AMENDED AND RESTATED SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT (this "Agreement"), dated as of
March 30, 2001, between FINLAY FINE JEWELRY CORPORATION, a Delaware corporation
("Finlay"), eFINLAY, INC., a Delaware corporation ("eFinlay" and, together with
Finlay and such other Subsidiaries of Finlay which may from time to time become
party hereto, the "Companies"), and SOVEREIGN BANK (successor to Fleet National
Bank, f/k/a BankBoston, N.A., f/k/a The First National Bank of Boston, successor
to Rhode Island Hospital Trust National Bank) ("Sovereign"), a national banking
association (hereinafter, in such capacity, the "Agent") for itself and other
banking institutions (hereinafter, collectively, the "Institutions") which are
or may become parties to an Amended and Restated Gold Consignment Agreement of
even date herewith (as amended, restated or modified and in effect from time to
time, the "Consignment Agreement"), among the Companies, the Institutions and
the Agent.
WHEREAS, Finlay entered into a Gold Consignment Agreement dated as of June
15, 1995 (as amended or otherwise modified and in effect from time to time
immediately prior to the date hereof, the "Original Consignment Agreement"),
with Sovereign, pursuant to which Sovereign, subject to the terms and conditions
contained therein, agreed to make Purchases and Consignments (as defined
therein) to Finlay;
WHEREAS, Finlay entered into a Security Agreement dated as of June 15, 1995
(as amended or otherwise modified and in effect from time to time immediately
prior to the date hereof, the "Original Finlay Security Agreement") with
Sovereign, pursuant to which Finlay provided collateral security to secure the
due and prompt payment and performance of all of its Obligations (as defined in
the Original Consignment Agreement);
WHEREAS, eFinlay entered into the eFinlay Guaranty, dated as of September
29, 2000 (as amended or otherwise modified and in effect from time to time
immediately prior to the date hereof, the "eFinlay Guaranty") with Sovereign,
pursuant to which eFinlay guaranteed all of the Obligations (as defined in the
Original Consignment Agreement);
WHEREAS, eFinlay entered into the eFinlay Security Agreement dated as of
September 29, 2000 (as amended or otherwise modified and in effect from time to
time immediately prior to the date hereof, the "Original eFinlay Security
Agreement") with Sovereign, pursuant to which eFinlay provided collateral
security to secure the due and prompt payment and performance of the eFinlay
Guaranty;
WHEREAS, Finlay and eFinlay have entered into the Consignment Agreement,
pursuant to which Finlay, eFinlay, the Agent and the Institutions have
-2-
amended and restated the Original Consignment Agreement in its entirety, and
pursuant to which the Agent, subject to the terms and conditions contained
therein, agrees to make Purchases and Consignments (as defined therein) to
Finlay and eFinlay on behalf the Institutions;
WHEREAS, it is a condition precedent to the Agent's making any Purchases
and Consignments to Finlay and eFinlay under the Consignment Agreement on behalf
of the Institutions that Finlay and eFinlay amend and restate the Original
Finlay Security Agreement and the Original eFinlay Security Agreement in order
to confirm and continue the provision of collateral security to secure the due
and prompt payment and performance of all of Finlay's and eFinlay's Obligations
(as defined in the Consignment Agreement, the "Obligations"); and
WHEREAS, each Company (including, without limitation, Finlay and eFinlay)
wishes to grant security interests in favor of the Agent, for the benefit of the
Institutions and the Agent, as herein provided;
NOW, THEREFORE, in consideration of the promises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Definitions. All capitalized terms used herein without definitions shall
have the respective meanings provided therefor in the Consignment Agreement. All
terms defined in the Uniform Commercial Code of the Commonwealth of
Massachusetts and used herein shall have the same definitions herein as
specified therein.
2. Grant of Security Interest.
2.1. Collateral Granted. Subject to the terms and provisions of the
Intercreditor Agreement, each Company hereby grants to the Agent, for the
benefit of the Institutions and the Agent, to secure the payment and
performance in full of all of the Obligations, a security interest in and
so pledges and assigns to the Agent, for the benefit of the Institutions
and the Agent, the following properties, assets and rights of such Company,
wherever located, whether now owned or hereafter acquired or arising, and
all proceeds and products thereof (all of the same being hereinafter called
the "Collateral"):
All Specified Gold Jewelry, the Cash Collateral Account (as
defined in the Cash Collateral Agreement), all sums from time to time
in the Cash Collateral Account and all Time Deposits (as defined in
the Cash Collateral Agreement).
