentence of
the definition of Borrowing Availability (as previously amended
pursuant to the Fourth Amendment) is hereby amended to read as
follows:
(ii) up to 61.795%, during the period from May
1, 2002 through May 10, 2002, 61.250%, during the period from
May 11, 2002 through May 20, 2002, and 60.500%, during the
period from May 21, 2002 through May 30, 2002, of the value
of Eligible Inventory of Borrowers at such date, calculated
on the basis of the lower of cost or market value, with cost
calculated on a first in, first out basis, and with the exact
percentages within such range applicable to various types of
Eligible Inventory of each Borrower to be determined by the
Agent from time to time (as to which indicative percentages
are specified below in this definition);
(b) Effective during the period commencing on May 1,
2002 and ending on May 30, 2002 the phrase "Up to 65%" set forth
opposite the description "Eligible Inventory (exclusive of jewelry
parts and watch parts)" in the table included in the definition of
Borrowing Availability shall be amended to incorporate the advance
percentages set forth in paragraph (a) above.
(c) Effective on May 31, 2002, the amendments set forth
herein shall be rescinded and the definition of "Borrowing
Availability" shall once again read as set forth in the Loan
Agreement, after giving effect to the Fourth Amendment thereto.
3. Amendment to Section 3.1. Section 3.1 of the Loan Agreement
is hereby amended by deleting subsection (B) thereof in its entirety and
substituting in lieu thereof the following revised subsection (B):
(B) Commitment Fee. Borrowers, jointly and
severally, agree to pay to Agent for the account of Lenders
(each to receive a Pro Rata Share thereof) an amount equal to
(i) the maximum amount of the Revolver Facility less the
average daily balance of the sum of all Revolver Loans and
all outstanding Letters of Credit during the preceding month,
multiplied by (ii) .375% per annum, monthly in arrears on the
first day of each month.
4. Amendment to Section 5.3. Section 5.3 of the Loan Agreement
is hereby amended by deleting the paragraph added to Section 5.3 after
subsection (F) thereof pursuant to Section 6(b) of the Fourth Amendment and
substituting in lieu thereof the following paragraph immediately after
subsection (F) thereof:
Lenders hereby agree that during the period
commencing on the date of the Fifth Amendment to Loan and
Security Agreement, among Borrowers, Lenders and the Agent,
and ending on May 31, 2002 ("Waiver End Date"), so long as
Jan Bell and its Subsidiaries are in compliance with the
requirements of the preceding subsection (F), none of (i) the
failure of Jan Bell and its Subsidiaries to comply (or to
have complied) with the requirements of the preceding
subsections (B), (C) and (D) for the third Fiscal Quarter
2001, the fourth Fiscal Quarter 2001 and/or the first Fiscal
Quarter 2002, (ii) the failure of Borrowers to have delivered
to the Agent their audited financial statements for their
Fiscal Year ending on or about January 31, 2002 within ninety
(90) days after such Fiscal Year end as required pursuant to
Section 5.1(H)(i), accompanied by the gemological review
required pursuant to Section 5.1(K), or (iii) the failure of
Borrowers to have delivered to the Agent their unaudited
interim financial statements for their Fiscal Month ending on
or about February 28, 2002 within thirty (30) days after such
Fiscal Month end as required pursuant to Section 5.1(H)(iii)
shall constitute Events of Default; provided, however, that
on the Waiver End Date, such failures of Borrowers to have
complied with such provisions shall constitute Events of
Default.
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5. Conditions Precedent. The amendments set forth herein shall
not become effective unless and until:
(a) Borrowers have delivered to the Agent unaudited
interim financial statements for Jan Bell and its Subsidiaries for the
Fiscal Month ending on or about February 28, 2002, prepared in the
manner required pursuant to Section 5.1(H)(iii) of the Loan Agreement
and certified by an Authorized Officer in the manner required pursuant
to such Section 5.1(H)(iii).
(b) Borrowers have delivered to the Agent internally
prepared financial statements for Jan Bell and its Subsidiaries for
the Fiscal Year ending on or about January 31, 2002, prepared on a
consolidated basis and on a consolidating basis by line of business,
certified by an Authorized Officer as prepared in accordance with GAAP
and fairly presenting the consolidated financial position and result
of operations of Jan Bell and its Subsidiaries for such Fiscal Year
subject only to audit adjustments.
(c) Borrowers have delivered to the Agent projections of
Excess Collateral Availability demonstrating Borrowers' ability to
comply with the requirements of Section 5.3(F) through the Waiver End
Date.
(d) Borrowers have paid to the Agent, for the account of
Lenders, the sum of $25,053 which constitutes additional commitment
fees payable pursuant to Section 3.1(B) of the Loan Agreement for the
period from February, 2001 through January, 2002, after giving effect
to the increase in the fee multiplier from .25% per annum to .375% per
annum for such period pursuant to such Section 3.1(B).