2.2. Delivery of Instruments, etc. Pursuant to the terms hereof and
subject to the terms of the Intercreditor Agreement, each Company has
endorsed, assigned and delivered to the Agent all negotiable or
non-negotiable
-3-
instruments, certificated securities and chattel paper pledged by it
hereunder, together with instruments of transfer or assignment duly
executed in blank as the Agent may have specified. In the event that any
Company shall, after the date of this Agreement, acquire any other
negotiable or non-negotiable instruments, certificated securities or
chattel paper to be pledged by it hereunder, such Company shall forthwith
endorse, assign and deliver the same to the Agent, accompanied by such
instruments of transfer or assignment duly executed in blank as the Agent
may from time to time specify.
2.3. Cash Collateral Agreement. Concurrently herewith each Company is
also executing and delivering to the Agent the Cash Collateral Agreement
pursuant to which each Company is granting a security interest in favor of
and pledging to the Agent, for the benefit of the Institutions and the
Agent, certain Collateral consisting of the Cash Collateral Account (as
defined therein), all sums from time to time in the Cash Collateral Account
and all Time Deposits (as defined therein). The provisions of the Cash
Collateral Agreement are supplemental to the provisions of this Agreement,
and nothing contained in the Cash Collateral Agreement shall derogate from
any of the rights or remedies of the Agent or any of the Institutions
hereunder. Nor shall anything contained in the Cash Collateral Agreement be
deemed to prevent or extend the time of attachment or perfection of any
security interest in such Collateral created hereby.
3. Title to Collateral, etc. Subject to the provisions of ss.2.1(c) of the
Consignment Agreement, the Companies are the owner of the Collateral free from
any adverse lien, security interest or other encumbrance, except for the
security interest created by this Agreement and other liens permitted by the
Consignment Agreement. None of the Collateral constitutes, or is the proceeds
of, "farm products" as defined in ss.9-109(3) of the Uniform Commercial Code of
the Commonwealth of Massachusetts. None of the account debtors in respect of any
accounts, chattel paper or general intangibles and none of the obligors in
respect of any instruments included in the Collateral is a governmental
authority subject to the Federal Assignment of Claims Act.
4. Continuous Perfection. Each Company's place of business or, if more than
one, chief executive office is indicated on the Perfection Certificates
delivered to the Agent herewith (the "Perfection Certificates"). No Company will
change the same, or the name, identity or corporate structure of any Company in
any manner, without providing at least thirty (30) days prior written notice to
the Agent. The Collateral, to the extent not delivered to the Agent pursuant to
ss.2.2 or the Cash Collateral Agreement, will be kept at those locations listed
on the Perfection Certificates and no Company will remove the Collateral from
such locations, without providing at least thirty (30) days prior written notice
to the Agent (or, to the extent that the giving of such prior written notice is
impracticable, as soon as is practicable, but in any event not less than ten
(10) days prior written notice).
-4-
5. No Liens. Except for the security interest herein granted and liens
permitted by the Consignment Agreement, the Companies shall be the owner of the
Collateral free from any lien, security interest or other encumbrance, and each
Company shall defend the same against all claims and demands of all persons at
any time claiming the same or any interests therein adverse to the Agent or any
of the Institutions. No Company shall pledge, mortgage or create, or suffer to
exist a security interest in the Collateral in favor of any person other than
the Agent, for the benefit of the Institutions and the Agent, except for liens
permitted by the Consignment Agreement or the Intercreditor Agreement.
6. No Transfers. No Company will sell or offer to sell or otherwise
transfer the Collateral or any interest therein except for, subject to the
provisions of the Consignment Agreement, sales of assets to the extent permitted
by the Consignment Agreement.
7. Insurance.
7.1. Maintenance of Insurance. Each Company will maintain with
financially sound and responsible insurers insurance with respect to its
properties and business against such casualties and contingencies as shall
be in accordance with general practices of businesses engaged in similar
businesses in similar geographic areas. Such insurance shall be in such
minimum amounts that such Company will not be deemed a co-insurer under
applicable insurance laws, regulations and policies and otherwise shall be
in such amounts, contain such terms, be in such forms and be for such
periods as may be reasonably satisfactory to the Agent. In addition, all
such insurance with respect to Specified Gold Jewelry shall be payable to
the Agent for the benefit of the Institutions and the Agent as additional
insured (with respect to liability insurance policies) or loss payee under
a "standard" or "New York" loss payee clause (with respect to property
insurance policies) as its interests may appear. Without limiting the
foregoing, each Company will (i) keep all of its physical property insured
with casualty or physical hazard insurance on an "all risks" basis, with
broad form flood and earthquake coverages and electronic data processing
coverage, with a full replacement cost endorsement and an "agreed amount"
clause in an amount equal to 100% of the full replacement cost of such
property, (ii) maintain all such workers' compensation or similar insurance
as may be required by law and (iii) maintain, in amounts and with
deductibles equal to those generally maintained by businesses engaged in
similar businesses in similar geographic areas, general public liability
insurance against claims of bodily injury, death or property damage
occurring, on, in or about the properties of such Company; business
interruption insurance; and product liability insurance.
7.2. Insurance Proceeds. The proceeds of any casualty insurance in
respect of any casualty loss of any of the Collateral shall, subject to the
rights,
-5-
if any, of other parties with a prior interest in the property covered
thereby, (i) so long as no Default or Event of Default has occurred and is
continuing and to the extent that the amount of such proceeds is less than
$50,000, be disbursed to the Companies for direct application by the
Companies solely to the repair or replacement of the Companies' property so
damaged or destroyed and (ii) in all other circumstances, be held by the
Agent as cash collateral for the Obligations. The Agent may, at its sole
option, disburse from time to time all or any part of such proceeds so held
as cash collateral, upon such terms and conditions as the Agent may
reasonably prescribe, for direct application by the Companies solely to the
repair or replacement of the Companies' property so damaged or destroyed,
or the Agent may apply all or any part of such proceeds to the Obligations
with the Total Commitment (if not then terminated) being reduced by the
amount so applied to the Obligations.
7.3. Notice of Cancellation, etc. All policies of insurance shall
provide for at least thirty (30) days prior written cancellation notice to
the Agent. In the event of failure by any Company to provide and maintain
insurance as herein provided, the Agent may, at its option, provide such
insurance and charge the amount thereof to the Companies. The Companies
shall, in accordance with the requirements of the Consignment Agreement,
furnish the Institution with certificates of insurance and policies
evidencing compliance with the foregoing insurance provision.
8. Maintenance of Collateral; Compliance with Law. Each Company will keep
the Collateral in good order and repair and will not use the same in violation
of law or any policy of insurance thereon. Subject to the provisions of the
Consignment Agreement, the Agent, or its designee, may inspect the Collateral at
any reasonable time, wherever located. In accordance with the provisions of the
Consignment Agreement, each Company will pay promptly when due all taxes,
assessments, governmental charges and levies upon the Collateral or incurred in
connection with the use or operation of such Collateral or incurred in
connection with this Agreement. Each Company has at all times operated, and each
Company will continue to operate, its business in compliance with all applicable
provisions of the federal Fair Labor Standards Act, as amended, and with all
applicable provisions of federal, state and local statutes and ordinances
dealing with the control, shipment, storage or disposal of hazardous materials
or substances except where the failure to so comply would not have a Materially
Adverse Effect.
9. Collateral Protection Expenses; Preservation of Collateral.
9.1. Expenses Incurred by Agent. In its discretion, upon the
occurrence and during the continuance of an Event of Default, the Agent may
discharge taxes, Liens and other encumbrances at any time levied or placed
on any of the Collateral (to the extent such taxes, Liens or encumbrances
are required to be discharged by any Company under the Consignment
-6-
Agreement), make repairs thereto and pay any necessary filing fees. The
Companies jointly and severally agree to reimburse the Agent on demand for
any and all expenditures so made. The Agent shall have no obligation to any
Company to make any such expenditures, nor shall the making thereof relieve
any Company of any default.
9.2. Agent's Obligations and Duties. Anything herein to the contrary
notwithstanding, each Company shall remain liable under each contract or
agreement comprised in the Collateral to be observed or performed by such
Company thereunder. Neither the Agent nor any Institution shall have any
obligation or liability under any such contract or agreement by reason of
or arising out of this Agreement or the receipt by the Agent or any
Institution of any payment relating to any of the Collateral, nor shall the
Agent or any Institution be obligated in any manner to perform any of the
obligations of any Company under or pursuant to any such contract or
agreement, to make inquiry as to the nature or sufficiency of any payment
received by the Agent or any Institution in respect of the Collateral or as
to the sufficiency of any performance by any party under any such contract
or agreement, to present or file any claim, to take any action to enforce
any performance or to collect the payment of any amounts which may have
been assigned to the Agent or to which the Agent or any Institution may be
entitled at any time or times. The Agent's sole duty with respect to the
custody, safe keeping and physical preservation of the Collateral in its
possession, under ss.9-207 of the Uniform Commercial Code of the
Commonwealth of Massachusetts or otherwise, shall be to deal with such
Collateral in the same manner as the Agent deals with similar property for
its own account.