6. Additional Covenant. Borrowers will not hereafter pay (a)
severance payments to any terminated officers of Borrowers or (ii) settlement
payments, termination payments or any other similar payments to the landlords
of Borrowers under real estate leases in connection with the abandonment or
termination of any such leases. Any failure of Borrowers to comply with the
foregoing covenant shall constitute an Event of Default as to which there shall
be no cure right.
7. Miscellaneous.
(a) Effect of Amendment. Except as set forth expressly
herein, all terms of the Loan Agreement, as amended hereby, shall be
and remain in full force and effect and shall constitute the legal,
valid, binding and enforceable obligations of Borrowers to the Agent
and Lenders. To the extent any terms and conditions in any of the Loan
Documents shall contradict or be in conflict with any terms or
conditions of the Loan Agreement, after giving effect to this
Amendment, such terms and conditions are hereby deemed modified and
amended accordingly to reflect the terms and conditions of the Loan
Agreement as modified and amended hereby. This Amendment may be signed
in multiple counterparts, all of which shall constitute one and the
same agreement.
(b) Ratification. Borrowers hereby restate, ratify and
reaffirm each and every term and condition set forth in the Loan
Agreement, as amended hereby, and the Loan Documents, effective as of
the date hereof.
(c) Estoppel. To induce the Agent and Lenders to enter
into this Amendment, Borrowers hereby acknowledge and agree that, as
of the date hereof, after giving effect to this Amendment, no Default
or Event of Default has occurred and is continuing and, in addition,
there exists no right of offset, defense, counterclaim or objection in
favor of Borrowers with respect to any Obligations.
(d) Governing Law. This Amendment shall be governed by,
and construed in accordance with, the internal laws (and not the laws
of conflicts) of the State of New York.
(e) Costs and Expenses. Borrowers agree to pay on demand
all costs and expenses of the Agent in connection with the
preparation, execution, delivery and enforcement of this Amendment and
all other Loan Documents executed in connection herewith, the closing
hereof, and any other transactions contemplated hereby, including the
fees and out-of-pocket expenses of the Agent's counsel.
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IN WITNESS WHEREOF, this Amendment has been duly executed by
the parties hereto as of the date first above written.
"BORROWER"
MAYOR'S JEWELERS, INC., formerly known as
Jan Bell Marketing, Inc.
By:
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Name:
-----------------------------------
Title:
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MAYOR'S JEWELERS, INC.
By:
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Name:
-----------------------------------
Title:
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JBM RETAIL COMPANY, INC.
By:
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Name:
-----------------------------------
Title:
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"AGENT"
CITICORP USA, INC.
By:
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Name: Miles D. McManus
Title: Director
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"LENDERS"
CITICORP USA, INC.
By:
----------------------------------------
Name: Miles D. McManus
Title: Director
FLEET RETAIL FINANCE INC., f/k/a
BankBoston Retail Finance, Inc.
By:
----------------------------------------
Name: Keith Vercauteren
Title: Vice President
FOOTHILL CAPITAL CORPORATION
By:
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Name: Michael Baranowski
Title: Vice President
FIRST UNION NATIONAL BANK
By:
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Name: Richard Preskenis
Title: Vice President
NATIONAL CITY COMMERCIAL FINANCE, INC.
By:
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Name: Dennis Hatvany
Title: Vice President
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ACKNOWLEDGMENT OF GUARANTORS
Each of the undersigned, being a guarantor, pursuant to certain
Corporate Guaranty and Security Agreement, dated as of July 28, 1998
(collectively, the "Guaranty"), of the obligations of Jan Bell Marketing, Inc.,
JBM Retail Company, Inc. and Mayor's Jewelers, Inc. (collectively, "Borrowers")
under the "Loan Agreement" referenced in the within and foregoing Fifth
Amendment to Loan and Security Agreement among the lenders named therein,
Citicorp USA, Inc., as agent for such lenders, and Borrowers (the "Fifth
Amendment") hereby (a) acknowledges its receipt of a copy of, and consents to
the Fifth Amendment, (b) agrees to be bound thereby and (c) acknowledges and
agrees that the Guaranty shall continue in full force and effect from and after
the execution and delivery of the Fifth Amendment without modification,
diminution or impairment.
IN WITNESS WHEREOF, the undersigned have set their hands as of the
_____ day of April, 2002.
JBM VENTURE CO., INC.
By:
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Name:
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Title:
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ULTIMATE FINE JEWELRY INTERNATIONAL, INC.
By:
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Name:
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Title:
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JBM INTERNATIONAL, INC.
By:
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Name:
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Title:
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MAIER & BERKELE, INC.
By:
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Name:
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Title:
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MAYOR'S JEWELERS INTELLECTUAL PROPERTY
HOLDING COMPANY
By:
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Name:
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Title:
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MAYOR'S JEWELERS RECEIVABLES HOLDING
COMPANY
By:
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Name:
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Title:
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AMERICAN HOROGICAL CORPORATION
By:
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Name:
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Title:
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JAN BELL MARKETING/PUERTO RICO, INC.
By:
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Name:
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Title:
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