10. Settlements and Deposits. Whether or not any Obligations are due, upon
the occurrence and during the continuance of a Default or an Event of Default,
the Agent may demand, xxx for, collect, or make any settlement or compromise
which it deems desirable with respect to the Collateral. Regardless of the
adequacy of Collateral or any other security for the Obligations, any deposits
or other sums at any time credited by or due from the Agent or any Institution
to the Company may at any time be applied to or set off against any of the
Obligations.
11. Notification to Account Debtors and Other Obligors. Subject to the
terms of the Intercreditor Agreement, if a Default or an Event of Default shall
have occurred and be continuing, each Company shall, at the request of the
Agent, notify account debtors on accounts, chattel paper and general intangibles
of such Company and obligors on instruments for which such Company is an obligee
of the security interest of the Agent in any account, chattel paper, general
intangible or instrument constituting Collateral and that payment thereof is to
be made directly to the Agent or to any financial institution designated by the
Agent as the Agent 's agent therefor, and the Agent may itself, if a Default or
an Event of Default shall have occurred and be continuing, without notice to or
demand upon any Company, so notify account
-7-
debtors and obligors. Subject to the terms of the Intercreditor Agreement, after
the making of such a request or the giving of any such notification, each
Company shall hold any proceeds of collection of accounts, chattel paper,
general intangibles and instruments received by such Company as trustee for the
Agent, for the benefit of the Institutions and the Agent, without commingling
the same with other funds of any Company and shall turn the same over to the
Agent in the identical form received, together with any necessary endorsements
or assignments. Subject to the terms of the Intercreditor Agreement, the Agent
shall apply the proceeds of collection of accounts, chattel paper, general
intangibles and instruments received by the Agent to the Obligations, such
proceeds to be immediately entered after final payment in cash or solvent
credits of the items giving rise to them.
12. Further Assurances. Each Company, at its own expense, shall do, make,
execute and deliver all such additional and further acts, things, deeds,
assurances and instruments as the Agent may reasonably require more completely
to vest in and assure to the Agent and the Institutions their respective rights
hereunder or in any of the Collateral, including, without limitation, (i)
executing, delivering and, where appropriate, filing financing statements and
continuation statements under the Uniform Commercial Code, and (ii) obtaining
any necessary or appropriate governmental and other third party consents and
approvals.
13. Power of Attorney.
13.1. Appointment and Powers of Institutions. Each Company hereby
irrevocably constitutes and appoints the Agent and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorneys-in-fact with full irrevocable power and authority in the place
and stead of such Company or in the Agent's own name, for the purpose of
carrying out the terms of this Agreement, to take any and all appropriate
action and to execute any and all documents and instruments that may be
necessary or desirable to accomplish the purposes of this Agreement and,
without limiting the generality of the foregoing, hereby gives said
attorneys the power and right, on behalf of such Company, without notice to
or assent by such Company, to do the following:
(a) upon the occurrence and during the continuance of a Default
or an Event of Default, subject to the terms of the Intercreditor
Agreement, generally to sell, transfer, pledge, make any agreement
with respect to or otherwise deal with any of the Collateral in such
manner as is consistent with the Uniform Commercial Code of the
Commonwealth of Massachusetts and as fully and completely as though
the Agent were the absolute owner thereof for all purposes, and to do
at the Companies' joint and several expense, at any time, or from time
to time, all acts and things which the Agent deems necessary to
protect, preserve or realize upon the Collateral and the Agent's
security interest
-8-
therein, in order to effect the intent of this Agreement, all as fully
and effectively as such Company might do, including, without
limitation, the execution, delivery and recording, in connection with
any sale or other disposition of any Collateral, of the endorsements,
assignments or other instruments of conveyance or transfer with
respect to such Collateral; and
(b) to file such financing statements with respect hereto, with
or without such Company's signature, or a photocopy of this Agreement
in substitution for a financing statement, as the Agent may deem
appropriate and to execute in such Company's name such financing
statements and amendments thereto and continuation statements which
may require such Company's signature.
13.2. Ratification by Companies. To the extent permitted by law, each
Company hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with
an interest and shall be irrevocable so long as any Obligations shall
remain outstanding and the Total Commitment shall not have been terminated.
13.3. No Duty on Agent. The powers conferred on the Agent hereunder
are solely to protect the interests of the Agent and the Institutions in
the Collateral and shall not impose any duty upon the Agent to exercise any
such powers. The Agent shall be accountable only for the amounts that it
actually receives as a result of the exercise of such powers and neither it
nor any of its officers, directors, employees or agents shall be
responsible to any Company for any act or failure to act, except for the
Agent's own gross negligence or willful misconduct.
14. Remedies. Subject to the terms of the Intercreditor Agreement, if an
Event of Default shall have occurred and be continuing, the Agent may, without
notice to or demand upon any Company, declare this Agreement to be in default,
and the Agent shall thereafter have in any jurisdiction in which enforcement
hereof is sought, in addition to all other rights and remedies, the rights and
remedies of a secured party under the Uniform Commercial Code, including,
without limitation, the right to take possession of the Collateral, and for that
purpose the Agent may, so far as the Companies can give authority therefor,
enter upon any premises on which the Collateral may be situated and remove the
same therefrom. Subject to the terms of the Intercreditor Agreement, the Agent
may in its discretion require each Company to assemble all or any part of the
Collateral at such location or locations reasonably convenient to the parties
within the state(s) of any Company's principal office(s) or at such other
locations reasonably convenient to the parties as the Agent may designate.
Unless the Collateral is perishable or threatens to decline speedily in value or
is of a type customarily sold on a recognized market, the Agent shall give to
the Companies at least five (5) Business Days prior written notice of the time
and place of any public
-9-
sale of Collateral or of the time after which any private sale or any other
intended disposition is to be made. Each Company hereby acknowledges that five
(5) Business Days prior written notice of such sale or sales shall be reasonable
notice. In addition, each Company waives any and all rights that it may have to
a judicial hearing in advance of the enforcement of any of the Agent's rights
hereunder, including, without limitation, its right following the occurrence and
during the continuance of an Event of Default to take immediate possession of
the Collateral and to exercise its rights with respect thereto. To the extent
that any of the Obligations are to be paid or performed by a person other than
the Companies, each Company waives and agrees not to assert any rights or
privileges which it may have under ss.9-112 of the Uniform Commercial Code of
the Commonwealth of Massachusetts.
15. No Waiver, etc. Each Company waives demand, notice (except as expressly
provided herein or in the Consignment Agreement), protest, notice of acceptance
of this Agreement, notice of loans made, credit extended, Collateral received or
delivered or other action taken in reliance hereon and all other demands and
notices of any description. With respect to both the Obligations and the
Collateral, each Company assents to any extension or postponement of the time of
payment or any other indulgence, to any substitution, exchange or release of or
failure to perfect any security interest in any Collateral, to the addition or
release of any party or person primarily or secondarily liable, to the
acceptance of partial payment thereon and the settlement, compromising or
adjusting of any thereof, all in such manner and at such time or times as the
Agent may deem advisable. The Agent shall have no duty as to the collection or
protection of the Collateral or any income thereon, nor as to the preservation
of rights against prior parties, nor as to the preservation of any rights
pertaining thereto beyond the safe custody thereof as set forth in ss.9.2. The
Agent shall not be deemed to have waived any of its rights upon or under the
Obligations or the Collateral unless such waiver shall be in writing and signed
by the Required Institutions. No delay or omission on the part of the Agent in
exercising any right shall operate as a waiver of such right or any other right.
A waiver on any one occasion shall not be construed as a bar to or waiver of any
right on any future occasion. All rights and remedies of the Agent with respect
to the Obligations or the Collateral, whether evidenced hereby or by any other
instrument or papers, shall be cumulative and may be exercised singularly,
alternatively, successively or concurrently at such time or at such times as the
Agent deems expedient.
16. Marshalling. Neither the Agent nor any Institution shall be required to
marshal any present or future collateral security (including but not limited to
this Agreement and the Collateral) for, or other assurances of payment of, the
Obligations or any of them or to resort to such collateral security or other
assurances of payment in any particular order, and all of its rights hereunder
and in respect of such collateral security and other assurances of payment shall
be cumulative and in addition to all other rights, however existing or arising.
To the extent that it lawfully may, each
-10-
Company hereby agrees that it will not invoke any law relating to the
marshalling of collateral which might cause delay in or impede the enforcement
of the Agent's rights under this Agreement or under any other instrument
creating or evidencing any of the Obligations or under which any of the
Obligations is outstanding or by which any of the Obligations is secured or
payment thereof is otherwise assured, and, to the extent that it lawfully may,
each Company hereby irrevocably waives the benefits of all such laws.
17. Proceeds of Dispositions; Expenses. Each Company shall pay to the Agent
on demand any and all reasonable expenses, including reasonable attorneys' fees
and disbursements, incurred or paid by the Agent in protecting, preserving or
enforcing the Agent's rights under or in respect of any of the Obligations or
any of the Collateral. After deducting all of said expenses, the residue of any
proceeds of collection or sale of the Obligations or Collateral shall, to the
extent actually received in cash, be applied to the payment of the Obligations
in such order or preference as is provided in the Consignment Agreement, proper
allowance and provision being made for any Obligations not then due. Upon the
final payment and satisfaction in full of all of the Obligations and after
making any payments required by Section 9-504(l)(c) of the Uniform Commercial
Code of the Commonwealth of Massachusetts, any excess shall be returned to the
Companies, and the Companies shall remain jointly and severally liable for any
deficiency in the payment of the Obligations.
18. Overdue Amounts. Until paid, all amounts due and payable by any Company
hereunder shall be a debt secured by the Collateral and shall bear, whether
before or after judgment, interest at the rate of interest for overdue principal
set forth in the Consignment Agreement.
19. Governing Law; Consent to Jurisdiction. THIS AGREEMENT IS INTENDED TO
TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS. Each Company
agrees that any suit for the enforcement of this Agreement may be brought in the
courts of the Commonwealth of Massachusetts or any federal court sitting therein
and consents to the non-exclusive jurisdiction of such court and to service of
process in any such suit being made upon such Company by registered or certified
mail at such Company's Principal Office. Each Company hereby waives any
objection that it may now or hereafter have to the venue of any such suit or any
such court or that such suit is brought in an inconvenient court.
20. Waiver of Jury Trial. EACH OF THE AGENT AND EACH COMPANY WAIVES ITS
RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY
DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER
OR THE PERFORMANCE OF ANY SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by
law, each Company waives
-11-
any right which it may have to claim or recover in any litigation referred to in
the preceding sentence any special, exemplary, punitive or consequential damages
or any damages other than, or in addition to, actual damages. Each Company (i)
certifies that neither the Agent or any Institution nor any representative,
agent or attorney of the Agent or any Institution has represented, expressly or
otherwise, that the Agent or any Institution would not, in the event of
litigation, seek to enforce the foregoing waivers and (ii) acknowledges that, in
entering into the Consignment Agreement and the other Consignment Documents to
which the Agent or any Institution is a party, the Agent and the Institutions
are relying upon, among other things, the waivers and certifications contained
in this ss.20.
21. Concerning Revised Article 9 of the Uniform Commercial Code. The
parties acknowledge and agree to the following provisions of this Agreement in
anticipation of the possible application, in one or more jurisdictions to the
transactions contemplated hereby, of the revised Article 9 of the Uniform
Commercial Code in the form or substantially in the form approved by the
American Law Institute and the National Conference of Commissioners on Uniform
State Law and contained in the 1999 official text of Revised Article 9 ("Revised
Article 9").
21.1. Attachment. In applying the law of any jurisdiction in which
Revised Article 9 is in effect, the Collateral is all Specified Gold
Jewelry, the Cash Collateral Account (as defined in the Cash Collateral
Agreement), all sums from time to time in the Cash Collateral Account and
all Time Deposits (as defined in the Cash Collateral Agreement), in each
case whether or not within the scope of Revised Article 9.
21.2. Perfection by Filing. The Agent may at any time and from time to
time, pursuant to the provisions of ss.13, file financing statements,
continuation statements and amendments thereto that describe the Collateral
of each Company and which contain any other information required by Part 5
of Revised Article 9 for the sufficiency or filing office acceptance of any
financing statement, continuation statement or amendment, including whether
any Company is an organization, the type of organization and any
organization identification number issued to such Company. Each Company
agrees to furnish any such information to the Agent promptly upon request.
Any such financing statements, continuation statements or amendments may be
signed by the Agent on behalf of such Company, as provided in ss.13, and
may be filed at any time in any jurisdiction whether or not Revised Article
9 is then in effect in that jurisdiction.
21.3. Other Perfection, etc. Each Company shall at any time and from
time to time, whether or not Revised Article 9 is in effect in any
particular jurisdiction, take such steps as the Agent may reasonably
request for the Agent (a) to obtain an acknowledgement, in form and
substance satisfactory to the Agent, of any bailee having possession of any
of the
-12-
Collateral that the bailee holds such Collateral for the Agent, (b) to
obtain "control" of any investment property, deposit accounts,
letter-of-credit rights or electronic chattel paper that constitute
Collateral (as such terms are defined in Revised Article 9 with
corresponding provisions in Rev. xx.xx. 9-104, 9-105, 9-106 and 9-107
relating to what constitutes "control" for such items of Collateral), with
any agreements establishing control to be in form and substance
satisfactory to the Agent, and (c) otherwise to insure the continued
perfection and priority of the Agent's security interest in any of the
Collateral and of the preservation of its rights therein, whether in
anticipation and following the effectiveness of Revised Article 9 in any
jurisdiction.
21.4. Other Provisions. In applying the law of any jurisdiction in
which Revised Article 9 is in effect, the following references to sections
in this Agreement to existing Article 9 of that jurisdiction shall be to
the Revised Article 9 Section of that jurisdiction indicated below:
---------------------------------------------------------------------------
Agreement Section Existing Article 9 Revised Article 9
---------------------------------------------------------------------------
3 ss. 9-109(3) Rev.ss.9-102(a)(34)
---------------------------------------------------------------------------
9.2 ss. 9-207 Rev.ss.9-207
---------------------------------------------------------------------------
17 ss. 9-504(1)(c) Rev.ss.ss.9-608(a)(1)(C)
and 9-615(a)(3)
---------------------------------------------------------------------------
21.5. Savings Clause. Nothing contained in this ss.21 shall be
construed to narrow the scope of the Agent's security interest in any of
the Collateral or the perfection or priority thereof or to impair or
otherwise limit any of the rights, powers, privileges or remedies of the
Agent or any Institution hereunder except (and then only to the extent)
mandated by Revised Article 9 to the extent then applicable.
22. Miscellaneous. The headings of each section of this Agreement are for
convenience only and shall not define or limit the provisions thereof. This
Agreement and all rights and obligations hereunder shall be binding upon each
Company and its respective successors and assigns, and shall inure to the
benefit of the Agent, the Institutions and their respective successors and
assigns. If any term of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity of all other terms hereof shall in no way be
affected thereby, and this Agreement shall be construed and be enforceable as if
such invalid, illegal or unenforceable term had not been included herein. Each
Company acknowledges receipt of a copy of this Agreement.
-13-
IN WITNESS WHEREOF, intending to be legally bound, the Company has caused
this Agreement to be duly executed as of the date first above written.
FINLAY FINE JEWELRY
CORPORATION
By: /s/ Xxxxx Xxxxxxxx
----------------------------------
Title: Senior Vice President, Treasurer
and Chief Financial Officer
eFINLAY, INC.
By: /s/ Xxxxx Xxxxxxxx
----------------------------------
Title: Senior Vice President, Treasurer
and Chief Financial Officer
Accepted:
SOVEREIGN BANK (successor
to Fleet National Bank, f/k/a
BankBoston, N.A., f/k/a The First
National Bank of Boston,
successor to Rhode Island
Hospital Trust National Bank),
as Agent
By: /s/ Xxxxxxxx Xxxxxxx
--------------------------
Title: V.P.
-14-
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OR STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
Before me, the undersigned, a Notary Public in and for the county
aforesaid, on this 30th day of March, 2001, personally appeared Xxxxx X.
Xxxxxxxx to me known personally, and who, being by me duly sworn, deposes and
says that he/she is the Sr. V.P. Treasurer and CFO of Finlay Fine Jewelry
Corporation and eFinlay, Inc., and that said instrument was signed and sealed on
behalf of said corporations by authority of their Boards of Directors, and said
Xxxxx X. Zurlinck acknowledged said instrument to be the free act and deed of
said corporation.
/s/ Xxxxx X. Xxxxx
---------------------------------------
Notary Public
